“Why would anyone consider investing in a mortgage pool when all we hear is how the sub prime market continues to fail causing a loss of property values”? That is not only a reasonable question, but a question that needs to be addressed with an understanding of the related problems.

Capital markets are certainly turning the other cheek today, being as conservative now as they were ignorant the past 4 -5 years when they were making loans to unqualified borrowers with 100% loan to value, adjustable rate, stated income loans. Unfortunately the barn door was closed too late. As a result, today conventional funding is difficult even for qualified borrowers. Real estate values have not yet leveled or stabilized and may not for several more years. The main problem is affordability. Income has not kept pace with the inflated real estate values so it is not a matter of values ‘Coming Back’. Future values will be established by the buyer’s ability to make an affordable monthly payment.

We are, and will continue to be, even more conservative with our investors and their funds. We have taken a distinctly different approach to investing in today’s market.

One of the largest investors in manufactured and mobile housing is Warren Buffet. Why? Because he is a smart man. Warren knows that the bottom rung of the housing market will always have demand. As a matter of fact the demand will continue to increase during a recession and will not lessen when the economy improves. In this low end housing market there is a less then 1% default rate. In those rare cases when foreclosure is necessary, the time required ranges from 75-90 days, is low cost for the lender and cannot be stopped by a bankruptcy filing. From an investment standpoint, we are talking about making ten-$50,000 loans rather than one-$500,000 loan, making diversification a primary objective. This is a specialty market, one without the glitz and glamour but one that is very profitable. Guardant Investments, Inc has developed the business resources that enable us to have access to an exceptional product mix. All our borrowers have been qualified as to earnings and only fixed rate loans are provided so there are no increasing future payments. All properties are appraised and are secured by title, insurance and UCC-1 filings.

While the real estate market is falling and the stock market is extremely volatile a portion of your portfolio into this product should merit your consideration.

Keith Webb
CEO

This entry was posted on Tuesday, March 4th, 2008 at 11:57 am and is filed under Blogroll, Self Directed IRA, Mortgage Pool, Mortgage Industry Crisis, foreclosure, Investment, Opportunities, California. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.