Steep declines in the stock market have been in the news lately. With that, many investors are nervous (rightfully so) and looking to move their investing capital to more stable investments. But wait! Don’t do anything out of fear! This is prime time for some investors to stoke that fear and say “Hey, come invest with me, it’s safer than the stock market”.
Well, yes, there are plenty of other investment vehicles to use that are less risky than the stock market. But guess what?... They’re still investments, and even if they are not directly impacted by the stock market, they’re certainly going to be indirectly impacted. Mortgage note investing will certainly see many indirect impacts.
Why? Because the ripple effect of people being out of work will impact them being able to pay their mortgages at some point. If you’re blessed enough to be in a position where your job or profession lends itself to teleworking, you may not feel the impact. You will at least still get a paycheck.
Look at the travel industry? I recently cancelled a trip of my own. I had planned this trip back in December last year to travel out of the country this month. Look at all those different jobs that are affected due to closings or stopping services, like cruises, cancelled flights, entertainment venues, sports events, etc.
Some of those people have mortgages! Even if you are an investor and own a rental property, your tenants need to pay their rent. Even some schools are closing in certain states. None of us know how long this spiral of the stock market will continue or when the pandemic will be contained. But as an investor, what you should not do is, make any rash decisions when investing.
I will say, at least one silver lining in this for mortgage note investors is, we have the flexibility as the bank to work out mortgage terms with borrowers. This is something most traditional big banks WON’T do, (or they will make it very difficult) for borrowers to dig out. Aside from money, the major reason many note investors go into this space, is to help borrowers stay in their homes. So, hopefully greed won’t take over and investors won’t see blood in the streets but have some compassion for people.
For more information on notes or if you have notes to sell, reach out to Zee at Awanna Holdings, LLC (571)659-5005. ©Awanna Holdings, LLC (Mar 2020-14), zee@awannarandh.com/www.awannarandh.com