real estate note

Note Investing 101

Once a lender originates a loan, it rarely stays in their possession.  The mortgage note is sold into the secondary market, usually as part of a larger pool of notes.  From there, depending on the performance of the note, it’s usually held by the Buyer of the pool of notes, who either services the notes themselves or subcontracts them out to a Servicer.  A Servicer is a company that’s licensed by the various states to collect on behalf of the Buyer. First and second mortgages are both loans with your house as collateral, but the first mortgage (also called first lien) has the primary claim on the property. It takes precedence over all other subsequent claims (called junior claims). Investing 101 I’m not the person who will tell you that you have a low chance of beating the stock market benchmarks by yourself because you can, as I’ve done over the years. I’m the person to tell you though that even if you can do it, you should most likely just stick with index funds. For one thing, you probably have a real job where you should focus your energy in because beating the market takes a lot of time out of every single day and energy out of you. Sure, you might be missing an opportunity on the investment end by going with low cost index funds but when you can concentrate more on your family and career, you get so much more. How Does Note Investing Work And finally, where should you actually put your money to work once you know what to invest in? Most people talk about the types of investments but not many people will talk about the companies (brokerage firms) that help you buy and sell equities. Here are a few reviews of popular stock brokers where you not only can read what I think, but what many others think of the company too. Want to give the tools a test drive? Take a few minutes and simply sign up for free here. While you are in their platform, remember to check out their nifty 401K Fee Analyzer that will show you whether you are paying too much in fees, as well as an Investment Checkup tool to help determine whether your asset allocation fits your risk profile. For those trying to build wealth, Personal Capital is worth a look. You can thank me later. Note Investing Training Now if the borrower defaults on the loan and does not pay the due debts, then the property can be sold to satisfy the debt. In such case, first mortgage has the primary claim on a property and will be paid first. There is a whole market of mortgage notes out there, that you can simply tap into and start making profit without a significant amount of investment and without many hassles. You need to know a few tricks and tips of the mortgage notes, how to get a discount and low performing note, and how …

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