Nathan Turner on Turning Flips into Freedom with Debt for a Life of Wealth and Wisdom

Most real estate investors fall in love with property. The drywall, the curb appeal, the smell of fresh paint after a renovation. Nathan Turner fell in love with something far less glamorous and arguably far more powerful: the paper behind the property. The mortgage note.

Known across the industry as “The Canadian Note Guy,” Nathan is the founder of Earnest Investing and a long-time veteran of the mortgage note space. In his conversation with Mattias and Erica on The REI Agent Podcast, he peels back the curtain on one of the oldest and most overlooked investing strategies in real estate, and shows why it might be the most relevant strategy for the market we are in right now.

If you have ever wanted the cash flow of real estate without the toilets, tenants, and turnover, this episode is the most practical introduction to note investing you will find.

What is Note Investing, Really?

Before he became a respected name in notes, Nathan was running a fix and flip business in Canada and across the border in the United States. Like many investors, he started in the property side of the business because that is where the noise is loudest. Fix this house. Sell this house. Repeat.

The shift happened almost by accident. After a rental project went sideways, Nathan stumbled into the world of seller financing, which is essentially becoming the bank for a buyer instead of selling to one with a traditional mortgage. What he discovered changed his entire trajectory. Instead of owning property, he could own the loan secured by that property. Instead of chasing appreciation, he could collect monthly payments. Instead of taking on the headaches of being a landlord, he could play the role of the bank.

That is note investing in its simplest form. You buy the debt. You collect the payments. The borrower owns the home. You own the income stream.

From Flipping to Notes: A Pivot Born from Pain

Nathan does not hide from the truth that this pivot came out of struggle. A failing rental forced him to think differently about how real estate income should be structured. The pain of that period planted a seed. Once he tasted the simplicity of being on the lender side of the equation, going back to traditional ownership lost its appeal.

For listeners considering whether to make a similar shift, this part of the episode is critical. The lesson is not that flipping is bad or rentals are bad. The lesson is that there are multiple ways to participate in real estate, and the right one for you may not be the one you started with. The investors who go the longest distance are the ones willing to evolve their strategy as their life and goals evolve.

Performing vs Non-Performing Notes

Nathan walks through the difference between performing and non-performing notes. A performing note is one where the borrower is making regular payments. A non-performing note is one where the borrower has stopped paying for some reason.

Early in his note career, Nathan worked extensively with non-performing notes. The opportunity was massive after the 2008 financial crisis. Investors who could buy these distressed loans at deep discounts and work with borrowers to restructure them generated outsized returns and helped homeowners keep their houses in the process. It is a deeply human side of the business that does not get talked about enough.

Today, Nathan’s focus has shifted heavily toward performing notes. The reason is straightforward. Performing notes provide cleaner, more predictable cash flow for the investors in his fund and require less operational lift. Both strategies have their place. The right mix depends on your time horizon, your risk tolerance, and your appetite for hands-on work.

How Nathan Finds and Buys Notes

One of the questions listeners always ask is where notes actually come from. Nathan explains that the note industry runs largely on relationships. Trust is the currency. After years of showing up at the same conferences, building rapport with the same brokers, and proving that he closes when he says he will close, Nathan has cultivated a network of sellers that consistently brings him deal flow.

He explains how discounts are used to determine whether a note is worth buying, how short-term and long-term notes each have a place in a portfolio, and the kinds of borrower profiles that show up most often in seller-financed deals. For new investors, this segment is gold. It demystifies the deal pipeline and shows that note investing, like every other corner of real estate, rewards people who keep showing up.

How Nathan’s Fund Works

Earnest Investing is structured as a private fund, which means accredited investors can passively participate in Nathan’s note portfolio rather than buying notes one at a time on their own. He breaks down how the fund is structured, how investor returns work, and how diversification across many notes lowers the risk for each individual participant.

This is a key distinction. Buying one note on your own carries concentration risk. If that borrower defaults, your single position is in trouble. Buying into a diversified fund spreads that risk across dozens or hundreds of loans, which is closer to how big banks and institutional investors think about lending.

For real estate agents and investors looking to add a passive income stream that is correlated with but not identical to property prices, a vehicle like Earnest’s fund is worth a serious look.

Default Handling and Creative Restructuring

Even the best portfolios experience defaults. What separates a great note investor from a struggling one is how they handle the worst cases. Nathan explains how Earnest works with borrowers who fall behind, exploring restructuring options that allow the loan to start performing again rather than rushing to foreclosure.

This is one of the most overlooked dimensions of the business. Foreclosure is expensive, slow, and emotionally exhausting for everyone involved. A creative restructuring, by contrast, can preserve the homeowner’s housing, restore predictable income for the investor, and avoid the legal and reputational mess of forced sale.

Mattias chimes in with a personal seller finance story of his own that illustrates how flexible note structures can solve problems that traditional bank financing simply cannot.

Selling Notes, Refinancing, and Overleveraging

The conversation gets even more practical when Nathan discusses how notes themselves can be sold as an alternative to refinancing. If you are a seller-financier holding paper, you do not necessarily need to wait years for the loan to pay off. You can sell that note to a backend buyer like Nathan and unlock the capital today.

They also dive into the dangers of overleveraging and the flexibility that creative note structures give borrowers and lenders. While big banks are stuck with rigid criteria, note investors can structure terms to fit the realities of a deal. That flexibility is part of why creative finance has exploded in popularity over the last several years.

2008 vs Today: A Tale of Two Markets

One of the most important segments in the episode is Nathan’s comparison of the current market to the 2008 crisis. He sees clear parallels. Rising defaults. Stretched borrowers. Mortgage payments that have surged beyond what many families budgeted for when they bought their homes.

But he also sees clear differences. Government intervention has slowed the foreclosure pipeline. Hedge funds and other institutional players entered the space in ways that did not exist in 2008 and 2009. The result is a market that is uncertain, not necessarily catastrophic, but full of opportunity for investors who understand how to read it.

Notes, he argues, are recession-resistant, not recession-proof. They handle uncertainty better than many real estate strategies because the underlying cash flow does not depend on appreciation. When home prices wobble, performing notes keep performing. That alone makes them a powerful diversifier inside a broader real estate portfolio.

Notes vs Syndications and Why Agents Should Pay Attention

Nathan and Mattias unpack how note investing stacks up against syndications, another popular passive vehicle. Both can produce strong returns. The biggest differences lie in liquidity, transparency, and how the underlying asset behaves in a downturn.

For real estate agents specifically, notes offer a way to put commission income to work without becoming a second full-time job. You do not have to manage tenants. You do not have to renovate properties. You collect monthly distributions while continuing to grow your primary business.

Nathan also touches on how retirement accounts can be used to invest in notes, an often overlooked strategy that allows investors to grow their portfolios in tax-advantaged accounts.

Vetting the Fund vs Vetting the Deal

For anyone new to note investing, Nathan delivers one of the most important reminders of the episode. When you invest passively, you are not just vetting the deal. You are vetting the operator. The fund. The team.

Track record matters. Communication matters. The way an operator handles tough conversations matters even more than their best year of returns. Nathan’s transparency about both wins and challenges across his career is exactly the kind of honesty investors should look for when choosing where to place capital.

Book Recommendation: Invest in Debt by Jimmy Napier

Nathan’s book recommendation is the classic Invest in Debt by Jimmy Napier. For anyone who wants to go deeper into the philosophy and math of note investing, this is the foundational text. It is short, blunt, and packed with insights that still hold up decades after it was written.

Final Wisdom: Perseverance Wins

Toward the end of the conversation, Nathan delivers a simple but heavy truth. Perseverance is the difference between the investors who quietly build wealth over decades and the ones who burn out chasing the next shiny strategy. Notes are not glamorous. They are not viral on social media. They simply work, year after year, for the people willing to learn the craft and stay in the game.

That is the kind of holistic, sustainable success this podcast was built to highlight.

Connect with Nathan Turner

You can learn more about Nathan Turner, his fund, and his upcoming events at earnestinvesting.com. He is also the founder and host of the Diversified Mortgage Expo, one of the premier annual events in the note investing world.

For more conversations like this with top agents and investors building wealth on their own terms, visit reiagent.com.