Author Topic: Have you invested in notes? Interested in learning more.  (Read 441 times)

Captain Cactus

  • Stubble
  • **
  • Posts: 107
Have you invested in notes? Interested in learning more.
« on: January 10, 2018, 07:44:59 AM »
After listening to a Bigger Pockets podcast recently I'm interested in learning more about investing in notes, specifically performing 1st or 2nd position real estate notes. 

Do you have any experience doing this?  Before investing did you consult an attorney and accountant? Do you recommend any resources?

On the surface it sounds pretty good.  Recognize there is inherent risk (death, divorce, job loss, illness).

VoteCthulu

  • Bristles
  • ***
  • Posts: 322
Re: Have you invested in notes? Interested in learning more.
« Reply #1 on: January 10, 2018, 02:25:52 PM »
I don't have any direct experience, but since you're not getting any other bites so far I'll put in my $0.02.

The returns are pretty good, but dealing with foreclosures is an absolute pain in the ass. I sleep better knowing I can take my money out of my investments at any time, so I don't have much real estate outside of my home anymore.

Captain Cactus

  • Stubble
  • **
  • Posts: 107
Re: Have you invested in notes? Interested in learning more.
« Reply #2 on: January 10, 2018, 07:02:56 PM »
Thank you!  Sometimes I feel like the Bigger Pockets podcasts are hyped up advertisements for some guru's service, even though they try not to paint it like that.  I listening to a few of their podcasts where they discuss note investing, and while the idea sounds great I don't see any practical way for the would-be note investor to find a note.  Accredited Investors are another story, but for the aspiring millionaire, nothing obvious.  To be fair I haven't dug too deep yet, but now I've got some healthy skepticism. 

MaikoTsumi

  • 5 O'Clock Shadow
  • *
  • Posts: 50
Re: Have you invested in notes? Interested in learning more.
« Reply #3 on: January 11, 2018, 09:12:13 AM »
Thank you!  Sometimes I feel like the Bigger Pockets podcasts are hyped up advertisements for some guru's service, even though they try not to paint it like that.  I listening to a few of their podcasts where they discuss note investing, and while the idea sounds great I don't see any practical way for the would-be note investor to find a note.  Accredited Investors are another story, but for the aspiring millionaire, nothing obvious.  To be fair I haven't dug too deep yet, but now I've got some healthy skepticism.

The notes guru at Bigger Pockets, Bwald Guy Jeff Brown, IMHO is one of the slimiest hucksters on there.  In their podcasts, they're always anti-guru but they regular have this guy on and promote his blog posts. None of his podcasts or posts are said with straight, up front language.  It's all magic thinking, rambling, and circular logic. He makes up his examples out of thin air and never provides real advice. You can listen to him and come away with no knowledge about notes.

L.A.S.

  • Bristles
  • ***
  • Posts: 472
Re: Have you invested in notes? Interested in learning more.
« Reply #4 on: January 13, 2018, 07:13:38 PM »
Aren't most mortgage notes that have been originated in the last several decades securitized and packaged into mortgage backed securities.  Can't someone just buy mutual fund or ETF that invests in Ginnie Maes and have exposure to a diversified pool of thousands of mortgages?

I'm sure if someone wants to own individual notes, there are a few cats and dogs out there such as seller-owned notes (seller financing/private mortgages apparently used to be quite popular), or banks that get stuck with a note because it turns out that there was an underwriting snafu and it is  non-conforming, so it can't be securitized and has to stay on their books.  Perhaps offers could be made to purchase these..  But, unless someone has really deep pockets there is no diversification.  Wouldn't this be really risky?