All Forum Posts by: Adam Johnson

Hello all,

I recently started out in the note business in late 2019 and am eventually wanting to grow to a minimum net income of $5 K per month, the research and studying that I've done so far has emphasized a lot on the importance of having standardized methods, systems and processes in place or at the very least fully developed and ready for implementation as the business grows over time. Would anyone be willing to share what kinds of systems and processes they have developed and/or implemented in their note business that have helped them? A search of the site has pointed me towards Adam Adams on youtube; he has some videos related to the topic that I'll be checking out. I would suspect that different practices would be more applicable to the business at different points of the business growth, for example I currently am not paying a VA to find deals for me but plan to hire one once I have 5 notes or so on my books; I am not currently doing any marketing campaigns but I would not expect to implement that until the 8 to 10 note mark. If anyone would be willing to advise at which points they would implement their business practices that would be extremely helpful as well!

Hello all,

I’ve been playing in the real estate space since about 2018 and made the transition to notes in late 2019 with my first purchase being a partial on a 1st lien performing residential note. I’m currently reviewing my business plan, setting financial savings and purchasing targets for 2020 and would like to hear from those individuals who are one or two steps ahead of me currently. If there is anyone out there that is currently holding 3 to 5 notes (1sts and 2nds, residential, partials, commercial or other), would you mind sharing your experiences so far as well as any advice you might have as to how I can best transition to the next phase of my note investing business? Feel free to DM me if you would prefer not to post publicly, I’d love to hear how your journey has gone so far and what your plans are for moving to the next phase of your business!

My biggest accomplishment in 2019 was breaking into the note industry with my first purchase.  I've had so many Ah-ha moments over the last year it's hard to define one but possibly the biggest is just how powerful the note industry can be in general and the realization of the advantages that this industry has over rentals and land lording.

@Jay Hinrichs Thanks for the tip!  Would you be able to recommend a source where I could learn about how that process is done?  In essence this sounds like becoming a real estate agent for commercial properties just without the real estate license.

Thank you all for your replies!

@Jay Hinrichs -

I am planning to get into the owner occupied residential note space; commercial loans sound like they can be a great strategy, but I haven't looked into them enough yet to seriously consider it. I'd rather not jump into non performing notes until I have a few performing ones under my belt so that I can get a reasonable grasp on the business before having to delve into workouts/foreclosures.

@Bob Malecki -

Thank you, a play by play of the work day was exactly what I was looking for! You mentioned that you have several notes owned by several companies; are you bundling them in LLC's in groups of 5/10 notes each?

@Andy Mirza -

I really like the idea of putting your "to do" list into a Smartsheet; at my current job I also make myself a list of targets to achieve for the day and remove them as they are completed; I find this is very helpful in remaining productive and taking care of the important items that need to be completed! Do you prefer to have a physical office space as opposed to working from home? I can see where this would be beneficial to keep yourself from getting distracted.

@Chris Seveney -

I do have a bit of a business plan laid out; I will remain in my current position at work until I can reach $5k per month in income from the note business. At that point I will be making slightly more than I am now, after that comes stage 2 which is to scale to $10k per month in income and possibly $15k for the long haul if it is necessary. One of the major benefits of focusing on the non performing notes side is that you can get some pretty huge payoffs if you get involved with the right assets; I definitely understand how the cash flow can vary depending on if you can get the borrower reperforming or if you have to pursue a foreclosure; I've heard Scott Carson mention that he started off in the note business with the idea that he would pursue foreclosures instead of workouts but in the end reversed his decision. Which do you prefer to do if possible?

@Chris Battaglia -

I would recommend the we close notes podcast, the good deeds note investing podcast, and note school for podcasts/youtube videos as well as the information that you can find on Bigger Pockets. As far as books are concerned I would recommend checking out Invest in Debt by Jimmy Napier, Paper Profits by Joshua N. Andrews, and How to Invest in Debt by Michael Pellegrino for starters.

@Jeremy Bond -

I'm looking for information from investors that are pursuing the residential note space currently, as related to single family home mortgages mostly. A "note" in itself can be any form of a promise to pay, and that can be affixed to a tax note, a tax lien, a home mortgage or even a personal check.

@Chad U. -

Thanks for the reply! Would you mind talking about a few of the more common issues that arise in the note space and what kinds of systems you have in place to deal with them? Also if you could advise people beginning in the note space on the best way to start, what would you tell them? It seems that the real estate market is in a bit of a peak right now, are there some things that you need to watch out for as a note investor when the market is at a high?

Thanks again for all of the replies, it's more than I had hoped for!

Hello all,

I've been looking at notes as an investing strategy for about a year now, I'll hopefully be pulling the trigger on my first purchase in the next few months.  Very frequently we learn that the reality of something turns out to be extremely different from how we perceive it to be; I am wondering if the note business is the same.  I have very much enjoyed the conversations I've had on bigger pockets with some of the note focused investors on the site, from what I can see so far it is the type of business that you can conduct from a computer and a cell phone and remain mobile while still working which seems like a big plus to me.

Would it be possible for the full time note investors on the site to get into what a normal day looks like for them?  I would expect that these explanations can vary pretty significantly when described by someone who is just starting out vs. someone who has a few notes under their belt, to someone who has scaled their business; the more responses the better!

Excellent input all, thanks for starting the thread.  I have spoken to several individuals over the last few months regarding the note industry and what the best way to get started might be; this provides me another perspective to consider.

@Chad U. thanks for the list, I'll be sure to check those out!  Even if they're not selling exactly what I'm looking for I'm sure there are notes in there that I can use for practice.

Thank you all for the great info!  I do understand that the returns on performing notes has diminished over the years as the market has grown and recovered from 2008 and a few other influential factors; I'm certain that I would be able to get greater returns from investing in non performers but I am not comfortable doing that just yet as my experience is, well, non existent at this point.  I'll continue to save up and work on practice deals to become more comfortable with crunching the numbers until I'm ready to make the leap.  Ultimately to start out cash flow will be an important factor as well to speed up my ability to reinvest as quickly as possible.  Thanks again for the advice!

Hello all,

I have been researching notes since June of 2018.  So far I've read several books and listened to several note podcasts to get myself educated; at this point I would say I know enough to make mistakes and lose money.  I am planning to make my first purchase in the note industry in late 2019; by then I will be able to invest $20,000 - $30,000 and am looking for a "secure" and "reliable" investment that can net me a 12% - 15% return.  

I would like my first purchase to be a partial on a performing 1st mortgage note, I am thinking that to get started I would like to focus mainly on performing 1st mortgage notes (possibly contract for deeds, still researching this one), partials on performing 1sts, and performing seconds with a guarantee as is offered through PPR and other companies. 

Would anyone be willing to offer some advice on where to find partials for sale, and possibly some due diligence on what to look for/look out for when purchasing a partial?