The Story of My First Private Note Deal (My First True Local Investment)

 I want to share the story of my very first note deal — my first real private investment. If you’ve seen my earlier video about my failed Lonnie deal, this one happened about three weeks after I sold that old trailer… and thankfully it went much better. https://youtu.be/jA5HV9hTMbc 

The Kijiji Ad That Started It All

One day I was on my computer browsing Kijiji — Canada’s big online classifieds site (similar to Craigslist in the U.S.).

I came across an ad from a woman who had recently been divorced. It said something along the lines of:

“Recently divorced, with a poor credit score, need a private lender to buy a mini home.”

I reached out to ask what the situation was.

She had found a 20-year-old mini home, and one thing to know about older mini homes is that once they hit a certain age, banks won’t finance them anymore. Structurally they start to deteriorate, so lenders consider them too risky.

The sellers were asking $32,000, but she managed to negotiate the price down to $20,000. She had $10,000 cash and needed another $10,000 to complete the deal.

Structuring the Deal

All the specific math is in my book Invest Local, but here’s the core of what I did:

• I loaned her the missing $10,000.
  
  

• I secured my position with a lien on the mini home.
  
  

• I charged a lender fee, so instead of owing me $10,000, she owed $11,000.
  
  

• She repaid the note over four years.
  
  

• She was late three times, which meant I collected a few late charges too.
  
  

This was a great investment for me because she had so much of her own equity in the home. There was no chance she was going to let me take it — she had $10,000 cash tied up in it.

Turning One Deal Into Two: Borrowing Against the Note

Here’s where the deal went from “good” to “excellent.”

After writing the note, I used it as collateral to borrow $9,000 from a friend at a lower interest rate.

That meant:

• I only had $1,000 of my own money tied up in the deal.
  
  

• I was earning interest on $10,000.
  
  

• I kept the difference between what she paid me and what I owed my friend.
  
  

In other words, I was acting like a bank — lending at one rate, borrowing at another, and profiting from the spread.

The final return on my $1,000 investment was well over 100% (again, the exact figures are in my book Invest Local).

Always Watching for the Next Deal

I’m always on the lookout for another opportunity like that. They don’t show up every week, but whenever I’m on Kijiji I keep an eye out. Deals like that are truly no-brainers when the fundamentals line up.

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