Hotel Deadline Today + The Craziest Investment Ever
Published: Fri, 10/31/14
THE CASH FLOW EXPRESS
A Service Of The Paper Source, Inc.
October 31, 2014
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IN THIS ISSUE: Is This The Craziest Investment Ever?
Conference Hotel Discount Expires TODAY, Oct. 31
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Hi ,
Gordon Moss' article Is This The Craziest Investment Ever? is below.
If you're planning to join your colleagues next month at our conference on non-performing notes in a few weeks (Nov. 20-22) in Las Vegas and haven't reserved your hotel room, time is running out. Our discount rates ($55.00
per night Sunday-Thursday and $105.00 per night Friday and Saturday
plus tax) expire TODAY, Friday Oct. 31. Go
to: https://www2.tuscanylasvegas.com/smsworld/wc.dll?smsWorld~AvailBox~%26RGP=13o293 and enter Group Code #13o293
and the dates you want to reserve. Or you may call the hotel at
877-887-2261. Be sure to tell them our group code when registering.
Don't be put off by the super low rates. The Tuscany Suites & Casino is one of the best-kept secrets of Las Vegas: a luxury resort hotel & casino just 2 blocks off the
Strip that looks like a tropical college campus. Each
room is a 650 square foot suite, including a seating area with sofa &
lounge chair in addition to a desk, chair, dining table and chairs,
coffee maker, refrigerator, wet bar, FREE WI-FI, etc. The
hotel website has photos and more information:
http://www.tuscanylv.com/
Cheers,
Bill
W. J. Mencarow
President, The Paper Source, Inc.
P.S. Check out the teacher lineup, the video and more at http://papersourceseminars.com/non-performing-notes-seminar-2014/
Is This The Craziest Investment Ever?
(Or One Of The Smartest?)
by Gordon Moss
Part I
Gordon Moss is president of Quixote Ventures, Inc., San Diego, CA.
He is THE most experienced buyer of non-performing 2nd liens.
Why would an investor in his right mind consider the purchase of a
non-performing 2nd (junior) lien?
Maybe they haven't dedicated the time, energy, and resources to
fully understand this unique niche, evaluated the risk/reward ratio
and come to the conclusion that it might be the LEAST risky
and most profitable strategy available in today's marketplace.
How can that possibly be?
Let me give you a bird's eye view of this niche, exactly why we
came to that conclusion years ago and why we have dedicated
ourselves to understanding the current non-performing 2nd lien
marketplace and the many strategies and tactics we have
learned and developed.
The current market (in California, at least) is paying 70, 80, 90 cents
and even more for a quality non-performing 1st lien, and that is
just too much money in my opinion; margins are too slim,
add foreclosure costs with a large potential for bankruptcy and
other related delays, and you can have your investment dollars tied
up for many more years than originally planned.
"Wait a minute here," you might say, "I can buy non-performing
first liens at 30, 20, or even less than 10 cents on the dollar
from my local hedge fund!" At this point I strongly urge
you to read my blog on "THE BULK REO GAME"
Cheap non-performing first liens could lead you on a very short
path to disaster. These will be notes on the wrong properties, in
the wrong areas, in the wrong parts of the country. Some local pros
might be successful at this niche, but I don't know any of them.
Consider the possibilities when paying 15 to 20 cents on the dollar
for a non-performing 2nd lien on a better quality borrower and
stronger quality collateral: What if you could buy a $100,000
non-performing 2nd lien for $15,000 and re-perform it at
$700 a month for 30 years (tax-deferred or tax-free in your own
self-directed retirement account) and/or season and resell it
for $60,000?
You might have most of your investment back in a short time frame
and an excellent rate of return. Even a fraction of those numbers
might be a profit margin worth chasing.
Evaluating First Position Non-Performing Liens
The old cliché is that real estate valuation comes down to three
factors: "location, location, location." When evaluating a
non-performing first lien the three most important factors
might be "collateral, collateral, collateral"...The chances of
owning the property are very strong, and your risk needs to be
evaluated this way.
Evaluating a non-performing 2nd lien is a bit unique - it might
be the "borrower, borrower, borrower." The most important factors
in evaluating a junior lien come down to your ability to analyze a
borrower's "emotional equity" and his ability and willingness to
work with you to keep his home and create a "win/win" solution that
benefits all parties.
How might you do that?
Clues can be found in the "pride of ownership" (or lack of) in the
condition of the house - Is the lawn mowed and are the rose bushes
planted? The study of credit reports is an art that once mastered
can greatly increase your chances of success. They are by far the
most important indicator even on notes with little or negative
equity. Statistics show that the "Emotional Equity" and credit
history and potential of the borrower are what really tell you the
story.
At the Paper Source Las Vegas seminar on non-performing
notes next month I'll show you some actual deals we've done -- I'll
put the numbers in, what we paid, the monthly cash flow, and
multiple exit strategies.
I'll also show you how we create cash cows by turning non-performers
into re-performers for high returns.
The other teachers (that's teachers, not pitchmen) and I will also be
available for private consultations at no charge. So bring your questions!
If you have documents and spreadsheets, etc., bring them also.
We expect a strong turnout of real estate and note investors, brokers,
hard money lenders, servicers, hedge fund managers and others. This
will be a tremendous learning and networking opportunity!
This is the only seminar of its kind and may never be offered again.
For the teacher lineup, a video and to register, see
Or call 1-800-542-2270.