April 8, 2020

Investing in the Paper Market, with Jim Maffuccio

Episode 79:

Jim Maffuccio is a 30-year real estate veteran and an expert in mortgage notes. He is deeply networked in the secondary mortgage industry and is responsible for acquisitions and underwriting as well as relationships with primary sources and key vendors.

Mr. Maffuccio received his degree in civil engineering from Louisiana State University in 1979. Upon graduating, Mr. Maffuccio moved to the West Coast and gained extensive project management experience with Exxon.

From 1986 to present, Mr. Maffuccio has been engaged full time in the real estate development and investment industry. In addition, he has overseen several hundred purchase, sale, and/or financing transactions, and has been a licensed real estate agent since 1985.

During his real estate career, Mr. Maffuccio developed, and/or rehabbed multiple residential projects in Southern California, including infill subdivisions, affordable homes, luxury homes and homesites, multifamily, and planned developments, such as the Gold Nugget Award-winning “Traditions” community in Fillmore. Mr. Maffuccio has personally executed and/or managed every aspect of the development process, including site selection and acquisition, project conceptualization and design, procurement of entitlements and permits, regulatory compliance, entity structuring and capitalization, construction management, marketing, sales, and investor relations.

In 2009, Mr. Maffuccio began investing in mortgage loans, developing key sources and vendors and applying his extensive real estate experience to the note investment space. In 2012 Maffuccio co-founded Aspen Funds, a fund management company focused on mortgage investments.

What you’ll learn about in this episode:

  • How Jim and his team at Aspen Funds leverage relationships to find second mortgages to invest in despite the lack of an established market
  • How the second mortgages Aspen Funds buy average around 20 cents on the dollar, and how they only end up foreclosing on these properties under 2% of the time
  • How Aspen Funds structures their second mortgage deals to get a solid low-to-mid teens return on their investment
  • Why it is possible to foreclose from the second position, and why many people are unaware of that fact
  • How Jim started out as a Southern California-based real estate developer, and how the 2008 market crash forced him to start over using a new business model
  • Why Jim finds his current strategy to be less risky and more profitable than his time as a real estate developer
  • How Aspen Funds offers two different types of passive investment for their clients that offer varying degrees of risk and reward
  • How the “paper” niche is sustainable both in good economic times and in times of struggling markets
  • How to learn more about Aspen Funds and the investment funds they have to offer, and what kinds of investors they look to work with

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