Growing passive income through mortgage notes: what they are, how servicing works, typical processes, and key risks. No offers of securities are made on this website.
Explore the basicsA mortgage note is a promissory note secured by real estate. Investors may purchase notes and receive payments made by borrowers. Servicers handle payment collection, escrow, and statements.
Mortgage notes are secured by real estate, providing a tangible asset backing your investment. This reduces risk compared to unsecured investments.
We focus on first-lien positions—these have priority over junior liens in foreclosure. Junior liens can be impaired or extinguished by senior-lien enforcement
Receive regular payments from borrowers, creating a stream of passive income. This requires minimal effort once the investment is secured.
Licensed servicers manage payment processing, escrow, statements, and default workflows within state and federal rules.
How cash flows may be generated and what makes them more or less hands‑off.
Performing notes may produce scheduled payments from borrowers. Licensed servicers collect and remit per the amortization schedule.
Cash flow can pause or stop due to prepayments, hardship, or default. Expenses like legal fees, taxes, and advances reduce net cash flow.
We use professional servicing, automate bookkeeping, and set review cadences. Diversify within clear criteria; avoid concentration risk.
Testimonials — experiences vary; not a guarantee of results.
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Increased her retirement income annually using mortgage note investments in her SDIRA..
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Using diversification in his investment portfolio, I achieved stable returns with mortgage notes.
Private credit and mortgage note investments involve risk, including loss of principal. Markets can be illiquid, payments may stop, and legal outcomes vary by state.
Borrower hardship or strategic default can disrupt cash flows and trigger legal expenses.
Senior liens, tax liens, or title defects can impair recoveries.
Foreclosure timelines, costs, and rights differ by state; always budget conservatively.