Buying Discounted Notes -
You must verify the property's value, the title's clarity, and the borrower's payment history before buying.
AI responses may include mistakes. For financial advice, consult a professional. Learn more Should You Only Buy First Position Notes? - BiggerPockets
When a lender (like a bank or private seller) wants to free up cash, they may sell their mortgage notes at a discount. buying discounted notes
You buy a note with a $100,000 balance for $70,000.
Buying discounted notes allows you to act as the "bank" by purchasing existing mortgage debt at a price below its face value. This strategy can provide high-yield passive income or a path to acquiring property through foreclosure. How It Works You must verify the property's value, the title's
If the property value drops below your investment amount, your "security" is weakened.
Borrowers are making regular payments. These offer lower risk and steady, immediate cash flow. Learn more Should You Only Buy First Position Notes
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.
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