Show Me the Money: How Much Do I Need?

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You’re ready to jump in and get your first note, but how much money do you need to get started?

So you’ve done a lot of homework and searched the internet as much as possible to find out about these things called notes. You even read through all of The Pier Harbor Groups Note Investing 101 blogs to learn all you can. You’re ready to jump in, but how much money do you need to get started?

Cash Only Business

First things first. Note investing is a cash only business. This is not like buying a house or a rental property where you can go to the bank, submit an application and wait 30 days before the deal is funded. When you put an offer in on a mortgage note, you need to be in a position to wire cash funds within a few days.

Hard Money Lenders

I know what you’re thinking…how about a hard money loan. That is not recommended unless you know what you are doing. Hard money loans are generally short-term loans with high interest rates. The benefit is that a hard money lender can generally fund within a few days to a couple of weeks. If you go this route, there is no guarantee that you will be able to pay back the loan in the short timeframe and still make a profit. Plus, you will have monthly interest payments to the hard money lender until you pay back the loan.

Because every note has a borrower behind it, you never know what will happen. They could reinstate and start paying again, they could claim bankruptcy, or a pandemic could hit and close down the courts and put a temporary halt to foreclosures.

Although hard money can be used, we do not recommend it for people starting out.

How Much, You Say?

You can purchase your first note for as little as $15-$20K. However, you can also get some for $10K, but those types of notes can be few and far between and you will have  greater success in the $15-20K range.

Reserve, Reserve, Reserve

Whether it’s a performing note or a non-performing note, you need to have funds in reserve to work out the note. If you have a non-performing note, you should have a reserve of at least $5K to help with the workout of the loan. I suggest this with performing notes also, because performing notes can become non-performing. This reserve will be used for the workout that could include lawyer fees, winterizing the property, paying taxes, maintaining the lawn and/or securing the property.


If you want to start off and test the waters with a small note, you are able to get them in the $15-20K range, but be sure to have a reserve available. Remember, this is a cash-only asset class. When you say you are going to buy, then you are going to buy with cash and be ready to wire funds at the agreed upon time.

If you would like more information, take time to view the free webinar on note investing. It’s chock full of great information to start you on your note investing journey.

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