An Overview of Mortgage Note Investing, According to

An Overview of Mortgage Note Investing, According to

Looking for alternatives to IRAs and other traditional retirement savings plans can be complicated.  Investors are always looking to minimize risk while maximizing income, while the market generally dictates that higher-profit investments are also higher-risk investments.  Mortgage note investing is one way to increase profits without taking on tremendous risks.  Because it adds diversity to an investment portfolio, it can protect against stock market fluctuations that can disproportionately impact non-diversified investors.  Visit here to find more information.

Real Estate Investment

Most people know that real estate can be a profitable long-term investment strategy. Traditionally, this has meant focusing on purchasing multiple properties, with the goal of either rehabbing them and flipping them or holding them for use as rental properties.  When handled well, these strategies are certainly effective ways to invest money.  However, they are often touted as a passive way to earn income, but that descriptor is not accurate.  Whether rehabbing real estate for resale or holding it as a rental property, property owners have obligations that are not only passive.  These obligations are financial, such as taxes and handling repairs, but can also put demands on the investor’s time.  

Real Estate Notes

In Real Estate Notes: A Smart IRA Investing Alternative, the author explores various types of real estate notes, including mortgage notes.  A real estate note refers to any promise from a borrower to repay a lender an amount of money for a piece of real property.  However, what is not included in that generic definition is the most appealing part of real estate lending, which is what these notes are almost always tied to the property through a mortgage or other type of lien. According to, these liens decrease the risk associated with the loans. 

Mortgage Notes

A mortgage note is a specific type of real estate note, which specifies that the property is collateral for the loan. It contains important details about the underlying transaction, including how much money was borrowed, the interest rate, monthly payment amounts, the terms of the loan, what happens if there is a default, and the borrower’s identifying information. 

How to Invest in Mortgage Notes

While it is possible to invest directly in mortgage notes by providing mortgages for individuals, this scenario can be risky.Amerinote Xchange is a mortgage note investor that buys mortgages on the secondary market and provides investors with the opportunity to purchase those mortgages, or parts of those mortgages.  Purchasing multiple parts of mortgages helps spread out the risk from active real estate mortgage investing.  

Secure Investment Opportunities

The appeal of collateralized loans is that, in the event of default, the lender can take possession of the property and sell it to satisfy the debt.  Therefore, unless the real estate market itself is overvalued, there is security to these types of investments that do not exist in many other investment scenarios.

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