5 Things to Know Before Buying or Selling Real Estate Notes

[Barbara Johannsen]

Hey BP community 👋,

I’ve been learning and working around real estate notes lately, and I wanted to share a quick list for anyone curious about buying or selling them. Notes can be a powerful tool if you know how they work.

Here are 5 key things to keep in mind:

1️⃣ Notes Are Secured by Real Estate – When you buy a note, you’re essentially stepping into the lender’s shoes, with the property as collateral.

2️⃣ Cash Flow vs. Lump Sum – Buyers often want the monthly income, while sellers may prefer cashing out for a lump sum today.

3️⃣ Due Diligence Is Everything – Always check the borrower’s payment history, property value, and terms before buying.

4️⃣ Discounted Purchases – Notes often sell at a discount, which can mean higher yields for investors.

5️⃣ Exit Strategies – You can hold for cash flow, resell the note, or even work out new terms with the borrower.

💡 Whether you’re a buyer or seller, the note space can open new doors for your investing journey.

Curious—has anyone here bought or sold notes before? What’s been your experience?