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February 7, 2020

Becoming a “Lienlord” Instead of a Landlord, with Bob Fraser

Episode 138:

Bob Fraser is on a mission to help investors take advantage of one of the most effective and overlooked avenues of real estate investing: residential mortgage notes. As Founder and Principal of Aspen Funds, Bob has purchased more than 1,000 mortgage notes earning double-digit annual returns without the risk and volatility of traditional investing options.

Bob has personal experience with the unpredictable nature of public markets. In the 90’s, he launched a tech company, raised $44 million in venture capital, and grew it to over 300 employees. Then the tech bubble burst and he transitioned to finance and investing, becoming CFO for several organizations and running a hedge fund. In 2012, he met business partner Jim Maffuccio, and the two found an alternative way to invest in real estate without the volatility of traditional options. By purchasing discounted residential real estate notes in the American heartland they discovered a high yield, liquid, asset-secured investment that produced consistently superior returns without all the risk. Better yet? They could work with homeowners to help them stay in their homes. Everyone wins.

With Aspen Funds, Bob uses his 20-plus years of experience in finance to oversee the company’s mortgage note portfolios. A Magna Cum Laude graduate in computer science from U.C. Berkeley and former Ernst & Young Entrepreneur of the Year Award-winner, Bob often makes bold, contrarian predictions about the economy and technology, most of which have already come true.

What you’ll learn about in this episode:

  • How Bob got involved in the housing market during the recovery from the 2008 market crash, and how he got involved in mortgage notes
  • How the current housing market and economic conditions are very different from the conditions that caused the 2008 crash
  • How President Obama’s JOBS Act opened the door to a new level of accessibility for private investment opportunities
  • How Bob’s “lienlord” niche works, and how it allows investors to buy notes for pennies on the dollar and create powerful cash flow
  • Why a second position mortgage isn’t a bad investment and how the default rate of second mortgages during the 2008 crash was just 5%
  • Why investors are often surprised to learn that they can foreclose from second position and how Bob handles a situation where the first mortgage becomes delinquent
  • How Bob transitioned from working as a computer programmer into real estate after the dotcom crash and how working with the right mentors made all the difference
  • Why Bob recommends you read The Tipping Point by Malcolm Gladwell and The Happiness Advantage by Shawn Achor
  • Why if you create a note with a good interest rate, yield, and a solid pay history, groups like Bob’s company Aspen Funds will be happy to buy it from you

Resources:

Bob Fraser’s Recommended Reading List:

Additional resources: