What is a mortgage investment and how do I get started?
6bits questioned:
I inherited a large amount of money and someone mentioned getting into mortgage investments. I don’t know a thing about them. I already have my Roth IRA and other mutual funds going so I want to try something new but I don’t want to get taken advantage of.
I inherited a large amount of money and someone mentioned getting into mortgage investments. I don’t know a thing about them. I already have my Roth IRA and other mutual funds going so I want to try something new but I don’t want to get taken advantage of.
If that someone means for you to personally buy mortgages, forgetaboutit, too much distress to collect, let the pros handle it. Thornburg Mortgage Company (TMA) is (in my and others opinion) the best managed company in the mortgage business. Year after year, when others were reducing dividends due to reduced earnings, TMA was churning out 10% plus in dividends per year and seeing an increase in their stock price. Now I am getting 14.7% yield on my original investment. For a less risky investment, a mutual fund is the way to go. Vanguard GNMA Fund is among the best (again, in my opinion, and the opinion of many employees and customers of Vanguard). But just don’t take my word for it, do your own research.
Best advice, if you don’t know what you are investing in, no matter how excellent of an investment it is for someone else, it is probably too risky for you.
Mortgage Investing entails buying mortgage notes at a discount from holders of those notes. You get a decent return in the interim and sometimes a windfall when the note is refinanced early.
Takes a lot of work chasing the leads down and you have not diversified your risk if you only own 1-2 notes. Involuntary investment in real estate(through foreclosure) is nearly always a terrible thing.
Stick to things you know or find people you have confidence in who know those things.