One of my hobbies is wine making and I am incorporating that in my business.

You can look at opportunity costs comparing other investments, like use of funds, but be careful not to access them in the same manner, RE is unique, physically, financially and economically. :)

You have to understand that purchasing notes can tie up your capital for a while, though, if problems arise.To me, it was very important to understand the actual value of the physical collateral.

I'd also try to secure this note with something tangible, maybe physical assets he owns or his business (worth at least the value of the money he owes you).

For example do you simply attach a testimonial to your letter, incorporate the testimonial into you letter or what?

You'll have to physically go to the courthouse and get that list.

Keep in mind also that when you are creating a business entity, you are required to put a business purpose, and what I found out before I Incorporated, was that you can state your business purpose as "Any lawful purpose" or "Real Estate Investing, and any other lawful purpose".That way you can conduct any business you want through your entity and nobody can come at you later and say why are you selling baseball cards on ebay when your business purpose is Real Estate..... just sayin....Also, my 2 cents.... creating a corporation might be more work, but can afford you some serious tax advantages.

All of these need physical buildings.

@Matt Regan I feel you totallyBoss could be your bank account or mortgage lender.Way less chance of you being robbed or attack verbally / physically.

I would keep the cost incorporated in order to account for it if you later decide it is too much for you to do on your own. 2) Just a tip, check with the city planner's office to see if any future plan is going to interupt the flow of business, i.e. major road construction, new zoning laws, new construction.Good luck,Dave