Real Estate Note Investing: How To Generate Passive Income Using Mortgage Notes

Real estate note investing can be a great way to build generational wealth and create income.

Investing in real estate notes has a lot of advantages and provides unique possibilities.

If you have ever purchased a property, you might have noticed that sometimes the lending institution you signed at closing differs from the one now holding your mortgage.

What is Real Estate Note Investing or Mortgage Note Investing?

The most common reasons for investors to invest in notes are: 1. Receive regular monthly income based on the interest rate of the note

While we may not agree with everything he says, there are nine decades of wisdom buried in Warren Buffett’s quotes.

Since mortgage notes generate high interest and the interest payments are taxed at the income tax level, a self-directed IRA is the most tax-efficient way to invest.

Mortgage Note

A mortgage note, also known as a real estate lien note or borrower’s note, is the document you sign when you take a mortgage.

The mortgage note contains the terms of how you will repay your loan and how your home will be used as collateral if you fail to pay back the loan.

Promissory Note

In most cases, the mortgage note is usually accompanied by another note that outlines the conditions of paying back the lending institution.

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