If you’re looking to break into the real estate market in New York, there are other ways you could do it besides traditional methods of buying properties and flipping them. For instance, if you’re looking for good sources of passive income, you should strongly consider buying mortgage notes.
Investing in mortgage notes in NY is more than just buying notes and hoping for the best. In this article, we’ll tell you everything you need to know about mortgage notes and how they work.
What Are Mortgage Notes?
Mortgage notes, also known as borrower’s notes, are promissory notes that are secured by a mortgage loan. When you take out a loan on a property and begin making payments for it, that loan is represented in the mortgage note. You can think of mortgage notes as a physical promise to pay off the loan.
Mortgage notes tend to be in the possession of banks and other lending institutions, but change hands often for low prices. Behind the scenes, mortgage notes for sale are actively traded, as banks often prefer to sell them instead of holding onto them. Putting mortgage notes for sale allows banks to free up their cash flow.
When purchasing a mortgage note, all rights that go with the note also accompany it. This means that the note is secured by the property it was created for. Investing in mortgage notes means you purchase an existing mortgage. Once you’ve purchased the mortgage note, that makes you the lender. This means that the person who took out the loan now has to make their payments to you. This also means you have the rights of a lender. While you don’t own property, you have the right to take collateral if your borrower doesn’t come through on payments.
Types Of Mortgage Notes
Mortgage notes come in different asset classes, usually divided by residential or commercial loans. Residential loans include single-family and multifamily homes, while commercial loans include malls, office parks, warehouses and other buildings.
Institutions like banks usually offer mortgage notes. In a private mortgage note, a borrower makes payments to an individual directly and may be part of a portfolio. Essentially, there are two types of mortgage loans. One is a loan secured by a property, which is known as a collateralized loan. The other type is an unsecured loan, with nothing to back it.
There are also two main risk categories. Performing mortgage notes are when the borrower has remained current on the payment. Non-performing notes are when the debtor has fallen behind on his or her payments. Non-performing notes are sometimes called distressed notes.
There are many ways to start investing in mortgage notes. However, keep in mind that all investments carry some form of risk, so make sure you understand the risk factor before investing.
Convinced that mortgage note investing is for you? Consider buying distressed mortgage notes in New York for passive income. Luckily for you, you’re on the right page! Look no further than Melanin Homes for your real estate mortgage notes needs.
Looking to Invest In Real Estate Notes in New York?
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) 809-5811 today!