Unlocking Passive Income: Nathan Turner's Journey into Note Investing
How mortgage note investing builds passive income and return on life
Mortgage notes — including seller-financed loans, contracts for deed, and first-lien mortgages — offer a way to earn steady monthly income without typical landlord headaches. This episode explores how to buy performing mortgage notes, source seller-financed deals, and use note portfolios to fund a five-year retirement or financial freedom plan.
What is a mortgage note and why it matters
A note is basically an IOU secured by real estate: a written promise to pay with collateral. Investing in notes means buying that payment stream rather than managing a rental. For investors seeking passive income, learning how to buy performing mortgage notes and first-lien mortgages provides predictable cash flow with built-in security.
How to buy notes: sourcing, positions, and deal structure
Nathan describes buying notes from private lenders or banks (lender-to-lender transfers) and focusing on first-lien positions where the mortgage sits ahead of other debts. He targets homes typically under $200,000 in value across the U.S. Midwest to Texas corridor, preferring performing notes for steady returns but acknowledging higher-risk, higher-reward non-performing note opportunities.
Returns, trade-offs, and fund models
Investors can expect note yields such as 10–12% on first mortgages for direct buyers, while pooled structures can offer accredited investors around 8% annual distributions. Notes behave more like annuities (depreciating loan assets) rather than appreciating real estate, so the trade-off is passive, low-management income versus property appreciation.
Practical tactics: refinance exits, resale, and communication
Exits include encouraging borrower refinance to a conventional mortgage, reselling the loan to other investors, or foreclosing when necessary. Nathan emphasizes clear communication with borrowers to resolve delinquencies and avoid costly foreclosures — a reminder that negotiation often prevents escalation.
How this supports Return on Life (ROL)
Beyond financial metrics, note investing can fund a lifestyle-focused ROL: fewer hours managing properties, more family time, travel, and purposeful projects. The episode ties investing mechanics to life design — building passive “wake-up money” that supports your five-year retirement or mission-driven goals.
- Key tactics: seller-financed sales, contract-for-deed structures, first-lien purchasing.
- Important reminders: accredited investor rules for funds, cash-based purchases, and due diligence.
For hands-on listeners, attending niche conferences like the Diversified Mortgage Expo (Nashville) is a recommended next step for networking and deal flow.
