Note buying vs regular REI - Posted by HC

Posted by John Behle on March 16, 2006 at 12:51:50:

There are exuberant masses in the paper business also. But, that doesn’t mean much. The important thing about competition is how good is it. If they are riding ten speeds and you have a Honda V65, that’s what’s important.

The average wanna-be paper investor is even less trained than the average wanna-be or new real estate investor. So, the competition is not a big factor, it’s how good are they, how good are you and can you even work with them as an asset.

It’s about the training. Most of those trying to do the business have a very light and un-realistic training. Sometime their training is even from people that have never even done the business. If you get good training - like from those in this forum - you can be highly competitive and make good profits in this industry. Anything from Terry Vaughan, David Butler or Michael Morrongiello will give you a good education.

Donna Bauer is good too. I haven’t read her course, but I did meet her about 16 years ago when her mentor and employer Jay Swob sent her out to take my 5 day training. I was very impressed with Donna and I’ve known Jay a long time. So, I know her education is good and she has had some wonderful experience working with Jay and since then. Based on that, I would assume her course is very good. If it wasn’t, I think I would have heard that.

Coming from the background of a real estate investor, Michael Morrongiello’s course might be the first step. Michael has a great background in both areas and my understanding of his “Unity of Real estate and Paper” course is that it talks about not just paper, but how to use paper in real estate transactions, etc. Terry and David also cover those types of subjects. Donna’s course is more likely just geared towards brokering notes and probably covers areas of buying “Bad Paper” which is one of Jay Swob’s specialities.

As far as comparing paper, I wrote an article some years ago titled “A Loanlord’s Lament” which highlights some of the pros and cons of both real estate and paper. As far as my background, I started in real estate and found paper to be much more attractive. The article is at:

There are more articles at that sight and several published here in this forum also. Two others that might be of interest that are published here are:

Real Estate Paper: Your Most Valuable Tool


Four Tips to Be a Real Estate Paper Pro

Those should help to get a good perspective of paper investment versus real estate and how they work together. In addition, if you read the archives of this forum, you will find more information than almost any course that has ever been published on paper.

Note buying vs regular REI - Posted by HC

Posted by HC on March 16, 2006 at 08:25:10:

Hi All
I am just getting into Real estate investing, learning fast. I have been studying for about 2 years, done one good deal, and am really excited to eventually go full time.
I saw Donna Bauer talk in Charlotte and the whole notebuying thing started to make sense. I see that I really should understand this process because it is a huge part of REI.
Here is my question. Should I consider notebuying as a possible niche so I can separte myself from the irrationally exuberant masses chasing Single family homes these days. Or is it just as competitive? What are the pros and cons of approaching REI from the backdoor through notebuying.

Multiple Businesses - Posted by Jimmy

Posted by Jimmy on March 17, 2006 at 06:48:49:

Your posting seems to envision a black and white world, where you choose REI or notes. Don’t think that way! You can make money (and lose money) in a lot of real estate and RE-related endeavors.

If you see a lot of craziness in newbie investors in your area, than look elsewhere. Get away from the coasts, and you will find plenty of sanity and reality and cash flow. I lived in the San Francisco area, and built a portfolio of properties in East Texas. Why? Because that is where I found the cash flow and economics that I wanted. I did not limit myself to what was near my home. and neither should you.

I have not bought any notes in my travels, but I have created a small pile of them by seller-financing properties. I love notes! I view my little pile of notes as the residue of successful deals.

I have been approached several times by note-buyers. They must have a way of learning about newly recorded seller-financed notes. They want to buy my notes. at discounts, of course. I’m not selling. But I did take notice. amd I did allow the note-buyer to run me through a series of questions (and I took thick notes of what he was asking and why). It occurred to me almost immediately that this guy was acting exactly like a bank. and that makes a lot of sense.

my bottom line: be versatile. be adaptable. pay attention. be open to a wide array of possible business activities. don’t lock yourself in with narrow-minded thinking.