Why People Invest in Mortgage Notes

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Can people really buy other people's mortgages as an investment? Why? Keep reading...

Are you like most people who want to invest your money in real estate, but don’t have the time to put the work in? Then you might want to consider note investing!

Note investing is an excellent way to make passive income for investors who don’t have the time for wholesaling, flipping houses or managing rental properties.

If you are anything like me, then you probably have tried it all. I tried wholesaling and flipping. I also owned rental properties. I was doing everything I was told to do in order to be a successful real estate investor. Sometimes finding your niche in a particular field takes time. I found my niche when I discovered note investing.

The benefits of note investing


Passive income

When you invest in notes, you’re creating a stream of passive income that will come in month after month, year after year. This is a great way to secure your financial future and make sure you have a steady flow of income.

This doesn’t mean that you set it and forget it. You still need to monitor your investments. Sometimes that means checking that the servicer ran an escrow analysis or assessed a late fee, if needed. If you have a note that is non-performing, meaning the borrower has stopped paying, then you may need to contact a lawyer and begin the foreclosure process or work on a modification.

Safer Asset Class

Investing is notes is a much safer asset class and less volatile than the stock market. It provides higher yields than any savings instrument (savings accounts, bonds, CDs), and is secured by the underlying real estate. Oftentimes when acquiring notes, you buy them at a price that is much lower than the value of the asset or property. For example, you may purchase the note for $50,000 and the property value may be $120,000. If the borrower defaults, you own a $120,000 property for which you only paid $50,000.

Higher ROI

When you note invest, you can get a better return on your investment than with most other types of investments. Because most notes are purchased at discount of the unpaid balance, or balance remaining on the loan, investors are able to make a higher return on their investment. This makes note investing one of the best ways to have your money work for you.


Note investing is a safer asset with much higher yields. If note investing sounds like something you want to pursue or looks like an effective method for financial security, contact us today so we can help guide you through the process.


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