What Types of Notes Are There?

Real estate note investments generally fall into two main categories: Performing Notes and Non-Performing Notes.

Performing Notes are loans in which the borrower is making payments as agreed. For investors, the primary objective with these notes is consistent, predictable cash flow.

Non-Performing Notes are typically sold by banks and other financial institutions at significant discounts—often ranging from 50% to 90% below the loan’s original value. Because the borrower is not making their scheduled payments, investors focus on resolving the loan through strategies such as working with the homeowner to modify the terms, negotiating a lump-sum settlement, or pursuing foreclosure if necessary. While these notes can offer higher potential returns, they also generally involve greater risk.

Advantages Of Investing In Mortgage Notes

Investors instinctively understand the value of being the bank—that’s one reason banks seem to be on every corner. When you invest in mortgage notes, you step into that role and become the bank.

With traditional rental real estate, investors take on the headaches and responsibilities of being a landlord. Note investing, by contrast, allows you to be a “lien-lord,” holding a secured interest in the property rather than managing it.

By investing in mortgage notes, you gain many of the benefits of investing in real estate without the day to day challenges of property ownership. No personal tax returns are needed, no long closing process, and no "Terrible T's" at the end of it all.

Landlords are constantly dealing with the “Terrible T’s”—tenants, toilets, and termites. As a note investor, those concerns belong to the homeowner, not you. This difference creates several advantages for note investing compared to other real estate investments, including the following:

Performing Notes

Earn monthly without being a landlord.

• Passive Income - No tenant management, repairs, or property maintenance

• Targeted Cash Flow - Monthly payments with defined terms

• Portfolio Diversification - Beyond traditional stocks and bonds

• Professional Management - Expert servicing and collection handling

Non-Performing Notes

Distressed Assets.

• Asset-Backed Security - Notes are secured by tangible real estate collateral

• Potential for High Returns - Acquire assets at a significant discount

• Multiple Exit Strategies - Loan Modification, Foreclosure/Property Acquisition, Short Sale, etc

• Counter-Cyclical Potential - Loan defaults increase during economic downturn

Make Informed Note Investments

We help investors evaluate opportunities, manage risk, and deploy capital with clarity and discipline.