Turning Paper into Profit: Why More Investors Are Buying Mortgage Notes

[Barbara Johannsen]

I’ve been spending a lot of time studying mortgage notes lately, and I’m starting to realize how powerful they are for building long-term cash flow. Unlike traditional real estate, buying notes lets you be the bank — and you can often pick them up at a discount.

One thing I’ve noticed: a lot of note holders don’t even realize they can sell their notes before maturity, which opens up opportunities for both sides of the table.

Curious to hear from this community:
➡️ Are you currently investing in notes or sticking with physical properties?
➡️ What’s been your experience with notes, if any?

Let’s discuss. I’m here to learn from everyone’s insights.

[Jay Hinrichs]

Quote from @Charles Perkins:

Notes has been something I have considered on several occasions in my investing life. I certainly can see the potential, but like other areas of real estate investing there are pitfalls.  

@Jay Hinrichs I'm sure you have knowledge of the legal issues, the vetting process, lending regulations, and I have no idea what other issues to consider.  

Like any investment I'm certain that with the potential for good profits there is the potential for losses.  I know there is risk and this is an area for me full of land mines because I don't know that much about these risks.  Can you explain some of them.

just think of yourself as a bank.. what risks do banks take ?????  same goes with any investor buying notes  Making new loans  etc etc.. you do have license rules.. owner occ loans you basically cant make new loans without proper license .. you can buy owner occ loans but you have to have a 3rd party service them i believe.  IN all but 12 to 14 states you can make non owner occ loans without a license. 

Risks are property is not worth what you think it is.
Borrower is no good and defaults.

Then you have states that are harder to foreclosue in than others.. and for those reasons many wont work in those states  Like NY NJ PA  states with long drawn out and expensive foreclsoure laws.

thats a few.