Note Investing Success: My First Kicker
When I first found Biggerpockets.com I worked my way through the podcasts. Episode 28 with @Dave Van Horn really sparked my interest in note investing. I took the PPR online education and started researching. A year later I had saved up enough cash to buy a small second mortgage on a house near where my family lives in California. I knew the area, felt confident of the property values and was willing to take the risk and buy the note. After three years of collecting my small monthly payment, I just got a payoff request - the homeowner is refinancing!
I paid $22k for the note, valued at $55k.
For 3 years, I've been receiving payments equal to 13% return on my cash invested.
My payoff will be $54k due to a balloon payment on the loan. Combined with interest received, that's a total of 185% return cash on cash or roughly 60%/yr.
Thanks for the inspiration Dave!! Time to go buy another!
PS Since a lot of people ask, I bought my note through LinkedIn's Distressed Second Mortgage Group