Note investing is the smarter, quieter way to profit from real estate—without tenants, toilets, or unexpected repairs. If you’re tired of landlord headaches but still want the security of real estate-backed returns, it’s time to consider a new path. In (Ep 60) of the 5-Minute PRIME Podcast, host Martin Maxwell explores the powerful strategy of note investing—where you don’t buy the property, you buy the mortgage. Discover how savvy investors are collecting monthly payments like a bank while bypassing the operational burdens of rental ownership.
Tune in to learn: Note Investing
- The Investor’s Pivot – How note investing lets you earn real estate income without owning physical property.
- Two Proven Strategies – A full breakdown of performing notes for passive income and non-performing notes for discounted, high-reward opportunities—all under the note investing umbrella.
- Why 2025 Is the Time – Foreclosures are up 34%, creating the perfect storm for acquiring distressed mortgage debt through note investing.
- Start Your Note Investing Journey – Three ways to get started: from hands-off note funds to hands-on asset workouts.
Are you ready to access real estate profits without the traditional landlord headaches? Subscribe now to learn the secrets of note investing and how you can become the bank.
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Show Notes: Note Investing
Key Takeaways
- Become the Bank, Not the Landlord: Shift from owning physical property (“Land-Lord”) to owning the mortgage debt (“Lien-Lord”), trading maintenance and tenant issues for the quiet efficiency of collecting payments.
- The Two Paths of Note Investing:
- Performing Notes: Buy mortgages with current payments for steady, passive cash flow, with potential yields of 8-12%.
- Non-Performing Notes (NPNs): Buy delinquent loans at a steep discount and actively work to “fix the mortgage” through modification or foreclosure for potentially high returns.
- Engineered for Cash Flow: Note investing dramatically reduces operating expenses compared to rental properties. Your main cost is a small fee to a loan servicer, not surprise repairs or property management.
- Understand the Trade-Offs: Unlike direct property ownership, note investing offers no benefit from property appreciation, and the income is taxed as ordinary income without the tax shield of depreciation.
- The 2025 Opportunity: A rise in foreclosures (up 34% year-over-year per ATTOM) means lenders are selling more distressed loans, creating a prime buying opportunity for note investors, especially in states like Delaware, Florida, and Illinois.
Action Step:
- For Beginners (The Fund Investor): Research reputable real estate note funds. This is the safest way to gain experience and returns by pooling your capital with a professional operator.
- For Your First Direct Deal (The Sniper): Start sourcing a single, first-lien performing note. This allows you to learn the transaction process with lower risk.
- For Experienced Operators (The Workout Specialist): Assess your capital reserves and legal team to prepare for acquiring and managing non-performing notes.
Mentioned in This Episode
Episodes to Revisit:
- Episode 59: A Hard Look at Self-Storage Investing
- Episode 57: Mid-Year Market Update
- Episode 51: The Importance of Deep Cash Reserves
Challenge for Today:
- Reflect on your current real estate strategy – is it built for cash flow or chaos?
- Learn the basics of mortgage note investing (start with performing notes).
- Research one reputable note fund or note marketplace.
- Identify a loan servicer you’d consider using if you invested in a note.
- Look into foreclosure data in Delaware, Florida, or Illinois for opportunity zones.
- Decide if you’re better suited for passive income (performing notes) or active investing (non-performing notes).
- Talk to a fellow investor about note investing—share and gather insights.
- Write down your top 3 questions or fears about note investing.
- Set a 30-day goal: read one guide, contact one fund, or attend one webinar on the topic.
- Take one small step today—subscribe to a newsletter, download a guide, or reach out to a note investing mentor.
