It’s no secret that I love notes. And since my book just launched, I wanted to tell you the biggest reason why.
Whether you buy a performing or non-performing note, create it via seller financing or by lending hard money, the goal is for that note to perform. And when it’s placed with a servicer and it’s performing, I would argue it’s better than almost any property that cash flows the same amount.
Here’s why: it’s passive. And when it’s passive, things get easy. Or rather, they stay easy. There are no calls in the middle of the night from tenants, there are no townships hassling you, and there’s no property being slowly worn down until the day your tenant moves and you have to renovate. In fact, with institutional notes, if a borrower moves, they still have to settle the note, whether it’s by selling the property or renting it out.
Now if you’ve read any of my previous articles, you probably already know that. But what you may not know is that when you have a passive investment that’s a debt instrument like this, it makes paying debt with debt an interesting idea.
College for a Fraction of the Cost
The more I mention this, the more people want to hear about it.
When I tell people this story, I often say, “Think back to your first note.” This provides context that we can all relate to. For some people, it was their car loan or their mortgage. My first note was my student loan, and that’s the same case for my son—only when he got to college age, I had already started in the note business and figured out that if we were to employ two different investing strategies together, we could pay for his college tuition with a fraction of the money.
So instead of my wife and I just writing…