Learn to Profit from Notes with Paper Assets Capital
Our educational materials are set up to help you better understand everything you need to know about buying and selling notes.
What happens when property values drop?
There has been a lot of this over the last several years.
Keep this in mind, you are buying a note that has a specific balance. While it is tied to the property value, the amount of the loan goes down only as the borrower pays off the principal balance. When the property value decreases, the amount of equity a borrower has does decrease. This is one of the reasons why we have discovered the most savvy Investors tend to only invest in notes with a 60 to 70 percent loan to value ratio. This keeps their risk manageable over the life of the loan.
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