Buying Defaulted Mortgages – One Note Buying Exit Strategy is Not Enough
February 12th, 2012 | 
Author: 
I had a conversation with a new Note Buyer the other day, and he told me that he was launching himself into buying defaulted mortgages after spending a long time wholesaling properties.
What worried me was when he said: “Dean, I want to get into buying defaulted mortgages in order to keep people in their homes and get some good cash flow.”
Don’t get me wrong. I’ll be the first to admit that Humanity counts.
But …
Don’t lose sight of the forest for the tree.
Don’t Try to Use Only One Exit Strategy For Buying Defaulted Mortgages
It just won’t work.
You see, you may WANT to pursue A SINGLE exit strategy for the defaulted mortgages you purchase (in this case, he was looking to re-perform all the notes he bought – possibly by modifying them all – and then to hold them for cash flow).
Buying Defaulted Mortgages: Multiple Exit Strategies Are Needed
In order to invest successfully in defaulted mortgages, you need to be like Rafael Nadal.
Nadal is a really well-balanced tennis star. He has an amazing serve, excellent grass court experience, plays solidly on clay, and can fire a wicked forehand.
Follow the same approach when buying defaulted mortgages. Learn how to pursue MULTIPLE Note Buying Exit Strategies at once.
Be careful you don’t “stick yourself” with one note buying strategy.
Using Foreclosure as a Buying Defaulted Mortgages Tool
One useful tool to get a borrower to cooperate with you in getting a loan modified can often be to start a foreclosure action.
Why?
Because for someone who has been missing payments regularly and hasn’t been current for a while, sometimes a wake-up call with a foreclosure notice (combined with a helping hand from you to help them with a loan modification) is what prompts them to get their act together, take control of their situation, and to work their way out of their delinquency.
Don’t fall into the same trap the investor I talked to did.
Don’t think that 1 Exit Strategy to your Defaulted Mortgage Buying business is enough to make you successful.
You really need to be a jack of all 5 Exit Strategies to do well in the note buying business.
Posted in Mortgages | 
Tags: Cash Flow, Court Experience, Foreclosure Action, Investor, Long Time, Mortgages, Tennis Star, Tool