KPA Wealth Weekly: Navigating Market Waves with Expert Insights and Strategies

Welcome to KPA Wealth Weekly, your source for the latest in financial and mortgage markets. Each week, we share economic updates, rate trends, and tips to build a strong financial foundation.

Let’s dive into this week’s highlights!

• Mortgage Interest Rates

• Stock Market Update and Trends

• Financial Numbers This Week

• Real Estate Market Update: Signs of Life for Buyers?

• This Week’s Wealth Strategy

Mortgage Interest Rates

Stock Market Update and Trends

Fed to the rescue? Mid-week, the Federal Reserve took center stage. As widely expected, the Fed held interest rates steady at its policy meeting​, after having cut rates late last year when inflation cooled. Fed Chair Jerome Powell tried to thread the needle: he noted the economy remains solid, but admitted forecasting is tough with so many wild cards in play​. In fact, the Fed downgraded its growth outlook for 2025 (now just 1.7% GDP growth vs 2.1% prior) citing “unusually elevated” uncertainty. Translation: they’re as unsure about what comes next as anybody. The central bank isn’t slamming on the brakes anymore, but it’s not exactly hitting the gas either – call it a monetary holding pattern for now.

Key Takeaway: Uncertainty is the same as fear. We expect stocks to make another leg downward.

Notable Earnings This Week:

This week’s earnings reports presented a mix of outcomes across various industries. Here's a quick summary:

• Nike (NKE): The company's shares fell by 5% after it predicted a significant drop in future revenue, attributing the downturn to geopolitical tensions, new tariffs, and diminishing consumer confidence.

• FedEx (FDX): FedEx's stock declined by about 6% following its announcement that future revenues are expected to remain flat and it is reducing its profit outlook due to concerns about global demand and the impact of trade tensions.

• Lennar (LEN): Shares dropped 4% as the company adjusted its forecast downwards for new orders and prices, citing high mortgage rates and inflation pressures that are making housing less affordable.

• Boeing (BA): Contrarily, Boeing's stock rose roughly 5% after winning a major Pentagon contract for fighter jets worth over $20 billion, providing a boost to the company and the Dow index amidst a tough week for industrial stocks.

• Tech Sector: Technology stocks saw a rebound later in the week, led by gains in major companies like Apple and Microsoft. However, Micron (MU) experienced an 8% drop due to ongoing issues with oversupply and demand in the chip industry. Meanwhile, Tesla (TSLA) saw a modest recovery, though it's still significantly down year-to-date.

These varied results highlight how forward guidance and broader market sentiments can heavily influence investor reactions, even when companies meet or exceed earnings expectations.

Financial News This Week

Here’s a concise summary of this week’s financial news:

Labor Market:

Employment Growth:

• In February 2025, the U.S. economy added 151,000 jobs, aligning with the average pace of recent months but still showing signs of a cooling labor market due to various economic uncertainties and policy changes.

• The unemployment rate increased slightly to 4.1% from 4.0% in January, indicating a minor uptick in joblessness​

Sector Highlights:

• Healthcare and Social Assistance: This sector continued to be a major driver of employment, adding 52,000 jobs in February, reflecting ongoing strength​

• Federal Government: Faced a reduction of 10,000 jobs, likely influenced by policy shifts and budget constraints​

Manufacturing:

• ISM Manufacturing PMI: The index was at 50.3 for February, suggesting a marginal expansion in manufacturing activities​

• Core Business Goods Orders: There's no specific update for this week, but manufacturing employment saw an increase with 10,000 new jobs added, despite broader challenges in the sector.

Trade and Tariffs:

• No new tariffs were reported this week. However, existing trade dynamics and policy settings continue to impact various sectors of the economy, including manufacturing and technology.

Monetary Policy:

• Given the mixed signals from the labor market and slight increases in unemployment, there is ongoing speculation about the Federal Reserve's next moves, particularly with regard to interest rates. The market's anticipation of monetary policy adjustments remains a focal point for economic forecasts

Real Estate: Buy or Sell?

Real Estate Market Update: Signs of Life for Buyers?

The housing market is showing nuanced dynamics as of mid-March 2025, with various factors influencing both buyer and seller behaviors.

Latest Developments:

📉 Home Sales Dynamics: There's been a slight adjustment in home sales and inventory levels. While no specific data post-March 16, 2025, was mentioned, the broader trends from early March suggest that mortgage rates are stabilizing, which could influence sales activity moving forward. The average 30-year fixed-rate mortgage has been reported to hover around 6.5%​.

🏡 Inventory and Listings: The inventory of homes has shown a slight increase, which could mean more options for buyers. This aligns with national trends indicating a rise in the number of homes available, potentially easing the competition among buyers and stabilizing prices​

📈 Pricing Trends: Home prices are expected to see modest increases, with some predictions suggesting around a 3% rise throughout 2025. This is a slowdown compared to the rapid price increases in previous years, suggesting a potentially less intimidating market for buyers​.

💡 Market Outlook: While the market is not fully a buyer's market yet, the trends indicate a move towards more balance between buyers and sellers. The stabilization of mortgage rates and a slight increase in inventory are contributing to this shift. Buyers might find better conditions now than in recent months, but should remain cautious and strategic in their decisions​.

🏆 Bottom Line: The real estate market as of late March 2025 suggests a gradual shift towards more favorable conditions for buyers. However, the market still presents challenges, such as relatively high mortgage rates and a modest increase in home prices. Buyers should approach the market with careful planning and consideration of the latest trends to make informed decisions.

This Week’s Wealth Strategy

Tired of the same old financial advice? Below is a unique, non-mainstream wealth-building strategy tailored for entrepreneurs, realtors, and real estate investors (ages 21–50). Each strategy is actionable and designed for meaningful returns or long-term wealth. We break down how to implement them step-by-step, who they’re best for, what you need to get started, and the potential payoff. These aren’t your typical stock-and-bond tips – they’re fresh ideas you won’t hear from traditional finance gurus.

Strategy: “Be the Bank” with Mortgage Note Investing – Profit Like a Lender, Not a Landlord

Overview: Mortgage note investing means buying the debt (the notes) secured by real estate instead of buying the property itself. In other words, you step into the bank’s shoes – you own the mortgage, and the borrower pays you. This approach is largely overlooked by mainstream investors, yet it offers a way to build wealth without ever owning a physical property​. Unlike being a landlord dealing with tenants and toilets, note investing lets you earn passive income from interest payments – it’s “far different from collecting rent” as a traditional landlord would​. Savvy investors buy distressed or underperforming mortgage notes at a discount (often for a fraction of the loan’s face value), then profit by getting them to perform again or by acquiring the property through foreclosure if the borrower fails to pay. Fewer people play in this niche, so competition is lower and deals can be easier to find​. In short, you’re making money like a bank – earning interest and fees – without having to manage a property directly.

How to Implement (Step-by-Step):

1. Learn the Basics of Note Investing: Start by educating yourself on mortgage notes. Understand the difference between performing notes (the borrower is paying on time) and non-performing notes (the loan is in default). Research the legal process for note transactions and foreclosure in your area. Gain insight from expert resources or courses – for example, note investors like Scott Carson share how they find and structure profitable note deals​.

2. Network and Source Notes: Notes aren’t found on the MLS. Connect with note brokers, asset managers at banks, or online marketplaces (like Paperstac or DebtX) that list notes for sale. Leverage LinkedIn and real estate investor networks to find leads on note deals​. Often, banks or hedge funds sell off non-performing notes to investors. Build relationships in the industry so you get access to off-market notes before others do.

3. Due Diligence on the Note: Once you find a prospective note to buy, analyze it like a pro. Key steps: Review the loan documents (note and mortgage/deed of trust) and the payment history. Evaluate the property securing the note – its fair market value, condition, and local market trends (since this is your collateral). Check the borrower’s situation: Why did the note become distressed? Are they likely to resume payments if given a modification, or will you need to foreclose? Tip: Just as you’d inspect a house before purchase, inspect the note’s details and possibly hire an attorney or title company to ensure there are no liens or title issues. This due diligence protects you from buying bad debt.

4. Finance the Purchase: Determine how you’ll fund the note purchase. Many note deals are relatively affordable – you might acquire some notes for a few thousand or tens of thousands of dollars, depending on the unpaid balance and property value. You can use personal savings, partner with another investor, or even use a self-directed IRA or solo 401(k) to buy notes (for tax-advantaged gains). The good news is you don’t need huge capital to start – some investors begin their note portfolio with just $5–10K and scale up as they reinvest profits​.

5. Acquire the Note and Execute Your Strategy: Work with the note seller to complete the purchase (usually via a loan sale agreement and assignment of the mortgage). Once you own the note, you have a few exit strategies:

   • Modify or “Re-perform” the Note: If the borrower is willing and able, you can offer new terms (e.g. extend the loan term, forgive some past due interest, or lower the rate) to help them resume payments. You bought the note cheap, so even getting, say, 70% of the original payment can yield you a great return.

   • Foreclose and Take the Property: If the borrower can’t pay, you have the legal right to foreclose. After foreclosure, you could sell the property or keep it as a rental. Often, note investors prefer to avoid foreclosure due to the time and cost, but it can lead to acquiring the property well below market value.

   • Flip the Note: In some cases, experienced investors resell the note to another buyer at a higher price once it’s performing again. For instance, you might buy a non-performing note for 50¢ on the dollar, get the borrower paying, then sell that now-performing note for 80¢ on the dollar to another investor.

6. Use Professional Loan Servicing: As a note holder, you’ll want a licensed loan servicer to handle the collection of payments and manage escrow for taxes/insurance. They act as the middleman between you and the borrower, which keeps everything professional and compliant. The servicer will send you the monthly checks (or ACH deposits) after taking a small fee. This makes the income truly passive – you’re not chasing borrowers for payments. If issues arise (like defaults), the servicer can help initiate foreclosure or legal actions per your guidance.

7. Scale Up Carefully: Reinvent and grow your note portfolio by reinvesting the profits. As you gain experience (and income), you can purchase more notes or bigger notes (e.g. notes with larger balances or secured by commercial properties). Always continue learning – note investing has some moving parts (legal regulations, market conditions) so stay informed via industry forums (like BiggerPockets’ note investing section) and perhaps mentor with veteran note investors. With time, you build a diverse portfolio of notes for steady cash flow.

Who It’s Best Suited For:

Investors and entrepreneurs who want real estate-backed income without becoming landlords. It’s ideal if you enjoy “paper investments” and analyzing deals, and are comfortable negotiating or working out solutions with borrowers. Realtors or agents can also benefit – your market knowledge helps evaluate collateral property values, giving you an edge in pricing notes. This strategy appeals to those who value passive income but are willing to learn a somewhat technical niche. (If you have a knack for finance or lending, you’ll feel right at home being the bank!)

Startup Costs & Required Skills:

• Startup Costs: Moderate, depending on the notes you buy. You can start small (some notes <$10k), but realistically having $20k–$50k gives you flexibility to buy higher-quality notes or a small bundle of notes. There may be legal fees (for due diligence or foreclosure) and servicing fees, but these are manageable (servicers might charge ~$30/month per note).

• Skills/Knowledge: You’ll need to grasp real estate law basics (foreclosure process, lien priority), note valuation, and negotiation. Strong due diligence skills are a must – you’ll be researching properties and borrower situations. Networking skills help in sourcing good deals. If you’re new, plan to invest time in education (online courses or books on note investing) before investing dollars. An analytical mindset and patience to navigate paperwork will serve you well.

Potential Returns & Outcomes:

• Cash Flow: Expect regular income as borrowers make payments. Yields can range from modest to very high. For example, buying notes at a discount can lead to double-digit annual returns. One investor, after buying several short-term real estate notes, said: “I don’t know where else I can get a 10-percent ROI with the level of risk I’m getting.”

  It’s common for performing notes to yield around 6–10% annual interest, and non-performing notes can return even more after you work them out (because you bought the debt so cheaply​.

• Wealth Growth: Over the long term, you’re growing wealth by continuously reinvesting your interest income into more notes. Compounding kicks in as your note portfolio expands. Additionally, if you occasionally acquire properties via foreclosure and sell them, those lump-sum profits can significantly boost your net worth.

• Outcomes: In the best-case scenario, you build a steady passive income stream that’s relatively hands-off – all while helping borrowers find solutions. You’ve diversified your real estate portfolio (notes often perform well even if rentals are struggling, and vice versa). However, outcomes can vary: you might encounter a bankruptcy or a lengthy foreclosure that delays returns. The key is that by holding a secured note, you have multiple ways to profit (loan payoff, property takeover, or resale of note). Done right, this strategy can produce income now (interest checks) and wealth later (through property equity or reinvestment), truly fitting an entrepreneur’s desire for both cash flow and growth.

Thank you for reading! If you found this newsletter helpful, please share it with anyone who might benefit. Stay tuned for 1-2 posts every week with the latest market updates and insights.

Kyle Allgair
CEO of KPA Home Loans
📞 (279) 977-8149 | ✉️ [email protected]
🌐 KPAhomeloans.com

Kyle Allgair is the CEO of KPA Home Loans, with years of experience helping clients build wealth through real estate and strategic financial planning. Contact him for personalized advice on achieving your financial goals.