From Joe Varnadore of NoteSchool:
Most real estate investors have heard of the “Note Business” but many misunderstand it while others think that it is completely separate from the real estate business. The fact is, most real estate investors are in the note business, and they just don’t know it. The note business is the financing side of the real estate business.
Note Business in the Simplest Terms
The note business is based upon the purchase, sale and assigning of two documents: the promissory note and the mortgage agreement. These two documents represent a promise to pay and a solution for non-payment.
Note = Promissory Note = IOU (I Owe You)
Mortgage = Collateral Agreement = Foreclosure Agreement
When someone borrows money to purchase real estate, they have to sign an agreement to promise to pay it back. This agreement also outlines the terms of the payback. This written promise is not enough to get a loan. This promise must be backed by collateral of value, which is typically the real estate itself. The collateral agreement pre-authorizes the foreclosure of the property if the debt is not paid according to the promissory note.
Move from the Paying End to the Receiving End of the Business
So if you have ever borrowed money from a traditional lender, private or hard-money lender, or even a property seller, you have been in the “note business”! Well, you have been on the paying side of the note business. Why not get on the receiving end of the note business!
In the receiving end of the note business, you can receive monthly cash flow without the headaches and liabilities of being a landlord, lump sum cash payouts, or even end up with the property at 30 to 40 cents on the dollar!
Acquire Property or Cash Flow for Pennies on the Dollar
Today’s inventory of both performing and non-performing notes is so massive that it doubles the number of foreclosures since 2008. This supply has prices for notes at historical lows but it will not last forever.
Non-Performing
When you buy a non-performing note on a vacant home, you will acquire a Deed in Lieu or foreclose and end up with the property. You are a real estate investor simply acquiring property in a different way.
If you buy a non-performing note on an occupied property, you will either modify the loan to start receiving monthly cash flow, get a Deed in Lieu or foreclose.
Performing
When you purchase a performing note, you acquire long term, real estate backed, monthly cash flow. Today, these assets can be purchased for 60 cents on the dollar. That is an unbelievably good deal. No land lording, no hassles, just automatic monthly deposits into your account.
Learn More
Joseph Varnadore from NoteSchool will be presenting “Rich Rewards in Notes” to our group on Thursday, Aug. 23. His presentation will start at about 7 p.m., but you'll want to be in your seat early.
You owe it to yourself to learn more about this huge opportunity in real estate.
EARLY MEETING: Attorney John C. Talbott will update us on the Jefferson Development Group's 3-acre, 30-story project (offices, apartments, condos, hotel) at the intersection of Lexington Road and Grinstead Drive.
Keep in mind that Thursday's main meeting will be followed up on Saturday with a more intensive workshop!