The Keys to Smart Investing with Mortgage Notes: Strategies, Insights, and Services
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- The Keys to Smart Investing with Mortgage Notes: Strategies, Insights, and Services
Why Invest In Notes?
Below is a short list of additional reasons why sophisticated investors, seek out and demand diversifying their investment capital toward investing in mortgage notes:
True Passive Income
Investing in mortgage notes typically generate predictable, recurring interest payments, creating a reliable income stream for investors.
Notes Offer Lower Volatility
Compared to stocks or bonds, notes are less susceptible to market fluctuations, providing a buffer against economic downturns.
You Determine Level of Security
Notes are often secured to collateral, such as real estate, by way of security instruments, commonly referred to as mortgages or deeds of trust.
You Make the Rules
Investing in notes places the capital investor in a unique position of control. You can make the rules that the borrower must play by.
Earn More, Risk Less
Shift Risk and Reap Rewards: The Lender’s Advantage in Mortgage Note Investing
Invest in Assets! Not Liabilities.

How to Invest in Mortgage Notes?
Barriers to Investing in Real Estate Notes
Access to Deals
Finding reliable sources of quality borrowers isn't always easy. Unlike publicly traded securities, notes don't have a centralized marketplace. Investors may need to rely on niche brokers, networks, or direct seller contact, which can be time-consuming and require specialized knowledge.
Lack of Transparency
Information on how to invest in mortgage notes can be limited, particularly on how to create these investments. Due diligence requires scrutinizing loan documents, property details, and borrower history, which can be challenging for smaller investors with limited resources.
Capital Requirements are a Bar to Entry
Investing in notes often requires more upfront capital compared to other investments. Depending on the loan size and type, initial investment amounts can be significant, potentially excluding individual investors with lower liquidity.
Market Illiquidity
Unlike stocks or bonds, notes aren't easily traded on secondary markets. Selling a note before maturity can be difficult, making them less flexible investments and potentially locking up capital for longer periods.
Legal and Servicing Complexities
Managing notes involves legal and servicing intricacies. Investors may need to handle delinquency issues, foreclosures, or property management, which can require expertise and resources beyond simple financial analysis.
What We Do

Loan Request Evaluation
Market, source, and underwrite the loan requests, verify and fact-check all the information found within those documents. Evaluate true property values, costs, and title work. This requires keen insight, awareness, and discernment by capital investors who invest in mortgage notes.
Document Preparation & Review
Prepare and review all necessary documents. Wire the loan amount to the real estate investor’s title company or, in most cases, to our own in-house title insurance company.
Loan Servicing
Service the loan, collect payments, inspect the project if there is construction involved, and oversee legal issues if there is a default. Depending on the state where the asset is located, servicing your own notes secured to real estate may require a license, annual fees, and ongoing education, which can increase business overhead.
Time & Team Considerations
Ultimately, investing in real estate notes can be time-consuming and create a whole new J.O.B. unless you have a team and experience in vetting and mitigating risks.
Aligned Capital Group Advantage
I believe that Aligned Capital Group offers a unique and highly flexible way for investors seeking alternative investment options to invest in notes. By becoming an investor in ACG, my partners experience the benefits of a customizable investment vehicle that invests in assets, not liabilities.
Handling Morgage Notes
Depending on the state where the asset is located, servicing your own notes secured to real estate may require a license, annual fees and ongoing education, which can increase business overhead
Here are the biggest benefits to invest in mortgage notes with Aligned Capital Group:
Low Barrier to Entry
The minimum investment in Aligned Capital Group is $50,000. This is significantly lower than what most 1st position loans secured to real estate will require from an individual investor.
Fractional Investing
As noted above, Aligned Capital Group offers the opportunity to invest alongside ACG for portions of secured notes. This allows for diversification and mitigation of risk across an investment portfolio. Example : Investor has $1,250,000 they’d like to invest. They would have the option of : 2- 625,000 investments OR 1-500k & 3-250k investments etc
True Diversification
With Aligned Capital Group there is no requirement to be fully invested into a single deal. The investor chooses the amounts to co-invest alongside ACG and has the option to take pieces of multiple notes.