Would You Rather be the Bank or the Landlord?

By Eddie Speed, Editor, REal Income Alert

During December, I explored the state of the housing and mortgage markets with you. To cut a long story short, things are not as rosy as Main Street’s telling you.

But that’s not bad news. In fact, for us, that’s great news. The once-in-a-lifetime-opportunity kind of great news.

That’s why I recorded a training webinar for you, which we made available between December 30, 2013, and Wednesday this week. For those who were unable to watch, here’s a brief overview of the greatest money-making opportunity this century…

It all boils down to choosing the easy way or the hard way.

The hard way is to buy a fixer-upper property, spend three stressful months making it good enough to sell for a profit and then flipping it. Or you could rent it out, and then be responsible for managing tenants — some good, more bad — when you can find them and paying for repairs and maintenance.

Sounds mighty unpleasant and stressful.

Then there’s the easy way: become the bank instead of the landlord.

And that’s easier than you think. It doesn’t involve having millions in capital. And you don’t need a finance degree or to have been a banker in a past life. All you need is the ability (and desire) to do your due diligence… and having someone like me guide you until you’ve learnrned how to swim in this sea without armbands.

So how do you become the bank?

You buy the note instead of the property. Let me explain…

When you buy a home using a loan or mortgage, you had to sign a piece of paper promising to repay that loan to the lender. That’s a note. And it’s typically backed by the real estate to which the loan is attached.

And there are millions upon millions of these notes. More importantly, there are millions upon millions of these notes available at a deep discount because the people who signed the note have defaulted (non-performing notes), or they stopped paying for a while and have started paying again (re-performing notes).

In fact, it’s estimated that there are more than 10 million non-performing notes in the market right now, and several million re-performing notes (the latter number is harder to pin down for various accounting reasons not in the scope of this article today).

Ten million is no small inventory! And all you need do is cast your net in to find the ones that are best for you.

Now, my 30-years’ experience in this rodeo has taught me that your head is swimming with questions already. I’ll hazard a guess and say the biggest question for you is this: “But if they’ve defaulted, why would I want to buy the note? They’ve already proved they’re unreliable…”

I can assure you, everyone who first hears about buying real-estate backed notes asks that exact same question… so you’re not alone.

But the answer is simple… and I’ll share it with you next week.