Buying discounted real estate notes involves purchasing the debt secured by a property—rather than the property itself—at a price lower than its face value. This strategy allows you to step into the role of the "bank," collecting monthly principal and interest payments often at a higher effective yield than the original note's interest rate. 1. Types of Notes to Buy

: Loans where the borrower is current on payments. These are typically sold at smaller discounts (e.g., to free up cash for the seller) and offer steady passive income.

: Loans where the borrower has defaulted. These are sold at deep discounts—sometimes 20% to 70% off —because they require more work to resolve. 2. Where to Find Discounted Notes Investing in Real Estate Notes Guide