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Borrowers have stopped paying. These are bought at much steeper discounts, often with the goal of restructuring the loan or foreclosing to take the property. buying discounted notes
💡 Unlike being a landlord, there are no "tenants, toilets, or termites" to manage.💰 Higher Yields: Buying at a discount creates an automatic gain in equity and a higher ROI than traditional bonds.🛡️ Asset Security: Your investment is backed by a physical asset that can be liquidated if necessary. Risks to Watch For AI responses may include mistakes
Buying discounted notes allows you to act as the "bank" by purchasing existing mortgage debt at a price below its face value. This strategy can provide high-yield passive income or a path to acquiring property through foreclosure. How It Works - BiggerPockets Borrowers have stopped paying
When a lender (like a bank or private seller) wants to free up cash, they may sell their mortgage notes at a discount.
The loan is secured by real estate, providing a safety net if the borrower stops paying. Types of Notes
You collect interest on the full $100,000 balance, significantly increasing your effective yield.