July 14, 2023

Investment Sponsor Spotlight: Paper Profits 

Written By: Daniel Gleich 

We recently met with Joshua Andrews, Managing Partner of Paper Profits LLC, and author of Paper Profits – How to Buy and Profit from Notes: A Beginners Guide. 

Key Points 

  • Paper Profits specializes in the acquisition of promissory notes.
  • You can invest in promissory notes with your Self-Directed IRA.
  • Promissory notes offer several benefits that can positively affect the growth of your retirement funds.

1. Who is Paper Profits and what does Paper Profits do? 

Paper Profits is a private equity firm specializing in the acquisition of promissory notes, mortgages, and deeds. Led by Joshua Andrews and Jane Wabs, Paper Profits works with borrowers and investors to create solutions and financial gains. 

2. Describe the ideal client that Paper Profits aims to reach.   

The ideal client that Paper Profits works with is a Self-Directed IRA owner who is typically accredited. They are generally well-educated professionals such as doctors, lawyers, and salespeople trying to grow their retirement funds safely. They understand that any investment involves some degree of risk. Before they work with Paper Profits, they will typically educate themselves on assets that pique their investment interests. My book, Paper Profits, is a great topic to provide a primer on mortgage notes and it is available on our website. That is the target market that Paper Profits is best able to serve. 

Promissory note close up with the tip of a pen

Promissory notes are considered a popular investment for several key reasons: One reason Self-Directed IRA investors like promissory notes is due to their relatively steady cash flow. Another reason that promissory notes are popular is because they are very predictable. You get a measurable payment that you receive each month, and you can project however many years are left on that mortgage, as well as how much your Self-Directed IRA is likely to collect.

These factors are appealing to a lot of investors. Furthermore, once you have purchased a promissory note, a lot of the work is done by the servicer. Lastly, the promissory notes our investors buy are secured by real estate.  

  

4. How can promissory note investing possibly affect an investor’s Self-Directed IRA?  

Paper Profits believes that promissory note investing can affect an investor’s Self-Directed IRA positively. I believe investors should be diversified into different assets that they understand.  It can be a good asset for an IRA with diversified investments and then you have that predictable cash stream coming in. You can use this additional cash flow to compound your earnings, and Paper Profits offers some opportunities for investors to do this. The faster you can reinvest is the key to a positive result, and promissory notes lend themselves well to achieving this goal.

5. Please provide a brief overview of mortgage investing as it relates to Self-Directed IRAs.

The opportunity for mortgage investing for investors with Self-Directed IRAs is on the secondary market. You can buy and sell smaller mortgages with your Self-Directed IRA. It is largely passive where you provide capital to purchase a mortgage. In turn, someone else pays the mortgage (a servicer is involved in collecting those payments) and the payments get sent directly to your Self-Directed IRA.  

6. What is your favorite part of mortgage investing?  

My favorite part of mortgage investing is that you can do it from anywhere because it is so geographically diverse. With notes, you can buy them anywhere, you do not even need to see the property in person. Paper Profits does several types of valuations where we have boots on the ground to look at properties for you so that really opens mortgage investing to a wider audience.

Paper Profits has been invested almost everywhere – from Texas to New York, New Jersey, and locations in almost all 50 states. 

Landscape of a green field in aerial view with residential community nearby

7. What might investors consider if they choose to invest with Paper Profits?  

 First, I would consider what other types of assets an investor has in their account. Paper Profits is very excited about the notes. The book, Paper Profits, is made up of educational content. Investors can always speak with us about understanding the basics and being realistic about returns and risk. We are happy to talk with them and give them supplemental information on this topic. We take pride in working with investors to help them understand their investments in a transparent way. 

8. What is next for Paper Profits?  

Paper Profits is excited to continue to grow. Our focus is on our performing note fund. The performing loans are a great fit for IRA investors because they are typically passive and secure. Paper Profits is cautious with ensuring there’s protective equity. Our plan is to continue to expand upon that in the coming years and do our best to serve more investors. 

If you are considering investing in alternative assets, set up a call to speak with a Self-Directed IRA Specialist at Madison Trust Company.  

    

This content is for educational purposes only and is not an endorsement.  

   

Disclaimer: All the information contained on our website is a general discussion for informational purposes only. Madison Trust Company does not provide legal, tax or investment advice. Nothing of the foregoing, or of any other written, electronic, or oral statement or communication by Madison Trust Company or its representatives, is intended to be, or may be relayed as, legal, tax, investment advice, statements, opinions, or predictions. Before making investment decisions, please consult the appropriate legal, tax, and investment professionals for advice.    


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