Many real estate investing strategies are complex, especially when there are tenants involved or repairs to be made in the process. This is the reason why many investors opt for note investing. But what is this strategy and how can you be the best at it?
To be a good note broker, you might want to enroll in training classes from Udemy, JKP Holdings, Keyhole Financial, Note Investor University, and FixNotes. Most of these courses are paid, so you should be willing to invest.
If you want to find out more about note investing, its pros and cons, which course suits your needs, and more, read the rest of this comprehensive blog!
A real estate note is an IOU (phonetic acronym for I owe you) agreement between a lender and a borrower. In this agreement, the borrower agrees to pay the lender under the terms they agreed upon in the note. Usually, notes in real estate use a property as a collateral for the loan.
Real estate notes also include the loan amount, what happens when the borrowers default, and the tenure of repayment. Generally speaking, a note covers all credit and debt agreements between two parties.
A real estate note contains two parts — the promissory note and the lien. The promissory note details the terms of the debt while the lien is an instrument recorded against the title of a piece of property. The lien may be a deed of trust or a mortgage deed. These two parts move together in order to form a note.
Note investing is the act of buying real estate notes to gain profits. This profit is realized from the note itself, from interest payments, or a real estate sale. Many real estate investors do this to diversify their real estate portfolio, while beginning investors choose this since it needs a lot less work from their part.
Moreover, many investors buy real estate notes because they are secured against a physical property, they produce regular monthly income, and they can be purchased at a lower price.
Typically, when investors secure real estate notes, they hold it in a self-directed IRA or 401(k). This is so they can grow their retirement income and diversify their returns.
Here are some ways to start investing in real estate notes:
As mentioned, a real estate note has two parts — the promissory note and the lien. Usually, no two promissory notes are alike since its terms are defined by the parties involved during the time that the loan originated. In connection to this, we can identify whether a note is performing or non-performing depending on whether the borrower fulfills their obligation written in the promissory note.
It is crucial that you understand the difference between performing and non-performing notes to ensure that your note investing business would be profitable. Lucky for you, we made a detailed distinction between the two below:
Performing note, as its name suggests, is a note where all the obligations (payments) of the borrower are current. Performing notes are low-risk tools to collect passive monthly income and diversify a real estate investor's portfolio.
Moreover, performing notes are prioritized by investors when the real estate market is volatile and interest rates are on all time low. Some of the most common performing notes include private lending notes, reperforming notes, and finance notes.
If you consistently buy performing notes, you can expect a monthly income of 8% annually or even higher.
A non-performing note is a note where the borrower stopped paying for. In other words, the borrower is already in default. In real estate, a note becomes non-performing when the borrower falls behind 90 days on payments. Meanwhile, if the borrower is behind on payments for 30 days, the note is already sub-performing.
Note investors who buy non-performing notes buy them for cheap and work out the best way to earn a profit. In most cases, they'll renegotiate the loan terms and balance with the borrower. When this happens, they would have a reperforming note that can provide them with monthly income or they can sell this note to earn more.
It's also possible for investors to sell the property through a short sale if a foreclosure is imminent.
Generally, non-performing notes are valueless in their current state and it depends upon the skills of the note investor to succeed. But expect that it would not be an easy process.
Note investing is not for everyone. It has its fair share of pros and cons that you should learn about before deciding whether this path is for you. That being said, here are the pros and cons of a note investing business.
Note investing is a unique industry and it is also ever-changing. To get catch up on recent trends and strategies, you must enroll in training classes or courses be it physical or online. This also lessens the risks associated with this business.
Moreover, note training courses will provide you with the foundational knowledge you can use in identifying the right notes to buy and what to avoid. This is so you can avoid notes that would end with foreclosure and leave you at a loss.
To ensure that you get the best out of your note training, find courses that can provide the following:
Of course, the quality of training you'll receive depends on the content you want to learn and the money you should be willing to pay.
A simple Google search will provide you with a list of the best note investing courses right now, but to save you the trouble of going to different websites and assessing which courses cater to your needs, we already made a list of the top courses for you! Check them out below.
The real estate note investing - be the bank! course from Udemy is a highly-rated training for note investors. It is currently priced at $19.99. This course will generally teach you how to buy and profit from different types of distressed mortgages and it is created by Martin Saenz from Northern Virginia who is also the author of the book Note Investing Made Easier.
In this course, you'll learn how to find and buy discounted and distressed mortgage notes, how to find note opportunities, learn the foundation of note investing as well as its four phases, and of course, the steps that follow it, including dealing with sellers, etc. This course's great content includes 2 sections with 10 lectures and runs for 2 hours and 33 minutes.
You can also get access to 5 case studies from Ohio, Florida, and South Carolina. A certificate will also be given once you finish the course.
The advanced note investor training from JKP Holdings LLC aims to help new investors get started on making note investments. This course includes 20 videos for $69.95 which covers the following topics:
Aside from the videos from their website, you'll also get one on one sessions that last for 1.5 to 2 hours. You'll also get access to private tools and resources, including the following:
Keyhole Academy offers different courses related to note investing as well as private mentorship. Here are some of their courses and their cost:
The digital classroom used by Keyhole Academy can be accessed anywhere from their website so most people can study at their own pace. They use videos, text, audio, group discussions, webinars, quizzes and exams in dealing with various topics.
As for their private mentorship program, they would require their students to buy five distressed notes and split the profit with them as they guide them throughout the end.
Note Investor University offers three major curriculums for beginning investors in order for them to find a good deal and make good money throughout their life, which include:
Here are some of the specific topics covered by the course:
They also offer free resources such as a free 10-part video training about note investing and an ebook called Note Investing Pocket Guide.
Fix Notes helps you brush up on your investing skills through their online resource. Their course has 5 segments subdivided into 17 modules which will teach you everything about note investing from its history to different creative exit strategies you can use.
Meanwhile, their Advanced Due Diligence and Resolution course contain 12 more guides that cover liquidation tactics as well as research analysis.
The best thing about this course is that it is completely free. Yes, you've read it right! If you are on a budget but want to enter note investing and be like a bank, this detailed course is for you. They'll help you enter this lucrative industry for less and invest in notes in no time.
The Note Assistance Program or NAP has an online mortage investing eCourse that teaches investors about the critical components of note investing. It is composed of 17 online sessions that includes 15 to 20 minute bite sized modules for self directed learning.
This eCourse will help you learn the core methodology of note investing including how to work with non-performing mortgage notes. The course uses photos, videos, integrated graphics, and recorded live calls for each session where the instructors talk about each topic in detail.
This online broker training course costs $3,995 and once you create an account, you'll get 2 years of access to the videos on the platform whenever you want to take a refresher on buying and investing on real estate notes. Here, you'll hear the instructors talk about relevant topics to note investing.
NoteConference was founded because of the lack of decent education for note investors. This is a family business headed by Mike Rus, a note investor who has a gift for educating others.
In this course, Mike will teach you how to buy notes and earn 10x your income tax-free. Mike has a YouTube channel you can go to if you are unsure whether he is the right coach for you. But if you are decided to take this course, all you have to do is book an appointment on their website. You can also check out their page for the testimonials of their students.
Note Newbie was founded by Daphne Wilson in 2020. This claims to be the number one course nationwide for mortgage note investing, and it promises to increase its student's net worth by tens of thousands of dollars within 90 days.
In Daphne's note investing free course, she will talk about how to start building your portfolio for less than $5,000, using only 4 hours per month to manage your real estate portfolio, investing in mortgage notes all over the country, gaining monthly cash flow using the basics of note investing business, and more. You don't need to spend any money to learn the basics from this course which is very helpful if you are on a budget.
She will also provide you with a free mortgage investing strategy checklist so you get lump sums of cash in the long run and you get a bit of free time for yourself. Note that aside from the free course, Daphne also offers the following helpful industry courses:
NoteTools.com will provide you with tools as well as a free newsletter, live classes, books, study courses, and a private mastermind group so you can get started in note investing world.
More over, NoteTools.com has live events you can join in to meet industry experts and learn new tactics and strategies you can use for note investing. They'll also provide you with systems and checklists as a shortcut to your success in the business.
NoteTools.com is founded by Aaron Halderman, the best selling author of Note and Real Estate Profits which is available on Amazon.
NoteSchool, like the other training providers listed in this blog promises high-quality training programs lead by expert note private investors. Their curriculum focuses on up to date strategies for the note holder based on the market condition.
Moreover, the advanced classes provides you with recent case studies that will show you how actual deals are being made.
Another great thing about NoteSchool is that they have the most up-to-date intel as well the most current working strategies in the note investing world. It is for this reason why almost half of their enrollees every batch is composed of old students who want new intelligence on mortgage notes.
Pier Harbor Group is a private equity firm that specializes in finding and selling both performing and distressed mortgage notes in the United States. They offer several training programs to help every note investor whether they are new or just want to be updated about the current trends.
They have a free 1 hour note investing webinar that can teach you an overview of the note investing business. This is meant to help you choose the right course from Pier Harbor Group for you. You can also either choose between live online training and self-paced broker training.
Live online training means you attend an instructor-led course. This is only offered thrice a year. Meanwhile, self-paced online training means you get access to 25 note investing modules that you can study at your own pace.
Note Inc. offers free training for aspiring note private investors. This free training will teach you about the banking crisis, the mortgage market cycle rhythm, asset trends in the real estate note industry, the strongest mortgages in history, policy and banking, and winning note business strategies.
Aside from the free training, they also hold a two-day training class called Infinite Yield Class for $797. This is held every first Saturday of the month. Here are some of the helpful topics covered by this two-day training:
If you are a less experienced investor looking for ways to diversify your portfolio without all the hassles of buying and selling a property, the note investing business is ideal for you. To start off your note investing business and build a steady source of income for the rest of your life, you should consider enrolling in courses from Udemy, JKP Holdings, Keyhole Financial, Note Investor University, and FixNotes.
Alternatively, you can read free resources online, get a personal coach, or watch YouTube videos about note investing. You'll never run out of choices if you are willing to take risks in entering this industry.
On the other hand, if you've tried note investing and decided it's not for you, you may want to try traditional real estate investing. Just buy highly-qualified leads from Property Leads and you're already set up for success!
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