Real estate purchases have always been considered a wise investment. Some investors who are looking to capitalize on the real estate market have started to invest in the notes that underlie residential and commercial properties.
Buying notes can be a great way to generate income and build your wealth, but you need to know where you can find viable notes to invest in. Try one of these three sources as you look into working with real estate note buyers.
1. Private Note Holders
Investors who purchase multiple notes are often looking to divest themselves of some of the notes they hold. This makes other investors a great resource when it comes to finding viable real estate notes that you can invest in yourself. A private note holder will be able to offer you information on the performance of the property so that you can determine how much of a return to expect from that property before you buy. This allows you to make an informed investment decision that will benefit you over time.
2. Hedge Funds or Private Equity Funds
Many hedge funds or private equity funds buy real estate notes in bulk. The notes are then re-sold to individual investors. You can work with your financial planner to identify hedge or equity funds that have the types of real estate notes you are looking for available to purchase. The majority of the notes that are sold through private equity funds or hedge funds have been vetted. This means that you can count on the properties to be a viable addition to your investment portfolio in the future.
3. Banks or Credit Unions
Another great resource for the purchase of real estate notes is your local bank or credit union. These financial institutions carry notes for all of the homeowners they have financed. Selling the notes benefits both the banks and private investors. You can purchase the note from the financial institution to get it off their books, then the bank or credit union can provide you with ownership of the notes for local properties with proven payment history. Working with a bank or credit union to source your real estate notes can offer you access to a pool of low-risk investment opportunities.
If you are thinking about adding real estate notes to your investment portfolio, be sure that you are prepared to source your notes through a reputable avenue.