Mortgage note investments are an exceptional way to build wealth and protect your capital by investing in a real estate secured investment. However, like most investments, there are risks associated with mortgage note investments. By investing in one of our no junk fee mortgage funds, with the strategy of having multiple notes pooled together, investors can eliminate the downside of non-performance of a specific loan. This reduces risk and increases the likelihood of achieving his or her investment objectives.
A mortgage note investment is created when an investor purchases a share of a mortgage note fund, which in turn owns a promissory note, and mortgage on real property. At which time, the fund becomes “the bank” and holds a legally negotiable instrument that is secured by real property.
The mortgage lending process is characterized by the arranging of a loan to a borrower who executed a promissory note and mortgage secured (recorded against) the real property. The promissory note is the borrower’s promise to repay the loan, and the mortgage is a security instrument (lien) recorded against the borrower’s real estate. Mortgage notes are saleable instruments that are regularly sold in the secondary mortgage market.
The benefit to the lender and private investor is that these have higher interest rates, typically 10% to 13%. Private mortgage loan opportunities are great for investors where double-digit returns can be realized from these very attractive and secured investments. The risk associated with these loans is very acceptable since the amount of protective equity in the property provides protection to the investor against payment defaults, market fluctuations, and property devaluation. Protective equity is what provides security to the mortgage..
Since the amount of protective equity directly relates to the security of the mortgage note, it is fair to say that the primary risk to the investor relies on the amount of protective equity remaining in the property.
If you are an accredited investor and seeking attractive returns, please contact us to learn more about available investment opportunities. For those new to mortgage note investing, mortgage note investments are a great alternative to purchasing investment real estate.
If you are a private investor looking to invest in real estate, but don’t possess the know-how or time required to acquire investment properties, mortgage note investments are an excellent alternative. Mortgage note investments can offer attractive annual returns through a more passive investment vehicle. Every mortgage note offer potentially high annual yields that can sometimes outperform the ROI achieved from investment property ownership. Our management team has over 30 years of combined experience in the real estate industry, arranging private money loans and working with private investors. We have worked with multitude of investors and have enjoyed building long-standing relationships.
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