How do you scale your note business once you have exhausted your initial stack of seed capital? Is there a way to make a living doing notes without already having a ton of capital?

I purchased this non-performing second mortgage back in 2018 on a property in North Olmstead, Ohio. At the time the property was valued at $150,000. Shortly after I purchased the mortgage, I applied my asset management techniques to the process. I hired a law firm that manages foreclosure cases. The law firm sent out a legal demand letter. Since I didn't hear from the borrower when the legal demand letter expired, I moved forward with the foreclosure process. After the foreclosure judgment was filed, we set a foreclosure sale on the property. About a month prior to the foreclosure sale, the borrower eventually reached out to resolve the delinquent 2nd mortgage. Here is his story, there was a point in 2012 were the borrower went through a divorce, unfortunately. The borrower didn’t realize the wife took out a 2nd mortgage in 2007. The wife left the property in 2010 and the husband stayed in the property. The loan was sold around from 2014 through 2018 and no lender attempted to collect on the second mortgage during that period. Then in 2019, before his property was due to go to sheriff sale, the borrower hired an attorney to help get this situated. The borrower had a 1st mortgage balance of $117,570, that he was current on. The 2nd mortgage unpaid principal balance was $28,457, plus they owed another $35,000 in past due interest, late fees & lender recoverable legal expenses (owed arrears). With a total payoff number of $63,457. I took him through my loss mitigation process, and we agreed on an amount for him to payoff the 2nd mortgage in full. This allowed him to satisfy the mortgage and be completely done with it. The borrower had a 401K plan with the company he worked for, and he was able to access that due to a financial hardship to save his primary residence. He was only able to access $45,000 out of his 401k. Even though he owed a total of $63,457 on the 2nd mortgage, I accepted the $45,000 to satisfy the 2nd mortgage. As I always say, this is why I love note investing, both parties of the transaction come out ahead, creating a win-win for both parties.

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