Good book on buying notes?

Question

Listened to a BP pod cast the other day on buying notes. Iv been looking for my second rental property but after listening about notes I'm interested in learning more about them . Does anyone know of a good book or other resource that would be instructive to a note noobie.

Thanks guys

Account Closed · Answer

I have note investors contacting me all the time asking me to look over the paperwork before they buy and I always help and never charge anyone needing help.

Joe Gore

Rick H. · Answer

Scott - ok, I get the frustration. Just a book or two that give you an overview about the note business. Not a home study course, not a seminar.

Here are a couple that might come close:

Invest in Debt - Jimmy Napier. Ancient, oversimplified and definitely out of compliance, but the approach to yields and negotiation might be useful. I'm not a big fan but many of my friends are.

Smart Trust Deed Investment - George Coates. Really for California note investors but will give you a good handle on the concept(s) and pitfalls. Again, very out of date and compliance (as well as out of print). George lived in a town near me and, like Jimmy, got to speak to him (once).

The note investment game used to be more straight forward and now is heavily affected by compliance and servicing issues. Takes much of the fun out of it, but it's still a great way to invest for cash flow.

If you find any if the old courses by John Schaub, you can't go wrong. Also, Bill Tan is a good teacher. Gordon Moss has a book on non-performing notes, Performance Anxiety.  All are friends of mine, however I stand behind what I've said.

Steve Babiak · Answer

So, Bill, how far along are you?  How soon until it is ready for prime time?

Brian P. · Answer

Scott

Agree with Rick Harmon's post. Also suggest you go to the note professors site and read his posts and archives. Also has a book/course at a fair price. He is at hpnotes com and it won't empty your wallet.

Bill Gulley · Answer

I just know a guy, rumor has it there is one, Brandon might have an idea....

I could pass along some suggestions if anyone has any. :))

Account Closed · Answer

I usually buy notes to solve title problems or to control property, so it's not a main investment strategy for me. More like just another tool. The note world is filled with competition just like RE. But just like, there's always distressed notes and distressed sellers of note

You can get a good overview of the basic workings of notes in your state by reading the "real estate financing" educational materials written for agents. By reading that you can at least get a handle on the vocabulary and issues surrounding loans and notes.  Because it's created to educate licensees, it's likely to be pretty up to date.  You might want to learn the material anyway, as it's relevant to lots of investing strategies.

Bill Gulley · Answer

I'd say Jay's idea is a good one if you can locate a broker who would actually educate you. I certainly educated many of my investors but certainly not as to specifics as all I'd end up doing would be losing an investor and gaining a competitor!

If they had come to me with specific questions I would have answered them. One investor did make a few loans and brought them to me to bless without charge, which I did, but he was very skidish as to risks and came back in to more still waters you might say.

While much is rather related in originations and buying existing notes, they are not the same ventures and there are different approaches. Due diligence will be from a different angle. But, such knowledge gained certainly won't hurt!

I'll bet that there will be a basic note information book that will come out soon that will be current. :)

Mark Scarola · Answer

Scott, I hope that I didn't give you the wrong impression. I'm a fan of notes and invested in them myself. My point was not to discourage you from getting involved in notes, but simply a caution to treat it like you would learning about any other opportunity. There is certainly potential with notes, and one of the advantages over rental properties is that you're not dealing with tenants, but homeowners. In other words, they handle all the repairs.

If I can help out as you continue learning, please feel free to connect and reach out.

Jay Hinrichs · Answer

Instead of the concept of buying notes.. think about investing in new originations... of commercial loans... IE your local hardmoney lender.

this is an excellent way to get your feet wet... Every city has a few to many experinced hard money lenders.. IE cities of 100k or more... Many take on small investors... And then their are PPM type funds were you can invest in the PPM that then invests in TDs and Notes..... this could be an excellent way to learn as well as the PPM will have detailed information on the formation, risk ,reward etc of the particular note investments they are doing.

Lastly most of the crowd funders are doing some sort of new originations and they have disclosure docs that you could learn from ... though you need to be accredited in most instances with these folks.. but you will find bigger funds that take non accrediteds.

Scott McGill · Answer

It did sound a little to good to be true. Thanks everyone for the help. I will probably continue to focus on buy and hold for the near term. However I will try to get a bit more knowledge about notes as I go. Now might not be the best time but I think getting some understanding might open doors in the future. I truly appreciate the time you all took to respond to this post.

Thanks

Scott

Play to the kings

Good book on buying notes?

Most Popular Reply