Buying Discounted Notes < 2025 >

First position notes are paid first in a foreclosure, while "second" or junior notes are riskier but often cheaper. Key Benefits

You collect interest on the full $100,000 balance, significantly increasing your effective yield. buying discounted notes

AI responses may include mistakes. For financial advice, consult a professional. Learn more Should You Only Buy First Position Notes? - BiggerPockets First position notes are paid first in a

Borrowers are making regular payments. These offer lower risk and steady, immediate cash flow. For financial advice, consult a professional

You buy a note with a $100,000 balance for $70,000.

When a lender (like a bank or private seller) wants to free up cash, they may sell their mortgage notes at a discount.

Borrowers have stopped paying. These are bought at much steeper discounts, often with the goal of restructuring the loan or foreclosing to take the property.