The target asset class in which we invest are distressed non performing residential mortgage notes in first position on single family homes in the U.S. We intend to acquire residential mortgages secured by one home. Asset pricing target is less than 50% of the home’s as-is value. Pricing can vary in range from 40% to 70% depending on the location and the amount of equity (if any) difference between the note balance and home value.
With the overload of nonperforming residential mortgages weighing heavily on the balance sheets of our banks and federal regulations requiring substantial reserves, financial institutions have been unloading nonperforming mortgage notes in large volumes at steep discounts. We see an opportunity to purchase highly discounted notes on properties in key markets, then reposition them for cashflow income, or in the case of a vacant property, foreclose and sell the property at a substantial profit margin.