Watch the episode here: https://youtu.be/sw5LNQ4Zp7E
Most Real Estate Investors Are Chasing Properties
BUT… The real leverage is often in owning the paper.
In this episode of Founders Club, I sat down with Eddie Speed, founder of NoteSchool and one of the most experienced note investors in the country.
With more than 50,000 note transactions over four decades, Eddie has seen every real estate cycle imaginable.
What he’s seeing right now should get every entrepreneur’s attention.
The traditional rental model is under serious pressure, and note investing is quietly becoming one of the smartest plays in real estate.
Why the Rental Model Is Breaking
Landlords everywhere are feeling it.
Expenses have risen faster than rents, and margins are getting crushed.
Insurance, taxes, maintenance, and labor costs have exploded.
Many rentals are producing half the net income they did just a few years ago.
Eddie framed it perfectly.
This isn’t a personal problem, it’s an industry problem.
When something breaks in a rental, the owner writes the check.
That risk compounds as you scale.
Key takeaway:
When margins shrink across an entire industry, it’s time to rethink the model, not just work harder.
Why Owning the Note Changes Everything
Eddie’s core philosophy is simple.
Owning the note often beats owning the property.
When you hold the note, you are the bank.
You collect payments without dealing with tenants, repairs, or upgrades.
Notes are less management intensive.
They scale faster and create cleaner cash flow.
Eddie said it best.
“When you own rentals, you fix toilets. When you own notes, you collect checks.”
Key takeaway:
The highest leverage position in many businesses is the financing side, not the operations side.
Seller Financing: The Hidden Weapon for Landlords
One of the biggest eye openers in this episode was seller financing.
Most landlords believe their only choices are rent or sell.
Seller financing creates a third option.
Sell the property and carry the note.
Here’s why it works.
Mortgage payments are often 10 to 40 percent higher than rent.
The seller stops paying expenses.
The buyer becomes responsible for the property.
In many cases, the seller’s net income increases 2.5x.
With far less stress.
Eddie asked a simple question.
“Why don’t you just be the bank?”
Key takeaway:
If you feel trapped in your current role, look for ways to shift responsibility while keeping income.
Why Conservative Returns Win Long Term
Eddie doesn’t chase flashy deals.
He stays disciplined.
Today, high quality first position notes are still producing 10 to 11 percent yields.
These are institutional grade assets with proper underwriting.
Eddie has survived multiple cycles by staying in his lane.
He knows what performs and ignores everything else.
This isn’t about getting rich quick.
It’s about getting rich predictably.
Key takeaway:
Longevity beats excitement. Build systems that work in good markets and bad ones.
The Importance of Having a Recipe
Note investing is not complicated.
But it must be done correctly.
Eddie teaches a clear recipe.
Qualify the property.
Qualify the neighborhood.
Qualify the buyer.
Structure the right terms.
Use compliant paperwork.
Always use third party loan servicing.
Most failures happen when people improvise.
Professionals follow a process.
Eddie made this clear.
“It’s not brain surgery. It’s originating a loan.”
How Eddie Uses Leverage Differently
One of the most powerful moments in the episode was Eddie’s explanation of selling partials.
This is advanced but incredibly effective.
An investor buys a long term note.
Then sells a portion of the future payments to another investor.
Often, that investor is using self directed IRA funds.
The original buyer recovers most or all of their capital.
What’s left is long term cash flow.
With very little money left in the deal.
Eddie didn’t buy 50,000 notes with cash in his wallet.
He used structure, leverage, and understanding of cash flow.
How Risk Is Actually Managed in Notes
The biggest fear people have with notes is default.
Eddie addressed this head on.
He insists on third party loan servicing for every deal.
Servicers handle compliance, collections, and defaults.
They also manage foreclosure processes when needed.
Just like a property manager handles rentals.
This removes emotion and protects the investor.
It turns risk into a system.
Entrepreneur takeaway:
Risk doesn’t disappear when you ignore it. It disappears when you systemize it.
Why Realtors Are Perfectly Positioned
Many of Eddie’s most successful students are real estate agents.
That surprises people until they think about it.
Agents already work with landlords.
They see cash flow problems before anyone else.
Seller financing gives agents a new conversation.
“How would you like to make more money and less hassle?”
That conversation wins listings.
It also creates long term income opportunities.
In tight markets, differentiation is everything.
Seller financing makes agents indispensable.
The Perfect Storm Creating This Opportunity
This opportunity isn’t hype driven.
It’s math driven.
Rates are higher.
Property values are higher.
Expenses are higher.
That combination broke the old rental model.
Seller financing and notes thrive in this environment.
Eddie made an important distinction.
Rates going down won’t fix this.
Expenses going down will.
And that isn’t happening anytime soon.
Key takeaway:
Markets don’t reward loyalty to old models. They reward adaptation and innovation.
Listen to the episode here:
Watch the episode here:
Final Thoughts
This episode with Eddie Speed was a masterclass in thinking differently.
It wasn’t about chasing trends, it was about understanding cycles.
Entrepreneurs who win long term don’t follow the crowd.
They position themselves where the math works.
If you’re a landlord feeling squeezed, a realtor looking for an edge, or an entrepreneur seeking scalable cash flow, this episode will shift your perspective.
Sometimes the smartest move isn’t buying another asset.
It’s owning the income stream instead.
That’s exactly why Founders Club exists.
To learn from people who have already navigated the cycles and know how to win in the next one.
Find more episodes of Founders Club Podcast here.