FBF #623: How to Successfully Invest in Defaulted Second Mortgages and Junior Liens -- with Jim Maffuccio
Real Estate Investing for Cash Flow with Kevin Bupp
Kevin Bupp
4.9 • 675 Ratings
🗓️ 28 July 2023
⏱️ 45 minutes
🧾️ Download transcript
Summary
Today's Flash Back Friday Episode is from Episode #242, which originally aired on August 13, 2019.
In this episode of the Real Estate Investing for Cash Flow podcast, Kevin talks to real estate and note investment expert, Jim Maffuccio. Jim is co-founder and CIO of Aspen funds, an investment fund that provides returns without the volatility of traditional investment options. He is a 30 year old real estate veteran and deeply networked in the secondary mortgage industry.
In the podcast, Jim covers how he bounced from the recession and got into the note business. He talks about secondary mortgages and the profit strategies he and his team employ when capitalizing on note investments. He explains the process of restructuring distressed debt to benefit investors. Kevin and Jim also discuss the dynamics of working remotely and having a headquarters for business.
QUOTES:
“Aspen Funds was started in 2012, really kind of born out of the adversity and the lessons that I learned in what debt can do to you if you’re a small developer, a small fish in a big pond. So that’s what launched me into the mortgage space.”
“If you’re gonna buy one offs, you can be picky about what you buy in terms of the equity profile of the deal that you’re buying. At our scale, we have to be ready to pretty much buy everything..”
‘We’re at about 65% of the time, we are able to modify the loan, keep the loan, get it re-performing and sell it to an income fund or another cash flow buyer. Another 10 or 15% of the time we actually get a settlement..”
“We’ve seen the quantity of deal flow has definitely diminished in the residential mortgage space in general. Most of that is first leads where most of the players have been, and margins have shrunk as price points have increased for mortgages in general.”
“If 10% of our loans, at any given time, stop paying, all the metrics of our fund are set up such that the fund investors don’t miss a blip and our management don’t miss a blip. We have that built into our pricing model.”
HIGHLIGHTS:
8:13 Jim’s background and how he co-founded Aspen Funds
14:11 Buying and selling real estate notes
18:41 Different investor profiles
21:10 What would be an ideal loan acquisition?
27:44 How the landscape changed since the crash
34:25 Business and management structure at Aspen
Recommended Resources:
- Accredited Investors, you’re invited to Join the Cashflow Investor Club to learn how you can partner with Kevin Bupp on current and upcoming opportunities to create passive cash flow and build wealth. Join the Club!
- If you’re a high net worth investor with capital to deploy in the next 12 months and you want to build passive income and wealth with a trusted partner, go to InvestWithKB.com for opportunities to invest in real estate projects alongside Kevin and his team.
- Looking for the ultimate guide to passive investing? Grab a copy of my latest book, The Cash Flow Investor at KevinBupp.com.
- Tap into a wealth of free information on Commercial Real Estate Investing by listening to past podcast episodes at KevinBupp.com/Podcast.
Learn more about Kevin’s investment company and opportunities for Lifetime Cashflow at sunrisecapitalinvestors.com.
Transcript
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| 0:00.0 | Welcome to this week's edition of Flashback Friday. It's your opportunity to get some good review by listening to episodes from the past that Kevin is handpicked to help you along your investment journey. If you like to partner with Kevin and join his team at Sunrise Capital Investors, head to invest with Sunrise.com to learn more. That's |
| 0:22.1 | invest with sunrise.com. Enjoy the show. Now, our guest for this week's show is real estate |
| 0:28.2 | and note investment expert Jim Mafutio. Now, Jim is a 30-year real estate veteran and an expert |
| 0:34.7 | in mortgage notes. He's deeply networked in the secondary mortgage industry |
| 0:38.5 | and is responsible for acquisitions and underwriting as well as relationships with primary |
| 0:43.4 | sources and key vendors. Now, Jim received his degree in civil engineering from Louisiana State |
| 0:48.4 | University back in 1979. Upon graduating, he moved to the West Coast and gained extensive |
| 0:53.4 | project management experience with Exxon. |
| 0:55.9 | From 1986 to present, Jim has been engaged full-time in real estate development and investment. |
| 1:00.8 | In addition, he has overseen several hundred purchase, sale, and or financing transaction, |
| 1:06.2 | and has been a licensed real estate agent since 1985. |
| 1:09.6 | Now, during his real estate career, Jim developed and or rehabed multiple residential projects |
| 1:13.9 | in Southern California, including infill subdivisions, affordable homes, luxury homes, and |
| 1:19.3 | home sites, multifamily, and planned development, such as the Golden Nugget Award-winning |
| 1:23.6 | Traditions Community in Fillmore. |
| 1:25.8 | He has personally executed and or managed every aspect |
| 1:28.4 | of the development process, including site selection and acquisition, project conceptualization |
| 1:33.0 | and design, procurement of entitlements and permits, regulatory and compliance, entity |
| 1:37.5 | structuring and capitalization, construction management, marketing sales, and investor relations. |
| 1:42.4 | Now, in our interview with Jim today, here's what you're going to |
| 1:44.4 | learn. You're going to learn how the hard times during the 2008 recession led Jim into the no |
| 1:49.3 | business. You're going to learn why Jim believes that it's much better to be on the debt side of an |
... |
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