If you’re thinking about buying real estate notes, you’ll love the many benefits they provide. It’s no wonder that more and more real estate investors are jumping on board to buy notes! In this article, you’ll read about the four advantages of real estate note investments…
In the world of real estate investing, there are many different ways to invest. You can wholesale, you can flip; you can do residential, you can do commercial; and, of course, you can also invest in notes. Notes are like mortgages and when you invest in a note, you’re basically acting like the bank with the home-buyer or homeowner paying YOU their mortgage payment. When you buy “a note” it is secured by a deed of trust in deed of trust states.
Why would you want to invest this way?
Real Estate Note Investment Advantages
#1. Flexibility
Investing in notes gives you a lot of flexibility because you can do many of the same things with notes that you can do with actual real estate: you can buy it and hold onto it, enjoying the cash flow; or, you can partner with other investors to split the cash flow; or, you can turn a non-performing note into a performing one (which is just like a rehab!) and sell the note to another investor for a profit.
#2. Afford-ability
Some people want to invest in real estate but find that owning a property with a house on it is just too expensive to acquire and also expensive to maintain. However, if you invest in notes, you may be able to get them for a fraction of the price of a property with a house on it, plus there are no ongoing maintenance bills!
#3. Cash Flow
When you invest in cash flowing notes (not all notes are cash flowing), you enjoy the cash flow that comes with the homeowner paying you what is basically their mortgage payment. You get regular income, just as you would with a rental property!
#4. No Structure Hassles
Every real estate investor fears getting the call in the middle of the night to fix a tenant’s toilet. But with a note, you don’t have any real estate structure issues to worry about – you basically hold what might be considered the mortgage. The toilet is the owner’s responsibility. So you don’t have to worry about flooded basements, re-roofing, replacing the heat and AC system, etc.
Summary
There simply isn’t a simpler way to invest in real estate other than investing in real estate notes. And there are many more advantages beyond these 4 advantages of real estate notes.