Foreclosure timelines vary wildly. In a "judicial" state like New York, it can take years to seize a property; in a "non-judicial" state like Texas, it can take weeks.
The borrower has stopped paying. These are bought at deep discounts (often 30–60 cents on the dollar). The strategy here is "workout" or "liquidation": you either help the borrower re-perform, or you foreclose and take the property for a fraction of its market value. 3. The Power of the "Discount"
Sellers usually offload notes for the "Three Ds": They might need cash for a medical emergency, a new investment, or they are simply tired of "clipping coupons" and want to exit the management of the debt. 6. The Risks
Are you looking to notes for a commission, or are you interested in buying them for your own retirement portfolio?
If you buy that note for $80,000, your isn't 6% anymore—it jumps significantly because you paid less for the same cash flow.
Eventually, that seller might want a lump sum of cash rather than small monthly payments over 30 years. This is where the note buyer steps in. They buy that stream of future payments at a , providing the seller liquidity while securing a high-yield investment for themselves. 2. Performing vs. Non-Performing Notes The market is divided into two distinct worlds:
In physical real estate, you check the roof. In notes, you check the .
Buying and selling notes is the ultimate "passive" real estate play. You have no tenants, no toilets, and no termites. You simply own the debt. However, it requires a high "financial IQ" to navigate the legalities of the paperwork and the nuances of the discount.
