This Little Piggy went to the Stock Market. He put his money into stocks that his “adviser” told him to buy. His stocks would rise and fall with the news of the day. He lived in a house made of Clay. At least his adviser was making money.
This Little Piggy went to the Mutual Fund. His Human Resources department gave him a list of twelve funds to choose from. 6% was taken out of his paycheck and he would check his account once a year to see how his retirement was doing. He lived in a house made of Hay.
This Little Piggy went to the Savings Account. This is what his parents taught him. His money wasn’t earning anything, but he knew it was safe and would be there for retirement. He lived in a house made of Sticks.
This Little Piggy went to his Self Directed IRA. He invested with another Little Piggy who was buying non-performing mortgage notes. His money was making double digit and sometimes triple digit returns. He took all of his earnings and bought a house made of Bricks.
When the Big Bad Wolf came to town, the Wolf was so full of bacon from the first three houses that he didn’t stop at the brick house.
Did you know that the S&P 500 only gained 1.2% in 2015? That didn’t beat inflation, but it was still better than having your cash in a savings account or CD. There are a number of alternative investments and they are becoming more popular every day. Real Estate is one of those options. We all learned years ago the basic principle of buy low and sell high. It's harder to do in real estate these days. That's why we have been focusing our efforts on non-performing mortgage notes.
While wholesalers are trying to design that special postcard to make them stand out from the dozens of other postcards, we are calling the banks and buying the note at a discount before the ink is dry on the wholesaler's postcard. Sometimes we are getting these assets for as low as 20% of Fair Market Value and funding these deals with as little as $10,000. These steep discounts give us room to work with the borrower to come up with a solution other than foreclosure. We underwrite our deals with the borrower in mind. When we do this we can create a win-win situation between the investor and the borrower. The home owner still has their home and AJA Realty Investments and its partners have made a very good return. There are other exit strategies, including, but not limited to, Loan Modification, FHA10-23 refinance, Deed in Lieu, Cash for Keys, Rental and lastly Foreclosure. With any of these exit strategies, we can easily earn double digit returns within 12-18 months. In the end, we can sell off the asset or we can collect mailbox money for the term of the note.
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