The Top 5 Resources to Educate Yourself on Real Estate Note Investing

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As with any new venture or form of investing, it’s important to gain knowledge of what’s involved, so as to increase the likelihood of success. Well, note investing is really no different, and getting educated in this area is definitely not something you want to skip.

Remember, as I stated in previous articles, that if you want to be successful in something, you’ll need to get educated in the space, start to network with others doing the business, and if you really want to accelerate things, you should find a mentor or coach in the business.

Education is a big part of it. Although I discussed some resources in my recent article, “How to Get Started in Real Estate Notes: A Primer for Investor Newbies,” I’d like to expand on the sources of education that are available for learning the notes business.

Related: An Introduction to Investing in Notes: Why You Should “Be the Bank”

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5 Sources of Note Education

1. Books

There are many books on the topic of note investing, but to know which ones to pick up, you may want to first decide what types of notes you’re thinking about investing in.

For me, one of the best books I read when starting out was Invest in Debt by Jimmy Napier, but this was geared more to the seller-financed note business. I started out doing seller financed second mortgage notes when selling a property and private money notes (very similar to a hard money lender), which are really short-term, first mortgage rehab loans.

The Banker’s Code by George Antone is broadened to wealth building strategies and being the bank, but it’s definitely a good read when you’re just starting to learn about note investing.

If you’re looking for something specific, such as information on mobile home notes, then you could check out Deals on Wheels by Lonnie Scruggs.

It’s important to get to know what your flavor is, such as first mortgages, second mortgages, commercial mortgages, private mortgages, distressed banknotes, etc., just to name a few.

2. Blogs

Then there are blogs, and of course one of the best is BiggerPockets. There are plenty of note articles, and there is also a Tax Liens, Notes, Paper, & Cash Flows discussion forum that you can subscribe to or use to ask note related questions.

A lot of note event promoters have blogs on their websites too, where you can find free content about note investing, such as the NoteWorthy Newsletter or The PaperSource blog.

There are also industry blogs, which are geared towards news and updates that impact the mortgage industry. A few examples are DS Mortgage News, National Mortgage News, Mortgage News Daily, or even HousingWire.

3. Podcasts and Webinars

BiggerPockets has a podcast on notes, as do some other venues, such as Brecht Palombo’s DistressedPro.com.

Besides some low or no-cost interviews and webinars that note experts in the business put on, many self-directed IRA companies (CamaPlan, QuestIRA, Equity Trust, etc.) also provide free webinars on note investing. And another perk is that they’re not selling you anything.

Keep in mind, some webinars may be a ploy to get you to go on to the next level with the speaker or promoter of the podcast or webinar, but a great way to screen that is to ask others on BiggerPockets for their opinions and past experience with the various speakers.

4. Mentors and Events

Finding a mentor and attending events may be a little more challenging, depending on the amount of time and money you have to invest in your note education.

To be quite honest, at most of the note events I’ve been to, I’ve met a lot of great people and learned a lot too, even if there was some guru selling going on. Usually, the events really weren’t super expensive either.

As with anything where common sense will have to prevail, there are good mentors and there are bad; sometimes you get what you pay for and sometimes you don’t. The best advice is to do your homework and research the person or programs.

For me, networking with other note investors has been the most helpful. As for new groups, these are usually online or in person.

For example, I run a Distressed Second Mortgages Group on LinkedIn (DSMG). In my area, you can join Philadelphia Note Investor Group (PING), where you can physically go to a meeting and network with like-minded individuals.

There are many note groups out there, many of which are organized through either Facebook, LinkedIn, or Meetup.

No note group near you? Do like Andrew McDaniels did with the National Note Buyers and Sellers group on Facebook, and start your own.

There are also national conferences focused on notes, such as PaperSource and Noteworthy. Then, there are conferences more specifically in reference to institutional notes and mortgage servicing, such as Five Star and Mortgage Bankers Association.

ACA International also holds Conferences & Expos, which cover compliance and other topics related to debt collections.

Now, finding a mentor can be a little tougher. There are mentors you can pay — after all, they’re giving up their time and it may be well worth it, or there’s no-cost or low-cost mentors. Maybe it’s someone who doesn’t sell coaching, but they happen to have a lot of experience in the business.

Hopefully you can bring something to the table to help them. Really, it needs to be a two-way street in this type of give-and-take situation in order for it to be fair. What can you do to help your mentor out? It doesn’t really matter what it is, but it should be a fair exchange.

5. Taking Action

When teaching about delinquent second mortgages over the years, we used to have a saying that our students were afraid of the “F” word — Foreclosure. Oftentimes, they were afraid of the unknown future outcome and expense of their note deal (especially since deal outcomes are more statistical with second mortgages), and they were often reluctant to move forward in the collections process.

Related: Real Estate Notes vs. 401k: Which Investment Wins Out Over 30 Years?

Well, this is very similar to someone who’s learning about note investing for the first time, except that for them, the “F” word is really Fear, which can be a roadblock preventing them from taking future action.

Getting educated in the note space is important, but I also believe that it is a “learn by doing business.”

At some point, the student needs to pull the trigger and get into a note deal. Keep in mind, there are safer ways to do this when starting out, such as purchasing first liens or deals with a lot of equity.

If you’ve done your due diligence and your homework, maybe it’s time to move on.

After all, the best education I’ve gotten has usually cost me some money.

Please chime in to provide feedback on these resources or to recommend others!

Leave your comments below.

About Author

Dave Van Horn

Dave Van Horn is President at PPR The Note Co. - an operating entity that manages several funds that buy/sell/hold residential mortgages, both performing and delinquent. Dave has been in the Real Estate business for 25 years, starting out as a Realtor and contractor and moving onto everything from fix and flips to Raising Private Money.

14 Comments

  1. Joel Owens

    Dave what are some good books on commercial note investing??

    For example I am seeing a minimum bid for 75k for senior loan on a former Rite Aid. I can buy the note at a discount and then get a DIL from the borrower. Then I own the property and can repurpose it with a new commercial tenant or sell off later once the income stream and lease is in place.

    Looked at residential notes a few years back but do not like all the regulatory government BS. I am buying notes to unlock value with repurposing a property and not hold for monthly payments.

    • Dave Van Horn

      Hi Joel,
      Although no books on commercial note investing really come to mind, I do know of a few coaches and courses that address commercial real estate & note investing.

      That being said, commercial financing is pretty flexible. Local community banks are a good source for commercial notes, and there’s certainly less government regulation.

      Sometimes, connecting with a commercial real estate attorney or a commercial real estate broker, could be helpful, as they may have someone to re-purpose it to that you could connect with before you get locked into the deal.

      Dave

  2. Ann Howell

    Thanks, Dave. You mention many resources that I will check out. I have learned a lot from the book, Performance Anxiety by Gordon Moss. I am also working through your two courses – on performing and non performing notes. They have been helpful in understanding how to read tapes and evaluate the notes. Your courses plus following all of the Notes threads on this site have been extremely helpful!

  3. He’s being modest, the best education has been PPR’s mentoring program (now closed) and even Dave’s articles provide a ton of value.

    Kidding aside, I disagree about the books. Jimmy Napier’s book explains how to calculate value, but it doesn’t explain the note business. George Antone’s book explains why to do it, but it’s mostly geared towards hard money lending and isn’t really a how-to manual.

    They’re all good books but none of them will make a note investir out of you.

    Conferences are okay because you meet a lot of like minded individuals and you can come up with partners. But let’s be honest, speakers can’t teach you much in a one hour presentation where 15 mins is about who they are and 15 mins is about what their company is selling.

    By far the best information I have found over time is podcasts / webinars, the mentoring program, and actively working on our notes talking with borrowers, attorneys, real estate agents, title companies etc. You don’t learn everything in one sitting but over time you develop a good base.

    I can’t endorse it because I haven’t followed his course myself but I have networked with a lot of small investors who have been in Scott Carson’s events and found good value (if that helps anyone)

    • Dave Van Horn

      Hi Patrick D.,
      Thanks for the positive feedback on the program. We’re actually planning to release a new advanced course sometime after the current mentoring students finish up their training.
      Regarding the books, I agree with you. It’s difficult to find a book on note investing that teaches everything. They usually just cover an aspect of it, which is why it’s important to know what you’re looking for.
      Hope all is going well,
      Dave

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