Judgement vs Note investing?

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Posted by Jason McAdams on July 10, 2002 at 20:59:01:

I've been researching the note biz but lately I've gotten sidetracked and I'm learning about judgement investing. It just seems even better than notes. The way I see it, with notes you really have to work long and hard to develop a system that constantly brings you good quality notes to buy. And then you're lucky to make 20-30% yield these days. On the other hand, with judgement investing it seems a heckuva lot easier to find judgements to buy, and the yields are in the 100s of percent. In all but a few states you can put a lien on the debtor's real property once you have the judgement, garnish wages, sieze assets, etc. etc. so how hard can it be to collect? If you bought only those judgements in which case the debtor owned real property, at the very least you're buying/creating a secured interest in real estate for pennies on the dollar ... 5-10% is the going rate I hear. So what if the people don't want to pay up right away. Even if I'm buying the judgements for 10 cents on the dollar I can buy a million bucks worth of liens on real property for 100,000. At some point within the next 3-5 years most of these people are going to want to sell or refinance, in which case I have to get paid off in full PLUS interest (which is usually about 10% per year). So what am I missing here? Judgement investing sounds like a relatively easier and very very profitable business ... even more so than notes. Don't get me wrong, I think the notes are great too ... I have John's paper game course in front of me. It just seems that judgement investing would be 10 times simpler and probably even more profitable. John ... if you have a minute ... clue me in will you? Obviously you're biased towards notes ... but what am I missing here? =)

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