Don't miss the latest articles, products, offers, and events. Subscribe today and get four free bonus gifts! Bulk REO investing is BIG business these days and everyone is looking to get involved. This article is going to share with you the difference between a REO real estate owned and a Non Performing Note NPN , and how you can profit from the two as an investor. What is an REO?

An REO Real Estate Owned property has previously been foreclosed on and unsuccessfully sold at a real estate auction, and is presently owned by a bank. Banks are not in the business of managing properties. Typically, you will make money by charging points. In addition to points, you can also use the "spread" strategies to increase your profits when brokering these deals. These are usually private equity funds, hedge funds, real estate investment trusts, or high net worth investors that play in the game who have the cash to buy packages of plus homes.

Then you can re-sell these homes wholesale to secondary buyers for maximum profit. If the borrower cannot qualify for either the two you may want to consider seller financing. What is a Non Performing Note? A Non Performing Note is a mortgage that has not been paid and is in danger of being foreclosed on by the bank or note holder.

How to Profit from Non Performing Notes? The Quick Flip Approach The most desirable option when buying Non Performing Notes is to buy properties at favorable discounts, and sell them quickly for an admirable profit.

With this method, you can buy out the former homeowner who still lives in the property. As the owner of the NPN, you were able to avoid fees attached to foreclosing on the property, and help out the former owner by not placing a deficiency judgment on them, or reporting a foreclosure to their credit report.

Now, you can quickly list the property for sale on the market, or rent the property to a tenant for a long term hold strategy. Reduce the Mortgage Principle Balance Approach Third is to negotiate a deal directly with the homeowner, and bring the property out of its non performing state. This option is the most challenging and will require a team to work out the non performing notes with the homeowners.

You have now written a new, and more affordable, mortgage to benefit the homeowner.

After months of timely payments from your homeowner, your once distressed asset is now a performing note ready to be resold to an investor. Choosing the right niche depends on several things; your short and long term investment goals, how long you can commit your money into an asset before you need to recover those funds typically, it may take longer to get your money back if it is invested in an NPN ; if you prefer to own the paper mortgage note as opposed to the tangible assets deed ; or what your exit strategy entails.

Whichever niches you decide to invest in, just make sure you buy the note or the REO for a price that will allow you to make a handsome return on your investment. Kenny Rushing is a remarkable tale of a life turned around. A resident of Tampa, Florida who is an evolving account of transformation that is simply extraordinary.

Kenny is best known for the moving story of his humble and troubled beginnings, and his phenomenal success as a real estate investor - in spite of the seemingly insurmountable odds he faced.

He is a phenomenally successful real estate mogul, civic leader and devoted philanthropist. His company, Rehabbers Superstore, Inc.

Kenny Rushing is quickly becoming known for the life transforming impact his uncommon wisdom is having on the lives of those who have benefited from his knowledge, wisdom, training and coaching. His goal over the next five years is to teach 1 million people how to achieve financial independence and flip their life through real estate investing.

Kenny Rushing is a living testament that: If KEN Can Do It - So KEN You!

Non-Performing Notes, Loans, and How to Make Money

Copyright All Rights Reserved. Published with Permission of Author. Send This to Friend. Anyone Can Get Started With Bulk REO's - No Cash, Credit. Buying a House with an Attached Buildable Lot. Buying Condemned Homes Secret.

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The Differences Between Performing and Non-Performing Notes

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