Borrowers have stopped paying. These are bought at much steeper discounts, often with the goal of restructuring the loan or foreclosing to take the property.
If the property value drops below your investment amount, your "security" is weakened. buying discounted notes
Foreclosing on a non-performing note can be expensive and time-consuming. Borrowers have stopped paying
You must verify the property's value, the title's clarity, and the borrower's payment history before buying. Foreclosing on a non-performing note can be expensive
When a lender (like a bank or private seller) wants to free up cash, they may sell their mortgage notes at a discount.
First position notes are paid first in a foreclosure, while "second" or junior notes are riskier but often cheaper. Key Benefits
💡 Unlike being a landlord, there are no "tenants, toilets, or termites" to manage.💰 Higher Yields: Buying at a discount creates an automatic gain in equity and a higher ROI than traditional bonds.🛡️ Asset Security: Your investment is backed by a physical asset that can be liquidated if necessary. Risks to Watch For