Online Note Investing Seminars

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Selling Business Notes for Quicker Cash

In about 85 percent of all business sales, sellers accept a cash down payment and a promissory note to pay the balance in installments. The note is personally guaranteed by the buyer, and it is secured by the business and its assets in case the buyer defaults. Providing owner financing allows sellers to cater to a broader pool of potential buyers.

However, many sellers do not want to be in the lending business and would prefer not to hold business notes. The good news is: they do not have to. If you created a business note to unload your company, you can sell the note to someone else. This way you can get instant cash out of the business, instead of waiting to receive periodic payments in the future. You can use the cash for a variety of purposes, including: capitalizing on other investment opportunities, paying off debts, funding college tuition and making major purchases.

How Selling Business Notes Works

Business notes are purchased at a discount – like all notes sold on the secondary market – to make them attractive to potential buyers. Without a discount, there is no incentive for investors to incur the risk of waiting three to five years or even longer to recoup their money. Historically, more than 90 percent of new business owners fail within the first five years. Therefore, there's considerable risk attached to the purchase of any business note.

You may receive less than the full balance of your note when you sell it. However, the total cash you receive from the down payment and the sale of the note will usually be about the same as you would have received from an all-cash sale of your business. That's because all-cash buyers can insist on a much lower selling price.

The amount of money you'll actually receive for your note depends on a number of factors. But as a general rule, for a full purchase, you can expect to be paid 50 to 80 percent of the balance of the note. Specifically, the amount…

Read More…. by David Springer

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Promissory Notes: Rejuvenate Your Retirement Income

Not Having a Retirement Plan May Make Retirement Impossible

Are You Heading Toward Retirement Without a Plan? Most Americans think about, and talk about retirement by age 65, but fewer and fewer can do it. The group of people age 65 and older is the fastest growing segment of the labor force. About 10 years ago, 52% of such Americans worked full time, but that has increased to 58%. Obviously, many working people are not investing properly for their retirement; they may be under investing; they may be investing in the wrong assets; they may be taking unnecessary risks. Each year that passes reduces opportunities to make corrections and increases the savings necessary for a comfortable retirement …

The problem with not having a retirement investing plan-a financial goal– is you can spend your life working hard, running up and down the field and never score a touchdown.

Plan your Income Needs Identify where you want to be, financially speaking, at retirement age. Calculate how much income you will need to live during your anticipated retirement period; determine the life-style you need; estimate the number of years that income will be needed. Make realistic estimates.

Determine the savings and the income you will need to reach your retirement goal. Put your calculations on paper; use numbers, not mere words. Have a trusted friend review it for reasonableness. We all have a tendency to delude ourselves on matters that are difficult to face. Sometimes "the truth is badly heard".

Maximize your Income Using Promissory Notes Gaining financial security is a three steps plan by having: • An above-average work ethic • A below-average spending and consuming pattern • A desire to, and a plan for, investing for the long haul

Promissory note investing is not as easy as stock market investing because promissory notes are not listed and traded on a public exchange. You have to inquire and make…

Read More…. by Lawrence Tepper

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Discounting Your Promissory Note To Sell – Part Two

Selling your mortgage note is a very competitive process

Cash-in-hand investors have thousands of competitive investing choices and opportunities available to them.

Corporate Stocks, Corporate bonds, Annuities, Mutual funds, Exchange Traded Funds, Real Estate Investment Funds, Municipal bonds, Private placement funds, Land, Apartment houses, Commercial real estate, Mortgage pools, and Individual Mortgage notes to name just a few.

When you sell your mortgage note all of the above investment products are your competitors. Since the main reason for investing money is to earn extra income, your note of income producing potential and safety must appeal to the investor more than any of the other investment products. Investors, consciously or unconsciously, compare your note to all of these other products in order to make their investment decision. The investor is like the judge at a beauty contest. All of the contestants are parading and smiling in front of the cash-in-hand investor-trying to look their best-in order to be crowned as the "the winner".

What determines the value of your promissory note?

Because the investor seeks a "stream of income" of a certain amount and risk of a certain amount, your note will be assessed -judged-by the investor.

Investors will compare your mortgage note to all the other investment products available to them. The following factors will be used in making the investment decision:

– Quality of the borrower – payment history, credit history, financial strength – Quality of the collateral security – land, buildings, furniture fixtures and equipment – Quantity of the collateral security – equal to, less than, more than the balance owed – Term of the loan – 6 months, 60 months (5 yr.), 120 months (10 yr.) – Terms of the loan – amortizing, balloon, monthly payments, annual payments – Income generated – monthly, annually, upon reimbursement in full – Default Provisions -…

Read More…. by Lawrence Tepper

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How To Double Your Money Every 7 Years Safely – Mortgage Note Investing in Your IRA Account

The fundamental rule of investing: All investments that have the ability to provide a yield, or a profit, or a gain also carry the risk of loss. There are no exceptions to this rule. Never be tricked into believing that any investment is "risk-free" or a "sure-thing".

Since risk can not be avoided, you then ask ask two questions: 1) in what can I invest that has the least risk? 2) how can I double my money over time with as little as risk as possible? My answers are: 1) invest in things that you understand; 2) invest in things that you can personally control; 3) allow the passage of time to multiply your income; 3) minimizeize income income taxes; 4) get expert advice and guidance when you do not understand what is happening.

Mortgage note investing is an excellent long-term investing plan . Investing your IRA funds in mortgage notes (promissory notes) is one of the best investing vehicles available. All investing, and especially retirement saving and investing, is a long-term process, but the sooner you get started, the more time your investments have to grow.

There are several reasons why mortgage notes are an excellent investment for you-especially in your IRA account. The advantages of notes are:

Capital gains and interest earned are either tax-free, or tax-deferred

If interest is received monthly, it is compound 12 times per year

The yield on private notes is usually 7% to 14%

If the note is properly collateralized it is usually very secure

If the note is properly drafted, it is usually very collectable and enforceable

If the note is properly drafted, its risk is usually predictable and clear

If funded by your IRA, there will be no bank borrowing to repay

The size of the investment can be tailored to your needs by investing in smaller notes, or by investing in fractional interests of a large note. As an example, it is possible to own a 5% or a 15% interest in a large note.

Here is how…

Read More…. by Lawrence Tepper

The post How To Double Your Money Every 7 Years Safely – Mortgage Note Investing in Your IRA Account appeared first on Note Investing Seminars.

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Promissory Note Investing – Planning for Success

There is no such thing as "smart money" – only smart people – the money goes where they go.

Planning – A General Overview

Becoming successful in any activity that requires education and training will also require planning. Without a financial plan – a road map – that shows you where you are now and where you intend to go, it is doubtful that you will have a successful journey.

Becoming a successful promissory note investor definitely requires an understanding of where you are now – financially speaking – what you plan to accomplish – and how you plan to get it done.

Examples:

"I now am age 30 and I want to retire at age 65 without any debts. I now have $ 20,000.00 available for investment.

"I am now age 45 and I want to retire at age 65 without any debts. I now have $ 40,000.00 available for investing. I want to use promissory notes to build my investment capital." I plan to add fresh investment capital annually. "

In each of the above examples the person's current investable funds, their current and future employment income, their current and future cost of living, their health, their family size, etc. must all be factored into their long-range investment / retirement plan.

Planning – Tailored To Your Individual Situation

Now, you should take pencil, paper, and / or computer and layout your individual plan for long-term investing success. Doing this, while not very exciting now, may be one of the most important financial exercise that you ever do. If you take your time and really apply yourself, you will go through a process of financial self-discovery and financial self-awareness that should be revealing to you. Remember-be honest and be realistic.

Force yourself to deal in specifics – -specific income dollars, specific time-frames, specific living expense dollars, etc. Do not "wing it" and rush through this exercise; take your time; be completely honest and open with yourself. If you "cheat",…

Read More…. by Lawrence Tepper

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Promissory Note Investing – Principles And Tips

Because of the uncertainty of the stock market, many investors are looking for safer and more predictable ways to invest their money. Promissory Note investing, which is also know as Private Money Investing, and Hard Money Investing, offers an individual the opportunity to earn safer, more predictable, and higher returns on their money.

Promissory Note investing is fairly low risk because the loans are backed by the appraised value of the collateral security plus the promise to pay of the borrower. Generally, the loans are conservative–at about 65% of the appraised value of the security. In case of a foreclosure, the property is sold to recover the funds. The borrower’s promise to pay and credit provide an additional measure of protection and an exit strategy. Additionally, hazard policies (fire, hail, wind) are insuring the property. The title to the property and the note holder’s interest is also covered by insurance-title insurance and lender’s insurance. This is the correct way that the investment is structured.

Private Mortgage Notes provide borrowers with an alternative to traditional bank financing for real estate properties. A borrower may not want to pursue bank financing due to time constraints, credit worthiness, or other factors, so they look for individuals or groups to finance their investment. Investors/lenders will take on the risks of lending, and in exchange, will receive a higher than normal interest yield on their investment.

Yields for private mortgage notes are generally higher than the traditional investments available. Return rates of 9% to 15% are typical. The more risk the lender is willing to accept, the higher the return expected. Generally, you want to be listed as the first position lien holder on the property-the first mortgage. You should fully understand the circumstances of a particular note investment before determining the amount of risk you are willing to accept. Take your time and get all…

Read More…. by Lawrence Tepper

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Saving For Retirement With Bond Investments

With the cost of living nowdays, most of us will face some problems meeting our needs when we retire. That is without you happened to be one of those who is going to retire with a fabulous pension. If you are not, then it is critical that you start your retirement planning early. The earlier you begin, the easier it will be for you to build up your retirement egg nest and that will provide you with the kind of lifestyle you want.

In the early days, most people placed their money under their bed. While that may be safe then, it is extremely foolish to do so today. With inflation hovering at around 3%, it can easily erode the value of your money. Your $ 1000 today will have only the purchasing power of $ 860 in five years time if you are not going to do anything with it.

The only way you can protect the value of your money is to save and invest them wisely. The best investment vehicles in the market today include stocks, commodities, properties and bonds. If you wish to save for your retirement, you should start putting money in these investment vehicles along your standard retirement or pension funds.

While people may argue that such investment tools are risky and it would be better to put their money in a savings account. The only problem is that with interest rates near 1% and inflation at least 3%, you will still be losing money. Your money is simply not keeping up with inflation. To grow your money, you need your investment or savings to grow more than the current inflation rate.

One of the investment tool you can consider is investment-grade bonds. They are great tools for saving as you can expect a return between 3% and 6%. If you have a greater stomach for risk, you can consider the more risky bonds. While the value of such bonds may fluctuate, it can grow you money faster as they come with higher interest rates.

Bond investing is seldom discussed in parties as they are generally boring. …

Read More…. by Partric Wumolt

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Learn From Your Investment Mistakes

Every one makes investment mistakes. From the time we were born, we learned from the mistakes we made. As investors, we need to learn from our investment mistakes by recognizing when we make them and make the appropriate adjustments to our investing discipline. When we make a losing investment, do we recognize our investing mistake and learn from it, or do we attribute it to some outside factor, like bad luck or the market? To make money from your investments and beat the market, we must recognize our investing mistakes and then learn from them. Unfortunately, learning from these investing mistakes is much harder than it looks.

Some of you may have heard of this experiment. It is an example of a failure to learn from investing mistakes during a simple game devised by Antoine Bechara. Each player received $ 20. They had to make a decision on each round of the game: invest $ 1 or not invest. If the decision was not to invest, the task advanced to the next round. If the decision was to invest, players would hand over one dollar to the experimenter. The experimenter would then toss a coin in view of the players. If the income was heads, the player lost the dollar. If the income landed tails up then $ 2.50 was added to the player's account. The task would then move to the next round. Overall, 20 rounds were played.

In this study there was no evidence of learning as the game went on. As the game progressed, the number of players who elected to play another round fell to just over 50%. If players learned over time, they would have realized that it was optimal to invest in all rounds. However, as the game went on, fewer and fewer players made decisions to invest. They were actually becoming worse with each round. When they lost, they assumed they made an investing mistake and decided to not play the next time.

So how do we learn from our investing mistakes? What techniques can we use to overcome our "bad"…

Read More…. by Hans Wagner

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7 Key Promissory Note Questions and Answers

Does it make sense for me to draft the promissory note myself?

It makes about as much sense as filling your own tooth cavity.

There are several reasons why making your own promissory note is financially dangerous:

you probably do not know the current laws impacting private party lending

you probably have never had to enforce a note that you drafted in a court of law

you probably never had to justify the value of a note that you drafted to a banker

you probably never had to justify the value of a note that you drafted to a buyer

you probably never had to justify the value of a note that you drafted to the IRS

What sort of attorney should I engage to draft my promissory note?

Many attorneys honestly believe that filling in the blanks on a promissory note form is all that is necessary; they are badly mistaken. Many attorneys who call themselves real estate attorneys honestly believe that they are experts in and knowledgeable about promissory note; Generally, they are badly mistaken.

Only engage an attorney who has had a real experience-collection experience, enforcement experience, and note marketing experience. There are new and changing laws relating to private party promissory notes that must be followed. Only an active, experienced, specialized attorney will understand what is necessary to protect you.

What sort of collateral security should I demand and how much should I demand?

The basic rules are: "you can never have too much collateral security"

"the higher the quality of the collateral security the better"

Real estate is generally good security. As compared to an automobile, real estate places put, you can always find it; a car can be wrecked, it can be driven away, it can be hidden. The same problem applies to furniture, fixtures and equipment. Try to get a first mortgage on real estate as your primary collateral security.

How do I know if I have enough collateral security?

Do…

Read More…. by Lawrence Tepper

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5 Steps to Becoming a Master Investor

Diversify – Diversification is a powerful investment tool that helps you reduce the risk of holding aggressive investments. Diversifying simply means that you should hold a variety of investments that do not move in tandem in various market environments (for instance bull and bear markets). You do not need 50 different funds in order to diversify. You can diversify with five, at the most 10, mutual funds or ETFs.

Keep fees to a minimum – For both mutual funds and exchange traded funds you can look at the 'total expense ratio. "The best case is an expense ratio less than 1%, and certainly no higher than 2%. have to watch out for "sales load".

Be aware of your time frame – Match your time frame to the investment. For example, for money that you expect to use within the next year, focus on low-risk investments such as money market funds, certificates of deposit or US government bonds.

Ignore the "gurus" – Pay no attention to the fortune-tellers and prognosticators who are paraded on CNBC. Predicting the future is impossible. If anyone could actually predict future prices of the stock market they certainly would not be telling you about it!

Start Now – If you have not started putting away money to invest, start now! Open an investment account today and setup automatic monthly contributions. The younger you are, the more money you will have come retirement. The magic of compound interest multiplied by time is powerful. So, do not wait. Start investing today!

Read More…. by James Fowlkes

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California Real Estate Investing – Three Important Things To Note Before Investing There

California is, no doubt, the jewel on the Pacific coast of USA. It has enchanting natural beauty and abundant resources that have attracted thousands in search of a better life. California real estate investing, therefore, is the ideal way to capitalize on the great opportunities available in the state.

California has all the ingredients that make it attractive to those who wish to move in there. It offers a sophisticated urban lifestyle, great educational opportunities from kindergarten through university, good business environment, recreational facilities and artistic avenues. From the sun-kissed beaches of San Diego to the studios of Hollywood and the digital revolution spawred on in the Silicon Valley, all represent a fine blend of natural endowment and human ingenuity. The state's population is multi-ethnic and the humming cultural scene reflects this trend.

Whether you wish to make California your home or earn returns that are inflation-proof, California real estate investing is one decision you would never regret.

The instant image that strikes one when discussing real estate in California is of the multimillion-dollar mansions of the rich and famous. Majestic in size and design and lavish in detailing, these homes represent the ultimate in luxury that money could buy. Does that mean a small investor can never buy property in California?

The answer is an emphatic no. Here are a few things one should keep in mind while scouting for California real estate investing opportunities.

o Localize your search and narrow down your criteria in specific terms, as it would make you focus only on those properties that meet your budget and other constraints. Not doing so would mean getting lost in the plethora of tempting properties that are well, not affordable by you.

o California has a well-regulated real estate industry. The real estate agents and brokers work under license from the state administration. …

Read More…. by Joel Teo

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What is a Cash Flow Note?

Many who consider becoming involved in the cash flow industry as private note finders have no concrete understanding of what a note is. Some simple education on the matter however, can help new note finders get started on the path to success in the note business.

When professionals in the cash flow business refer to a "note" they are not talking about love notes, music notes, or a "note to self." In the language of the private cash flow business the word "note" is shorthand for promissory note. While it is easy to get tripped up in the various types of notes, this term refers to an official IOU; the right to collect payments based on terms outlined in the promissory note itself. In most cases a note is secured, meaning the borrower stands to lose something if they fail to make payments in accordance with the terms of the note. The security can be any form of property including cars, boats, planes, or real estate. While some venture into niche markets, the type of note most finders work with is the real estate note because they are well secured and it's easy to find note holders and buyers.

A real estate note, commonly called a mortgage, trust deed or land contract, is simply a note that is secured by a home, vacant land, or other type of real estate property. These notes are very attractive for buyers and finders for numerous reasons, with one of the most predominant ones being the sheer volume created on a daily basis. Additionally, in most circumstances, real estate notes are more secure because real property tends to appreciate in value and is fixed in location, whereas many other types of property (like cars) tend to depreciate and can be easily moved. Buyers want to get the most bang for their buck which is why many of them choose to work with real estate notes. They know that should a borrower fail to make payments it would be more realistic for them to recuperate their invested funds by foreclosing on…

Read More…. by Russell Dalbey

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Options Income Strategies For Monthly Cash Flow

Trading options is a risky business. You have to learn the basics, take note of stock movements and rely on your instincts. While these ideas may prevent you from buying stock options in the market, it is still best to gauge whether you can survive or have the guts for this type of trading. Options income strategies for monthly cash flow abound in the net these days. Not only are you facing a number of online tutorials or methods, you are also challenged by media speculations and tips from pundits.

Business enthusiasts such as the media and brokerage firms, tend to downplay the idea of ​​investing if not trading options as a way of generating money. On the other hand, a rise in the number of market players in the past years, seem to negate the negatives as well. In fact, the year volume of contracts, as well as the number of investors, as shown in annual statistics proves criticisms wrongs. Meaning, many traders and investors still gamble on options income strategies for monthly cash flow

True enough, options trading (specifically, buying 'call options') offer prospects with huge benefits and rewards. Imagine possible increments of 100, 200 even 500 percent to possible monthly income. However, trading options may result in losses and failures at hand. Meaning, there is also a big possibility of losing your entire savings in an instant. So, how can we avoid this trap? By understanding the following strategies and principles:

Timing is everything. Remember that stock options are wasting assets and are short-term investments. You have to decide when to make the purchase, what type of stock and when to invest. Time and options are basically foes, in the sense that you have to rely on market and price movements within a shorter period. You may remedy this problem by means of acquiring LEAPS (Long-term Equity Anticipation Securities). However, you have to pay for higher premiums.

Think hard before…

Read More…. by Mitch Greenberg

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How to Make Money Investing in 401K Plans in 2015-2016 and Beyond

Torie, like millions of other people, knows that she needs to make money investing in 401k plans in 2015-2106 and beyond (she has a couple) in order to retire comfortably. What she also needs to know: 401k asset allocation, how to pick and manage her best 401k investment options, and the outlook for 2015 and 2016. Let’s take a look at how she and you can make money in 2015, 2016 and beyond (or at least make the best of it) if you’re in the same boat.

Although it’s been easy to make money investing in 401k plans in recent years, this is not always the case. The first thing Torie and you need to do is to set a goal (Torie’s is to retire in about the year 2040). Second, be honest about your personal risk tolerance. Torie’s is “moderate” – but definitely not aggressive! Third, review your present 401k asset allocation to determine whether the investment options you hold are in line with your risk tolerance. Are you in the best 401k investment options, and in the right proportion?

Finally, you need to understand that 2015 and 2016 could be a difficult time to make money investing in 401k plans. The reason: weak economic forecasts make yesteryear’s best 401k investment options vulnerable to losses. Stocks are pricey and so are bonds. Assuming your risk profile is similar to Torie’s (she would like to make money but wants to avoid heavy losses) what can you do now to stay on track, make money, and avoid heavy losses if 2015 and beyond turns ugly? We’ll use Torie as our example.

A number of years ago Torie decided that she wanted to make money investing in 401k plans, but wanted to keep things simple. She had changed jobs once and was planning on another change in the future. With both employers she had set her plan up with 50% going to a safe stable account and 50% to a Target 2040 fund. She was busy and pretty much ignored her statements over the years. After all, her goal was to make money investing, and she could see at a glance…

Read More…. by James Leitz

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Promissory Note Valuation Mistake: Fair Market Value Vs. Historical Cost

Overpaying Taxes and Fees Because of Valuation Confusion

Fair Market Value vs. Historical Cost How you value your investments (promissory notes included) impacts the taxes and fees you pay. In the worlds of finance and accounting, there is a debate about the best methodology for asset valuation. Being a promissory note investor, decide to value at Fair Market Value, not at historical cost.

Historical cost is the price paid when the note was acquired. Fair Market Value is the price at which the promissory note would change hands between a willing buyer and seller in an arms-length transaction today. It’s the cash amount you could receive today if you had to find a buyer and sell.

Fair Market Value and Historical Cost Rarely are the Same The two definitions are completely different and create two very different results. As an example consider publicly traded closed-end funds. The day-to-day trading price of Fair Market Value (FMV) is rarely the same as cost. Publically traded funds trade at prices above, below, and at historical cost. Your promissory note has two distinct values depending on which definition is applied.

A Promissory Notes Fair Market Values are Usually Less than its Cost Because private notes are relatively illiquid–they do not trade on a public market-they have to be sold individually, one note to one buyer. Because of the extra time and cost to sell a note, its market value is discounted. Notes can be wonderful investments, pay an above-market yield, and yet have a legitimate reason to be discounted if they had to be sold. As an investor, the yield is vital; as a tax payer or a fee payer, the discounted value is vital.

Note investors normally are long-term holders, not frequent traders. Selling is not part of their agenda; holding for income is the usual goal. Investing for the long-term and valuing the investment based on the short-term (FMV) for taxation is a good business practice.

Using the Wrong Value Costs…

Read More…. by Lawrence Tepper

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Promissory Note Frauds and Tricks

I have been actively engaged in the promissory note business for over 40 years. My and my wife’s self-directed IRA accounts have been invested in notes for the same length of time. My note investments have been the foundation of my estate building. Because I believe that promissory notes can be an excellent investment vehicle for the average investor, I try will try explain what they are and how they work. But, I will also point out that notes can be misused and abused by dishonest people and by ignorant people. This article is the first of several articles in which I will attempt to inform the average investor about the benefits and warn the average investor about the detriments of investing in notes. Obviously, there is no perfect investment.

Just as cars do not injure and kill people (bad drivers do), promissory notes do not trick and harm people (dishonest or ignorant sellers of promissory notes do).

What Promissory Notes Are: Generally, promissory notes are a form of debt similar to a loan. Companies and individuals issue these notes to finance a wide variety of endeavors. Bona fide notes are an important means by which companies and individuals raise capital. However, not all notes are legitimate and investors must be mindful of potentially tricks, deception, and exaggerations. Not all notes are created equal.

Promissory Notes Often Are Securities: In many instances, these investments are promoted as not involving the sale of securities, either by the issuers of the notes or by salespersons. The Securities Act of 1933 and the Securities Exchange Act of 1934, however, include “any note” in the definition of a security. From these definitions, a legal presumption has been developed that a note is considered to be a security, although this presumption may be overcome if, based on all facts and circumstances, the instrument is deemed to be a commercial-type loan. In many cases, notes are construed to be securities. In some…

Read More…. by Lawrence Tepper

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Seven Promissory Note Myths and Seven Myth Busters

Myth Defined: A myth is an invented story, idea, concept, or legend that concerns some idea or hero without a basis in fact. There are numerous promissory myths. Here are the main myths.

Myth #1: The value of a promissory note is clear and obvious-it is not debatable. Myth Buster: A promissory note can have many values. The term “value” means different things to different people. The meaning of “value” is different to when used by the Internal Revenue Service, by an art auction company, by an antique dealer, by a real estate appraiser, or by an investor.

There are at least 15 meanings to “value”: Fair Value, Fair Market Value, Market Value, Book Value, Cost Value, Discounted Cash Flow Value, Quick Sale Value, Liquidation Value, Speculative Value, Intrinsic Value, Investment Value, Personal Value/Owner’s Value, Insider/Family Value, Wholesale Value, and Retail Value.

Myth #2: The cash value of a $50,000 promissory note is $50,000-just like a bank CD. Myth Buster: Promissory notes are not like cash or bank CDs. They are mere promises to repay cash, not actual cash. There is always uncertainty about debt repayment. Consequently, their value is discounted because they lack marketability, liquidity, enforceability, adequate collateral security, proper documentation, and proper interest rate.

Myth #3: Investing in a promissory note is low-risk investing-just like buying a bank CD. Myth Buster: Every investment has some degree of risk. Because of the reasons mentioned in #2 above, notes may have a higher risk factor. To compensate the investor for this added risk, their yields are higher than safer investments. This concept is the “Risk-Return Trade-Off”.

Myth #4: Doing a foreclosure to collect on a defaulted promissory note is quick, easy, and inexpensive. Myth Buster: There are always significant cash expenses and costs related to the foreclosure and repossession of a property. Attorney fees, eviction fees, property insurance premiums,…

Read More…. by Lawrence Tepper

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