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Investing in private mortgage companies good alternate to stock market?


I have read that private mortgage companies can secure your principal investment by real estate and deeds and along side provide a higher return that cd accounts.

Assuming that is what they really do. But what about when you want to sell out that stake? Or what if they sell out a book of business to a bank and assume another with worse prospects? The nice thing about public companies is that being public means you have access to information and access to markets to let you buy more of that business or divest (sell) yourself of it when you no longer want to be in it. Banks and insurance companies invest in mortgages, why not try that instead?

Absolutely. But be careful with whom you deal. Private lenders are hard money lenders that will only give a loan on 65% of the value. They lend to any one who has a home. The APR that they lend at is about 14%. The foreclosure rate is very high but they can resell and profit big $$ on the investment since there is at least 35% equity in the home. The loan is secured by a deed of trust and you should get a good return on investment if done correctly.
I am a mortgage banker

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