You're curious about note investing, but something is holding you back. Maybe that's the uncertainty, or the feeling that this is too complex to break into.
The truth?
Getting started is simpler than most think—when you have the right roadmap.
Let’s walk through the exact steps that take you from intrigued to invested.
Education is Key
Smart investors don’t guess—they learn. Before making a move, stack your knowledge like a pro:
Watch insightful videos and attend webinars from seasoned investors.
Book a consultation with a successful note investor (someone who has been where you are and is now where you want to be).
Join a "Lunch & Learn" session designed for beginners who want to grasp the fundamentals over a good meal.
Fun Fact: The concept of "notes" goes back centuries! Merchants in ancient Babylon used promissory notes, proving that lending and borrowing have always been part of wealth-building.
Understand the Basics of Note Investing
To make smart moves, you need to know the game:
Different types of notes: Performing, non-performing, and re-performing.
Lien positions: First lien, second lien—which one aligns with your strategy?
The role of servicers: These pros manage the loan payments, so you don't have to chase down borrowers.
Determine Your Investment Style
Every investor has a preferred play style.
What's yours?
Passive Investing
Partner with an experienced note investor or a reputable investment fund.
Benefit from their expertise without getting into the weeds.
Ideal for those who want steady returns without daily involvement.
Active Investing
Take control and manage the note yourself.
Requires a deeper understanding and more hands-on effort.
Potential for higher returns, but also more responsibility.
Prepare Your Finances
Numbers matter. Let’s get them right.
Determine Your Investment Budget
Most first-time investors start with $30,000 to $50,000.
Set your budget based on your financial goals and risk tolerance.
Secure Funding
Options include self-funding, leveraging retirement accounts, or working with private investors.
Find the Right Note
Time to pick your first investment!
Prioritize Performing Notes
Start with notes that have a consistent payment history.
Lower risk, steady returns—a great way to get your feet wet.
Conduct Thorough Due Diligence
Analyze the borrower's payment history, property value, and loan terms.
Verify the property location and assess potential risks.
Complete the Purchase and Start Collecting
Now comes the rewarding part: putting your money to work.
Execute the Purchase Sale Agreement
Review and sign the agreement with the seller.
Double-check that all documentation is solid.
Fund the Investment
Transfer the agreed-upon amount to complete the purchase.
Begin Receiving Payments
If you work with a servicer, expect consistent payouts.
If managing on your own, prepare for some variations in payment timing.
Embrace Continuous Learning
The best investors evolve. Stay ahead by:
Keeping up with market trends: Regulations change, and so do opportunities.
Networking: Learn from experienced investors who have been in the trenches.
Re-evaluating your portfolio: Fine-tune your approach as you gain experience.
Note investing isn’t just about making money—this is about financial freedom. Many investors say that it has transformed their lives, giving them more control and peace of mind.
That first step?
That is right in front of you.
Ready to take action?
Join our Lunch & Learn on February 25, 2025, at 12 Noon CST, or book an exploratory call with me to map out your investment journey.
I am Hànanda Whittingham, and let me help you invest in a LIFE you LOVE!
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