Is There Opportunity Amid Coronavirus?

This Coronavirus pandemic has created what will likely become a huge opportunity for investors that has not been seen since the 2008 mortgage crisis. Just like in 2008, an economic slowdown was the best time to buy real estate. Note investing is not the stock market. Note investing provides a diversity in your portfolio that you should have anyway. Even though many borrowers are out of work temporarily and not paying their mortgages, it will only be a matter of time before most are back to work and hopefully back on their feet.
Even before the virus hit, many investors were predicting another mortgage implosion anyway (or I should say “correction”). Private investors are waiting with their capital for an opportunity just like this to deploy funds on assets coming to the market. Why would anyone want to buy mortgage notes that people are not paying on? Well, here’s the thing, according to most reports, at least two thirds of borrowers are still paying their mortgages on time even during this pandemic.
Even though one third of borrowers are not paying, many of those are only temporary. For those unable to recover, that is where the opportunity will come from. The courts will not stay closed forever. In the coming months, many non-performing assets will hit the market (many already are). This is the time to have your capital ready to get those discounted assets and bring them back to performing again and generating monthly cash flow income.

Real estate, and opportunities in real estate is about supply and demand. This means, when supply is high and demand is low, we may be able to purchase notes at even deeper discounts. It means that those notes, once performing again, are producing cash flow, or the properties can be used as rentals or sold using seller financing. It wasn’t too long before the pandemic, all I saw were note investors complaining about how high the notes were, there wasn’t as much of a discount as they were used to seeing in years past.

Doubtfully, prices will go as low as they were back in 2008, however some are anticipating pricing coming way down from pre-pandemic pricing. Just like with stocks, when the market tumbles, stocks can be bought for pennies on the dollar, the same is true for mortgage notes. When the housing market falters, notes can be bought for even more of a discount than previously. When the market recovers…which after every downturn it has typically always done…you will have a cash flowing note! As always, stay safe out there.


For more information on notes or if you have notes to sell, reach out to Zee at Awanna Holdings, LLC (571)659-5005. ©Awanna Holdings, LLC (Apr 2020-18), zee@awannarandh.com

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Awanna (Zee)

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