Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 54%
$32.50 /mo
$390 billed annualy
MONTHLY
$69 /mo
billed monthly
7 day free trial. Cancel anytime
×
Take Your Forum Experience
to the Next Level
Create a free account and join over 3 million investors sharing
their journeys and helping each other succeed.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
Already a member?  Login here
General Real Estate Investing
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 1 year ago on . Most recent reply

User Stats

3
Posts
0
Votes
Vamsi Vikash
0
Votes |
3
Posts

Promissory Notes - Risks and Benefits

Vamsi Vikash
Posted

Hello friends, 

I'm brand new to real estate investing. Based on my research, Promissory notes seem to be a good passive income with around 10 - 15% returns. Here are some of the websites, that I've researched so far: 

1) F Street - https://fstreet.com/ - 10% 
2) Norada Real Estate - https://www.noradarealestate.com/real-estate-markets/ - Around 15% 
3) SIMM Capital - https://simmcapital.investnext.com/portal/offerings - Exploring 

I tried to go through this blog - https://www.investopedia.com/terms/p/promissorynote.asp to understand more about the Promissory notes as well. Unfortunately, most investments are $50K minimum, and I'm in my early 30's and still trying to get that much liquid cash to invest. Can experienced investors like you, please share your thoughts, risks, or things I need to be aware of about Promissory notes? 

I'm using this as a vehicle for passive income if there are other options, please feel free to share. I'm already familiar with Stocks, Options, CDs (Ladder), Bonds,..etc. I'm looking for an option that might generate a 10% return with fewer risks (I know I know :) ) if possible. 

Cheers

Most Popular Reply

User Stats

1,782
Posts
1,528
Votes
Doug Smith
  • Lender
  • Tampa, FL
1,528
Votes |
1,782
Posts
Doug Smith
  • Lender
  • Tampa, FL
Replied

I actually prefer loans to real estate, but that's because that's mostly what I've done for more than 30 years. No tenants or toilets. That being said, it's a bit more capital intensive. We don't take less than $35K from investors when we place capital. We prefer North of $75K. It's just as expensive to manage money for smaller investors as it is for larger ones. It's really tough if you're doing it yourself with a few bucks to properly diversify the note portfolio. You usually only have an asset or two and that really amps up the default risk to your portfolio. The biggest issue with the note industry is, regardless of what some of the gurus will tell you, it's hard to teach you the pitfalls of notes in a weekend course or through a $10K "mentorship" where you jump on a call every week. A lot can go wrong and there's a lot to learn. Be very, very cautious going into note investing. It's not as simple as what the course-offering gurus will lead you to think. If you do take a course, actually pay attention to the pedigree of the instructor. Do they have a formal credit background in lending or were they are realtor, stock broker, etc...not a real lender...before they decided to teach about credit. Just my rant and advice. 

Loading replies...