There are many benefits to investing in real estate. With well-chosen assets, you can enjoy predictable cash flow, excellent returns, tax advantages, and diversification—and it’s definitely possible to leverage real estate to build wealth.
One investment opportunity that not enough people talk about are mortgage notes. Mortgage notes or real estate notes are regular parts of well-diversified portfolios of financial institutions, hedge funds, and small private investors.
Mortgage notes are ideal real estate investment options if you want to have a steady source of passive income. Additionally, mortgage notes also offer higher-than-average returns for real estate investments.
But how can you use mortgage notes to maximize your real estate investments in New York? Read about mortgage notes investments and more in this article.
Investing in Mortgage Notes: What You Need to Know
Before you can successfully take out a mortgage, you must first go through a lengthy and thorough underwriting process. Your prospective lender will then check to see if you are creditworthy, and whether or not the home you want to purchase has value sufficient to secure the loan in case of default. Essentially, a mortgage note provides a description of the mortgage. It describes how you will repay your loan and that it will be using your home as the collateral.
Generally, the mortgage note should contain the following information:
- Total amount of the home loan
- Cost of the down payment
- Requiring monthly or bimonthly payments
- Whether the mortgage interest rate is fixed or adjustable
- Prepayment penalty clause
Investing in real estate notes generally means purchasing an existing mortgage. When you purchase a mortgage note, you become the lender. You then acquire all the rights of the lender. They don’t own the real estate, but they have a right to take the collateral if the borrower doesn’t pay.
When you choose to invest in real estate notes, you get all the perks of being the bank without the difficulties of being a landlord. You don’t have to manage the property, you don’t have to worry about maintenance issues, you don’t have to manage tenants, you get a lien secured by real estate, and you also get discounts on the real estate notes themselves.
As for kinds of mortgage notes, there are generally two kinds: performing notes and non-performing notes. Performing notes have debtors that have a good history of making payments on time, so its a relatively safe investment. Non-performing notes, on the other hand, are distressed notes with buyers who generally have a problem of paying on time. While it is cheaper than a performing note, it is riskier and harder to make a profit out of.
Despite this, non-performing notes still sell a lot because the lure of high interest rates in contrast with the low selling price promises attractive returns to its investors. However, purchasing mortgage notes are barely this straightforward. For more information on how to invest your hard-earned cash into mortgage notes to ensure commensurate profits, reach out to us here at Melanin Homes.
INVEST THROUGH US!
Discover positive cash flow investment properties with high returns when you choose to be a buyer under our preferred buyers’ list here at Melanin Homes. Melanin Homes is a real estate solutions company. We are full-time investors and specialize in finding assets with high competitive returns that you may not be used to hearing. Here at Melanin Homes, we deliver on our promises.
With our proprietary system we find unique opportunities to invest in real estate through privately held mortgage notes, first trust deeds, contract for deeds, and land contracts. We then pass these deals along to our preferred buyers who are looking for great competitive returns or positive cash flow. Be one of them by investing in mortgage notes in New York today.
Interested in investing in real properties in New York City? Look no further because you’ve come to the right place! Here at Melanin Homes we offer a wide-variety of real-estate solutions for all of your property needs! We have mortgage notes for sale to make investing in real estate easy as one, two, three.
So, are you interested in getting on our Preferred Buyers List (it’s free) so you can be notified of each new asset or investment property available? Reach out to us here (347) 809-5803 today!