From Struggling with Rental Properties to Note Investing Success
Wayne Garrett, an engineer from the Dallas-Fort Worth area, had always been analytical about his investments. Like many real estate investors, he initially explored rental properties but couldn’t make the numbers work.
“I never could get those to pencil out as an engineer,” Wayne explained during his interview on NSTV. “I’ve got too much analytics in my mind. I couldn’t make that pencil out.”
That all changed when Wayne discovered NoteSchool and the power of note investing. What started as a journey to find better investment opportunities led to an award-winning case study that Wayne presented on stage at Note Expo in front of 500 fellow investors.
The Deal That Changed Everything
In January 2021, Wayne purchased his first mortgage note on a modest 3-bedroom, 1-bathroom property in Dallas. The property itself was valued at $110,000 – nothing extraordinary, just a solid working-class home in a stable neighborhood.
Wayne’s careful analysis of the opportunity highlighted several positive factors:
- Strong neighborhood with good BPO (Broker Price Opinion)
- Excellent payment history from the borrower
- 24 months of seasoning on the loan
- Solid borrower profile
The note had been originated in January 2019 with a loan amount of $101,900 at an 8.5% interest rate on a 30-year term, creating a monthly payment of $784. By the time Wayne purchased it, the balance had been paid down to $90,000 with 239 payments remaining – already showing signs of accelerated repayment.
Wayne purchased the note at a discount for $82,775, positioning him at approximately 75% investment-to-value ratio, giving him a comfortable 25% equity cushion in the property.
“I wish I could buy 20 more just like it,” Wayne shared during his NSTV interview.
The Hidden Bonus Nobody Expected
What Wayne didn’t realize when he purchased the note was that he had stumbled upon a note investor’s dream scenario. The borrowers weren’t just making their regular $784 monthly payments – they were consistently paying significantly more.
In fact, the borrowers were paying approximately $3,800 per month – nearly five times the required amount!
This aggressive repayment schedule dramatically compressed the loan term and supercharged Wayne’s return on investment. Instead of receiving about $10,000 per year in payments as originally expected, Wayne began collecting over $40,000 annually.
The ITIN Borrower Advantage
One key factor in this success story was that the borrowers were what’s known in the industry as “ITIN borrowers” – individuals with Individual Taxpayer Identification Numbers rather than Social Security Numbers. These are typically legal residents with green cards who have limited access to traditional financing options.
Eddie Speed, founder of NoteSchool, pointed out during the interview that this scenario, while exceptional, isn’t uncommon among ITIN borrowers. “Those of us that have been doing this for decades, we’re like, ‘Yeah, he’s an ITIN buyer,'” Eddie explained.
This highlights one of NoteSchool’s core teachings: the value of seller financing for underserved borrowers who might otherwise never experience homeownership.
“Not only do they have real equity in the property, but they have emotional equity in the property,” Eddie noted, describing the pride these borrowers take in homeownership.
The Numbers That Speak Volumes
After just 26 payments, Wayne had already received $106,000 back on his $82,775 investment – a complete return of his capital plus a substantial profit, with the note continuing to perform.
Let’s break down the impressive returns:
- Initial investment: $82,775
- Total received after 26 months: $106,000+
- Monthly cash flow: Approximately $3,800
- Monthly profit: Over $1,000
As Eddie Speed pointed out during the interview, this translates to more than 1% interest on Wayne’s investment per month – a remarkable yield by any standard.
From One Note to a Portfolio Strategy
The accelerated cash flow from this single note created a powerful ripple effect for Wayne’s investing strategy.
“The velocity of the cash flow is really what allowed me to be able to buy my next note sooner,” Wayne explained. “One note’s great, but five notes are even better. As you stack those P&I payments, then that time frame to buy your next note gets shorter and shorter.”
This compounding effect is precisely what NoteSchool teaches its students – how to build a sustainable note investing business that grows over time.
Why Notes Over Rentals?
When asked whether he’d prefer notes or rental properties, Wayne’s answer was emphatic:
“The notes are phenomenal. The note environment… look at a rent house – who’s going to pay you triple or quadruple your rent payment? Nobody’s going to do that. You’re going to get paid exactly what you’re owed, not a penny more, and no headaches.”
Wayne added, “This type of situation that I experienced can never happen with a rent house. It’s physically impossible.”
Unlike rental properties, notes don’t come with maintenance expenses, tenant headaches, or property management concerns. As Eddie Speed puts it, “You’re just the bank, you’re not a landlord. You don’t pay their taxes and insurance.”
The NoteSchool Advantage
Wayne’s success didn’t happen by accident. As a longtime NoteSchool member, he gained access to the education, community, and deal flow that made this investment possible.
NoteSchool’s focus on seller financing and working with real estate investors who create quality notes helped position Wayne to find this opportunity.
“We fish in that pond,” Eddie explained, referring to the specific market segments where these high-performing notes can be found. “When you fish in that pond, you might catch a big fish. It’s the kind of fish you’re looking for.”
By implementing NoteSchool’s strategies and leveraging their network, Wayne was able to transform from what he calls “just a regular guy” into an award-winning note investor showcasing his deals on the main stage at Note Expo.
Looking Ahead to a Bright Future
As traditional lending continues to tighten and banking becomes more restrictive, the opportunities in creative financing and note investing are expanding. Wayne’s story demonstrates how ordinary investors can achieve extraordinary results in this space.
“We are setting the stage for a repeatable environment,” Eddie emphasized during the interview, highlighting that Wayne’s success is not a one-time occurrence but rather a model that can be replicated.
With the velocity of cash flow from his current notes, Wayne is positioned to continue growing his portfolio and compounding his returns in the years ahead.
“The note school TV channel has hundreds of stories like this over the years and it just proves that this business model of purchasing notes works. It can sometimes be a boring business, but boring is really good when it comes to consistent returns.”
Your Turn to Experience Note Investing Success
If Wayne’s story has inspired you to explore note investing, NoteSchool offers the education, community, and resources to help you get started. From comprehensive training programs to networking opportunities at events like Note Expo, NoteSchool provides everything you need to build your own note investing business.
Below are four ways you can get started with note investing… which will you choose?
Download the Free Note Investor Guide– Start learning the basics right away.
Get the Full Note Investing Book–Delivered straight to your door.
Watch Our On-Demand Webinar – Learn the secrets of note investing anytime.
Join Our Upcoming Live Training – Ask questions and dive deeper into notes.
