Today I’m going to be talking with you all about investing in debt, or what we investors also call the “note investing” business. To be honest, I wasn’t a huge fan of this investing strategy when I got started simply because I didn’t understand. But thanks to my note investing partners who “dumbed it down” for me and did a breakdown of the process, I’m a lot more confident working in this market. And that’s my goal today, to help all of you understand how to invest in debt, acquire notes, and not be afraid of the unknown. Because you’ll know!
There are two types of notes in the market: performing and non-performing notes. Performing notes are when the borrower is paying the bill and there’s no back payments, no issues. A non-performing note, however, happens when the borrower is having trouble making payments.
Now why would you want to invest in a note where the borrower ISN’T making their payments?! Well, that’s because when they fail to make payments, the terms of the note is violated. When this happens, there are a lot of options of how to make a profit BESIDES just collecting payments every month. Examples are foreclosure, short sales, “deed in lieu”, etc. Every exit strategy is an avenue to continue to make profit.
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Get out there and make some CASH FLOW!