Can Performing Notes (PN) earn a cash flow just like collecting
ANSWER: YES... with numerous perks! Since the
Landlord / Investor inherits all of the maintenance issues, insurance and tax burden that go with it, while
the note Investor simply pays a servicing company collect the Mortgage payment as passive income and desposit
it in their portfolio.
The ONLY reason Landlords are afraid of buying notes is because it is such a new arena for individuals... it used
to only be available to big institutions. Since not all notes are equal, of course, the Investor does need a company
like "REPS" to do the "due diligence" prior to buying the note and guide them in choosing the correct notes.
It's easy when you enlist the services of REPS to guide you. Call us today and get started.
PERFORMING NOTES SUMMARY: Instead of being a landlord, the smart investor becomes
the bank by buying a Promissory Note (mortgage note) where the home borrower has been making their monthly payments diligently.
This is called a performing note. Any performing note acquired by the Investor is put into their portfolio as a passive
asset and they collect monthly returns which will be managed by a 3rd party servicing company for them. The Note
Investor receives his monthly payment directly from the servicing company costing a small monthly fee of only $35.
The Note Investor does not pay the taxes, insurance, or any maintenance since the home borrower is paying for those expenses. I
bet you have never heard of a bank being called in the middle of the night to go fix the leaky roof, have you? That
is just one of the reasons why you should "Be the bank, instead of the landlord?"
Here is another reason to be the bank! The Note is purchased through a Note Broker like REPS at a substantial
discount, based on a quick sale value of the current market pricing... usually 65%-80% for a Performing Note.
The variance is because the price is based on the annual yield of each note based on interest rates and other variables. Sometimes
location raises the price of a performing note as well.
What were the Questions?
Should those cash Investors be buying Performing Mortgage
Notes at about 65-80% of the current market value? YES
Would Performing Note owners have to worry
about leaky roofs or plumbing issues or even pay property taxes? NO