There are different types of notes and often the question arises about how they work.
Here are probably the two most common types of notes…
The note purchased from a lender
These require some real estate investing knowledge and diligence to create the right structure.
- They require you have the ability to create the opportunity when you purchase the note. At the time you purchase there is often an occupant with a financial hardship and you need to contend with this non paying occupant first.
- Most times you need to deal with home renovations to the property. The challenge is you may not have a good understanding of the condition of the property as you purchase the note. This means it is very difficult to be a purposeful investor, if you cannot assess the expense up front, it is a lot like investing in a slot machine, you are rolling the dice in hopes of a great payout.
- The financial reward of the note investment relies on your ability to create the opportunity. These notes are great for the seasoned investors who understands the many nuances of real estate deals and negotiations. They can be very lucrative for the diligent mind. The risk levels are higher if you do not know what you are doing and the rewards can be higher as well.
Then there is the 50% equity Share Cash flowing notes
- Properties are purchased and rehabbed
- Properties are tenanted and cash flowing
- Properties are managed by the person who owns the property (the best invested interest to a value play)
- Properties are located in emerging markets (the best ability to create capital growth)
- Notes are typically 20% below appraised value giving you great capital growth potential
- A nice fixed rate of return generates consistent cash flow month after month
Cash flowing Notes with 50% equity share are great investment vehicles for the out of area or overseas investor. There are literally no management headaches, no lost cash flow due to tenant issues or repair issues.
We KNOW that the biggest problem investors have is finding current, active notes that are available for sale RIGHT NOW. Our list is updated weekly and has ONLY currently listed Real Estate notes for sale.