group discussion

Is anyone out there familiar with buying and selling notes?

Not me. Tell us about it.

A note is basically a legal contract that obligates someone to make a payment to you over a period of time..its a legal IOU.. the most popular example of what a note is..is a home mortgage...there are other forms of notes , and maybe anyone that is reading this thread can chime in with some examples of notes...notes are a great form of investing..A note is really an income stream running into the future. The person who is receiving that income stream, the beneficiary, may find that he or she does not want the income stream, but wants or needs a lump sum of cash now. The only thing that can buy that income stream at a discount is cash. Lets chime in with some examples of what notes are and then I will give some of my examples of my business dealings with notes in the past.. I dont want to confuse anyone who doesnt know what a note is..so lets just start giving examples of notes, and then once everyone understands what a note is, maybe we can go over some examples of how they can be profitable in business.

Car Note - hahaha damn that bill every month!
School Loan

Oh and enlighten me(well us) further with your wild experiences in this area.

car notes is a great example, school loan notes are another good example...

some examples of note investing are: 1) investors sell a product or service and create a note, which obligates the buyer to make a monthly payment to the investor...the investor then sells the note that he/she created to another investor at a discounted price... (if you invest in notes, you can either be the investor that creates the note and sells it for a discount..or .. you can be the investor that buys the note at a discount..

are you following the concept? you with me so far?

Here is an example that might help you understand a bit more of why "investing in notes" might be a good form of investing...

Mike Investor purchases a used mobile home located in a mobile home park from a motivated seller for $2,000 cash. Mike Investor then places an ad in his local newspaper classifieds advertising the mobile home that he just bought for sale, offering to finance the purchase price to a buyer. Billy Buyer agrees to purchase said mobile home for $8,000 on financing.. Mike Investor now creates a note, which obligates Billy Buyer to pay $250 per month for 32 months (we will leave the interest rate out of the equation for our example) for a total of $8,000... Mike Investor spent a total of $2,000 on his investment, but decides he would rather sell his note at discount price, in order to make a quick profit.. Mike Investor then offers his "note" of $8,000 (payable at $250 for 32 months) for sale at a discounted price of $4,000 cash...Bob Investor sees a good investment opportunity to spend $4,000 cash and double his money, he then only has to wait for a check to come in the mail each month for 32 months at $250 per month..

Mike Investor started with $2,000 cash, and he now has $4,000 cash, a profit of $2,000... Bob Investor spent $4,000 that he had laying around in his savings account, and doubled his money after 32 months. (His bank was only offering to pay him 3% interest on his $4,000 that he had in his savings account), so he made a profit of $4,000.

This was just an example, but does everyone see how the concept works? Since everyone has to pay taxes, I'm sure as an investor, you could juggle the numbers around a little bit so that it fits your financial quota, if you were in one of these 2 investment situations.

Totally with ya - nicely put with the mobile home scenerio.