Non-performing notes (NPN) are financial instruments backed by real estate that are in default or at high risk of default. Investors can purchase NPNs at a discount to their face value, potentially generating high returns if the underlying real estate can be successfully liquidated or refinanced.
There are several reasons why investors might consider buying NPNs. First, NPNs can offer the potential for high returns. If the investor is able to successfully liquidate or refinance the underlying real estate, they may be able to generate a significant profit. Second, NPNs can provide diversification benefits. NPNs are not correlated to the stock market or other traditional investments, so they can help to reduce the overall risk of an investment portfolio. Third, NPNs can be a source of passive income. If the investor is able to successfully refinance the underlying real estate, they may be able to generate a stream of monthly income.