Have you ever heard the phrase “It’s Good to Be the Bank”?
Well, there’s a reason for that…because it IS good to be the Bank! The BANK is the controlling party and makes the most money!
Note investing allows YOU to be the Bank! So, what is a Note? It’s simple…a Note is a debt instrument-it is a “promise to pay”. When you buy a car or a house, you sign a promissory note that tells the bank you will pay back the loan at a certain dollar amount per month, with a certain percentage of interest, over the course of a certain period of time. You might be wondering: how can YOU make money from investing in Notes?
People who invest in Notes literally become the bank for the borrower. There are different types of performing or non-performing notes you can invest in, including real estate (mortgages), car loans, judgments, credit card debt, etc.
This month at WREN, Paige Panzarello, the Cashflow Chick, is going to teach us about real estate specific notes, i.e. Mortgage Notes. Typically you can buy a “performing note” for cash flow (where the borrower is making on-time monthly payments), without the headache of tenants, taxes, and toilets; or you can buy “non-performing” notes (the borrower has not been making their monthly payments)…this sounds CRAZY, right? Why on earth would you buy a Non-Performing Note?
Buying a non-performing note allows you to buy the note at a BIG discount, thereby building in a BIG cushion of equity, which helps mitigate your risk against loss of time, or loss of money. If you buy a first position note, you are the first in line to get paid. With good due diligence steps, you can mitigate your risk based in fact, not speculation. As the Bank, YOU have all of the power, and YOU make all the decisions. You are IN CONTROL of the outcome of your investment.
You also have choices and many different exit strategies (23 in all)! When you have that many possible exit routes, it’s like a reinforced safety net! And the best part: as a note investor, you actually can MAKE MONEY by helping people to stay in their homes.
If any of these things appeal to you: making money in real estate without speculation; mitigation of risk; control; becoming the Bank; helping people stay in their home; or monthly cash flow without the headache of tenants and toilets, JOIN US at a WREN meeting this month, and learn about investing in notes and how YOU can BECOME THE BANK!