Total newbie to notes

[Doug Fluckiger]

I have a couple of STRs generating good cash flow but am looking down the road and have been reading about investing in notes. I have one question that might be blindingly obvious to you but is not to me: Must I already have the cash in hand in order to invest in notes? That is, if I buy a note worth $100k so that the mortgage holder now makes payments to me, I must have $100k in cash lying around to buy the note in the first place—it's not something that can be financed, like an investment property. Correct?

[Jamie Bateman]

Sure answer is yes, you need the $ for the purchase up front. You can get a private loan to buy a note, but you can't simply apply for a bank loan like you can with real estate as the collateral. Look up hypothecation. Even then, it is easier to get a loan AFTER you have purchased the note and the lender can see that it is performing.