Guest Blogger Joe Varnadore: What does it Mean to “Buy a Note”?
Understanding Performing vs. Non-Performing Note Investments
There are 2 kinds of notes that you can buy: performing (that is, the note is being paid as agreed by the borrower) and non-performing (the payments are not being made, and the note is “in default”).
Usually, when you buy a non-performing note on a vacant home, your goal is to get the property, either through a Deed in Lieu of Foreclosure or by foreclosing. You are a real estate investor simply acquiring property in a different way.
When you buy a non-performing note on an occupied property, you will often “modify” the loan so that the borrow can keep his home and you get a double-digit rate of return. If not, you get a Deed in Lieu or foreclose.
The goal when you purchase a performing note is to get long term, real estate backed, monthly cash flow. Today, these assets can be purchased for 60 cents on the dollar. That is an unbelievably good deal. No land lording, no hassles, just automatic monthly deposits into your account.
That’s the Basics: Learn More…
You owe it to yourself to learn more about this huge opportunity in real estate. Joe teaches 1 day classes throughout the country on this topic; where he shares:
- How to get started buying (or flipping) notes, even if you have to use other people’s money at first
- How to minimize your risk when you buy notes
- Real-life case studies where notes were purchased for as little as $3000 and made triple digit returns.
- And lots more
If you’re in Ohio, check out his February 11th and 18th classes in Cincinnati (www.CincinnatiREIA.com) and Columbus (www.CentralOhioREIA.com); they’re inexpensive and a great way to get introduced to a whole new way of making money in real estate.