What's Your Self Directed IRA Doing?

Did you know that you can use your Self Directed IRA (SDIRA) to invest in notes? Many of our investors use their SDIRA funds. If your SDIRA isn't making money, it's losing money.  And with the expected inflation coming, you need to stay ahead of it and keep your money working. Let us put that money to work for you and help your retirement grow.


How Much Is Out There?

Stocks and mutual funds are on a roller coaster ride. Your savings account is returning pennies. Cap rates are getting lower every day and the Real Estate Owned (REO) inventory is decreasing while prices are increasing.

One key reason to focus on buying notes in the present market is because there exist so many of them following the nation’s most recent foreclosure crisis. For every $1 of REO property owned by financial institutions, there are $25 of defaulted mortgages.  Even though the housing market is recovering, there are still billions of dollars in distressed assets on the books of banks and mortgage companies.

Why Banks Don't Foreclose

In the past, banks would foreclose on these notes and sell the property attached to the mortgage; but, depending on the State, it might take a year or more to foreclose. If the real estate is underwater, the bank will never recover the debt. These accounts are a drain on the lender both monetarily and from a human resources standpoint. Instead of incurring the legal expenses of foreclosure, it is simpler and more economical to sell the note, even at a discount. This creates opportunities for the astute investor.


Buying non-performing notes (NPNs) is an excellent way to invest in real estate. NPNs can be purchased for as low as 20% of value. This discount provides considerable flexibility to "workout" the note with the borrower to create a win-win situation for both the homeowner and the investor.  At AJA Realty Investments, our strategies include reperformance, forbearance and modification, deed in lieu, renting and foreclosure. With these options, we meet higher than average returns.

Our Model

AJA Realty Investments forms closed syndications to buy pools of notes to offer passive income or to help them grow their Self-Directed IRAs. Our aim is to provide our investors an annual double digit return over a 2 to 3 year period. When the opportunity presents itself and the returns are sufficient, we can work to keep the borrowers in their home. For the rest of the assets, we try to help the borrowers with Cash for Keys, or Deed in Lieu of Foreclosure, with the goal of gaining the property to rehab and sell it as a turnkey rental.

Here is A Prime Example

We purchased a mortgage for a duplex in Cincinnati with an unpaid balance of $180,000. The property value was $115,000 in the present condition. Rents for that market would garner us $1,000 per unit. The borrower was deceased. We paid $72,000 for the mortgage. After our legal costs, back taxes and miscellaneous expenses associated with working a note, we were into it for $82,000.  We foreclosed on the property, spent another $40,000 in rehab and leased up the units at $975. We then sold the asset as a turnkey rental for $215,000.  Profit? Close to $100,000 in capital gains and rental income.

And Here Is A Little Example

While buying a pool of notes, we picked up a small Land Contract in Cleveland for $5,500. The property was vacant and had $2,800 in back taxes. Once we recorded the deed, we sold it As-Is for $25,000.  Profit? Over $10,000 in four months.


Adam and Jen are highly competent in multifamily and distressed residential real estate investment.
— Brandon Wong - The Note Ninja

Delinquencies are still higher than normal. While we are not where we were in 2010, we are still higher than any time prior to the Great Recession.