Article - "Mortgage Investments Can Offer 10% to 15% Tax-Free Returns with Low Risk."
Privately Held Mortgage Investments Offer 10% to 15% Tax-Free Returns with Low Risk When Structured Properly.
Buyers of privately held mortgage notes have long been achieving 10% to 15% returns. However, for most people, investing in privately held mortgages is not easy. Finding good quality, low risk notes is a challenge, collecting payments is a hassle; and the worry of home-owner defaults have made this form of investment unattractive for normal investors. Now each one of these issues have been addressed with a new private mortgage investment strategy created by Mortgage Buyers Inc. Funds from an existing individual IRA or a profit sharing plan may be used to invest to generate tax-free returns.
With the downturn in the economy and 50% loss in stock portfolios retirement plans are in jeopardy, investing in privately held mortgages offers an alternative to the stock market. "Earning 10% to 15% tax free by buying a privately held mortgage in a Self Directed IRA without the normal risks and complications is possible.", says Jerry D. Remien, MBA, CMI and CEO of Mortgage Buyers, Inc, "Buying a low risk mortgage note is one of the keys. By using a turn-key process, our clients are earning above average returns while keeping safety of principal and returns as the program's primary goal. Setting up your self-directed IRA and collecting payments are taken care of with one low annual fee. Profits can quickly be reinvested in a mutual fund of your choosing. With low leverage notes, the mortgage retains its value and property can be easily sold for full recovery of your investment should the need arise."
What is the risk in buying privately held mortgages?
Low risk is achieved with the following steps.
- Keep the investment-to-value at or below 50% of the current property value
- Evaluate the buyer's down payment at the time of the sale. Having "skin in the game" is a show of commitment to making the mortgage payments and pride of ownership
- Review the payor's record of financial responsibility by running a credit check on the individual(s), which provides a quantitative analysis of how they perform on their financial obligations
- Order a current appraisal of the property to verify its current value
- Order a lender's title insurance policy from the local title company to be certain that the mortgage lien is in first position in the event of default. This insures that you will be in a first lien position should default occur
- Purchase payments at a discount to insure the required rate of return
What happens if the mortgage goes into default and they stop making the payments?
To simplify the process, a foreclosure service handles the foreclosure from start to finish. The fees for this service are added to the principal balance due and therefore recouped, in most cases, when the foreclosure sale is finalized.
The same program of low risk 10% to 15% returns is available in a Traditional Non-IRA investment as well.
To learn more about privately held mortgages and how to structure them properly contact Jerry Remien at Mortgage Buyers, Inc. 800.949.0888.