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The Path to Being a Note Investor

Note Investing is not for the weak.  There are many risks, pitfalls and nuances to consider yet if done properly the rewards can be great. With some real estate markets settling down and even growing in some areas and with interest rates still very low, many people are wanting to find out how to get started investing in notes. There is so much information available today that the question remains…how can a person with little or no experience, credit or cash get started as a note investor?  If you start slowly and focus on the basics, you can become a professional note investor with patience and persistence. The following is an excellent primer on how to get started.

Knowledge Is Power

The late Napoleon Hill noted in his timeless classic, Think and Grow Rich!, that in order to achieve success in anything you want you’ll need to acquire specialized knowledge. Becoming a professional real estate investor takes a combination of specialized knowledge and general knowledge to skyrocket your success. There is plenty of information which can be gathered from many sources such as the internet, various home study courses, and your local library or by learning from an experienced mentor or master broker. There are countless courses and training sessions available and literally hundreds of books have been written about the subject. Realize that many roads that can lead to success, but only one is right for you. You must decide which path it is going to be which will lead you to become a professional note investor.

The First Step

Along the way to building your education, I suggest that you don’t quit your day job until you are making at least the same money investing in your spare time as you are presently earning at your current full time job. This is the first piece of advice anyone should give the new note investor.

One reason is that you’ll need working capital to make deals happen and to cover any necessary holding costs until the cash flow starts coming in and you have cash in your pocket. I’ve seen countless would be investors fall out of the race before they even got started because they believed all of the guru hype about making a million dollars overnight.

Infomercial gurus are always talking about no money out of your pocket to be in the note business but true no money out of your pocket deals take specialized knowledge to make happen and aren’t as common as all of the so-called gurus would lead you to believe. There are always some sort of holding costs, closing costs or fees, appraisals and title insurance, to pay.

As your education advances you’ll become more in tune with what strategies to use and when to use them. Don’t worry about right now. You didn’t learn everything there is to know about your present occupation in a couple of hours so understand that advancing through the levels of note investing takes time. Most note investors at one point in time all started out as note brokers.  There is something to be said about time on the water and experience.

Easy Does It! – Step Two

The next step to success in becoming a professional investor is getting to know your local market place and the markets in the areas you want to invest in. Real estate markets can vary from state to state and city to city. You’ll want to know what is going on in your area so you can make deals happen quickly and know what it will take to get them under contract and get those monthly checks coming in as a result. You’ll also need to know who your target audience is so you can market appropriately and you’ll never be scrambling to find new potential leads.

There’s A Law For That? – Step Three

You’d better believe there are some laws governing what note investors can and can’t do, however, there are many areas of the note business that are not regulated and the business as a whole isn’t regulated much. You need to have a basic understanding of the laws that govern your area and the areas where you want to invest in.  No need to panic, though. Everything you’ll need to know is easily found out as you add an experienced note professional or master buyer to your team.

Take That To The Bank – Step Four

You’ll need to learn property values for any given neighborhood you choose to work in. Determine how much the value of the properties have gone up or down by accessing the county assessor’s website for sales history of a target property, build a relationship with several valuation companies who understand what exactly you are looking for in regard to potential transactions and get educated on the real estate market for the areas you want to invest in.

All The Parts Create The Whole – Step Five

Part of your team of professionals may include a valuation company, a title company, a real estate attorney, an escrow company, a processing company, a servicing company and more. Become friends with your people who you will work with on a regular basis because you’ll want to be able to call and talk to them about a potential investment as the need arises. Some companies are becoming very particular about who they deal with and how much they will do when it comes to investing in a note. Knowing what these types of company’s costs are for particular tasks they may perform for you is something you will need in order to not have your profits reduced by unforeseen expenses. In addition, an experienced note professional who will tell you whether or not a deal will hold up or fall apart in front of your face is crucial to your success as well as peace of mind.

The Sky Is The Limit!

Always be open to learning new strategies and tactics as well as modifying what you may already know to ensure that you keep a competitive edge over other note investors. Learn as much as you can and then take action on what you learn! Remember that knowledge is only potential power but applied knowledge is real power! Seek out specialized knowledge from someone who has already done what you want to do and the money will flow like a river. Your first deal may just be right around the corner if you’ll follow these five steps. Remember success demands action, keep on marketing, it’s going to work!  TWITA! (That’s What I’m Talkin’ About!)

Jeff Armstrong of Armstrong Capital, your favorite Master Buyer, has been in the cash flow industry since 1991.  Specializing in the private mortgage note niche and seller financed notes he can be reached at 818-865-2322 or by email at For beginning to advance training opportunities, resources, to learn more or to obtain a quote visit and

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