HEDGE FUNDS are now, and have been for a number of years, the biggest buyers of real estate notes. And if you don’t know how to deal in this market and how to approach hedge fund managers directly– in a most PROFESSIONAL and CREDIBLE manner– you will certainly miss out on massive rewards over the next 5 years.
You see, hedge funds are purchasing $trillions of non-performing loans at an extremely prolific rate from banks for as low as 15% of original book value, as these loans are devalued by the banks to a small fraction of what they paid for them, written off and then sold. The banks’ very survival depends on the divesture of these “toxic assets”. These bad loans are being liquidated at well below “fire sale” prices because they have choked off the banks’ abilities to make new loans and conduct new business.
HEDGE FUNDS are THE major buyers of these “bad” loans. (Fund managers do their homework and buy loans they feel can be made back into “performing” through various methods.) To say that this has revolutionized the real estate note industry has to be the understatement of the last two or three centuries. TO SPELL THIS OUT another way, we, as individual note investors or brokers, are NO LONGER confined to dealing only with “mom and pop” individual sellers.
That’s because the “privately held” real estate note market has now been widened exponentially to include hedge funds and private equity firms who are now buying up all of these vast pools of mortgages that USED to be bank-held “conventional” loans. Up until now, these loans have been off limits– “untouchable”– for private investors. But that’s all changed. They’ve now been transformed into PRIVATELY-HELD loans (as opposed to bank owned) , thereby widening our net (as private investors and operators) by almost incomprehensible factors.
As a result, the big players in this game are now dealing “professional to professional”. If you’re a “little guy”, you can learn to operate very effectively in this space and approach these hedge fund managers directly with the right training and know-how. Believe me, it will not only be well worth your time and effort; it will dramatically alter your financial future for the better forevermore (and that’s putting it very lightly).
You may be excited to know that hedge funds buy these loans “by the case” and sell them “by the bottle”. Meaning, they will sell “one-offs” (as well as pools) to private investors like you and me. You can either turn a quick profit by reselling the note or buy it for your own portfolio. You can buy and broker pools of loans as well.
To operate in this space, what YOU need to do is hone your approach to work effectively with these fund managers– credibility being ultra-important here. You never get a second chance to make a first impression. You must not waste their time AND you have to deliver on what you say you can do.
Mind you, you do NOT need to use your own money to facilitate transactions and turn enormous profits (funding can be sourced out and you can rather easily find the money by laying the right groundwork), but you need to approach this PROPERLY (as I like to say “with your head screwed on right”) . Respect the fact that these fund managers are the best and the brightest and can detect a phony a mile away– so, there is NO room for error. That said, the skills and contacts you need CAN be learned and developed rather readily; you just have to have the right people and resources behind you.
The rewards are massive if you do this right. This is a vast, enormous market and it’s going to make many people– including a sizeable number who read this blog– very wealthy over the next 5 years.