What are the most misunderstood aspects of note investing?

[Fred Moskowitz]

What do you feel are some of the most misunderstood aspects of note investing? 

Partials? 

Structuring deal exits? 

Due diligence?

[Bob Malecki]

I think that one of the most misunderstood aspects of this business is the flexibility we have with non-performing debt. Being able to modify the coupon rate or the term or the balance of the loan to get borrower re-performing is kind of magical. 

Most real estate investors understand how renovating a home can add value and profit for them, but they don't understand how "renovating" distressed debt is relatively easier and creates profitable cash flow while keeping a bottle where in their home. It's a win-win for everyone in the deal. 

Also having the ability to recapitalize a project by selling partial term on a performing loan is much simpler then, let's say, trying to refinance a rental property -- especially if a bank is involved!