What is a Note?
What Is a Note?
A note is a loan—typically a mortgage. It represents the debt and the borrower’s promise to repay it with interest, not the physical asset itself (such as a house or car).
When you buy a note on a property, you are purchasing the loan and its future payment stream, not ownership of the property.
What Happens if the Borrower Doesn’t Pay?
If the borrower fails to meet the terms of the loan, you may have the right to pursue foreclosure and eventually take possession of the property.
However, this process:
- Is governed by state-specific laws
- Involves legal procedures, timelines, and costs
- Requires strict adherence to regulatory guidelines
👉 Learn more about foreclosure laws by state
Because of this, notes should not be purchased solely with the expectation of acquiring the underlying property.
Want to Learn How This Works in Practice?
If you're interested in working directly with banks—whether to purchase notes or broker deals—our training covers the full process step-by-step.