The Risk/Return Spectrum: Investing in a Mortgage Bank
Posted To: The Garrett Watts Report
What is the risk-return spectrum ? It is the relationship between the amount of return gained on an investment and the amount of risk undertaken in that investment. I was chatting with a well known mortgage banker that is exploring starting a de nova mortgage bank. He has a history of developing and operating very successful mortgage banks in the past. His companies have always been high performers and shareholders have always generated sizable returns. He doesn’t need to do it again, but believes there are huge opportunity today to own and operate a mortgage bank because of the severe barriers to entry and shrinking competition. We agree, but with a caveat. It takes capital, experience management, a solid business plan and an ability to execute. As we all know execution is where the...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.