Soft Asset in Real Estate Investing


Soft Assets


Soft assets allow the investor to purchase controlling interest in a Hard Asset, commercial or residential property, without actually owning the physical property or the headaches. There are two basic methods for cashing in on delinquent notes: 1) Short Sale - With a short purchasing the property from a homeowner that is about to face foreclosure. The negotiations take place with the bank that is holding the defaulted mortgage.
Your goal is to negotiate with the bank and get the bank to accept a substantially lower payoff (i.e., a discount), which will then allow you to purchase the home at a price that is far less than the fair market value of the house. 2) Negotiate the purchase of the mortgage (not the property) from the lender - Once you own the mortgage, you have a number of options: a) Restructuring the note b) If you want the property, you can negotiate to obtain a deed in lieu of foreclosure from the homeowner c) Can foreclose on the mortgage yourself. Sell the property at auction. Either way, you bought the soft asset (mortgage), at a significant discount!

Soft Assets