Many investors don’t know much about residential mortgage notes. Nonetheless, they should consider them as part of their investment mix, as they can offer steady and stable passive income for real estate investors.

Residential mortgage notes fund a large percentage of the residential mortgage loans in the marketplace. When a bank or lender makes a loan, oftentimes they sell those real estate loans, in the form of mortgage notes, to free up their cash flow. However, it may be difficult to buy mortgage notes directly from banks, as it requires investors to be very familiar with the real estate, building and land values. Private mortgage notes are available as well, and in those cases, borrowers pay their mortgages directly to those private entities and their mortgages become a part of investment portfolios. It is important to note that high cost residential notes tend to carry substantial collateral and protection against defaults. 

“At YellowFi, through its subsidiaries, we have been originating, underwriting and funding mortgage loans for over a decade with successful results and high yields for our investors. Our investors range from high networth individuals, family offices and institutions,” said George Zac Zac, CEO of YellowFi. 

Residential mortgage notes are for investors who want to: 

DIVERSIFY their investment portfolio and gain a steady and stable passive income.

INVEST IN REAL ESTATE, but don’t want the hassle of property management / tenants. 

RECEIVE HIGH YIELD RETURNS in a low yield rate environment.

INVESTMENT BACKED in average 130% hard asset collateral (residential real estate). 

When buying mortgage notes, investors should do their due diligence beforehand. They should have some understanding of the real estate market, property values and the different types of mortgage notes available. Investors need to ensure that the borrower vetting process is solid. 

“In a world of high volatility and low yield investment options, YellowFi brings high yield, low volatility and predictable returns investment options. Our exclusive underwriting proprietary model ensures that borrowers are vetted appropriately, which lowers risk and protects our investors,” concluded Zac Zac.