Introduction

Real estate has long been a trusted avenue for wealth building. But if you’re a seasoned investor or real estate professional, you’ve likely heard the term “mortgage notes” and wondered how this could fit into your strategy. Today, we’re diving into the world of purchasing mortgage notes—a unique yet lucrative investment opportunity that offers high returns with lower risk than traditional real estate investing.

In this Think Bigger Real Estate Podcast episode, we had the privilege of speaking with Eddie Speed, a recognized leader in the note-buying industry. With over 50,000 notes purchased and decades of experience, Eddie shared his insights on how anyone, from real estate agents to seasoned investors, can start purchasing mortgage notes to build wealth. Here’s a breakdown of what we learned and how you can get involved.

What Are Mortgage Notes and How Do They Work?

A mortgage note represents the debt owed by a borrower on a property. When you purchase a mortgage note, you essentially step into the shoes of the original lender, becoming the bank. This means you’re entitled to the monthly payments on the loan until it’s paid off, and in the case of default, you could even take possession of the property.

What sets this investment strategy apart from traditional real estate is that you’re investing in cash flow rather than physical properties. Eddie explained that mortgage notes can be purchased from a variety of sources, including institutional lenders and seller-financed transactions. By purchasing these notes, investors can earn steady cash flow with far fewer headaches than managing rental properties.

Why Mortgage Notes Are a Great Investment Option

For investors tired of the day-to-day grind of being a landlord, mortgage notes provide a perfect middle ground. As Eddie explains, investing in notes is a combination of the benefits of both syndications and rental properties. You receive passive income like a syndication, but you still maintain control, as you’re the lender, not the landlord.

One of the key benefits of mortgage notes is the low overhead. Unlike rental properties, which can have high maintenance costs, mortgage notes require minimal ongoing expenses—typically just the cost of loan servicing. This means that, in most cases, the income from a note investment is much more favorable than the cash flow from a rental property.

For example, consider an investment of $250,000. In a middle market like Dallas/Fort Worth, that amount might buy you a rental property with a monthly income of $1,800. However, with the same $250,000 invested in mortgage notes, you could see monthly income of $2,700—without the headaches of being a landlord.

How to Get Started with Mortgage Notes

While purchasing mortgage notes might sound complex, Eddie’s approach makes it accessible for anyone with investable capital. His Note School teaches aspiring investors how to evaluate, purchase, and manage mortgage notes for maximum returns.

If you’re a real estate agent or a seasoned investor looking for a new opportunity, Eddie’s system offers a comprehensive way to diversify your portfolio. The strategy is especially beneficial for “burnt-out landlords” or anyone looking for a less hands-on investment approach.

One of the main appeals of mortgage note investing is that it can be done without needing to worry about tenants or property upkeep. As the lender, you’re simply focused on receiving the monthly payments from the borrower. Plus, in the case of default, the underlying property acts as collateral—offering an added layer of protection.

Notes as a Retirement Strategy

In addition to being a lucrative way to generate income, mortgage notes can also be a powerful tool for retirement planning. Eddie shared that owning notes in a self-directed retirement account can be an incredibly effective way to grow wealth tax-deferred. In fact, there are unique leveraging techniques that can make note investing even more powerful when used in retirement accounts.

The bottom line? Notes provide investors with an excellent option for building wealth that offers both short-term cash flow and long-term security.

How Real Estate Agents Can Leverage Notes to Help Clients

As a real estate agent, you’re likely always on the lookout for ways to better serve your clients and create more value. By learning about mortgage note investing, you can offer an additional solution for your clients who may be looking to sell or finance their property in a creative way. In fact, Eddie’s note system can even be a tax-saving strategy, helping sellers avoid capital gains taxes by financing their sale over time.

For those looking to retire, sell investment properties, or simply diversify their portfolio, you can present mortgage notes as a viable alternative to traditional real estate transactions.

Why Now Is the Perfect Time to Invest in Mortgage Notes

With interest rates at a high, many potential homeowners are finding it harder to secure financing through traditional channels. This opens the door for sellers to offer seller financing, and investors like you can step in as the bank. As Eddie puts it, now is the time to be on the other side of the table—purchasing mortgage notes rather than borrowing from a bank.

Learn More from Eddie Speed’s Master Class

Eddie’s expertise has helped thousands of investors diversify their portfolios and build wealth through mortgage notes. For those interested in diving deeper, Eddie is offering a master class that will reveal even more insights into note buying, leveraging retirement accounts, and finding the best deals in today’s market.

As a real estate agent or investor, understanding the nuances of mortgage note investing could be the key to taking your wealth-building strategy to the next level. Don’t miss this opportunity to learn from one of the industry’s foremost experts.

Conclusion

Purchasing mortgage notes offers a creative and profitable way to build wealth in real estate without the headaches of property management. Whether you’re a real estate agent looking for new ways to serve your clients or an investor seeking high cash flow with minimal risk, mortgage notes can be the solution you’ve been waiting for.

Stay tuned for Eddie Speed’s upcoming master class and start learning how you can leverage the power of mortgage notes to diversify your portfolio and secure long-term financial freedom.

At ProInsight, we’re here to empower you to reach new heights. Let’s think bigger together.