Ep 273: An Introduction to Note Investing with Dave Van Horn

[Mindy Jensen]

Most people understand the world of rental properties, house flips, and other common real estate investments. But there is one little-known niche that could provide massive cash flow and profits without the headaches: note investing. In this episode of the BiggerPockets Podcast, we sit down with Dave Van Horn, author of Real Estate Note Investing, to talk about how anyone can get started with real estate note investing—even as a first investor. In addition to a great conversation about notes, you’ll also hear some of Dave’s powerful strategies for getting his real estate offers accepted, how he started his investments using the BRRRR strategy (with credit cards!) and much, much more.

Listen here or on your favorite podcast app.

[Dave Van Horn]

@Account Closed These mortgage notes have since been modified after they've gone into default and because of this default they're purchased by a company like mine at a discount - usually in bulk. So it's important to remember we're buying it for less than what's owed (a percentage of Unpaid Principal Balance or Fair Market Value).

Then we're re-modifying these loans with a new payment plan that can include not only the principal payment but also interest, arrears (missed payments), and any corporate advances (like HOA fees, back taxes, etc). So now this asset has an exponentially higher return than the original interest rate on the note.

We then sell the note at a current market rate that's acceptable to investors (which is the "8% to 10%" you're talking about) and price it accordingly.