Advantages of Note Investing


Have you ever heard of note investing? If you’re not yet familiar with it, a note is basically a written promise to pay such as a promissory note, which is the simplest example.

Since there’s a written promise, it carries the same value of what has been promised. Therefore, you can also treat this as an asset. If you are given a check, you are now a holder of a note, and this investment concept applies to other types of notes.

Investing in a note is simply buying a note. When you buy a note, the issuer will pay you interest typically in increments. After a certain period, your note will expire, and you will get the face value back.

The face value is usually higher than the price you purchase it for. In a nutshell, you can start earning upon buying a note not to mention you can still earn interest every allotted increment depending upon the period the note is held.

If you want another income source, note buying allow you to get your feet wet by purchasing one one. You could also make money with veterinarian card processing, but to do you you would need to set up a more involved infrastructure and acquire a client base.

Five Fundamental Advantages of Note Investing

  1. Collateral

When you invest in mortgage notes, your risk is very low because you have an option to foreclose a property if the borrower is no longer able to pay.

Although you have all the legal rights to chase a non-paying borrower, you won’t have to do this if you have the property as collateral.

  1. Profitability

There are several ways you can profit from note investing. Aside from the interest you may earn, you can profit by purchasing a mortgage note at a discounted price, which occurs when the mortgage is delinquent.

This could be different levels of being delinquent from a month to several months, and the bank no longer wants the risk and is willing to sell it at a discounted price. Moreover, you can have a chance to increase its profitability if the borrowers are forced to pay for the amount overdue in late fees.

  1. Control

As a mortgage note holder, you can have the same control of the original owner, but you have less responsibility since you don’t have to worry about things like location, property maintenance, and more.

You don’t have to bother yourself dealing with contractors or tenants. Therefore, owning a mortgage note is a relatively passive investment.

  1. Versatility

Owning a mortgage note does not only give you full control over the property you can also do several things with your note other than keeping it. You can use it to refinance the borrower, rehab a non-performing note, sell it, or use it as a collateral when you are also borrowing for future loans.

Amerinote Xchange states that it’s better that you sell your mortgage note to a direct buyer who can give you the best price. As a recent seller stated, when they sell my mortgage note, I know they’re getting the best price that the market has to offer. This makes note investing all the more profitable.

  1. Volume

Real estate investors can manage up to 15 properties per month while mortgage note owners can manage up to 25 loans per month and even more depending how they’re incorporated.


Almost every one of us is in note investing because many people own a mortgage. The only difference is that only some of us are on the borrower side, and others are on the lender’s side.

If you are a property owner, it’s likely you are on the side of the borrower. However, you can also be a property owner at the same time while being on the side of the lender by simply investing in mortgage notes.

Author’s Bio

Carl Aamodt

Title: Super-Connector at Outreach Mama

Carl is a super-connector with Towering SEO and OutreachMama, who helps businesses find their audience online through outreach, partnerships, and networking. He frequently writes about the latest advancements in digital marketing, business, and finance, and focuses his efforts on developing customized blogger outreach plans depending upon the industry and competition.




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