Welcome to the other side of the real estate business! Do more deals, maximize your current portfolio to its full potential, and decrease risk—all through mastering finance and leverage in this introduction to the note investing business.

Whether it’s through mortgages, student loans, or credit card debt, nearly all of us (especially real estate investors!) are in the note business. The trouble is, most people are on the other side of it: writing checks to note owners rather than cashing checks as note owners.

This isn’t another cookie-cutter "how to" book—instead, Dave Van Horn takes readers on a journey with him as he looks back over lessons learned across three decades of real estate investing, and the path that led him to his current success in the note industry. He teaches by example, illustrates with real-life stories, and gives a 30,000-foot view of the note space.

Whether you’re a wholesaler, rehabber, landlord, or even turnkey investor, reading this book will help you turn your focus to the “other side” of real estate. No matter your level of experience in the real estate business, the strategies in this book can help you build sustainable wealth today and for years to come.

Inside, you will learn how to:

TABLE OF CONTENTS

Introduction: The Accidental Note Investor

Twenty Units Free and Clear

My Financing Problem

The Power of Leveraging Connections & Knowledge

Invest in Debt

How I Built My Wealth by Being like the Bank

The Goal of This Book

Introduction Takeaways

Chapter 1: How Notes Really Work

The First Note

My First Note

Case Study: The Beef Band House

How the Bank Really Makes Its Money with Your Mortgage

Banks Don’t Just Make Money on Mortgages

How to Be like the Bank

Chapter 1 Takeaways

Chapter 2: Financing Real Estate: The Best Notes Are Your First Notes

The Football Game of Life

My First Property        

Buying Purposefully and Structuring the Best Note Possible

Residential vs. Commercial

Why Buying in Your Name Initially May Make More Sense

Owning vs. Renting

Chapter 2 Takeaways

Chapter 3: When Traditional Financing Dried Up Part I

Using Unsecured Notes to Purchase Properties

What It Takes to Own a Home

Buying Investments with Unsecured Debt

The Real Lesson

How I Bought My First House with a Credit Card

Chapter 3 Takeaways

Chapter 4: When Traditional Financing Dried Up Part II

Using Secured Notes to Purchase Properties

Using HELOCs to Build Wealth

The Risks of Lines of Credit     

Chapter 4 Takeaways

Chapter 5: When Traditional Financing Dried Up Part III

Using Private and Hard Money 

Private Money

Why Private Money Can Beat a Joint Venture

How to Protect Your Private Money Deal

How to Find Private Money

Self-Directed Accounts

Things to Consider as a Private Money Lender

Hard Money

How to Become a Hard Money Lender

Case Study: Taking a Banker to Lunch

Chapter 5 Takeaways   

Chapter 6: Other Ways Notes and Creative Financing Can Fund or Create Deals

Highest and Best Use of Your Property

The Life Cycle of a Deal

Another Way to Use HELOCs

Lease Options

Chapter 6 Takeaways

Chapter 7: Taking Over a Note (and a Property) via Subject-To Investing

What Is Subject-To Real Estate?

Walking into a Note: The Advantages of Subject-To for the Buyer

Walking Away from a Note: Advantages for the Seller

The Pitfalls of Subject-To

The Due-on-Sale Clause

Insurance

Chapter 7 Takeaways

Chapter 8: Use Notes through Owner Financing

Multiple Offers

Seller Seconds

The Lease Option Returns

Advantages for Sellers Carrying a Second

Advantages for Buyers Purchasing with a Seller-Second

Selling on a Wraparound Mortgage

Leasebacks: An Alternative to Owner Financing

Chapter 8 Takeaways

Chapter 9: Using Notes for Commercial Real Estate

My First Commercial Building

Mobile Home Parks

Debt vs. Equity Financing for Commercial Real Estate Deals

Case Study: A Mobile Home Park in Western Michigan

Chapter 9 Takeaways

Chapter 10: Institutional Notes

Calm Before the Storm

The Perfect Storm

PPR Is Born

Chapter 10 Takeaways

Chapter 11: How Institutional Notes Work

Lifecycle of a Loan

Two Paths for a Note

How Notes Are Sold

Chapter 11 Takeaways

Chapter 12: Advantages of Investing in Institutional Notes

Owning a Performing Note Is Easier than Owning a House

Owning a Note Portfolio Is Easier than Owning a Property Portfolio

What You Can Do with a Note

How Note Investing Can Be Beneficial

Chapter 12 Takeaways

Chapter 13: Where to Find Notes

Note Buying Is All about Relationships

Sources for Notes

Chapter 13 Takeaways

Chapter 14: Due Diligence for Note Buyers

Vet the Seller

Performing Notes

Nonperforming Notes

Chapter 14 Takeaways

Chapter 15: Exit Strategies

Option 1: Exiting through the Property

Option 2: Exiting through the Borrower

Utilizing a Servicer

Chapter 15 Takeaways

Chapter 16: Recapitalization

Recapitalization Method No. 1: Selling the Note

Recapitalization Method No. 2: Flipping the Note

Recapitalization Method No. 3: Selling a Partial Note

Recapitalization Method No. 4: Collateral Assignment of Note and Mortgage

Borrowing Private Money Utilizing Collateral Assignments

Chapter 16 Takeaways

Chapter 17: Sources of Capital and Getting Started in Notes

College for a Fraction of the Cost

Free or Low-Cost Insurance

How to Get Started in the Note Business

What Kind of Investor Are You?

Fund Investing

Buying Notes

Chapter 17 Takeaways

Chapter 18: What I Would Do Differently Today as a Real Estate Investor

My Do-over

My Philosophy

Glossary