Webinar

Learn to Invest in Notes - A Better, Smarter, Safer Way!

 

Recorded: March 12th, 2024

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Investing in Notes, or “Promissory Notes” can be a relatively safe strategy to earn high returns. To make these investments safer, we want the borrower to pledge some type of asset, so that if a borrower defaults on their “promise to pay”, that asset is forfeited.

During this educational webinar, you will learn how to invest in Notes, secured by real estate, one of the most secure assets available. Learn the ins-and-outs of these investments, and how you can begin to invest in them yourself.

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Topics Discussed During the Webinar:

  • Importance of understanding promissory notes as promises to pay in real estate transactions.
  • Discussion on the role of underwriters in assessing borrower creditworthiness and property collateral.
  • Distinction between traditional lenders like Fannie Mae and Freddie Mac and portfolio lenders like Ignite Funding in underwriting criteria.
  • Explanation of Ignite’s emphasis on property collateral over borrower credit in the underwriting process.
  • Different approaches to foreclosure in trustee states vs. mortgage states, highlighting the advantages of trustee states.
  • Comparison of direct ownership in specific properties versus ownership in a pool of properties managed by a fund manager, detailing advantages and disadvantages of each approach.
  • Pool vs. Specific Loan Ownership:
    • Pool investment provides diversification against all properties defaulting simultaneously.
    • Specific loan ownership offers transparency and direct asset ownership.
    • Pool investments carry the risk of lack of transparency and potential fraud.
  • Risks of Pool Investments:
    • Potential for Ponzi schemes or fraud due to lack of transparency.
    • Oversubscription of loans within a pool can lead to multiple investors holding the same loan.
    • Dependency on the operator for information disclosure and protection against fraud.
  • Foreclosure Process:
    • Discussion of foreclosure processes in California and Nevada.
    • Foreclosure initiated after borrower defaults on payments.
    • Minimum cure periods and foreclosure timelines explained.
  • Impact of Defaults on Cash Flow:
    • Defaulting borrowers halt interest payments to investors.
    • Investors do not receive payments during the default period.
    • Back due interest and fees are included in the notice of default filings.
  • Reasons for Borrowers to Pay Higher Interest Rates:
    • Borrowers opt for trustee lending due to speed in loan processing.
    • Trustee loans allow for quick property acquisitions and project financing.
    • Examples include property rehabilitation, quick sales, and construction projects.
  • Advantages of Portfolio Lenders:
    • Portfolio lenders provide fast financing without the complexities of traditional loans.
    • Speed is crucial for borrowers facing time-sensitive situations like escrow or construction projects.
    • Portfolio loans offer flexibility and efficiency in meeting borrower needs.
  • Discussion on penalties for early payoff in loans
  • Explanation of first, second, and third trustees in real estate investments
  • Importance of lien positions and collateral in securing investments
  • Differences between commercial and residential loans and borrowers
  • Investor protections in commercial lending versus residential lending
  • Voting rights and ownership percentages in multi-beneficiary loans
  • Tax implications of receiving 1099 for interest income
  • Advantages of investing in notes within retirement plans, especially Roth accounts
  • Importance of due diligence in choosing trustee companies for investments
  • Benefits of title insurance for lenders in protecting against mechanic’s liens

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About Your Host

Randy Luebke

President, Lifetime Paradigm, Inc.

Financial Consultant, Fiduciary Advisor, Coach
Investment Advisor Representative RFC, RMA, CWPP, CMP
Award-Winning Author of The Business Owner’s Guide to Financial Freedom

“I have been doing this for over 30 years, and what I’ve found is that my best clients have one thing in common.  That is, every single day they struggle because they want more.  Not because they are greedy.  They just want more time and more money, to do more of the things they really enjoy.  They want to spend more time with the people they love and give more money to the causes they care about most.  They struggle because they want less stress and more fulfillment in their busy lives and, frankly, who doesn’t?

Essentially, I’m no different.  I’ve been an independent entrepreneur for most of my adult life and, over the years, I’ve been fortunate to have learned a lot through both my personal experiences and my training.  So now, I teach my clients how to do the things that have helped me to improve my life, so I can help them to improve theirs.”

 – Randy Luebke President, Lifetime Paradigm, Inc.