Becoming a Real Estate Investor is Easier Than You Think: How to Make Your Dream a Reality with Mortgage Notes

When you drive past a “For Sale” sign, do you ever think:

●     “This would be a great location…”

●     “It’d be nice to have another source of income…”

●     “If only I had the money…”

●     “I wouldn’t be able to afford a second mortgage right now…”

 You’re not alone in those thoughts.

 Many people dream of becoming real estate investors. There’s great wealth building potential and it’s dramatized on TV as a pretty glamorous life. But most never get there because they either don’t have the resources or are too afraid to make the purchase.

 We can’t blame them.

 Owning property is a MAJOR commitment.

 But what so many fail to realize is that there are a number of different ways to invest in real estate without ever having to own physical property. Passive ways. Where you don’t have to worry about the pains of physical ownership or put yourself in an unfavorable financial situation.

 Better Than Brick & Mortar

 Taking the passive approach to investing in real estate gives you more time now to do what you actually love, and the financial security later to live on your terms for years to come.

 You can also avoid common problems of investing in physical real estate along the way:

 Confusion

 Will you fill out and file the mountain of paperwork the right way?

 Do you understand the neighborhood dynamics that will impact the value of your property?

 How do you know if you’re getting a good deal?

 What will the value of your investment be in the future?

 There’s a small margin for error…

Money

Buying an investment property could easily cost you an arm and a leg however you plan to use it.

Multiple mortgages with pesky interest rates, renovations and repairs, property management fees, taxes… and these are normal costs.

It all adds up fast.

 People

 Tenants, trash, and toilets are all sure to make your head pound.

 It doesn’t matter what time of day it is, problems never take a day off. Whether you’re on vacation, at work, or trying to spend time with your family - you’ll always be on call as a landlord.

 Toilets falling through floors (yes, it’s happened…)… trash and animal waste in the living room… tenants who don’t want to pay rent… they’re all your problems when you own physical property.

Contractors

 Dealing with tenants can really drive you crazy, but working with contractors can be just as stressful. If you’re not careful, you could be spending an unconscionable amount of money and have nothing to show for it at the end of the day.

 Not to mention all of the legal trouble you could end up in if you don’t do your due diligence. So you better get everything in writing.

 Bids, contracts, materials, purchases, payments…

 Everything.

 Most people say as long as you do things the “right way” you should be fine, but it’s so easy to miss something or hire a contractor that puts you in a bad spot.

 That’s why you should consider…

 Building Wealth Without Owning Property

 If you don’t want all of the headaches that come with investing in physical real estate, here are some strategies that work as an alternative.

 Real Estate Investment Trusts (REITs)

 REITs give you the ability to invest in real estate as an asset without buying the actual property. Instead, you buy shares of the REIT which owns the property, and then you receive passive income through dividends. The downside comes in the form of taxes. REITs must pay property taxes, and if you’re an investor you must pay dividend tax, both of which cut gains down quickly. 

Real Estate Mutual Funds

 It can be hard to diversify in real estate, but mutual funds, index funds, and Exchange-Traded Funds (ETFs) give you that option. These are like other professionally managed funds, the only difference is the holdings are made up of REITs (see above) and public companies that generate most of their revenue through real estate. But as with traditional investment funds, beware of hidden fees. You could unknowingly pay your advisor, planner, or fund manager a good portion of your nest egg over time.

 Mortgage Notes

 One of the easiest ways to take advantage of real estate’s potential for high returns, without owning physical property is to invest in mortgage notes. A note is the promisory note, IOU, or personal guarantee attached to a homebuyers mortgage, certifying that the owner will pay back the outstanding amount on the mortgage. If the owner doesn’t pay the lender, the note goes into default and the home goes into foreclosure. Investors can buy bad notes from banks and see quick, above average returns, while helping banks remove bad notes from their balance sheets.

 But wait, there’s more...

 ●     You don’t have to be an expert. You can invest with a knowledgeable partner, and your involvement in the process can be completely passive.

●     Notes are a secured way to diversify your portfolio and protect you from overexposure to the stock market.

 ●     Reinvesting your interest over-and-over again allows you to tap into the power of compounding interest.

 ●     They’re incredibly flexible, so if you invest but quickly decide that they aren’t right for you, there are a large number of exit strategies that you don’t get when you own physical property.

 And with notes, you’ll never have to worry about getting a call from your tenant in the middle of the night, have to do maintenance, or make mortgage payments. You’ll be the one receiving payments instead.

 Prosper Without the Pain

 Although mortgage note investing has been around for decades, it’s a new concept for most people for the mere fact that it gets overshadowed by other strategies.

 Here are 5 tips that should help you steer clear of trouble as you begin your note investing journey:

 Tip #1 - Learn from Trusted Note Investors

 Identify teachers who are knowledgeable, experienced, and have a good track record. There are snakes out there who just want to take your money with real estate seminars that cost $10K - $20k and promise huge returns.

 Run your own version of a background check on the people you plan to learn from. Research them thoroughly. The numbers don’t lie so try and talk to people who’ve partnered with them on joint venture deals in the past.

 Tip #2 - Invest with a SDIRA or Solo 401(k)

 In the fallout from the 2008 Financial Crisis, people are rebuilding their nest eggs using versatile wealth building accounts called Self Directed IRAs (SDIRA) and Solo 401(k)s. At one point these were primarily used by the wealthy, but now they’re known and being used by people at all income levels.

 Self-directed 401(k)s and IRAs are exactly like their traditional counterparts, but there’s one key difference: you’re in the driver’s seat. That means you choose the custodian (the person who manages your account based on your instruction), and you choose the investments. The main idea is that you have more flexibility and options.

 Tip #3 - Become a Joint Venture Partner

 Start small. Take time to learn the ropes.

 Based on our experience, the best way to get started is by partnering on a joint venture deal with one of those trusted note investors you previously identified. It’s not wise to jump in and try to hit a home run on your own without any prior knowledge of how things work.

 That’s too risky.

 Tip #4 - Ask Questions and Verify

 If you have concerns or you’re not sure about something that comes up before or during the investing process, raise your hand and ask questions. Be sure to find a note investor who will take time to answer your questions simply and clearly.

 Most importantly, before you make anything official you need to be aware of any potential problems you could run into with the seller, a clear understanding of your partner’s exit strategies, and the projected ROI and time frame of investment.

 Tip #5 - Seek Professional Help

 Self-directed investing can have unique tax implications. That’s why it’s important to have a team of trusted professional who can provide legal and tax guidance throughout the process.

 Try to find experts who have experience working with self-directed accounts and alternative investing. We say this because many don’t, but we can connect you with a list of vetted professionals who we trust.

 Join the Waitlist

 There’s so much opportunity to build wealth in real estate. Taking the passive approach with notes can be a safe way to invest your money. But why struggle trying to get started on your own or pay $20,000 to attend a gimmicky seminar that promises unreasonable returns, when you can learn everything you need to know from honest note investors who know how to win.

 No magic bullets… No get-rick quick schemes… just proven-note investing techniques that have helped real people like you build wealth that matters. 

 If you’re hungry to learn about note investing the right way and don’t want to leave your home to do it, then join the WAITLIST for our NEW ONLINE COURSE that’s launching before the end of the year. When you sign-up below we’ll notify you before the course goes live, that way you can reserve your spot before the seats fill up.