The Perfect Note To Buy

[Chris Seveney]

Hello fellow BP Members. 

As a buyer and seller of loans (and real estate), trying to find the perfect note is like trying to find the perfect spouse. If you truly want to tie the knot, you have to realize that no person is perfect, and if that is your search - you will always end up with nothing.

The same goes for note investing, we see a lot of newer investors seeking high returns on performing loans but want the perfect note (borrower high credit, all payments made before they are due). If that is what you are looking for, that is great but your returns are going to be 6-9%. If you want the double digit returns, you have to take on some risk and realize these loans the borrower may miss a month and catch up, there credit may not be the greatest. Does this add risk, yes it does, but that is where to evaluate risk vs reward.

There are plenty of loans out there to buy as an investor, but I see far too many people complaining they cannot find anything because they are looking for that "perfect spouse"

[Eric Gerakos]

As a conservative investor, I love my “perfect notes “ that pay 9%. In more than 20 years I’ve never had a late payment or default. I buy notes when rates are relatively high and buy more properties when rates are low. I was able to retire the first time at 35 using this strategy.