San Diego Creative Investors Association

Housing prices, according to Goldman Sachs, Fox Business News and Zillow have dropped more than $2 trillion dollars, nationwide, since the summer of 2022. This equals an equity reduction rate of almost 1% per month. This is of course a nationwide average. Some regions of the country are faring better than this, some worse. However, the important thing to watch is the trend, which is being driven by higher interest rates (bad news for real estate sales) and the fear of a looming recession. The result, not surprisingly, is that the number of foreclosures is growing. However, for every dark cloud, there is often a silver lining. And for Real Estate Investors (REIers) with access to cash--their own money or OPM (Other People’s Money), the coming months and years could portend some very good investing opportunities. As the number of foreclosures increases, we can expect housing prices to continue to decrease as DMF (Distressed, Motivated & Flexible) property owners are forced to make the difficult decision to sell their property, often at bargain basement prices. Smart REIers, who know their markets and are prepared with the appropriate resources, can reap good benefits from a down market.  

The start of the foreclosure process in most states begins with the property owner receiving a NOD (Notice of Default). Depending on the laws in the state in which the property is located, and the for
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A mortgage fund is an investment that pools money from multiple investors to purchase mortgages (also known as trust deeds). This differs from investing in individual trust deeds, in which the investor is secured on a single mortgage. In this article, we are going to explore the various benefits of a mortgage fund and why a fund can be a better option than investing in individual trust deeds.

Diversification

The biggest advantage of a mortgage fund is that it is comprised of a diversified over a pool of mortgages. If one of the mortgages from the fund is paid off, or the borrower defaults on the payments, you continue to earn income from the other mortgages in the portfolio. If the loan is paid off, the manager simply replaces that trust deed with a new one.

For trust deed investors, because you are invested in a single loan, your income is dependent on that one loan. If a loan is paid off or the borrower defaults on the payment, your income stream stops. In the case that the loan is paid off, it is then up to the investor to replace the trust deed with a new one.

 Liquidity

The next advantage is liquidity. When you invest in a mortgage fund, you can decide on the size of your investment and the timing. If you are looking to withdraw your investment, you have the option to submit your request to the fund manager and have it returned (keep in mind most funds have restrictions on how investor capi
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