Top 3 Reasons Note Investing Works

Amid the vast landscape of investment options, note investing stands out as a great option. Note investing offers a unique blend of security, flexibility, and passive income. Let’s look into the top three reasons why note investing works, addressing some common questions and demystifying this investment class.

The Call of Capital

A question that I often get is, “Why would anyone want to sell their note?” The answer is in the inherent nature of notes. The note itself establishes the terms of how much a borrower pays, the interest rate, and the repayment period. Many note holders, including banks, are very interested in the possibility of receiving a lump sum today rather than waiting for payments over several years. The immediate influx of capital provides the note seller with flexibility for other investments. Whether it’s home renovations, funding a child’s education, or extracting the capital to invest into another business venture – selling a note unlocks opportunities. As a note investor, this creates a marketplace of notes available for purchase, setting up both parties for a win-win scenario.

Networking and Discovery

“Where do you find notes to buy?” This is one of the other most common questions I get. While note investors are often open about their journey and experiences, the secret sauce lies in where they find these investment opportunities. Networking often proves to be the most productive and useful way to uncover any potential notes for sale. I have cultivated relationships over the years by attending conferences, and building a network of contacts. The art of finding notes involves a combination of industry knowledge, experience, and a network that covers the landscape of real estate and finance. You’ll hear it said over and over that note investing is built on relationships and relationships are built one at a time, over time.

Navigating Defaults with Flexibility and Empathy

Another common concern in note investing is, “What happens if the person in the house stops paying?” This is where the beauty of note investing truly shines. Unlike the unforgiving processes often associated with traditional banks, note investors can approach defaults with flexibility and empathy.  The secret here is that, although I act as a bank collecting borrowers’ monthly payments, I’m not a bank. Before buying a note, a I assess the underlying collateral – the property itself – ensuring sufficient equity to cover the worst-case scenario, foreclosure. If a default occurs, I, being human and not a bank, have the ability to understand the borrower’s situation. This flexibility allows for collaborative solutions to get the borrower back on track. Most if not all note investors will have stories of success in helping people retain their homes, demonstrating that note investing is more than just financial a transaction; it becomes a vehicle for positive impact.

What Next? 

In the realm of investment opportunities, note investing is a testament to the power of strategic thinking in financial decisions. The call of capital, the art of networking, and the ability to navigate defaults with flexibility and empathy collectively contribute to a solid investment. Can you name another investment as secure, passive, and unique as notes secured by real estate? If you’re seeking an investment avenue that checks all these boxes, consider joining me on a journey that blends financial success with positive impact. By strategically investing in notes, investors can benefit from long-term growth that real estate offers while diversifying from the stock market. If you are considering investing in real estate notes but unsure how to get started, book a consultation with Nathan Turner, the founder of Earnest Investing today: Speak to Nathan or call 312-860-3747 to get started.

About Earnest Investing

Earnest Investing buys performing and non-performing 1st lien mortgages (secured by real estate). We help existing home owners and revitalize communities. Our investors earn an 8% return with a quarterly distribution on a passive investment. Banks regularly sell defaulted loans at a deep discount, creating an opportunity to purchase these loans with the property as collateral. Earnest Investing buys select loans and works directly with the borrower to collect or re-establish payments, or to take over ownership of the property for resale or creation of a new loan. Unlike traditional real estate, investing in mortgage notes offers flexibility and a variety of profitable options and exit strategies that add value and reduce risk. Our founder, Nathan Turner, is passionate about the business and the opportunities it creates for “win-win” solutions for the home owner, for you as the investor, and for Earnest Investing. 

 

 

 

 

 

 

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