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Projected ROI: 19%-125%....WHAT?!!!

October 30, 2017

If you've looked at our note portfolio, you've seen these crazy Return-on-Investment (ROI) ranges. But what do they mean and why in the world would you settle for 19% if you could get 125%?  It depends on what you want: quick cash or longterm cashflow. There are at least 5 exit strategies with different ROIs that everyone contemplates on a distressed note. I'll describe each one in a separate blog post. 

 

Here's #1 - You have a mortgage your borrower has stopped paying on and you simply get them to "reinstate" and start paying again.  Here are sample numbers that show how this is done.

 

EXPENSES

$15,000   What we paid for the note

    3,500   Our expenses to get them paying again

$18,500   Our total expense

 

INCOME

 $1,400    Reinstatement fee - Charged as "skin-in-the-game" to make sure they mean to pay again

   2,100    6 months of $350 mortgage payments in the first year (a conservative estimate)

 $3,500    Our total income

 

ROI = $3500/$18,500

 

ROI =  19%

 

That's where our 19% projection comes from.  Up next, how we COULD get 125%!

 

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