Andrew Reichert and Dan Croce sit down with Chris Seveney, an experienced investor who buys distressed mortgage notes. Chris shares his unique approach to impact investing - instead of evicting borrowers behind on their payments, he works to keep them in their homes. He buys loans from banks and hedge funds at a discounted rate and uses a servicing company to handle payments and negotiate new payment plans with borrowers. They delve into buying and selling non-performing loans, with companies acting as middlemen for banks to divest them. Chris also discusses how his company started with a small investment and now manages over $10 million by focusing on distressed debt and providing win-win situations for borrowers by helping them refinance at lower rates.
Join us as we explore Chris's impactful investment strategy that helps people stay in their homes while generating profits for investors.
[00:01 - 07:39] Opening Segment
Welcoming Chris to the show
Chris discusses impact investing through distressed mortgage notes
Buying loans from banks and hedge funds for borrowers behind on payments
Keeping people in their homes can have a significant effect on wealth creation and property values
Banks sell loans to hedge funds in bulk, who then pick apart the ones they want to keep and sell
[07:40 - 13:16] Investing in Non-Performing Loans: A Win-Win Strategy for Investors and Borrowers
Companies can help banks sell non-performing loans
Whole Loan Trader acts as a broker for banks to divest loans
Prices for non-performing loans range from 40 to 70 cents depending on state laws
Loans are typically bought based on spreadsheet data and indicative bids
The foreclosure rate is low, and it's more profitable to keep borrowers in their homes
Loans are typically held for two to three years before being sold back on the secondary market
[13:17 - 20:45] Turning $25,000 Into a Successful Note Investment Company
The company works with borrowers to refinance at a better rate
The benefits of having multiple exit strategies
The company manages two funds: Regulation A+ and Regulation D 506(c)
[20:46 - 28:19] Diversifying into Other Asset Classes
Chris' vision is to stay within the $150-$250 million range with ten employees
An analytical approach to looking at every loan on a case-by-case basis
Foreclosure situations can arise due to a borrower passing away or being combative
[28:20 - 33:48] Closing Segment
Biggest win: overcoming failures and building for the U.S. Army
Chris' favorite movies, shows, and food
Current growth edge: being able to step away from the business
See the links below to connect with Chris!
Quotes:
"Being able to keep somebody in their home can have a significant impact on that individual, their wealth creation, and the neighborhood property values." - Chris Seveney
"Note investing isn't a net sum zero game, there can be win-win situations where you keep the home and it's better for us." - Chris Seveney
Podcast: Creating Wealth Simplified
Website: https://invest.7einvestments.com/
LinkedIn: https://www.linkedin.com/in/christopherseveney/
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