Note Investor University is a platform that teaches mortgage note investing, founded by Desi Arnaz. It provides lessons, with real-life examples, regarding due diligence, asset management, and exit strategies. The platform has membership levels and masterclasses for students. It features one-on-one coaching, group meetings, video trainings, as well as guest speakers for support.
Note investing is the process of purchasing mortgage "promissory notes" and collecting monthly interest. Unlike traditional real estate investments, investors do not need to monitor tenants or properties.
Note Investor University's testimonials complimented the community, training materials, and support. However, there's a lack of third-party testimonials for the platform. Additionally, non-performing notes has serious downsides. This is especially true for non-performing notes ending up in foreclosures. Investors end up paying for taxes, lawyer bills, and renovations.
On top of these, state-specific foreclosure laws add to the delay in acquiring ownership.
In this article, the pros and cons, memberships, masterclasses, and reviews of the platform are covered. The founder's background and claims are also discussed. Moreover, the mortgage note investing's definition and types, its advantages and pitfalls, as well as costs are included.
Note Investor University Review: Pros & Cons
Pros
Cashflow + collateral: In addition to the cashflow generated from interest rates, lenders have the property as their collateral.
Passive income: Mortgage note investors receive income without the responsibilities of the traditional real estate owners.
Beginner-friendly content: The courses in the platform are for novices wanting to learn about real estate note investing.
Cons
Risks: There are risks involving note investing. This includes purchase of non-performing notes, as well as the long and costly foreclosure process.
Unclear pricing: For some programs of Note Investor University, the costs are not indicated.
Lack of third party reviews: There are no online reviews for the platform.
Price
The price for Note Investor University's programs starts at $97/month.
Refund Policy
Refund policy for Note Investor University is not available.
Origin
Note Investor University was founded in 2022.
Reputation
Note Investor University has a mainly positive reputation, coming from testimonials from the official website. Students praised the easy-to-grasp training, responsiveness of the founder, and the helpful community.
Is Note Investing a Passive Real Estate Investment?
Yes, note investing is a passive real estate investment. When purchasing real estate notes, investors become the lender. They collect interest rates on a monthly basis. Unlike traditional real estate investments, mortgage note investors are not responsible for the upkeep of the property.
They can also hire a servicing company. This way, they don’t need to personally collect their income.
However, this is only possible for performing notes, or for property with consistent payments. For non-performing notes, the lender has to get in touch with the borrower. They are able to modify the payment agreement that’s beneficial for both parties.
What Is Note Investor University?
Note Investor University is a platform that teaches mortgage note investing. It offers membership programs and masterclasses. For its memberships, it includes Mastermind Group Coaching, Note Investor Program, and Master Investor Certification. As for its masterclasses, includes the Due Diligence masterclass, Hypothecation masterclass, Buying Partials masterclass. Joint Venture masterclass, and Raising capital masterclass.
What Does Note Investor University Offer?
Note Investor University offers 4 memberships and 5 masterclasses. Its membership programs provide one-on-one coaching, guest speakers, and group meetings. It also has resources, such as video training, templates and documents. Certain membership levels also allow student to view and purchase notes for sale. As for the masterclasses, they teach due diligence, joint ventures, raising capital, hypothecation, and buying partials.
Note Investor University Memberships
Mastermind Group Coaching has live weekly sessions about note investing. It costs $97 per month. It also has the following features listed below.
Provides answers & info: The last 30 minutes of the meetings is dedicated to the Q&A. Here, members are able to ask for any info they need.
Includes industry experts: There are guest speakers featured. They share their wisdom and stories with the group.
Has video-based training: The program contains the Note Fundamentals, which is composed of video-based training.
Conducts virtual meetings: The meetings are conducted via Zoom. They are held every Saturday from 8:30 am to 10:00 am PST.
Gives access to past meetings: Members are also given access to over 200 hours of archived meetings.
Note Investor Program is a 6-module training with 100+ videos on advanced real estate note investing. Details about the modules are provided below.
Module 1 contains the basics of note investing.
Module 2 has lessons on how to conduct due diligence.
Module 3 includes guidance on the processes involved in note investing.
Module 4 teaches monitoring, either by outsourcing or by an individual.
Module 5 contains lessons on exit strategies regarding notes.
Module 6 has lectures on how to master exit in real estate.
Enrollment in this program automatically gives access to 1 year membership to the Mastermind Group. This means that it also has all of the benefits included in the membership.
The Professional Investor Program is a training course that gives the CNIS (Certified Note Investing Specialist) Designation. It also has Q&A coaching every Thursday for 1 year. Additionally, it has advantages listed below.
Provides bonuses: It also has workshops + 6 masterclasses included as bonuses.
Gives Preferred Investor Status: This means that they are able to view notes that are for sale within the platform.
Has Note Investor Program benefits: It includes 6 modules of the Note Investor Program.
The Master Investor Certification is the highest membership level for Note Investor University. It provides access to the VIP Credit Line for note purchases. It also includes a due diligence review. Moreover, it features one-on-one coaching and partnership opportunities with Desi Arnaz and Patrick Franz.
It contains lifetime access to all of the masterclasses and workshops in the program. It also includes the following resources mentioned below.
Templates
Documents
Video-based training
Note Investor University Masterclasses
The Due Diligence Deep dive masterclass has 4 hours of lessons for secure note investments. It also contains the 127-point Due Diligence checklist. The masterclass costs $997.
The Hypothecation deep dive masterclass teaches how to utilize private funding to build portfolios. It is priced at $495. It also has lessons on the following listed below.
Structuring transactions
Attracting hypothecation partners
Utilizing hypothecation to come up with upfront profits
Comprehensive review of 4 primary hypothecation documents
Buying Partials deep dive masterclass has lessons on how to attract private capital. It costs $497. It also teaches the following listed below.
Structuring deals with multiple money partners
Buying more pricey notes utilizing the recommended method
Combining Hypothecation Agreement and Land Trust to fund deals
The Joint Venture deep dive masterclass includes lessons on how to properly partner with fellow investors. It is priced at $495.
It’s crucial to learn about joint ventures because they enable raising private capital. This method is also important in creating a large portfolio. It also has training on how to ensure the following stated below.
Both parties benefitting
Finding money partners
Talking to partners regarding offers
Compliant and transparent partnerships
Raising Capital deep dive masterclass is about self-promotion in order to attract funding partners. It tackles unique methods on regenerating capital. The masterclass costs $497.
Who Is Note Investor University for?
Note Investor University is for individuals interested in becoming mortgage note investors. It is also for real estate investors who prefer a hassle-free venture, without the responsibilities of landlords. Additionally, it is for people looking to purchase real estate notes. The founder owns two mortgage companies. Through the Note Investor University platform, students are able to buy notes if they belong to the "preferred investor list."
Note Investor University Reviews
Note Investor University reviews are from testimonials on the official website. Reviews shared that the course, group, and support was amazing.
They stated that the training was clear, detailed, and effective. They also mentioned that the group was useful for deals and information sharing. Additionally, the highlighted that the coaching calls and mentoring from the founder was exceptional. Details regarding the testimonials are given below.
Kent M.: Impressed with the course
Dr. Ivan T.: Praised the real life examples and deals
Wayna K.: Found the group and course to be helpful
William S.: Happy with the program and community
Diana B.: Stated that the founder and group were reliable
Laura Moore: Said found was responsive and calls were informative
Dr. Robert M.: Complimented the sharing of info in the group
Michael Terry: Loved the step-by-step and easy-to-understand training
Donna & Michael Trinsey: Purchased their 5th note, partnered with others in the network
Are There Verifiable Testimonials for Note Investor University?
Yes, there is a verified testimonial from Michael Terry. He posted in BiggerPockets that he was searching for company recommendations for mortgage note investing. In a later comment, he announced that he decided to work with Desi Arnaz. Terry’s testimonial is seen in investbrilliantly.com, a partner company promoting Note Investor University.
In 2021, Michael Terry posted in BiggerPockets that he wanted to become a mortgage note investor. He added that he was searching for a company that will help this venture to become passive.
He received 27 replies to his post. He later confirmed that he chose ACI Legacy Group, which is co-founded by Desi Arnaz. His review is available on the Invest Brilliantly website.
Invest Brilliantly has a partnership with Note Investor University. The platform promotes Desi Arnaz’s training program for note investing.
In fact, Invest Brilliantly’s YouTube channel has Arnaz on its display photo. It also indicates that it is the top media channel for noteinvestoruniversity.com
Who Is Desi Arnaz?
Desi Arnaz is a coach, mortgage note investor, and professional realtor. He is also a CEO, co-founder, and former landlord.
He has been teaching and exploring mortgage note investing for 10+ years. He discovered the industry back in 2013.
For decades, he has been a professional realtor in Southern California. He has been a real estate investor since 1982. Additionally, he has invested in 100+ real estate deals.
Arnaz is the owner of 2 mortgage companies and the co-founder of ACI Legacy Group. ACI Legacy buys mortgage notes from banks in bulk. And then, they resell these notes individually.
He was also a landlord and house flipper for 30+ years.
Desi Arnaz’s Claims: ‘Interest Is Pure Profit’
Desi Arnaz claims that the “interest is pure profit” from mortgage note investing. He stated this in a 2021 video from the Note Investor University YouTube channel.
Debunking Desi Arnaz's Claims
Arnaz’s claim that the collected interest is untouched is false. This is because a servicing company is needed to ensure that collection is passive.
In another video from the Note Investor University channel entitled “How To Buy A Note,” he shared that he doesn’t personally collect payments for real estate notes. He hires a servicing company to do this for him.
Since he promotes note investing that’s passive, following his personal process is needed. Aspiring note investors have to pay servicing companies to enjoy passive cash flow. This added expense subtracts from the lender’s income.
What Are the Risks of Buying Real Estate Notes?
The risks of buying real estate notes are delay and expenses due to foreclosure. Delays are experienced because of foreclosure laws. Meanwhile, payments include the following listed below.
Taxes
Lawyer fees
Property repairs and upkeep
One of the major selling points of mortgage notes is how properties serve as collateral for lenders. This is provided in addition to the interest they collect. Beginner investors are given this assurance in case the borrower fails to make payments.
However, the process of foreclosure, and finally acquiring ownership, is challenging. This is why, for more experienced note investors, this is the last resort.
A crucial risk for mortgage note investing is the delay of ownership during foreclosure. According to Forbes, the foreclosure process takes months or years.
Some investors try to mitigate this by setting up a land contract. However, state laws still slow down the process. This was indicated by a comment in the r/RealEstate subreddit in 2022.
Another significant risk of real estate notes is added expenses. Lawyer fees pile up since investors have to go to court to start the legal process. In fact, a comment in the same subreddit mentioned above shared that foreclosures are costly due to lawyer bills.
Taxes are another added cost to foreclosures. During this period, the lender is responsible for paying property taxes. As shared by a 2022 comment in the r/Bogleheads subreddit, tax payments can last for years.
During the foreclosure process, the lender also has to pay for property upkeep and repairs. This was highlighted in a 2020 comment in the r/realestateinvesting subreddit. When lenders try to acquire the property and sell it, they need to pay for house maintenance, damages, and insurance.
What Is Note Investing?
Note investing is the practice of buying debt associated with a mortgage. Note investors collect monthly interests. They also take on the role of the lenders. They are capable of foreclosing and retrieving properties as collateral.
“Note” in note investing stands for “promissory note.” They are also called “real estate notes” or “mortgage notes.”
There are two types of mortgage notes: performing and non-performing. Performing notes are characterized by borrowers making regular payments according to terms. Meanwhile, non-performing notes are the opposite.
Real estate properties associated with note investing range from the ones listed below.
Hotels
Houses
Condos
Gas stations
Office buildings
Shopping centers
Apartment buildings
Manufactured homes
What Are the Benefits & Risks of Note Investing?
The benefits of note investing include the following mentioned below.
Fixed Monthly Cash Flow: Note investors receive monthly payments.
Passive & Hassle-Free: Mortgage note investors are without the operational risks and responsibilities of other real estate investments. They aren’t in-charge of tenants and properties.
Secure Investment: In case the borrower does not pay, the property serves as collateral. This provides a level of security for note investors.
The risks of note investing are listed below.
No Due Diligence: One of the pitfalls of novice note investors is lack of due diligence. They do not properly check the borrower’s credit history, lien position, property condition, and the terms of the note.
Insufficient Legal Knowledge: Problems arise when mortgage note investors who do not understand the legal aspect of notes.This is especially true for state-specific laws and foreclosures. It is advisable to consult with lawyers during the early stages.
Non-performing notes: The biggest risk of note investing is when borrowers fail to make payments. Lenders have the option to foreclose or to modify the loan. In this process, documents are redone in order to benefit both the lender and borrower.
How Much Do Mortgage Notes Cost?
Mortgage notes cost anywhere from $10,000 to $10,000,000. According to Desi Arnaz, properties in the US coasts are more expensive. However, for the rest of the country, mortgage note prices are reasonable.
Discount is also expected when purchasing notes. Instant equity is acquired by note investors.
Additional costs when buying notes are listed below.
At least $500 for legal advice from an attorney is needed. This helps investors become familiarized with the legal aspects of notes.
At least $100 for broker price opinion is also required. This is a written report given by real estate agents. This helps investors learn about how much properties are worth.
At least $100 for title reports is another cost for note investors. This ensures that they are in the correct lien position. The report states how the property has gone from one lender to another.
With these costs, note investors are able to receive double digit returns. They are also able to sell the property in case of foreclosures.
Why Rank and Rent is More Profitable Than Note Investing
Rank and rent is more profitable than note investing. This is because the former has lower initial costs and is more scalable. With rank and rent, the initial cost is $300 to $500. Whereas, note investing has the lowest possible initial cost is $11k. On a monthly basis, rank and rent enables up to $3,000 per website. Meanwhile, note investing only collects interests from mortgage payments.
While both feature fixed and passive income, a local lead gen biz is much easier to scale. This is due to its low startup costs. There's also no need to hire lawyers and brokers, as well as having to deal with the long legal process of foreclosures. As soon as your site is built and is ranking, cash comes in monthly. Plus, there's little to no maintenance is required.
