How to Build a Mountain of Wealth Outside of the Stock Market-Part 2

Another week has come and gone and the Markets finished on a downward slide. I am sure some of you are experiencing some heartburn with your investments. Are you being proactive with moving your investments in and out of the Market, or are they tied up in your 401(k)? The one thing that I wanted to make sure for myself that I had full control of my investments as they are my retirement nest egg. In my last post I provided an overview of real estate note investing niche and the two types of investments that are available to you and me. In this post I want to discuss the ins and outs of performing notes.

A performing note A.K.A. is a mortgage that you or I can get from our local bank. Once your mortgage is funded by your lender or broker it either is serviced by that entity or it could be sold to another financial institution. Mortgages are sold in what is called the primary market. The major players in this market are banks, credit unions, and mortgage brokers. Now you are asking yourself where to do I come into play? You come into play in the secondary market. Before, I go into too much depth on the secondary market I want to give you an overview of Mortgage Backed Securities(MBS). Mortgage Backed Securities were created by President Lyndon Johnson when the Charter Act was passed in 1968. The original concept of MBS was to allow banks to sell off mortgages that would in turn allow them to free up funds to lend to other homeowners. The simplest MBS is called the pass-through participation certificate. This MBS pays the holder principal and interest payments that have been collected on the mortgage. This MBS is the most common you and I will invest in the secondary market. The creation of MBS also allowed non-bank institutions to enter into the mortgage business, and lenders were able to get their cash back in the secondary market instead of waiting for 15 to 30 years for the mortgage to mature. This brings us to the 2000s when the industry decided to become creative in offering complex MBS to entice new homeowners. We all know how this finished! I am not willing to rehash history, but if you want to read more about MBS here is a great website.

With all that out of the way lets talk about how you and I can invest in the secondary market. There are numerous ways to invest in the secondary market, but I am going to cover the three options I have experience with. First, purchasing directly from banks, lenders, hedge funds, and mortgage brokers. This choice is for a person that is looking to be a full-time investor, and he/she will have to build relationships with these financial institutions. Specifically as I have done in my career many times one has to "Dial for Dollars" to Asset Managers. These individuals control multi million dollar portfolios for their respected banks, and their job is to make sure these loans are sold and off the books before the end of the banks' fiscal year. The 2nd option is to purchase directly from private sellers. This option too has some full-time aspects as in you have to market your business to potential sellers in the form of phone calls, website presence, email marketing, and direct mail campaigns. A private seller is typically an individual/couple that has sold their home to a buyer on Contract/Owner Financing, which is another form of a MBS. Another nuance of contracts/owner financing transactions is that you need to ensure the loan was originated per Federal and State Laws. The biggest challenge I have experienced with these MBS is the contract violates State usury laws. When that is discovered the contract has to be re-written like a new loan. All terms stay the same except the interest rate on the loan is lowered and the home buyer will sign the new loan documents. The 3rd option is to be a private lender. Simply put you are the bank and you are lending funds to investors with an ROI expectation. This option by far is the easiest way to start investing in MBS.

There are endless investment vehicles that one can choose from, but there are not many investments that have a greater impact on society as a whole like MBS. When you invest in a contract/owner financing transaction you are providing financing to home buyers that otherwise would not be able to obtain a mortgage due to some credit challenges. In turn, you earn a healthy ROI and your investment is backed by real estate. I will leave you here for this post, and in my next post I will talk about non-performing notes (MBS), and how they too can be a great investment vehicle for your portfolio.

About the Author:

Ryan is an Executive Level Manager with over 20 years of progressive management experience in all aspects of; finance, compliance, divisional & product management, operations, advanced technology development, and real estate related investment opportunities. TruVest, infuses cutting-edge technology to identify non-performing assets that will generate multiple streams of revenue. Utilizing proven models and processes, TruVest consistently turns non-performing assets into performing, resulting in consistent solid returns.


How to Build a Mountain of Wealth Outside of the Stock Market

Seems like every time I either turn on the TV or read business articles all I see is that the Market is approaching a correction.? To me, that does not mean much as I have not been one that places all my financial eggs in one basket.? I like to have multiple streams of investment income when it comes to my financial future. One of those streams that I found 5 years ago was purchasing performing and non-performing mortgages.? I can hear you saying?What the heck are you talking about? I can invest in mortgages?? Yes, you can just as hedge funds and banks do.? Of course, on a smaller scale, and you too can own real estate without all the hassles of being a landlord.

Mortgages A.K.A. notes can be bought directly from banks, credit unions, lenders, and private sellers. To buy directly from banks and credit unions you would have to have established connections. Do not fret, the third option and that is purchasing notes from private sellers works just fine for us average investors. Full disclosure, my Company TruVest sells notes to interested investors. ?And I am not trying to pitch you at all.? I want to share and educate you on a different world that most investors do not know exists outside of the Stock and Bond Markets.

For this post, I just want to introduce you to real estate notes and how they can help you solidify your financial future.? Below are some basic key descriptions:

 

Real estate notes are also known in the industry as the following:

? Deed of Trust
? Land Contract
? Bond for Title
? Mortgage (Fixed or adjustable, First or second)
? Promissory Note

Typically, lenders refer to real estate notes in the following four distinct categories:

1.Residential Notes ? Those obtained by borrower(s) for use as a home or investment
2.Commercial Notes ? Those acquired by a business entity to have a location to perform business functions from or investment
3. Performing ? The borrower(s) are actively repaying the note within the note?s term and requirements
4. Non-Performing ? For whatever reason(s) the borrower(s) have ceased making the note?s required payments.

 

Mailbox Money or Risk Taker?-My favorite Question

?There are several avenues that you can explore.? The first question to ask yourself is are you looking for mailbox money or are you a bit more of a risk-taker? If you are looking for mailbox money, then you need to be looking at performing notes.? If you are a bit more of a risk-taker and are looking for a more substantial ROI then you want to look at non-performing notes.? Each of these investments can return double-digit returns in as little as 6 months. My last statement is solely based upon my experience investing in real estate notes. ?And I will share some of my deals in my upcoming posts.? I am going to leave you here for this post and next week I will be sharing more in-depth on performing notes and a few horror stories of mine from my note investing journey.

 

About the Author:

Ryan is an Executive Level Manager with over 20 years of progressive management experience in all aspects of; finance, compliance, divisional & product management, operations, advanced technology development, and real estate related investment opportunities. TruVest, infuses cutting-edge technology to identify non-performing assets that will generate multiple streams of revenue. Utilizing proven models and processes, TruVest consistently turns non-performing assets into performing, resulting in consistent solid returns.


What a Week!

This past week was full of so many emotions! We commenced beta testing for our due diligence platform, and also purchased 2 assets in Indiana. The launch of the platform by far has been the toughest challenge I have faced in my career. I am very thankful for my family, colleagues, and friends that have supported me on this journey. Now the next chapter of this journey starts this week with implementing feedback from the beta testers, creating the new website for TruExchange, and throughout the week I will be sharing our progress on our recent acquisitions.?Let's all be part of bringing Wall Street to?YOUR?Street! Have a great week and I look forward to speaking with you soon!

 

 


Have You Ever Felt Lost?

Have You Ever Felt Lost?

It seems like I misplaced my Crystal Ball

Has this ever happened to you?

That is how I felt this week, and all that I needed was just a little time to reflect

I started The Platform Journey several months ago, and I had no clue how it would turn out

This journey has taken me down several paths. Some have been good, and some have been not so good

However, this journey finishes I know two things: I have put everything that I have spiritually into this journey, and the Platform that is launched will provide great VALUE to you

Thank you for allowing me to share my personal journey with you

Have a great week, and I hope your own journey is going well!


This Week Has Been Challenging!

This week has been Challenging and Rewarding

The Platform is coming to LIFE!

Dashboard has gone from mock-up to development

Had a Discussion during the week with an individual that watched the dashboard video (https://lnkd.in/g_t6zaT ) from last week

The conversation went well, and he provided some great feedback and improvements. That all have been documented for future releases (I will share our conversation in an upcoming post)

Platform Lesson #1 from the week

Functionality is critical

And this is something I know, but this week the details got the best of me

I was too focused on getting three aspects of the platform completed and I lost sight of the end result

Providing automation and functionality for you.? I hate when I lose focus on the end result.? My passion and perfectionism got the best of me!

Which leads me down the road of tangents.? Can you say SQUIRREL!!!!

Platform Lesson #2 from the week

Never lose sight of your why

From the beginning of this journey, I have been focused on providing value

If myself and our team cannot provide this to you then we have failed

This is what drives me every single day.? I love the challenge!

What is driving you on your journey? Would love to hear from you!

I look forward to connecting with you next week!

Cheers!


I Put Everything I Had Into It

I put everything I had into it

Just could not imagine it would turn out this way

How can you go from ?zero? to a functional mock-up in a week?

That is what I was asking our developers this week about the dashboard project

They had a simple response that was astonishing? We believe in your vision!

As I am writing this I am still blown away!

The conversation that hit home this week for me was with our lead developer and myself

The topic was on our launch date and functionality

He tells me that we are on schedule to have beta testers at the beginning of February

He then dropped the bomb on me?The platform will not be perfect and will not have all the functionality you want

My response?. ?WHY??

He calmly told me ?The platform will be evolving daily for the next 3 to 6 months.?

I had one thing on my mind?..VALUE?.I asked

How do we provide value to our users if all functions are not available for beta testing?

His answer was direct and to the point ?Features we have developed for beta testing will give users back 3 to 4 hours daily by using the platform for their due diligence.?

I then added, ?Our number one goal is to automate as much of the due diligence process for our users as possible, and ensure the data we provide is accurate and timely.?

What a great conversation and connection we had.? It is great to work with a team that shares your vision and values!

Every day I know more and more I have made the right decision to develop the platform

When have you taken on a large project what have been some of the struggles you have gone through?


You Said What???

You Said What???

NO!

That is the answer I got from numerous developers I have spoken to about creating the platform

Speaking to 15 plus developers = Not all conversations are equal

They either said they do not have the expertise or did not want to get into a long-term project

The answers that surprised me the most were:

?I just work to pay my bills?

?The development time would cut into his gaming?

I do not understand the mentality of not wanting to take on work

From all the challenging conversations, I have had this week there is a silver lining

I have found two developers that are really passionate about developing new platforms, especially in an underserved market as note investing

Next week I will be spending more time with both of them to discuss the development plan and strategy

Thank you to everyone that has reached out to me with their referrals!

Time to start saving time and spending more quality time with the family!