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Mar 27, 2023

If you are a busy professional and a passive investor, you might want to consider adding Mortgage Notes to your portfolio. This asset class is secured by property, provides consistent cash flow, and ability for compounding interest. It can also be easily liquidated.

In this episode, we are joined by Joshua Andrews, a seasoned mortgage note investor with years of experience in the industry. He takes us on a journey from his days as a loan officer to becoming a full-time investor and shares his insights on note investing, specifically non-performing and performing loans. The conversation revolves around the difference between first and second-position loans, how they decided to focus on notes instead of real estate, and the impacts of macroeconomic conditions on notes. Joshua offers a free copy of his book Paper Profits, which delves deeper into note investing methodology. If you're seeking stable, predictable income and diversification in your portfolio, this episode is for you!

[00:01 - 07:13] Opening Segment

• Joshua shares his background and journey into the real estate space

• Navigating the world of non-performing notes and performing loans

  • The process of buying non-performing loans at a discount

[07:13 - 14:07] An Investor's Perspective During a Recession

• How investing in notes provides consistent income and can be replicated easily

• The importance of earning, investing, and repeating to build a passive income portfolio

• The impact of macroeconomic conditions on notes is not discussed in detail

[14:08 - 21:35] Understanding the Discounted Sale of Performing Mortgage Notes

• Performing notes are easier to manage and have less risk than non-performing notes

• Buyers of performing notes include funds, high-net-worth individuals, and banks

• The macroeconomic conditions that may affect the market for notes

  • Inflation, changing real estate prices, and interest rates

[21:36 - 28:58] Closing Segment

• The importance of collateral value and inflation in note investing

  • The collateral value fluctuates but only matters when taking possession of the property back

• Notes investing is good for diversifying portfolios, stable and predictable income, and patient investors

Connect with Joshua:

Website: Paper Profits Investors

Resources Mentioned:

Paper Profits: A beginner’s Guide 

Key Quotes:

“I'm a big believer in not going all in on any one thing, no matter how good that seems.” - Joshua Andrews

“I think the right path is as you're earning, whether it's a day job or whatever that cash flow stream is, putting that into more passive, whether it's real estate or whatever else you want.” - Joshua Andrews


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