I have a designed a very useful business model that steps away from the servicing strategies mindset of asset resolution and provided more detailed and personal integrative model to independent investors. I have an aggressive negotiation tactic that has succeeded in higher capital gains for note investors.
We purchase non-performing senior and Jr. Mortgage loans and actively work them through a serious of strategic methods. We work with the borrower to either a.) liquidate the property and sell as an REO to capitalize off the equity in the property, b.) workout a restructure through a loan modification to bring the loan current and capitalize off long term streamline monthly income or sell the performing loan to the secondary market at a higher mark up or c.) work with the delinquent mortgagor to refinance or execute a short payoff. All options lead to gainful returns. We have a full team in place to handle all challenges and skilled consultants to quickly resolve these pools of loans. Most investors continue to invest into purchasing more pools of loans and invest more capital for higher returns. I have provided an example of what the model consists of to understand the returns:
Case Scenario #1
Resolution: 1st Lien Mortgager /Sale/ Highly Litigated
Property: 17315 Collins Ave #2002 Sunny Isles Beach FL 33160
Mortgagor: xxxx
Investor Bidding Price: $560,000.00
Carry Costs: $42,516.00
- Origination Costs: $6,770.00
- On boarding date- 12/17/2020
- Resolution Date- 01/31/2022
Resolution Sale Price: $1,500,000.00
Net Proceeds: $1,334,656.88
Net Profit: $774,656.88
Case Scenario #2
Resolution: 1st Lien Mortgager / REO Sale/ Litigated Mortgagor
Property: 1118 Old Town Road Coram NY 11727
Purchased: 04/21/2021 / Resolved Date: 12/01/2022.
Timeframe: 20 Months
Investor Bidding Price: $209.166.00
Carry Costs: -$43,251.00.
Resolution: Loan Modification
UPB: $447,000.00
- Down-Payment: $8,000.00
- IR: 8.0
- Term: 5 years
- Mature: 30 years
- P/I Payment: $3,108.04
- Payment Date: 01/01/2022
Note Sale: $402,300.00
Net Proceeds: $359,049.00
Net Profit: $149,883.00
Case Scenario #3
Resolution: 1st Lien Mortgager / Buyer Payoff/ Refinance
Property: 81-83 Jersey Street, APT 1&2 Jersey City, NJ 07302
Mortgagor: 81-83 Holdings, LLC
Investor Bidding Price: $1,116,326.00
Carry Costs: $51,016.00
- Origination Costs: $8,716.45
- On boarding date- 04/07/2021
- Resolution Date- 01/28/2022
Resolution Sale Price: $1,550,000.00
Net Proceeds: $1.490.267.55
Net Profit: $373,941.55
Why Invest?
• I previously resolved 100% of previous backer’s loans at a 1.4 multiple. Excluding note sales, we realized a 1.6x multiple. On the loans reperformed and sold we realized a multiple of 1.3x – 1.5x multiple within a very short timeframe. In 2015 to 2021 we achieved 102.3% of revised expected revenue.
I realize where most fail is that:
- All loans are not equal.
- Loan services are process driven not results driven; therefore, you must be creative!
- Don’t be formulaic.
- Get the deal done.
- Foreclosure attorneys are process driven not results driven; therefore, you must actively manage your foreclosures!
- Train your lawyer
- Set up a system to identify and break down the roadblocks.
- Never miss a settlement conference
- Take the high road and always have an offer.
- Always confirm borrower data
- Mods must fit – income tests and LTV tests must make sense or else i) the mod will fail or ii) the secondary market value will be diminished.
- There are trades to be done on unresolved loans.
- REO – Negotiate the first offer and close.
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