1. The Payor makes the monthly payments until the note is paid off.
2. The Payor refinances the property and you get paid off the full amount early.
3. The payments stop coming in and you foreclose, keeping the property and all the equity.
Protective Equity:
Protective equity is the difference between the value of the property and the loans against it,
including yours. The greater the equity, the more secure your investment will be.
Seasoned:
A loan is “Seasoned” when the Payor consistently makes his or her payments over a period of time.
The textbook definition is twelve (12) months.
Property Location:
Know the area. Never buy a note on a property you would not mind owning.
Foreclosure:
If the investor purchases a note with good equity in the property, his investment is protected. The
property is the security. Foreclosure is the legal process safeguarding his interest.
