Real estate continues to be a booming investment class. Some investors choose to invest in real estate Notes.
A real estate Note, or promissory note, is the document a borrower signs, promising he/she will repay the debt on a property. Typically, there’s no reason to do anything with that Note, but sometimes stuff happens and, well, reasons crop up.
Most homeowners buy their homes in order to live a certain lifestyle and to create some level of generational wealth. It’s exciting, but it can also be challenging. Life happens—people get sick, jobs come and go, recessions happen, natural disasters happen, and the list goes on. All of these things impact homeowners and properties. I call them nuances, and nuances are important (I’ll come back to this).
Homeowners who are experiencing challenges or banks with a portfolio of properties experiencing challenges, seek Note investors who are willing to purchase these properties or just the Notes at a discount so they can work their magic.
The big question is: How do you know a Note investor is great and worth working with? Here are six signs.
1. They return your call or email. Good Note investors take inquiries seriously and they respond in a grateful manner, as though they’ve just been given the opportunity to help.
2. They “know a guy.” Good investors know partners who can help when they have questions; great investors have those partners on speed dial. In the end, the homeowner or bank has a partner (the great Note investor) who’s really more of a team of partners. That only happens by curating strong, trusting relationships over time.
3. They have grit. That word can be overused, but I don’t know of a better word to describe an investor who isn’t afraid to dig in and dig…and dig…and dig some more. Great Note investors dig into investment opportunities, spending the necessary amount of time and energy to get to know the borrower(s) and their challenges, and then having the tenacity to properly navigate those challenges in ways that protect everyone’s interests.
4. They understand risk. Period! Great Note investors say “no” to deals, because they’re too risky. Any Note investor who’ll take on just about any deal—regardless of the risks—isn’t someone to work with.
5. They have balance. The best Note investors know how to balance everyone’s interests—the Note sellers, their capital partners, the title company, lawyers (if involved)…everyone! It’s tricky.
6. They have compassion. I mentioned nuances (above); great investors are compassionate to those who experience life’s many unscripted challenges. And let’s be real: we’re all in that bucket. The best Note investors don’t judge; they look at what’s happened and assess the investment accordingly, and then they work with the homeowners.
The are other signs, but these are six biggies.
To learn more…
Call 844-433-6683; email firstname.lastname@example.org; browse to fallerfinancial.com/note-resources
Faller Financial is growing. We are currently seeking real estate Note sale opportunities worth $5MM or greater.
Photo by Agê Barros on Unsplash