Posted by Scot on February 28, 2009 at 11:13:52:
In Reply to: Any advantage or disadvantage declining markets? posted by Joel Rosenberg on February 25, 2009 at 06:35:21:
Advantages seem to be that more sellers are carrying back paper in a tough RE market. So more of a pool of motivated note sellers. I've heard it said as well that there is a lot of $ that has been pulled out of the stock market, and even with the declining RE market, realestate backed paper is seen as safer than stocks right now so these people are looking to buy notes in some cases for investment.
One danger of buying in a high market would seem to be that your equity cushion will soon be erroding. Like buying at the end of 2005, there's got to be a lot of paper out there that is secured now by property that is worth same or less than the originally discounted note.
I'm new to this but that's how it seems to me. It would seem to be the ideal time to buy notes if you can buy them at a good discount relative to the properties CURRENT value.
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