Question on notes - NOT investing in them

[Glenn Mayo]

Can anyone shed some light for me on how to use notes in real estate investing? For example, using notes as down payments and such? I've heard notes can be used in zero down deals, but I'd like to learn more about these kinds of strategies.

[Dion DePaoli]

A note is a promise from a borrower to pay a sum of money plus interest over time to a lender/holder usually in periodic installments.  A note is written form of debt. It is an I.O.U.  A note is not money.  Generally a note can not be used as a down payment as a down payment is cash contributed by a buyer seeking financing.  

As a borrower, the note is your liability.  As a holder/lender the note is an asset.  As the holder you are entitled to those periodic payments and the sums due on the note.  So there is value there if you hold the note.  To hold the note you would have had to have purchased it or been the lender which we can consider the maker of the note.  

Due to the latter, notes are an investment.  A way for an investor to put their money out and generate a return.  Typically notes dealing with real property are secured.  The borrower gives an interest in real property by way of a mortgage or deed of trust and the lender gives the money and makes a note to document the exchange and plan of repayment.  

A note can be unsecured which means there is no collateral given in exchange for the money the note represents.  An example of that would be like a credit card.  When you agree to the terms of credit from the card company, that is the note you are signing which says interest and repayment terms, etc.  

There is an entire universe of subject matter here and it is not clear which direction you really are trying to venture of into.  You can ask some more questions and we can help guide you in learning some more.  Also, browse some of the threads here as this is the forum about notes.