Buying Mortgage Notes Generates 15% + Returns with Brian Lauchner

Are you earning 15% on your passive investments? Would you consider buying mortgage notes if you could generate those returns?

Many investors in the real estate business routinely earn these type of returns through buying mortgage notes. Even 20%-30% or more.  During this investing podcast, Brian Lauchner and I discuss two main topics. First, how to close more deals as a real estate investor using creative financing methods powered by the use of purchase notes. Second, we discuss how to sell those performing notes and generate quick cash.

Guest: Brian Lauchner-In Just a Few Short Years, Brian Graduated from Wholesaling & Flipping Houses to Designing a Lifestyle of Freedom through Buying & Selling Mortgage Notes.  
Episode: Buying Mortgage Notes Generates 15% Returns & More with Brian Lauchner
Big Idea: “Any Cash I Put in a Deal, I Quickly Extract” The Note business is essentially originating, buying, selling, or holding mortgage notes.  Brian describes his strategy for pulling his cash out of every Note deal as soon as possible-ideally within the first week or two.  An even better scenario often occurs where a note deal is constructed and a large chunk of cash is pulled out day 1.



Episode Sponsored by the Deal Machine:

Driving for Dollars Software to Build a Team of Drivers, Manage Routes, & Even Automate Marketing.  Free Access at


How to Buy Mortgage Notes

The first logical step in generating large returns on investment capital is to figure out how to buy mortgage notes. It begins with understanding the risk & return of buying the note. Think about it this way, if you were to buy a stock, you’d first like to do some due diligence on the company. Maybe find out if they’re profitable, whether they have a good business model, or even if you trust the team running the company. In the same way, you can evaluate the risk of a real estate note by determining probability that the borrow will actually repay the note. You’d then figure out your potential return by calculating the unpaid balance (UPB) and considering the interest rate.

There are quite a few types of mortgage notes. One way to categorize them would be sorting them into performing notes & non-performing notes. Performing notes would be situations where the borrower is current on their payments. Non performing notes are situations where the borrower has stopped making payments or violated the terms of the note in some other way. The other way could be an expired balloon payment.

Both performing & non-performing notes trade at a discount to UPB. The discount you can expect as a note buyer on a performing notes is smaller than you might expect on a non-performing note. The reason being that the non-performing notes require more work to realize a return. You must either work out a new payment plan with the borrower or foreclosure to recover your investment. The bigger the discount, the larger the return. Assuming you an actually get paid.

Brian and I discuss the process of buying mortgage notes in detail during the episode. Perhaps a better question: “How are these mortgage notes created? What is the source?”

Creative Financing Real Estate Methods-the Key to No Money Down Deals

Find the source, cut out the middleman, and you put yourself in the most powerful position for profit, right? So the source of mortgage notes is to be the money lender yourself. You could lend hard money to rehabbers short term and easily earn 10%-15% returns on your money. However, unless you have a contact with a rehabber who is doing volume, the returns might be inconsistent. Instead you might consider creative financing real estate deals.

Here’s how it works. You purchase the property at a lower price, then resell the property at a higher price. You collect a large down payment and arrange terms of payment for he remainder-creating a note & mortgage in the process. Of course this is a very oversimplified version of events-I suggest attending the upcoming REI Note School masterclass mentioned below for a full training.

Many note investors begin investing in real estate through the conventional route. Maybe buy a rental property or flip a few houses. Then the drag of owning rental property wears down returns. Note investing removes the investor from the day to day responsibility of owning property, such as maintenance, evictions, vacancy, you name it. Note investing allows you to set the terms, set up the payment processing and just check monthly to see that the payments are being made.


Interested in Attending a Live, Full Day Masterclass in Creative Financing & Trading Mortgage Notes FOR FREE?

Note School trainer, high volume note trader, & REI Diamonds Show guest, Brian Lauchner, offers a full day “Gold in Notes” training coming up. You can attend FREE, and attend virtually if you sign up through

Normally $97, You Can Attend FREE by Signing up at


Brian & I Discuss Creative Financing & Buying Mortgage Notes

  • Originating Mortgage Notes Creates More Deals

  • Paying Higher Prices Still Generates Profitable Deals

  • Transition 100% to Buying, Selling, & Holding Notes

  • How to Do No Money Down Note Deals


Relevant Episodes: (There are 180 Content Packed Interviews in Total)


The transcript of this episode can be found here.
Transcripts of all episodes can be found here.