All Forum Posts by: Nicholas Z.

@Steve Vaughan yup, that was my problem. I was out of state and had hired someone to place a tenant. Unbeknownst to me, that person left the company and was replaced by a horrible person who, looking back, I’m not sure did any kind of reasonable screening. I was also in a tight financial situation so I prioritized getting someone in quickly over getting the right person in. (I hadn’t planned on being a landlord, but I bought a condo and then received a job offer out of state. I wasn’t sure if I’d want to come back after a year so I held onto the condo and tried to rent it.)

The good news is that being older and wiser, and having done my research, I understand the mistakes I made and how to not repeat them. 

Thanks for the response @Jeff S.. That’s very helpful. I’m just wanting to make sure I’m going through the appropriate beginner steps and not taking on more than I can handle right now. 

Thanks @Chris Levarek, that’s exactly my plan. I want to lend on projects where I can learn the most and I will be doing so out of state (California, ugh).

Thanks @Andy Mirza for summing that up for me. I'm currently investigating investing with one of PPR Note's funds to get started.

Thanks @Jay Hinrichs. I may just look into that.

Thanks @Ned Carey. That's also the conclusion I came to in doing my research. Plus, after watching 20% of my stock holdings value disappear during two weeks in March, it was a wake up call that not everything has such wild price swings. Slow and steady is just fine with me.

Hi everyone,

After months of lurking, searching through the forum for information on things I've been learning, reading books, and listening to the Bigger Pockets podcast, I've finally taken the leap into real estate!

I like to say I'm actually a recovered real estate investor. My go-around ten years ago was unpleasant (two evicted tenants in a row, each took six months) so I've been working up the courage to jump back in. I had to stop working as a software engineer several years ago due to health issues, and that had me scared that I couldn't afford to "risk" real estate. After researching, I feel like I'd be a lot better off financially had I looked at real estate when my health challenge started rather than waiting (and having my cash just sitting around doing nothing).

I decided to invest in a property a few years ago, just for diversification purposes (details) and now I'm looking into buying my first rental (turnkey, as my health makes doing all the legwork a little challenging). I'd like to get into BRRRRs and flips eventually, but in the short term, I think the best way for me to get started is as a private lender. Once my health improves, I'd like to move into doing BRRRRs and flips directly.

Ultimately, my goal is to replace all of the income I made as a software engineer with income from real estate.

I've found so much value in the Bigger Pockets books, podcasts, and forums, that I'm excited to get started meeting everyone and learning even more.

@Andy Mirza wow, those are some stories! I guess the lesson here is that non-performing notes have a lot of potential downside and are probably best left to people with some experience dealing with them. It sounds like the foreclosure process is never easy.

@Jay Hinrichs thanks for the tip about commercial notes. I'd imagine those would be more difficult to analyze for value? Any advice on where one could go to purchase commercial notes?

Thanks @Bob Malecki, that’s helpful. 

So it sounds like the downsides are all related to when the borrower stops paying and that foreclosure is not straightforward, fast, or cheap.

Any downsides to performing notes (other than becoming non-performing)?

@Chris Seveney under what circumstances would a borrower sue a note holder?


@Cody Cox that sounds unpleasant. Reminds me of trying to evict in MA. 

@Jamie Bateman thanks for the link, that was very helpful. I’d definitely prefer to own rentals, but looking at all aspects of real estate to figure out how best to leverage my money. 

I've been researching mortgage note investing, and from everything I've read, it seems like a great way to invest in real estate. However, I've not seen much about how mortgage note investing can go bad. According to what I've read so far, assuming you've purchased a first-lien mortgage, the possible outcomes are:

1. The borrower continues to pay, so you get regular monthly income.

2. The borrower refinances, so you get paid a large lump sum and exit the mortgage.

3. The borrower pays off the mortgage, you get a large lump sum and exit the mortgage.

4. The borrower stops paying, at which point you can:

   a. Sell the mortgage note

   b. Reach out to the borrower to try to get them to pay again

    c. Foreclose on the property

This seems about as close to a no-lose situation as there can be...and that gives me pause. I don't believe in no-lose situations. There's always some way for things to go wrong and you lose your money.

So the question is: what are the downsides of mortgage note investing? How might I actually lose all or most of my money doing this?