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by Dean Engle

The other day I had a conversation with a new Note Buyer who informed me that after a long career in wholesaling properties, he was going to start investing in buying defaulted mortgages.

The thing that worried me was when he made the following statement. He told me that the reason why he was getting into the business of buying defaulted mortgages was not only for some good cash flow, but also to keep people in their houses.

I do admit that Humanity counts, don’t get me wrong. But…

Don’t lose sight of the forest for the tree.

When Buying Defaulted Mortgages, Don’t Only Focus On One Exit Strategy

It will not work.

You see, you may WANT to pursue A SINGLE exit strategy for the defaulted mortgages you purchase (in this case, he was looking to re-perform all the notes he bought – possibly by modifying them all – and then to hold them for cash flow).

Buying Defaulted Mortgages: Multiple Exit Strategies Are Needed

If you want to be successful in your investments in defaulted mortgages, you need to be like Rafael Nadal.

With an amazing serve, grass court and clay court experience, and a great forehand, Nadal is a well balanced tennis star.

Follow the same approach when buying defaulted mortgages. Learn how to pursue MULTIPLE Note Buying Exit Strategies at once.

Be careful you don’t “stick yourself” with one note buying strategy.

When Buying Defaulted Mortgages, Use Foreclosure As A Tool

When trying to modify a loan, sometimes the only way to get a borrower to cooperate with you is to start the foreclosure action.


The foreclosure action acts like a wake up call to someone who has been missing payments on a regular basis. That in combination with your help in their loan modification may be just what they need to get going to work their way out of their situation.

Don’t be like the investor I talked to. Don’t fall into that trap.

Don’t think that 1 Exit Strategy to your Defaulted Mortgage Buying business is enough to make you successful.

You really need to be a jack of all 5 Exit Strategies to do well in the note buying business.

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