Investing in Non Performing Loans (NPNs)

[peterb]

Rich, a little OT, but you caught the Listing price graph (The little one in the right hand margin of the web page) up-trend some months back as a begining on prices bouncing up. Have you noticed its direction lately?

This thing could be a decent indicator as listing prices are usually influenced by what realtors are seeing at almost ‘real-time’….closing prices before they get added to the data pool for public consumption. Just a thought.

[Anonymous]

Allan, I understand your point, but I think some of your explanations are not clear. The “textbook” method for valuing in investment is all about “future cash flows.” Of course the balance sheet valuation of something plays into this.

It’s impossible to come up with a strict definition of what is speculating vs. investing. There are clearly activities that can be called one or the other, but there’s a lot of grey area in between.

Academic discussions aside, let’s apply a little street smarts: It appears that someone new to this site is peddling an “low risk” investment product that pays a multiple of the current market rate.

If the current return on other safe investments is far less than 5%, then why would someone offer 12%? Why wouldn’t they offer, say, 7% and keep the rest for themselves?

Why would anyone be so generous?

I’ve seen a few fixed income scams in my day, and it seems that the sweet spot for luring in investors/suckers is around 12%-15% return. (Remember Stanford?) It’s a high enough number to get people interested, but not so high to be unbelievable.

Be careful out there.

[Anonymous]

Allan, I understand your point, but I think some of your explanations are not clear. The “textbook” method for valuing in investment is all about “future cash flows.” Of course the balance sheet valuation of something plays into this.

It’s impossible to come up with a strict definition of what is speculating vs. investing. There are clearly activities that can be called one or the other, but there’s a lot of grey area in between.

Academic discussions aside, let’s apply a little street smarts: It appears that someone new to this site is peddling an “low risk” investment product that pays a multiple of the current market rate.

If the current return on other safe investments is far less than 5%, then why would someone offer 12%? Why wouldn’t they offer, say, 7% and keep the rest for themselves?

Why would anyone be so generous?

I’ve seen a few fixed income scams in my day, and it seems that the sweet spot for luring in investors/suckers is around 12%-15% return. (Remember Stanford?) It’s a high enough number to get people interested, but not so high to be unbelievable.

Be careful out there.

[Anonymous]

Allan, I understand your point, but I think some of your explanations are not clear. The “textbook” method for valuing in investment is all about “future cash flows.” Of course the balance sheet valuation of something plays into this.

It’s impossible to come up with a strict definition of what is speculating vs. investing. There are clearly activities that can be called one or the other, but there’s a lot of grey area in between.

Academic discussions aside, let’s apply a little street smarts: It appears that someone new to this site is peddling an “low risk” investment product that pays a multiple of the current market rate.

If the current return on other safe investments is far less than 5%, then why would someone offer 12%? Why wouldn’t they offer, say, 7% and keep the rest for themselves?

Why would anyone be so generous?

I’ve seen a few fixed income scams in my day, and it seems that the sweet spot for luring in investors/suckers is around 12%-15% return. (Remember Stanford?) It’s a high enough number to get people interested, but not so high to be unbelievable.

Be careful out there.

[Anonymous]

Allan, I understand your point, but I think some of your explanations are not clear. The “textbook” method for valuing in investment is all about “future cash flows.” Of course the balance sheet valuation of something plays into this.

It’s impossible to come up with a strict definition of what is speculating vs. investing. There are clearly activities that can be called one or the other, but there’s a lot of grey area in between.

Academic discussions aside, let’s apply a little street smarts: It appears that someone new to this site is peddling an “low risk” investment product that pays a multiple of the current market rate.

If the current return on other safe investments is far less than 5%, then why would someone offer 12%? Why wouldn’t they offer, say, 7% and keep the rest for themselves?

Why would anyone be so generous?

I’ve seen a few fixed income scams in my day, and it seems that the sweet spot for luring in investors/suckers is around 12%-15% return. (Remember Stanford?) It’s a high enough number to get people interested, but not so high to be unbelievable.

Be careful out there.

[Anonymous]

Allan, I understand your point, but I think some of your explanations are not clear. The “textbook” method for valuing in investment is all about “future cash flows.” Of course the balance sheet valuation of something plays into this.

It’s impossible to come up with a strict definition of what is speculating vs. investing. There are clearly activities that can be called one or the other, but there’s a lot of grey area in between.

Academic discussions aside, let’s apply a little street smarts: It appears that someone new to this site is peddling an “low risk” investment product that pays a multiple of the current market rate.

If the current return on other safe investments is far less than 5%, then why would someone offer 12%? Why wouldn’t they offer, say, 7% and keep the rest for themselves?

Why would anyone be so generous?

I’ve seen a few fixed income scams in my day, and it seems that the sweet spot for luring in investors/suckers is around 12%-15% return. (Remember Stanford?) It’s a high enough number to get people interested, but not so high to be unbelievable.

Be careful out there.

[justdoitstewart]

[quote=pri_dk]Allan, I understand your point, but I think some of your explanations are not clear. The “textbook” method for valuing in investment is all about “future cash flows.” Of course the balance sheet valuation of something plays into this.

It’s impossible to come up with a strict definition of what is speculating vs. investing. There are clearly activities that can be called one or the other, but there’s a lot of grey area in between.

Academic discussions aside, let’s apply a little street smarts: It appears that someone new to this site is peddling an “low risk” investment product that pays a multiple of the current market rate.

If the current return on other safe investments is far less than 5%, then why would someone offer 12%? Why wouldn’t they offer, say, 7% and keep the rest for themselves?

Why would anyone be so generous?

I’ve seen a few fixed income scams in my day, and it seems that the sweet spot for luring in investors/suckers is around 12%-15% return. (Remember Stanford?) It’s a high enough number to get people interested, but not so high to be unbelievable.

Be careful out there.[/quote]

I’m not following you here, who’s peddling anything? Seems like a good discussion to me about 1. buying non performing loans from the banks 2. and can residential real estate be considered an investment

I think it’s pretty crazy to say residential can’t be treated as an investment, but like the other posters said, the word is up for interpretation.

[justdoitstewart]

[quote=pri_dk]Allan, I understand your point, but I think some of your explanations are not clear. The “textbook” method for valuing in investment is all about “future cash flows.” Of course the balance sheet valuation of something plays into this.

It’s impossible to come up with a strict definition of what is speculating vs. investing. There are clearly activities that can be called one or the other, but there’s a lot of grey area in between.

Academic discussions aside, let’s apply a little street smarts: It appears that someone new to this site is peddling an “low risk” investment product that pays a multiple of the current market rate.

If the current return on other safe investments is far less than 5%, then why would someone offer 12%? Why wouldn’t they offer, say, 7% and keep the rest for themselves?

Why would anyone be so generous?

I’ve seen a few fixed income scams in my day, and it seems that the sweet spot for luring in investors/suckers is around 12%-15% return. (Remember Stanford?) It’s a high enough number to get people interested, but not so high to be unbelievable.

Be careful out there.[/quote]

I’m not following you here, who’s peddling anything? Seems like a good discussion to me about 1. buying non performing loans from the banks 2. and can residential real estate be considered an investment

I think it’s pretty crazy to say residential can’t be treated as an investment, but like the other posters said, the word is up for interpretation.

[justdoitstewart]

[quote=pri_dk]Allan, I understand your point, but I think some of your explanations are not clear. The “textbook” method for valuing in investment is all about “future cash flows.” Of course the balance sheet valuation of something plays into this.

It’s impossible to come up with a strict definition of what is speculating vs. investing. There are clearly activities that can be called one or the other, but there’s a lot of grey area in between.

Academic discussions aside, let’s apply a little street smarts: It appears that someone new to this site is peddling an “low risk” investment product that pays a multiple of the current market rate.

If the current return on other safe investments is far less than 5%, then why would someone offer 12%? Why wouldn’t they offer, say, 7% and keep the rest for themselves?

Why would anyone be so generous?

I’ve seen a few fixed income scams in my day, and it seems that the sweet spot for luring in investors/suckers is around 12%-15% return. (Remember Stanford?) It’s a high enough number to get people interested, but not so high to be unbelievable.

Be careful out there.[/quote]

I’m not following you here, who’s peddling anything? Seems like a good discussion to me about 1. buying non performing loans from the banks 2. and can residential real estate be considered an investment

I think it’s pretty crazy to say residential can’t be treated as an investment, but like the other posters said, the word is up for interpretation.

[justdoitstewart]

[quote=pri_dk]Allan, I understand your point, but I think some of your explanations are not clear. The “textbook” method for valuing in investment is all about “future cash flows.” Of course the balance sheet valuation of something plays into this.

It’s impossible to come up with a strict definition of what is speculating vs. investing. There are clearly activities that can be called one or the other, but there’s a lot of grey area in between.

Academic discussions aside, let’s apply a little street smarts: It appears that someone new to this site is peddling an “low risk” investment product that pays a multiple of the current market rate.

If the current return on other safe investments is far less than 5%, then why would someone offer 12%? Why wouldn’t they offer, say, 7% and keep the rest for themselves?

Why would anyone be so generous?

I’ve seen a few fixed income scams in my day, and it seems that the sweet spot for luring in investors/suckers is around 12%-15% return. (Remember Stanford?) It’s a high enough number to get people interested, but not so high to be unbelievable.

Be careful out there.[/quote]

I’m not following you here, who’s peddling anything? Seems like a good discussion to me about 1. buying non performing loans from the banks 2. and can residential real estate be considered an investment

I think it’s pretty crazy to say residential can’t be treated as an investment, but like the other posters said, the word is up for interpretation.

[justdoitstewart]

[quote=pri_dk]Allan, I understand your point, but I think some of your explanations are not clear. The “textbook” method for valuing in investment is all about “future cash flows.” Of course the balance sheet valuation of something plays into this.

It’s impossible to come up with a strict definition of what is speculating vs. investing. There are clearly activities that can be called one or the other, but there’s a lot of grey area in between.

Academic discussions aside, let’s apply a little street smarts: It appears that someone new to this site is peddling an “low risk” investment product that pays a multiple of the current market rate.

If the current return on other safe investments is far less than 5%, then why would someone offer 12%? Why wouldn’t they offer, say, 7% and keep the rest for themselves?

Why would anyone be so generous?

I’ve seen a few fixed income scams in my day, and it seems that the sweet spot for luring in investors/suckers is around 12%-15% return. (Remember Stanford?) It’s a high enough number to get people interested, but not so high to be unbelievable.

Be careful out there.[/quote]

I’m not following you here, who’s peddling anything? Seems like a good discussion to me about 1. buying non performing loans from the banks 2. and can residential real estate be considered an investment

I think it’s pretty crazy to say residential can’t be treated as an investment, but like the other posters said, the word is up for interpretation.

[clearfund]

Gentlemen – I bowed out of this conversation as it veered way off track from the initial topic of purchasing Non-Performing Loans to a philisophical discussion of investing vs speculating and whether real estate is a worthy endeavor (now I am hesitant to call it an investment…). As a fund manager I still have a job to do (and hopefully keep). My paid content writer was fired last year.

Whether anyone wants to, or chooses not to, invest in real estate is fine. This is why there are investments in gold, emerging markets, treasuries, etc with risk, return, and fundamentals all across the spectrum.

I believe that if one chooses to dive into commercial real estate, now is the time that opportunities will begin to surface, albeit not every transaction is worthy.

In today’s environment one of the best avenues to properties with distressed ownership is via the direct bank channel (note I stated distressed ownership vs. distressed property…very different). Now working your way to these loans and a real discount/pricing from the lender is 1,000x more difficult than any video promoter will let on. Banks don’t want to accept reality and take the hit any more than the former owner did.

Thus, if this thread can get back on topic via anyone with tangible experience acquiring notes as a principal, taking the property through foreclosure dodging lawsuits/bankruptcy filings, and repositioning the asset into a profitable cash flowing deal, I’d love to hear your experiences.

[clearfund]

Gentlemen – I bowed out of this conversation as it veered way off track from the initial topic of purchasing Non-Performing Loans to a philisophical discussion of investing vs speculating and whether real estate is a worthy endeavor (now I am hesitant to call it an investment…). As a fund manager I still have a job to do (and hopefully keep). My paid content writer was fired last year.

Whether anyone wants to, or chooses not to, invest in real estate is fine. This is why there are investments in gold, emerging markets, treasuries, etc with risk, return, and fundamentals all across the spectrum.

I believe that if one chooses to dive into commercial real estate, now is the time that opportunities will begin to surface, albeit not every transaction is worthy.

In today’s environment one of the best avenues to properties with distressed ownership is via the direct bank channel (note I stated distressed ownership vs. distressed property…very different). Now working your way to these loans and a real discount/pricing from the lender is 1,000x more difficult than any video promoter will let on. Banks don’t want to accept reality and take the hit any more than the former owner did.

Thus, if this thread can get back on topic via anyone with tangible experience acquiring notes as a principal, taking the property through foreclosure dodging lawsuits/bankruptcy filings, and repositioning the asset into a profitable cash flowing deal, I’d love to hear your experiences.

[clearfund]

Gentlemen – I bowed out of this conversation as it veered way off track from the initial topic of purchasing Non-Performing Loans to a philisophical discussion of investing vs speculating and whether real estate is a worthy endeavor (now I am hesitant to call it an investment…). As a fund manager I still have a job to do (and hopefully keep). My paid content writer was fired last year.

Whether anyone wants to, or chooses not to, invest in real estate is fine. This is why there are investments in gold, emerging markets, treasuries, etc with risk, return, and fundamentals all across the spectrum.

I believe that if one chooses to dive into commercial real estate, now is the time that opportunities will begin to surface, albeit not every transaction is worthy.

In today’s environment one of the best avenues to properties with distressed ownership is via the direct bank channel (note I stated distressed ownership vs. distressed property…very different). Now working your way to these loans and a real discount/pricing from the lender is 1,000x more difficult than any video promoter will let on. Banks don’t want to accept reality and take the hit any more than the former owner did.

Thus, if this thread can get back on topic via anyone with tangible experience acquiring notes as a principal, taking the property through foreclosure dodging lawsuits/bankruptcy filings, and repositioning the asset into a profitable cash flowing deal, I’d love to hear your experiences.

[clearfund]

Gentlemen – I bowed out of this conversation as it veered way off track from the initial topic of purchasing Non-Performing Loans to a philisophical discussion of investing vs speculating and whether real estate is a worthy endeavor (now I am hesitant to call it an investment…). As a fund manager I still have a job to do (and hopefully keep). My paid content writer was fired last year.

Whether anyone wants to, or chooses not to, invest in real estate is fine. This is why there are investments in gold, emerging markets, treasuries, etc with risk, return, and fundamentals all across the spectrum.

I believe that if one chooses to dive into commercial real estate, now is the time that opportunities will begin to surface, albeit not every transaction is worthy.

In today’s environment one of the best avenues to properties with distressed ownership is via the direct bank channel (note I stated distressed ownership vs. distressed property…very different). Now working your way to these loans and a real discount/pricing from the lender is 1,000x more difficult than any video promoter will let on. Banks don’t want to accept reality and take the hit any more than the former owner did.

Thus, if this thread can get back on topic via anyone with tangible experience acquiring notes as a principal, taking the property through foreclosure dodging lawsuits/bankruptcy filings, and repositioning the asset into a profitable cash flowing deal, I’d love to hear your experiences.

[Author]

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