Hey friend! I wanted to share an intriguing case study from my podcast about how a mortgage note investment ended up rescuing children from an unsafe home. When I purchased this performing contract for deed in Michigan back in 2019, I partnered with a long-time friend to fund the deal. The initial numbers looked solid - there was plenty of equity and the yield was strong at 13%. However, about a year later the borrower fell behind after struggling with drug addiction. We tried working with her, even doing a loan modification, but ultimately had to move forward with forfeiture when she stopped paying. It took a painfully long time to get the property back, but once we finally did the ending brought an unexpected surprise... As soon as child protective services entered the home, they immediately placed a call to remove the children from the absolutely appalling living conditions inside. So while it took 2.5 years and I learned some hard lessons along the way, I'm proud that our investment played a role in getting those kids out of an unsafe place. And financially, through the eventual profitable sale of the rehabbed home plus a solid insurance payout, we still managed to make this a "win win win" - for me, my investor, and most importantly those children. Let me know if you have any questions! I'm happy to chat more about this deal or joining one of my funds as a passive note investor.
In this episode, you will be able to:
- Discover the success of a real-life mortgage note investment case study and learn valuable insights for your own investments.
- Explore the positive social impact of mortgage note investing and how it can contribute to your financial goals while making a difference.
- Uncover effective mortgage note investment strategies that can elevate your real estate portfolio and financial returns.
- Learn how to effectively handle property blight in real estate investing, ensuring your investments remain profitable and sustainable.
- Gain insights into navigating insurance claims for real estate investments, safeguarding your assets and maximizing returns.
Our special guest is Justin Bogard, Jay Redding, Chris Seveney
Featured on this episode of the From Adversity to Abundance Podcast are Jamie Bateman, Justin Bogard, Jay Redding, and Chris Seveney. Jamie Bateman, an accomplished real estate investor, brings practical insights into overcoming obstacles in the industry. Justin Bogard's expertise in mortgage note investing, alongside Jay Redding's strategic real estate acumen, and Chris Seveney's seasoned approach to investments, collectively offer a comprehensive understanding of navigating challenges in real estate. Their case study provides an in-depth exploration of real-life investment scenarios, delivering valuable lessons and strategic considerations for investors seeking to thrive in the real estate market.
The key moments in this episode are:
00:00:00 - Mortgage Note Investing Case Study Introduction
00:01:21 - Impact of Mortgage Note Investing
00:09:19 - Loan Modification and Communication with Borrower
00:11:02 - Value of Loan Modification
00:13:47 - Alternative Approaches to Loan Modification
00:14:52 - Loan Modification and Foreclosure
00:18:24 - Dealing with Blight
00:21:49 - Court Proceedings and Redemption Period
00:23:06 - Property Cleanout Costs
00:26:37 - Impact of Drugs on Property
00:29:05 - Impact of Generosity and Premature Decisions
00:30:27 - Unexpected Insurance Payout
00:33:01 - Lengthy Investment Timeline
00:34:37 - Learning from Investments
00:36:20 - Communication with Investors
