The Comprehensive Note Investing Guide to Building Your Wealth Destiny

The Comprehensive Note Investing Guide to Building Your Wealth Destiny

Learn the path to building wealth with real estate, but not in the way most people think. Paige Panzarello unveils the secret world of Note Investing Wealth, Non-Performing Notes, and how YOU can BECOME the bank. 

In this video you’ll learn:

💸How Note Investing works on a fundamental level and why most people have never heard of this real estate investing strategy 

💸Why Non-Performing Notes are a great investment choice when combined with the right level of due diligence 

💸The different types of Non-Performing Notes and the strengths of each one 

💸 How to find deals as a Note Investor without having to knock on doors, cold call, or spend any money on marketing

💸The four main exit strategies that allow you to pivot and remain profitable in your investment, no matter what’s happening in the economy

💸How you can do this kind of business anywhere in the world!

Everybody knows real estate investing is a powerful strategy for building wealth and a legacy for your family, but very few people know about Note Investing and how Non-Performing Notes can help you achieve your investment goals without all the usual risks.

What are Notes?

Notes are a debt instrument. Essentially, they’re just a promise to pay. When you’re dealing with debt instruments, you’re literally stepping into the shoes of the bank, which means that YOU literally become your borrower’s bank. Sounds scary, but it isn’t if you know the steps to take!

Do you really become the bank?  YES!!!

In a buy and hold situation, you own the property. You lease your property to a tenant, and that makes you a landlord.

If the air conditioning breaks in your property, as the landlord, you now need to pay to fix it. You (or your property manager) are responsible for sending somebody out, and YOU have to reach into YOUR pocket to pay for the repairs.  Sometimes the repairs will be so expensive, it can cost you a whole YEAR’s worth of rental income!

As the bank, if the air conditioning breaks, your borrower is not going to call you to make the repair.  You do not have to pay for the AC repair guy to go out to that property, because you don’t own the property.  BUT, as the lender (the bank) ON the property, you are still SECURED by the property.

As the Bank, you own the debt, meaning the mortgage or the deed of trust, and your investment is SECURED by the property.  SO if the borrower stops paying that mortgage, you can go through the steps to foreclose or take over the property.   In owning the debt secured by the property, you are not on the hook to make any repairs. 

An added bonus? You can invest in Notes from anywhere in the world, as long as you have a computer, internet and a cell phone! 

Are there different types of notes you can buy?

There is a whole world of notes for you to explore. You can buy 

  • Real Estate Notes
  • Non-Performing Notes To build chunks of cash and streams of monthly cash flow
  • Performing notes for cash flow
  • First position liens 
  • Second position loans
  • Third position loans 
  • Auto loans 
  • Judgment loans 
  • Credit card debt

You can buy Notes on residential properties, commercial properties, industrial buildings, warehouses and land, just to name a few. In other words, you have a ton of options. 

Why would you buy a Non-Performing Note?

Buying Non-Performing Notes sounds counterintuitive. How do you make money buying a Note that is ‘Non-Performing’?

Because you can buy them at a discount. 

Using the collateral, aka the building, as the basis for the purchase price at a discounted rate automatically builds in equity, which mitigates the risk, and makes buying Non-Performing Notes a great investment strategy. 

Is there competition in Note Investing Wealth?

Like any form of real estate, there is competition in buying Notes. However, I call it the gentler form of real estate investing. 

Note investing doesn’t involve being on the courthouse steps where you’re standing at an auction and people are bidding against you. It’s not like a fix and flip property where you’ve got other investors that are overpaying for houses.

You’re not panicking and trying to outbid somebody just to get a deal. 

As a matter of fact, the deals come right to your email inbox!  For free!

How do you find deals?

The wonderful thing about Notes is that it’s all about developing relationships with people. 

I do not send out yellow letters, or knock on doors. I don’t cold call, and I don’t put up bandit signs.

I spend ZERO $0 marketing dollars for my deals. Instead I focus on going to conferences and meeting asset managers and other note investors, and I develop relationships.They send me their assets for sale at no cost. There is no” buying tapes” (a tape is the list of all the assets for sale) in our space, so if someone trying to “sell you a tape” please run the other direction!

Due diligence in Note Investing Wealth is CRUCIAL

There is no such thing as a bad note in my opinion, but there is such a thing as buying a note badly.

In Note investing, you will be spending the bulk of your time doing your due diligence and making sure that a deal makes sense (i.e. you have security) before buying the Note, so it’s absolutely vital that you don’t skimp on your due diligence steps.

Once you DO buy the note – you’ll be handing over the communication and documentation to your team of licensed debt collectors. They talk to the borrower and handle all paperwork. You then simply manage the team. I share a great case study in the training to illustrate. 

Note Investing Exit Strategies

There are 23+ different exit strategies (ways to cash out) as a Note investor so there are plenty of ways to make sure your investment stays profitable and meets your goals. 

The four main exit strategies we use on a regular basis are Foreclosure, Short Sale, Deed in Lieu of Foreclosure, and my favorite, Reperformance (Loan Modifications). 

I share what they are, and give some examples to explain them in more detail, but the main takeaway here is the ability to have numerous ways to ‘cash out’ that don’t rely on the real estate market (like a Fix ‘n Flip would). 

TAKE THIS FREE VIDEO SERIES TO LEARN THE BASICS ABOUT NOTE INVESTING

Get the 411 in this quick easy to digest video series, so you have a more comprehensive idea of what it is and if it’s the right next step for you.

 

 

 

 

 

ABOUT PAIGE:

Paige Panzarello is the “Cashflow Chick”. Having been a Real Estate investor and entrepreneur for almost 25 years, Paige has experienced many facets of real estate investing. Her experience includes founding and running her own Residential and Commercial Construction and Acquisition companies, Buy and Hold residential and commercial real estate investing, Tax Deeds/Liens Investing, Fix and Flip (Residential Remodeling), and other forms to name a few. She currently focuses on Non-Performing Notes that she purchases all across the United States. Whether in notes, residential or commercial real estate, in California, Arizona, or nationwide, Paige has been successful in completing over $150 million in real estate transactions to date.

Property Acquisition: The Hidden Gem of Note Investing

Property Acquisition: The Hidden Gem of Note Investing

The Hidden Gem Of Note Investing

Most people don’t realize that note investing is kind-of a backdoor means of acquiring property. This includes residential properties, mobile homes, land, commercial buildings, etc. 

Notes are secured by different types of property, and you can acquire those properties through note investing. 

I target non-performing notes (meaning the borrower has stopped paying), because I can mitigate some of my risk by buying at a discount. It also gives me leverage to move forward with an exit process, especially if you are looking to acquire the property.

IF YOU USE NOTE INVESTING TO ACQUIRE PROPERTY:

Please put your “heart hat” on, and remember that there are people that live in these homes. If you are going after the property, I strongly recommend targeting notes where the property owner has already vacated the premises. Believe me when I tell you: it is not fun kicking people out of their house.  It’s a little less intense if you’re dealing with commercial buildings or land, of course, because people aren’t as emotionally invested as they are in their residence. Nonetheless, it is NOT FUN!

How to buy fix and flip properties at a discount:

Over the past decade and into 2023, we’ve seen a lot of competition for houses. Pricing has gone up. Inflation has gone up. Interest rates are going up right now. We’re facing quite a crisis. And if you’ve tried to buy, fix and flip properties and haven’t been successful because the competition has been too high, perhaps you should look at note investing. Again, I like to call this “the backdoor way of investing and acquiring property.”

You buy the note, which is the debt. It is secured by the collateral, which is the building, and then you go through the steps to foreclose on those properties and bring them into your portfolio (without the competition, and probably at a much bigger discount, BTW).

Did you know my Building Wealth with Notes workshop is available Online and On-Demand?

Now you can go at your own pace to learn everything you need to know to become a Note investor! Be sure to check out BuildingWealthwithNotes.com and you can sign up for your On-Demand classes. I give you all the tools you’re going to need to be a successful note investor, including bonus resources and contact information for my team! Want to acquire properties the way we note investors do – through the back door, with a lot less competition and at a much bigger discount? Sign up today! 

Sign up HERE 

TAKE THIS FREE VIDEO SERIES TO LEARN THE BASICS ABOUT NOTE INVESTING

Get the 411 in this quick easy to digest video series, so you have a more comprehensive idea of what it is and if it’s the right next step for you.

 

 

 

 

 

ABOUT PAIGE:

Paige Panzarello is the “Cashflow Chick”. Having been a Real Estate investor and entrepreneur for almost 25 years, Paige has experienced many facets of real estate investing. Her experience includes founding and running her own Residential and Commercial Construction and Acquisition companies, Buy and Hold residential and commercial real estate investing, Tax Deeds/Liens Investing, Fix and Flip (Residential Remodeling), and other forms to name a few. She currently focuses on Non-Performing Notes that she purchases all across the United States. Whether in notes, residential or commercial real estate, in California, Arizona, or nationwide, Paige has been successful in completing over $150 million in real estate transactions to date.

The Importance Of Right Party Contact

The Importance Of Right Party Contact

The Importance Of Right Party Contact 

Building wealth with notes shouldn’t involve accumulating headaches – so to avoid those headaches, you are better off by working with servicing companies. It’s important to know who they are and what they do.

What Are Servicing Companies

Servicing Companies are essentially licensed debt collectors who work on your behalf, so YOU don’t have to have direct contact with your borrower.  They will maintain that contact for you.

I strongly urge you NOT to self-service your loans. I did a video on this here, where I chat specifically on why that’s a bad idea, in my opinion. 

What Does the Servicing Company Do?

The Servicing Company is in direct communication with your borrower and acts on your behalf. They are licensed debt collectors and they know the rules and regulations of what you can and cannot do when talking with the borrower.  One key step when talking with a borrower is establishing what’s known as “right party contact.”  To do that, they will issue what’s called a “Mini Miranda”.  The mini miranda tells the borrower that the Servicer is acting as a debt collector and that the call is being recorded. 

Further, it determines that the servicer is speaking to the correct party on the loan. You cannot speak to anyone about the loan that is not actually “ON” the loan (unless the borrower has issued written authority to do so). So, the servicer needs to verify that information up front, before ANY information about the loan is discussed.

How Do They Get Right Party Contact? 

The servicing Company asks for their name, and asks security questions, including, but not limited to, verifying what the last four digits of their social security number is.

Why is that important? 

Your borrower has a right to privacy about the DETAILS of their loan account.  That seems crazy because the mortgage or trust deed is recorded in the county recorder’s office. The recording just says that there IS a loan, but not the nitty-gritty details about the borrower or the status of the borrower’s account.   

Due to the right of privacy, discussions and decisions can only be made by those that are attached to the loan via the loan documents. 

For example, if only a wife is on the loan, but the husband answers the call and says, “It’s okay, you can speak with me, I’m her husband…” the licensed debt collector will politely say that they can NOT speak to him.

Unless both parties are on the loan, or there is a letter of authorization from the wife, the debt collector cannot speak with the husband, the unauthorized party.  You would be amazed how many husbands/wives have no idea that their Mortgage is in default, and the debt collector can’t tell them unless they are the right party contact! I wouldn’t want to be in that house when the spouse actually finds out! 😲

It’s very important that the servicing company establishes right party contact with the person on the loan documents to protect their right to privacy. 

If You Are Self-Servicing Your Loan 

If you ARE self-servicing your loan, (although, again, I strongly advise against it), you will also need to establish right party contact. If you skip this step, it could get you in some legal trouble and in breach of the borrower’s right of privacy.  

Remember – Right Party Contact is key!  

TAKE THIS FREE VIDEO SERIES TO LEARN THE BASICS ABOUT NOTE INVESTING

Get the 411 in this quick easy to digest video series, so you have a more comprehensive idea of what it is and if it’s the right next step for you.

 

 

 

 

 

ABOUT PAIGE:

Paige Panzarello is the “Cashflow Chick”. Having been a Real Estate investor and entrepreneur for almost 25 years, Paige has experienced many facets of real estate investing. Her experience includes founding and running her own Residential and Commercial Construction and Acquisition companies, Buy and Hold residential and commercial real estate investing, Tax Deeds/Liens Investing, Fix and Flip (Residential Remodeling), and other forms to name a few. She currently focuses on Non-Performing Notes that she purchases all across the United States. Whether in notes, residential or commercial real estate, in California, Arizona, or nationwide, Paige has been successful in completing over $150 million in real estate transactions to date.

Difference Between Mortgage and Deed Of Trust For Note Investors

Difference Between Mortgage and Deed Of Trust For Note Investors

Difference Between Mortgage and Deed Of Trust For Note Investors

You’ll hear the terms “mortgage” and “deed of trust” in note investing, but even when buying any type of house. 

Similarities Between Mortgages & Deeds Of Trust

A mortgage and a deed of trust are essentially the same document. The name to use just depends on the state where the house is located, and whether it is a judicial foreclosure state or a non-judicial foreclosure state.

Example – California is a non-judicial foreclosure state, and our document is called a “deed of trust”. Ohio is a judicial foreclosure state, so their document is referred to as a “mortgage”. Those two documents are essentially the same thing. They just have different titles based on the state and the foreclosure style. 

So, What is a Mortgage or Deed of Trust?

It is a binding document that ties the promise to pay (the Promissory Note) to the securing collateral (the house). This term is not only used in note investing (buying the debt secured by the house) but also when buying an actual house or piece of real estate..  

In note investing, the notes are secured by a house or a building. How I tie the house or building to the promise to pay is through the document called a mortgage or a deed of trust. 

When you go to the bank and you get a loan to buy your house, you’re going to be signing two different documents. 

One is the Promissory Note (your promise to pay).  Some characteristics of the Note are:

  • it is an unrecorded document
  • it will list out all of the terms that you have agreed to (how you are going to repay the bank)
  • it details the interest rate and the length of time for the loan (i.e. 15 years, 30 years, etc.) 
  • It will give detail your monthly principal and interest payment (also known as a P & I payment) 
  • it lists who the borrower is (you) and who the lender is (the bank)
  • it lists other legal terms 

The Mortgage or the Deed of Trust (aka Trust Deed).

This document is the document that secures the bank’s position. It’s the document that ties the collateral (the house or the building) to your promise to pay. Some characteristics of the Mortgage or Deed of Trust are:

  • it is a recorded document
  • it is the document that allows the bank to take your house if you stop paying 
  • it will list out all of the terms that you have agreed to (how you are going to repay the bank)
  • it details the interest rate and, the length of time for the loan (i.e. 15 years, 30 years, etc.) 
  • It will give detail your monthly principal and interest payment (also known as a P & I payment) 
  • it lists who the borrower is (you) and who the lender is (the bank)
  • it lists other legal terms

In Note investing, it is essential that you have both the Promissory Note (an unrecorded document) and the Mortgage or the Deed of Trust (a recorded document), collectively referred to as notes, in your collateral file.

What Happens If You Are Missing One?

If you just have the Note, but not the Mortgage or Deed of Trust, then your loan is UNSECURED! That means that there is nothing attached to the promise to pay (no security).  And we, of course, want to always be SECURED! 😉

If you are a private lender, and you are lending to somebody to fix and flip a property, you need to ensure they have signed both the Promissory Note, AND the Mortgage or the Deed of Trust, to attach  the house to the promise to pay. If you don’t, and your borrower stops paying you, you have to take them to court by filing a lawsuit against the borrower in the hope that you will get a judgment to force them to pay. 

Then you will have to file a writ of execution to enforce your judgment.  Its a long drawn out, expensive process, and there is a very real possibility that you will never get your money back, even if you have a judgment against your borrower.. You cannot just file a foreclosure and take the house as payment for your loan.

If you have secured your position, meaning you’ve secured that Promissory Note with collateral (the house or building) via a Mortgage or a Deed of Trust, then you can follow the foreclosure process in your state, and foreclose on that property to recoup your funds. So if your borrower stops paying, you have something tangible to go after, which gives  you security in your investment. 

You always want to protect your Ass-ets, right?!? 

TAKE THIS FREE VIDEO SERIES TO LEARN THE BASICS ABOUT NOTE INVESTING

Get the 411 in this quick easy to digest video series, so you have a more comprehensive idea of what it is and if it’s the right next step for you.

 

 

 

 

 

 

 

ABOUT PAIGE:

Paige Panzarello is the “Cashflow Chick”. Having been a Real Estate investor and entrepreneur for almost 25 years, Paige has experienced many facets of real estate investing. Her experience includes founding and running her own Residential and Commercial Construction and Acquisition companies, Buy and Hold residential and commercial real estate investing, Tax Deeds/Liens Investing, Fix and Flip (Residential Remodeling), and other forms to name a few. She currently focuses on Non-Performing Notes that she purchases all across the United States. Whether in notes, residential or commercial real estate, in California, Arizona, or nationwide, Paige has been successful in completing over $150 million in real estate transactions to date.

The 411 On Real Estate Note Investing Collateral Files

The 411 On Real Estate Note Investing Collateral Files

Description:

You might be interested in pursuing note investing as a career to earn yourself a passive income, or as a stepping stone to dig deeper into the world of real estate. If so, then note investing is perfect for you.

Once you begin your journey in note investing in real estate, you will come across the term “collateral files” a lot. If you are just starting out, you might get overwhelmed, so allow me to break down the term for you and give you an idea of what it is, and what it is for.

What the heck is a Collateral File?

A Collateral File in note investing is literally a set of documents that are used for analysis, and later, as your security for your investment. It consists of all the original and necessary documents that were put in place at the time the loan was originated. Some examples of these documents are the actual promissory note, and the mortgage or the deed of trust to name a couple.

The two types of Collateral Files:

The version, the Electronic Collateral File version consists of all the scanned copies of the original documents of the note that you are looking to buy. You get this before you actually buy the note. If your purchase price offer is accepted by the seller, you’ll get these digital files that pertain to this note.

The documents generally are in the form of PDFs. The best thing about acquiring the electronic version is that you will have access to extra scans of documents that may not be provided in the Hard Collateral version. Such files may include a BPO (Broker Price Opinion), letters or correspondence, statements of accounts, pay history, and collection notes (written log of communications between servicing company and the borrower), among others.

The second version is the actual Hard Collateral File – a physical file with all the original documents that are wet signed. These physical files are kept to a minimum because of storage space. Imagine how thick the file would be if every single letter or piece of correspondence was kept in the physical file! You will get the Hard Collateral File after buying the Note, containing all of the documents concerning your purchase.

You want to keep this in a very safe, fire proof place (often with a third party custodian) because THIS file is the security for your invested dollars! If anything happens to the original documents, it may end up voiding your claim to the debt that is due to you, so BE CAREFUL!

What’s important to remember..

In the Hard Collateral File, you should have all the wet stamped documents. If you don’t, as I mentioned above, it can nullify your ability to foreclose or collect the debt on the Note you just bought. Both of these files are paramount to your note investing career, so be sure to get both complete versions to be successful in your journey.

Want to know more? Watch this short video…

TAKE THIS FREE VIDEO SERIES TO LEARN THE BASICS ABOUT NOTE INVESTING

Get the 411 in this quick easy to digest video series, so you have a more comprehensive idea of what it is and if it’s the right next step for you.

 

ABOUT PAIGE:

Paige Panzarello is the “Cashflow Chick”. Having been a Real Estate investor and entrepreneur for almost 25 years, Paige has experienced many facets of real estate investing. Her experience includes founding and running her own Residential and Commercial Construction and Acquisition companies, Buy and Hold residential and commercial real estate investing, Tax Deeds/Liens Investing, Fix and Flip (Residential Remodeling), and other forms to name a few. She currently focuses on Non-Performing Notes that she purchases all across the United States. Whether in notes, residential or commercial real estate, in California, Arizona, or nationwide, Paige has been successful in completing over $150 million in real estate transactions to date.

Why You Need To Understand Your ‘WHAT’ When Note Investing

Why You Need To Understand Your ‘WHAT’ When Note Investing

When it comes to real estate note investing, many people focus on their “why” – the reasons behind why they invest.  These are always really personal:  you want money for your child’s education, you want retirement money, you want a ‘side gig’, you want to be RICH. 

However, it’s just as important to consider your “what”!  HUH? 

What I mean by that is: 

  • WHAT do you need right now?
  • WHAT does your risk tolerance look like?
  • WHAT type of cash or cashflow is right for you, right now?, and
  • WHAT your end goals are both short term and long term.

Knowing your personal motivations and goals is crucial, but knowing your WHAT will shape your investment decisions and help you achieve success.

Many opportunities are out there: 

  • Multi-family,
  • Buy and Hold rentals,
  • Short Term Rentals,
  • Notes,
  • Fix ‘n Flip,
  • Wholesaling,
  • Assisted Living

– there are a TON of options.  It can be paralyzing trying to figure out WHERE to start, or which one to dive into.

I encourage you to take some time to check in with yourself (and keep doing this at least once a year) and determine what your “WHAT” is. Ask yourself…. 

WHAT do I need RIGHT NOW for note investing?

  • Do I need chunks of cash, or am I looking for a steady stream of cash flow?
  • Am I in this for the short-term or the long-term?
  • Are you using your self directed IRA funds?
  • Do you want to be very passive or active?
  • Do you need monthly income to quit your job?

Why is this important? Here’s an example: If you are a short term real estate investor (meaning you need your cash out of the investment more quickly – Buy and Hold Rentals are a long term play, so that type of investing may not  be right for you. 

If you are a long term investor, you may not want to Fix ‘n Flip -as that is typically a quicker turnaround of 3-6 months. Knowing your WHAT will help you here! 

By knowing what you need RIGHT NOW – it’ll tell you what type of investing is good for you right now. And it changes as you grow as an investor. 

What is your risk tolerance?

Know the pitfalls, do your due diligence. A fix and flip situation might have more risk depending on the market. But note investing has 23+ exit strategies – so that might be a safer route for you. You have to know what you are willing to risk, how conservative or risky you are, and what real estate investing strategy fits your risk tolerance. 

How much monthly cash flow do you need for note investing? 

Will the investment help you achieve that? 

Will your needs change over time?

Your WHAT may change as you grow as an investor – so you may want to check in every 6 months, nor every year at a minimum. As you grow and evolve as an investor, your investment style or risk tolerance may change, but staying true to your personal motivations will ensure that you make the right decisions for yourself.

If you’re ready to embark on your journey to real estate investing success, don’t miss this video – it could be the start of a successful and fulfilling investment career.

TAKE THIS FREE VIDEO SERIES TO LEARN THE BASICS ABOUT NOTE INVESTING

Get the 411 in this quick easy to digest video series, so you have a more comprehensive idea of what it is and if it’s the right next step for you.

 

ABOUT PAIGE:

Paige Panzarello is the “Cashflow Chick”. Having been a Real Estate investor and entrepreneur for almost 25 years, Paige has experienced many facets of real estate investing. Her experience includes founding and running her own Residential and Commercial Construction and Acquisition companies, Buy and Hold residential and commercial real estate investing, Tax Deeds/Liens Investing, Fix and Flip (Residential Remodeling), and other forms to name a few. She currently focuses on Non-Performing Notes that she purchases all across the United States. Whether in notes, residential or commercial real estate, in California, Arizona, or nationwide, Paige has been successful in completing over $150 million in real estate transactions to date.

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