Have you been looking for more private mortgage money?
Great news is emerging for those real estate investors who having been searching for more capital…
Hard money and transactional lenders have been promoting their services more than ever recently and even conventional mortgage lenders and banks have begun to offer more incentives to borrowers to take out new loans.
Of course some real estate investing pros just prefer private mortgage lenders for the lower interest and fees, speed, control and ease of doing business. If that’s you then thanks to Ben Bernanke and the Fed it could be getting a lot easier for you this week.
Bloomberg reported this week that mortgage REITs are losing money, losing investors and losing returns in response to the Federal Reserve plan to buy up mortgage debt and the number of homeowners refinancing thanks to low mortgage rates and the $25 billion mortgage settlement.
Investing in mortgages may still be a great investment but giant REITs are bleeding investors due to a drop in returns and are showing investors how investing in publicly traded stocks is incredibly risky and volatile compared to direct investment in real estate, mortgage notes or private partnerships.
It doesn’t matter if you are up 99% in a day if you can lose it all tomorrow. Fortunately this isn’t an issue private lenders need to worry about with investing directly in mortgage notes or flipping houses for that matter.
According to the Bloomberg report annual dividend yields on these big home loan REITs have been around 13%. That’s not bad, and at least far out beats the S&P 500 performance.
Maybe you don’t want to giveaway those types of returns but at least you as a real estate investor can offer a much better investment vehicle which will be safer and more consistent.
Strike on this opportunity and close more private lenders. Don’t just build great presentation materials showing the strength and track record of what you are offering but contrast it with the downside of investing elsewhere too.