One of the most obvious benefits to investing in mortgage notes is that it is a source of passive income. And many of us out there, we're busy, we've got other jobs, we've got kids and families and hobbies and life pursuits. We got to sleep, we got to eat. A lot of us don't have time to get a second job, but we want more income.
And that's what's great about investing in notes is it's a source of income that comes in month after month after month as long as the borrower's paying. Now how does this work? Well, when I buy a mortgage note, it's the same thing as me becoming Wells Fargo or Chase Bank or Bank of America. Um, I am basically taking the position or the role of the bank by buying the mortgage from one of these lenders.
And now I'm the bank and the borrower on that mortgage now owes me. And typically, depending on the terms of the mortgage, that borrower has to make monthly payments, both principal and interest, but not always. It may only be interest only payments, but most typically, there's going to be monthly payments of principal and interest that the borrower has to pay every month over a certain amount of time.
And that time can vary. It could be five years. It could be, 12 months, it could be as long as 30 years. The term of the loan might be different, but during that term of the loan, the borrower is obligated to make those payments to me month after month after month. And I don't have to do anything once I buy the note, as long as I have a good servicing company handling the day to day.
I'm making money while I'm sleeping, while I'm traveling, while I'm doing my other job, while I'm pursuing my hobbies. The monthly payments come in month after month after month. And that's what's so awesome about buying mortgage notes.
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