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Retirement In Notes

Written by Jeffrey R. Armstrong – President/Owner of Armstrong Capital

Your favorite Master Note Buyer – Straightforward, Honest, Fair…

Retirement is Just a Couple of Notes Away

In order to stay in business as a note broker/investor in the field of seller financed notes a broker needs to make money now and be able to make money in the future. A note broker can do this by having a good referral network that is sure to keep producing for years to come or by having a great marketing plan that will generate current and future leads. A note broker can also prepare for the future by buying a couple of notes per year to hold for income AND by keeping a piece of the action at every chance possible for future income or to sell during the slow periods.

We talk a lot about how profitable note brokering can be and that is absolutely true, however, true wealth and retirement income will come in this business buy owning the notes yourself.  Here is an example of a small note and the passive income it could generate:

Type of property: Mobile Home and land in Bullhead City, Arizona.

Sales Price: $22,000.00 Payment Amount: $298.46
Down Payment: $3,000.00 Current Balance: $14,402.06
1st Deed of Trust: $19,000.00 1st Payment Due: 6-10-2007
Date of Sale: 5-10-2007 Payments Paid: 32
Term: 96 months Payments Left: 64
Interest Rate: 11% Next Payment Due: 2-10-2010
Present Balance: N I PV PMT FV
64 11% $14,402.06 $298.46 0
Purchase Price: 64 36% $8,448.35 $298.46 0

In this particular instance if you purchase the note for $ 8,448.35 your yield would be 36% if the note went full term. Should all 64 remaining payments be made you would realize $19,101.45 over the term of the note.  Can you imagine if you purchased this with your Self Directed IRA, and this is just a small one?  Do you think if you bought a couple of small notes every year you could build up a good size retirement account?  Or even if you just had a couple dozen small notes that produced passive income for you, do you think you could realize a nice monthly income?

What about using no money of your own, something I like to call keeping a piece of the action. When I keep the tail end of a note it is with no money out of my pocket. For the purposes of this article I am going to focus on just keeping the tail end of a note with no money out of your pocket. A tail end is the back of a note. For example, it might be keeping the last 3 years of payments on a 20-year note or keeping a part of the balloon payment due in five years. By keeping the tail end of a note you are creating an equity position in the note. You are purchasing the entire note from the seller and selling a partial to the funding source. The funding sources that will allow you to do this will usually prepare and record all of the documents for you. You will make money at the time the transaction is closed in the form of your negotiated commission and you have the right to receive more money when the tail end pays off or comes back to you!


I could keep waiting until 3-10-2018 to start receiving monthly payments or if I needed some cash during a slow period or to make a purchase I could call the funding source and sell all or part of the tail end to them at any time, for a discount of course.

I hope by reading this article you can see how buying notes and keeping a piece of the action can help you with your retirement goals. A good note broker is also a note buyer and does not only know how to make money now but also how to invest for the future.

Remember, success demands action! Keep on marketing, it’s going to work! TWITA! (That’s What I’m Talking About!)

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