Cash flow notes?

Question

Hi everyone. I've read some others post and read other pages, I was just wonder about a little more I for about Cash Flow Notes, simplified for someone that doesn't know all the terms and understand the rations like myself. I find myself Google definitions a lot on words, but I still find myself not understating a lot of things because I'm not sure how notes work still..... I came across them when researching about sellers financing. I am curious about if they are good thing to get into or should it only be getting into if you have years of experience? I don't understand a lot of the legal terms either but everyday I research and look up definitions. Thank you for reading and commenting

William "W.J" Mencarow · Answer

Hi Isaiah. I have a free 7-part ecourse on notes. PM me and I'll send you the info.

Dave Van Horn · Answer

Hi @Isaiah LopezGlad to you're interested in the note space! I obviously think notes can be a great investment, and I think what's great about the industry is that it's so vast that there's really a place for everyone no matter your experience, available capital, and risk tolerance level. There's a lot of great advice above, but there were two things that were big for me starting out that I think I should mention. First is networking. Both here on BP and in person at your local REIA and/or Real Estate Investing Meetup Groups are great places to start. If it weren't for groups like these, not only would I had not have found out about notes, I wouldn't be where I am today in Real Estate either. I was introduced to note investing and even came to meet my two current partners in my note company through connections at some of these meetings (not to mention I've met many great note buyers, sellers, and investors over the years).The other main thing is actually taking the leap and buying the first note. Now of course you shouldn't do this until you feel more comfortable with the terminology and understand the general mechanics of the part of the industry you're looking to enter, but once you're there don't hesitate. There's no such thing as a perfect note or a perfect deal, so it's best to take the leap and learn from there. This is how we started and eventually found our business model; buying a few notes and slowly but surely working our way up from there.PM me if you ever have any specific note questions or if there's anything else I can help you with.Best,DaveP.S.Thanks for the shout outs @Edward B. and @Chase Thompson!

Edward B. · Answer

@Isaiah Lopez,I definitely think it is an area to explore and at least diversify into if you are not going to focus on it. I believe a 12% return is very reasonable with minimal risk. Certainly much less risk than real estate and much less of the headaches as well. And that is just performing and reperforming notes. If you want to get into nonperforming notes (NPN or NPL) then the ROIs go up significantly as well as the risks. Think fix and flips vs buy and holds. And you have 1sts and 2nds. There is a lot to learn and a lot of very smart people on BP. Do some searches and you will find a wealth of information. After pouring through that bring some specific questions and people will be happy to answer them.To get you started, I began by reading all of @Dave Van Horn blog posts here on BP. He primarily invests in 2nds but has a wealth of knowledge in all things real estate, note, and wealth enhancing related. From there I pretty much settled on a strategy of investing in nonperforming firsts to generate cash to invest in performing/reperforming firsts and seconds for cash flow. On the NPN side I am just more comfortable with 1sts. I have invested with Dave's company PPR and got most of my education on NPN 1sts from @Scott Carson and his website weclosenotes.com. There is a good podcast called noteMBA that will help you learn while you drive. At least familiarize you with the asset and some strategies. Chase and Robby got their start through Scott and share a lot of their experience investing in notes on the podcast. Good luck.

Darren Eady · Answer

Thanks @Edward B. I'd be happy to send anyone information about performing notes if they'll ask me through BP for more info.

Scott Carson · Answer

@Chase Thompson and @RobertWoods do an amazing job with the NoteMBA podcast!

Bob Malecki · Answer

Hi @Isaiah Lopez I suggest you check out @William 'W.J' Mencarow 's offer, he provides great resources on performing notes, whereas Scott Carson and Dave Van Horn specialize more in non performing notes.

Dolly Caswell · Answer

Good morning @Chase Thompson, I've read so much about your blog and so I downloaded iTunes and etc in order to hear it on a regular basis. No sound! I've tweaked everything I can think of and still no sound. I get sound with everything else I use, but not your podcasts. I tried to find a "contact us" button on your site, to no avail, so am reaching out here to ask for help. Thanks, I'd really like to listen to your podcasts.

Jay Raught · Answer

@Isaiah Lopez good luck in this space. The Note MBA podcast @Chase Thompson is awesome. I am almost current. I actually listened to 2 on the way home from a Note Expo in NJ today. If you have any note questions do not hesitate to reach out. I look forward to hearing about your success!! Be the Bank!!

Isaiah Lopez · Answer

@chase @Chase Thompson thank you for taking the time to read my post and comment, it means a lot! I'm excited to start listening to the pod cast. I feel very blessed and greatfull that I found like minded people and also being given these opportunities to learn, I am defiently going to take the time to learn more about investing in paper. Thanks again!

Chase Thompson · Answer

@Isaiah Lopez, hey man!We get a ton of people that binge consume the content over at Note MBA. It's about the only thing we have in common with House of Cards. Well that, and we're also highly entertaining!To answer some of your questions, they're definitely a great asset style to go after. However, you need to take your time educating yourself. Investing in the paper is different than investing in the home. There are some great resources here on BP, a few great people that specialize in this niche have already been mentioned, you've got our podcast, etc.In fact, we actually did a great interview with @Dave Van Horn.