Note Investing

I hope everyone had a great weekend!  I apologize in advance for missing a week of our newsletter.  I was off the grid for a week and just needed some down time.  I came back this week to the Existing Home Sales Report, and when I read it I immediately had a shiver go down my spine.  There are many pieces of the report that remind of what happened in 2007.  By all means I am not all doom and gloom, but numbers do not lie and I rather be prepared and have a game plan put together just in case we have another down turn. The  one thing that I do not understand is how do we just think the market will only continue to go up?


Existing home sales report came out earlier today.


Highlights: Median Home Price-$263,000 (An increase of 6.6% MoM)

Median Housing Price continues to outgrow Wage Gains

Days on Market-28 Days (Down from 34 days)

Housing Inventory has dropped for 25 straight months


Some different signals came out today, but one that really stood out for me was the median home price of $263k. At the peak of the last housing bubble, the median home price got to $257K (April 2006) and steadily declined from there.


The other point that is concerning is housing prices continue to outgrow wage gains, which price buyers out of the market, bidding wars transpire with home buyers that could barely afford the original purchase price. And to afford the higher purchase price the home buyer takes out an exotic mortgage (ARM).


As the market continues to gyrate there could be some changes coming to note investors.  Over the past several months I have been seeing more tapes (Non-performing Notes) for sale, and the majority of these notes are from loans that were supposedly placed on Workouts during 2011-2013.  These homeowners were wanting to stay in their homes, but now their ARM mortgages have adjusted and their payments have increased as much as 25%.  We are in the business of helping these homeowners, and as we review and purchase assets we will share the investment opportunities with you.  Our investment opportunities are totally passive, and provide you a fixed rate of return monthly.  Let’s see what we can do together to help homeowners stay in their homes!