Notes anyone Input on Buying Notes.............Pros/Cons Thanks!
What type of notes?
Personally I thought about getting into note investing but I found it pretty complicated. I could do some research and probably figure it out but I have a family, full time job, and I am working on my MBA so unfortunately something had to give. There are a couple of podcasts that talks about note investing you my want to check out. One is Podcast 028 the other one is Podcast 017 Good luck!
Here's a blog post which provides a general overview of the topic.
Pros- High ROI's >30%, many profitable exits, can do nationwide, scalable, to many to listâ¦.
Cons- Higher education/experience entry point. If you're a novice you'll want to partner up with an expert. 1st and 2nd liens are VERY different risk profiles and you'll want to figure out where you feel most comfortable.
I respectfully disagree with the previous posters. I think that the learning when it comes to performing notes is not that steep. It's not that different than buying a stock or a bond. You purchase the asset and then you get an income stream. The key is to buy from a reputable note provider.
Nonperforming 2nds can be very profitable. I suggest starting out with a few practice notes. Personally I think this type of investing requires a more hands-on-learning approach.
Like many have stated, the idea is to buy a non-performing note at a discount, contact the borrower (within consumer protection guidelines), negotiate a win-win-win solution, collect payments.
The idea of it sounds easy enough, but the actual practice will require much more in depth understanding of the rules and regulation as to what you can or cannot do.
Suggested Reading, Fair Debt Collection Practices Act: http://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-debt-collection-practices-act-text
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