Notes: Buying Discounted

Foreclosing on a non-performing note can be expensive and time-consuming.

💡 Unlike being a landlord, there are no "tenants, toilets, or termites" to manage.💰 Higher Yields: Buying at a discount creates an automatic gain in equity and a higher ROI than traditional bonds.🛡️ Asset Security: Your investment is backed by a physical asset that can be liquidated if necessary. Risks to Watch For

First position notes are paid first in a foreclosure, while "second" or junior notes are riskier but often cheaper. Key Benefits buying discounted notes

If the property value drops below your investment amount, your "security" is weakened.

When a lender (like a bank or private seller) wants to free up cash, they may sell their mortgage notes at a discount. Foreclosing on a non-performing note can be expensive

You must verify the property's value, the title's clarity, and the borrower's payment history before buying.

AI responses may include mistakes. For financial advice, consult a professional. Learn more Should You Only Buy First Position Notes? - BiggerPockets Key Benefits If the property value drops below

You collect interest on the full $100,000 balance, significantly increasing your effective yield.