A non-performing mortgage is the one that has not been paid and is in the danger of foreclosure by the bank or note holder. The top California property investment advisors, BGK Investments, explain how you can make the most by investing in a non-performing mortgage.
The best option when you invest in a non-performing mortgage is to get real estate at big discounts, and sell them quickly for a neat profit. The quick getaway approach offers you the great benefit avoiding delinquent homeowners.
Long Term Hold
The second approach involves buying out the earlier owners. Get them to sign a Deed in Lieu, and leave the property. Since you decided to invest in the non-performing mortgage and now own it, you avoid foreclosure fees. Now, rent the property to a tenant for a long term hold. Some people choose to sell the property quickly.
Turn It Around
This approach involves turning the non-performing property around. For example, you invest in a non performing mortgage for $50,000 but the unpaid principle is $200,000 with a 10% interest rate on the mortgage. You cut the unpaid principle in half ($100,000) and decrease the interest rate to 6%. This is now a new mortgage. After few months of timely payments by the homeowner, the non-performing mortgage you invested in becomes performing and ready to be resold to another investor.
Expert California property investment advisors, BGK Investments, specialize in distressed assets and fair business dealing if you want to invest in non-performing mortgages.