Note buying in Columbus can make real estate investing simple, even for a novice. Investing in notes can help you to diversify your portfolio, achieving a profitable and well-balanced portfolio. Notes or promissory notes in real estate are, in essence, an IOU to the lender from the borrower. They are bought and sold on the open market, much like stocks. Keep in mind that notes represent ownership of the property, for which you will hold the first lien position. You are still buying real estate, so you should still perform full due diligence on the investment.
Just like an investor who buys single-family or multi-family properties, there are a number of investment strategies you can utilize when buying notes in Columbus. Read on to learn more about the many perks of investing in Columbus notes and how Flavortown Properties can help you get started.
How it Works
For banks, originating mortgages is a lucrative business. They will make profits on the loan processing and will collect payments before selling the note to another bank. If you have ever had a home loan, you may have noticed that who you direct your payment to, changes after some time has passed. The terms of the loan remain the same, including the payment amount, but the payee instructions are updated. Individual investors may also sell their notes much in the same way. Each time a note trades, it is sold at a discount. The monthly cash flow profit increases for those investors focused on note buying in Columbus. Because notes are purchased at a discount, there is a high potential you will see a solid return on your investment.
No Tenant Hassles
There are two types of notes you can purchase: performing and non-performing. A performing note means that the borrower is making timely payments, and the note holder can rely on the monthly cash flow. It is a passive way to invest in real estate, without the hassles of being a landlord or dealing with construction. Instead of dealing with tenants, you are acting as the bank.
You will not spend months finding the right long-term tenants or buyers. You will not have to concern yourself with the dust of construction crews, bad repair jobs, or contractors running over their deadlines and causing chaos. When buying notes in Columbus, you’ll see that investing in real estate does not always have to include the typical role of landlord and tenant. You will be able to skip all the headaches of maintaining a property for yourself. Imagine, investing in Columbus real estate, without ever answering calls about broken plumbing in the middle of the night.
The second type of Columbus note you can buy is a non-performing note. These notes sell at incredible discounts. If your borrower is not paying, you can work with them on a loan modification or repayment plan. Should the borrower be able to pay off their note, you will benefit financially. Even if the borrower can’t repay the loan, you can still come out as a winner. Real estate holds value, note buying in Columbus means you could sell the property and recoup your investment if the borrower fails to make their payments as promised.
Writing a check is an example of making a promise to pay. When an establishment encounters a customer using a check as payment, the first step taken is to verify the check writer by whatever means possible to ensure the reliability of the paper that they have signed. The balance of cash in their checking account acts as security for the payment. Unlike a check that may be forged or may bounce, real estate notes are secured with collateral.
Buying Notes From Individuals
Property owners who find themselves in distress can sell notes. As an investor, you can buy the note, helping the homeowner to stay in the home. Many investors in Columbus find assisting others through their investments can be a rewarding benefit in and of itself. And because you are buying notes at a discount, your charitable efforts are affordable, and will still be quite profitable. While the homeowner may need to refinance or make other changes, they will save their home, and the investor, while earning a profit, will have the positive experience of helping their neighbors through the process of note buying in Columbus.
Are you interested in note buying in Columbus? The pros at Flavortown Properties know what to look for in notes and the winning formula investment for your real estate portfolio. We are a diversified group of highly regarded professionals with experts in every facet of real estate. Our team can help you find the best performing or non-performing notes available! Contact Flavortown Properties today at (614) 665-5619 to learn more about how we can help you!