Intro
In this week’s tip, I’m sharing a strategy that left my accountant speechless: partial purchases. With nearly 30 years in note investing, starting in 1996, I’ve used this method to generate high yields with minimal risk. Whether you’re a newbie or a seasoned pro, this approach—buying a portion of a note’s payment stream—can work for you. Results vary, and local regulations apply. Here’s how to do it.
1. What Are Partial Purchases?
A partial purchase involves buying a set number of payments from a seller-financed note, not the entire loan. For example, on a $50,000 note at 8% interest, you might pay $25,000 for 60 months of payments, earning 12-15% yields. The noteholder gets cash now and keeps the remaining payments. It’s low-risk and beginner-friendly, especially in 2025’s high-rate market.
2. Source Notes Effectively
Start with note holder lists from trusted providers, costing $200-$300 for 1,000 leads with details like loan balance. Send direct mail: “Want to sell part of your note? I can connect you with buyers.” In 2001, I mailed 300 letters and secured a $60,000 note, buying 48 payments for $20,000 at a 14% yield. Avoid online platforms; their data is often incomplete.
3. Structure Smart Deals
Negotiate partials by offering 40-50% of the payment stream’s value. Work with funders to handle due diligence—liens, payer credit, property value. In 1999, I bought 36 payments on a $75,000 note for $18,000, earning 13%. Always verify compliance with local rules. A title company or lawyer can help.
4. Why It Works in 2025
High interest rates make note holders eager for cash, and partials let you invest less while earning more. Beginners can start with referrals to learn, then buy partials. Pros can scale with larger notes. Just don’t skip due diligence—check every detail to avoid losses.
5. A Lesson from Experience
In 2000, my accountant thought my partial purchase returns were too good to be true. They weren’t. I’d sourced a note through a Chicago accountant’s referral, structured it carefully, and earned steady cash flow. Discipline and math, not luck, made it work.
Ready to master partial purchases for note investing in 2025? My mini-course breaks down sourcing, structuring, and working with funders, built from my 30 years of experience. Results vary, and effort is required. Check it out and subscribe for weekly tips (opt-in box on the right).
IN THE “HOW TO TURN 90%..” PROGRAM, YOU WILL LEARN:
