Passive Income After Selling a Business: Why Some Entrepreneurs Choose Mortgage Notes

One of the best ways to invest in real estate when interest rates are high is to learn creative financing strategies like seller financing, mortgage notes, and other ways to structure deals without relying only on traditional bank loans.

That is where NoteSchool founder Eddie Speed has spent more than 40 years helping investors think differently.

Eddie started buying seller-financed notes in 1980, during one of the toughest interest rate environments in modern real estate history. Instead of running from the market, he learned how to find opportunity inside it.

Why High Interest Rates Make Real Estate Investing Harder

When interest rates rise, the math changes.

Buyers may qualify for less. Monthly payments become more expensive. Rental property cash flow can shrink. Sellers may have a harder time finding qualified buyers.

In a low-rate market, investors can sometimes rely on cheap financing to make the numbers work. But when rates are high, that cushion disappears.

That is why investors need more than one strategy.

High Rates Do Not Kill Opportunity

High interest rates can create problems, but they can also create motivation.

• Some sellers still need to sell.
• Some landlords are tired of managing rentals.
• Some buyers still need a path to homeownership.
• Some investors still need income.

The opportunity is not always in finding the perfect low-rate loan. Sometimes, the opportunity is in structuring the deal differently.

That is the power of creative financing.

What Is Creative Financing in Real Estate?

Creative financing is a way to structure real estate deals outside the standard “buyer gets a bank loan, seller gets paid in full” model.

It can include strategies like:

• Seller financing
• Owner financing
• Mortgage notes
• Subject-to deals
• Installment sales
• Private lending
• Partial note strategies

The goal is simple: help buyers, sellers, and investors solve problems when traditional financing does not fit.

Creative financing is not about being reckless. It is about understanding the numbers, the paperwork, the risks, and the people involved so you can structure deals smarter.

Why Seller Financing Matters When Rates Are High

Seller financing happens when the seller acts like the lender.

Instead of the buyer getting all the money from a bank, the buyer makes payments to the seller over time.

This can help in a high-rate market because it may create more flexibility for both sides.

• The buyer may get a path to purchase.
• The seller may create monthly income.
• The investor may create or buy a note.

That note can become an income-producing asset.

This is one reason Eddie Speed has taught investors for decades to “be the bank” instead of only thinking like a landlord.

What Are Mortgage Notes?

A mortgage note is the loan tied to a property.

When a borrower makes a mortgage payment, they are paying principal and interest on that note.

When you invest in a mortgage note, you are buying the right to receive those payments.

You are not buying the house.

You are buying the paper behind the property.

Why Notes Can Make Sense in a High-Rate Market

Mortgage notes can offer investors a different way to participate in real estate.

Instead of owning a rental property, dealing with tenants, and absorbing every repair bill, a note investor acts as the lender.

That can create several advantages.

1. Notes Can Create Monthly Income

Performing notes can provide monthly payments from borrowers who are already paying.

That income may appeal to investors who want real estate-backed cash flow without becoming landlords.

2. Notes Can Be Backed by Real Estate

Mortgage notes are tied to real property.

That does not remove risk, but it gives the investment an underlying asset connected to the loan.

If the borrower stops paying, the investor may have options depending on the property, documents, borrower, legal process, and strategy.

3. Notes Can Reduce Landlord Headaches

High rates are not the only challenge investors face.

Rental owners may also deal with repairs, taxes, insurance, vacancies, maintenance, and management issues.

With notes, the borrower typically owns and maintains the property.

The investor owns the loan.

4. Notes Give Investors More Ways to Structure Deals

One of the biggest advantages of note investing is flexibility.

Investors can learn strategies like buying performing notes, working with non-performing notes, selling partials, creating seller-financed notes, or using notes as part of a larger investment plan.

That does not mean every strategy is right for every investor.

But it does mean investors are not stuck with only one path.

Eddie Speed’s 40-Year Lesson: Markets Change, Strategy Matters

Eddie Speed began buying seller-financed notes in 1980, when interest rates were extremely high and the real estate market was under pressure.

That timing shaped the way he thinks about investing.

When the market gets hard, many people freeze. But experienced investors know that difficult markets often create new opportunities for people who understand how to solve problems.

Eddie’s career has been built around that idea.

Instead of following the herd, he learned how to position himself differently.

Instead of only asking, “How do I buy more property?” he focused on a better question:

That mindset is one of the reasons NoteSchool exists today.

The Best Time to Learn Notes

There is an old saying:

The same idea applies to learning note investing.

The best time to learn notes may have been years ago, before high rates, tight cash flow, and rental headaches pushed more investors to look for alternatives.

But the second-best time may be right now.

What Investors Should Avoid When Rates Are High

High-rate markets can create opportunity, but they can also expose weak deals.

Investors should be careful about:

• Chasing returns without understanding risk
• Buying deals that only work under perfect conditions
• Ignoring taxes, insurance, and repair costs
• Assuming rentals are always passive
• Trusting someone else’s numbers without doing their own review
• Buying notes without understanding the documents
• Thinking creative financing means skipping due diligence

How to Invest Smarter When Interest Rates Are High

If you want to invest in real estate when interest rates are high, start by expanding your toolbox.

Here are a few smart steps:

• Learn how seller financing works.
• Understand what mortgage notes are.
• Study the difference between performing and non-performing notes.
• Look at real deal examples.
• Learn how to review the borrower, property, documents, and payment history.
• Understand how notes can create income without rental property management.
• Get educated before putting money into a deal.

High-rate markets reward investors who know how to think creatively and protect themselves.

That is why education matters so much.

Why NoteSchool Focuses on Real-World Strategy

NoteSchool is not built around theory.

It is built around real-world note investing, seller financing, and creative finance strategies that Eddie Speed and his team have worked with for decades.

The point is not to tell investors that notes are easy, risk-free, or automatic.

They are not.

The point is to teach investors how to think differently, evaluate deals properly, and understand strategies that many traditional real estate investors overlook.