Case study #1

Background:

• • Age: 50 ish
  • Occupation: Real estate investor and business owner-entrepreneur
  • Experience: 10+ years in real estate investment
  • Investments in rental real estate, traditional stocks, bond, mutual funds and performing mortgage notes
  • Interested in Cash Flow generation for Roth IRA, and above average yields on investments

• Goals and Motivations:

  • Diversification: Jerry seeks to diversify his investment portfolio beyond traditional real estate assets like rental properties or fix-and-flip projects.
  • Passive Income: He aims to generate a steady stream of passive income that is not dependent on the day-to-day management of properties.
  • Capital Preservation: Jerry values the security of his investments and is focused on preserving his capital while achieving a reasonable rate of return.
  • Long-Term Wealth Building: He is interested in long-term wealth creation and appreciates the potential for substantial returns through mortgage note investments.

• Investment Preferences:

  • Risk Tolerance: Jerry has a moderate risk tolerance. He is open to taking calculated risks but prefers investments with a relatively lower risk profile compared to more speculative ventures.
  • Investment Horizon: He has a long-term investment horizon and is willing to hold mortgage notes for several years to maximize returns.
  • Investment Amount: Jerry has capital available for investment and is comfortable allocating a portion of it to mortgage notes.
  • Geographic Focus: He is open to investing in mortgage notes nationwide, but prefers markets with stable real estate fundamentals and potential for appreciation.

• Key Decision-Making Factors:

  • Due Diligence: Jerry conducts thorough due diligence on potential mortgage note investments, evaluating factors such as the borrower’s payment history, property value, collateral documentation, servicing partner and investment-to-loan value.
  • Risk Assessment: He carefully assesses the risk associated with each investment, considering factors such as the collateral’s condition, market trends, and borrower history.
  • Cash Flow Potential: Jerry values mortgage notes that offer a predictable and consistent cash flow through interest payments from borrowers.
  • Exit Strategy: He considers the exit options available for each investment, including selling the note, foreclosure, or negotiating loan modifications with borrowers.