Guides
Real Estate Debt Investing Guides
Plain-language guides to earning income as the lender, not the landlord: how real estate debt works, how to evaluate a note, what protects your capital, and how the options compare. Written by Sierra Davis.
Real estate debt basics
- What Is Real Estate Debt Investing?How real estate debt investing works: earning income as the lender on loans secured by property, where lenders sit in the capital stack, what protects them, and the risks.
- How Real Estate Debt Funds WorkA real estate debt fund pools investor capital to make or buy loans secured by property. How they work, how investors are paid, fund types, and what to ask before investing.
- What Is Private Real Estate Credit?Private real estate credit is lending secured by property from non-bank lenders. How it fits within private credit, why it lasts, the main strategies, and the risks.
- Mortgage Note Investing ExplainedMortgage note investing means owning the loan behind a property instead of the property. How notes work, how discounts create yield, the 3P underwriting framework, and the risks.
- How to Invest in Real Estate Debt with a Self-Directed IRAHow a self-directed IRA can hold mortgage notes, private real estate loans, and real estate debt funds: how it works, setup steps, prohibited transactions, UBTI, RMDs, and risks.
Comparisons
- Real Estate Debt vs. Real Estate SyndicationsReal estate debt and syndications are both passive, but one makes you the lender and the other an owner behind a bank loan. Compare position, income, upside, rate sensitivity, and risk.
- Mortgage Notes vs. Rental PropertyMortgage notes and rental properties are both backed by real estate. Compare income, responsibilities, risks, upside, and liquidity to decide whether to be the lender or the landlord.
- Private Real Estate Debt vs. REITsPrivate real estate debt and REITs both give investors real estate income without owning property directly. Compare liquidity, price volatility, income source, leverage, fees, and minimums.
- Private Credit vs. Private EquityPrivate credit investors lend; private equity investors own. Compare position in the capital stack, return drivers, hold periods and the J-curve, fees, and where real estate credit fits.
Risk and underwriting
- What Is a Performing Mortgage Note?A performing mortgage note is a loan whose borrower is paying as agreed. How seasoning, borrower qualification, and payer equity determine whether a performing note keeps performing.
- What Is Loan-to-Value (LTV) in Real Estate Lending?Loan-to-value (LTV) compares a loan balance to the property's value. How to calculate LTV, why lenders keep it low, and how investment-to-value (ITV) measures a note buyer's cushion.
- What Happens When a Borrower Stops Paying?What happens to a lender or note investor when a borrower defaults: the six resolution paths, how foreclosure timelines differ by state, and how underwriting determines the outcome.
- Senior-Lien Real Estate Debt ExplainedA senior (first) lien is the loan paid first from a property if the borrower defaults. How lien priority and recording work, how junior liens differ, what can prime a first mortgage, and title.
For accredited investors
- Real Estate Investments for Accredited Investors: 7 Options ComparedCompare seven real estate investments open to accredited investors, from syndications and debt funds to notes, REITs, and private equity funds, by income, liquidity, position, and risk.
- Passive Real Estate Income for Accredited InvestorsHow accredited investors can earn real estate income without managing tenants: debt funds, mortgage notes, syndications, REITs, and self-directed IRAs, plus what each still asks of you.
Seller financing
- Seller Financing Explained: When the Seller Becomes the BankSeller financing lets a property owner act as the lender. How the note and mortgage work, why buyers and sellers use it, how the note can be sold, and the compliance rules.
- What Is a Contract for Deed?A contract for deed is seller financing where the seller keeps legal title until the buyer pays in full. How it works, buyer protections, state-law differences, and investor notes.
Essential Income Fund
- How Essential Income Fund WorksHow Essential Income Fund I, LLC works: what it invests in, how investors are paid a fixed monthly rate, how loans are protected, fees, terms, and how to invest.
- Essential Income Fund: Frequently Asked QuestionsAnswers about Essential Income Fund I, LLC: what it invests in, who manages it, rates and terms, fees, leverage, risks, liquidity, and who can invest.