Why Mortgage Notes?
An exciting topic up for discussion, mortgage notes. My name is Heather Dreves and I will walk you through why they are so popular.
As Director of Funding at Secured Investment Corp, I’m excited to talk to you about one of my favorite topics: why do people buy mortgage notes? Everyone asks and there’s a lot of buzz in the industry: invest in funds, invest in syndications, invest in notes. People need to understand there are very different types of notes – in my opinion, the two categories are underperforming or non-performing, and performing notes.
What I’d like to talk about today is performing notes. They are powerful tools. When you purchase a performing note, you are immediately creating cash flow for yourself. For any of you that have retired, that have sold your businesses or your practices, looking to replace your income rather than to deplete your nest egg, and you want to create cash flow for yourself, notes are a perfect way to do that.
Mortgage notes typically pay on a monthly basis. It’s important for you to do your due diligence on the actual promissory note so you understand what that borrower’s obligation to repay the loan is. But more often than not, those borrowers are required to make a monthly payment on that mortgage, which means that you would be paid on a monthly basis.
A lot of our clients really like mortgage notes because they do create that passive cash flow.
They Are A Secured And Safe Investment
The last reason our clients like notes is because they like that they have a physical asset that is backing their investment. It’s not like investing in stocks and you’re crossing your fingers and relying on that company to be successful to get your money back. If that company goes bankrupt, you have nothing backing your money. A mortgage note means that you are now the bank. You are the lien holder against that asset, and the way that you secure your capital in the event that that borrower defaults is you have the ability to foreclose and take that piece of real estate back.
Get Started With Your Journey
For more information, click the link below. We’d be happy to talk with you more. Need to learn more about mortgage notes?
Director of Funding
Heather is a tenured employee that has worked in the Private Money Industry for over 15 years. Heather has been directly involved in the sale of over 100 million dollars in Trust Deed Mortgages and raised over 30 million in Secured Investment Corps High Yield Equity Funds. She has had experience in assisting underwriting, managing the Cogo and Servicing team in addition to Investor Relations.
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