: Ensure the property is worth more than the loan balance.
: Once funded, ownership is legally transferred. Most investors hire a licensed loan servicer to handle payment collections and legal compliance. Case Study: The $49,000 Discount How to Invest in Mortgage Notes - Yahoo Finance
Buying mortgage notes allows you to "be the bank" by purchasing the debt secured by real estate. This strategy provides passive income through monthly principal and interest payments without the responsibilities of property management.
: Review at least 12–24 months of payment history.
: Notes are often sold at a discount (e.g., paying $35,000 for a $40,000 balance), which instantly creates equity and increases your yield.
: Use online marketplaces like Paperstac or Note Trader, or contact banks and credit unions directly to find "off-market" assets.
: Check for superior liens (like unpaid taxes) that could wipe out your interest.
: This is the most critical phase. You must verify:
