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How Mortgage Notes Create Real Passive Income (Without Being a Landlord)

By January 28, 2026Real Estate Pros Show

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Show Summary

In this episode of the Real Estate Pros Podcast, host Micah Johnson interviews Nick Disney, a seasoned real estate investor specializing in mortgage notes. They discuss the importance of adapting strategies in a shifting market, the realities of passive income in real estate, and how to effectively manage mortgage notes. Nick shares insights on finding one’s place in the real estate industry and emphasizes the significance of professionalism and education in achieving success. The conversation concludes with Nick offering ways for listeners to connect with him for further guidance.

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    Investor Fuel Show Transcript:

    Nick Disney (00:00)
    And I have this conversation a lot. I’ve been doing it a long time. You know I’ve done a lot of things in this space. And a lot of people tell me, well, I want to be a landlord because I want to create passive income. Well, do you want to be a landlord? Do you want to create passive income? And and what is really going to happen? We own a lot of rental property as well. We’re not anti-rental property. It works great for what it does. But very few people ever told me like my dream is to be a landlord.

    Micah Johnson (01:59)
    Hey everyone, welcome to the Real Estate Pros podcast. I’m your host, Micah Johnson. And today I’m joined by Nick Disney, who’s been making some serious moves in the single family residential space for quite some time now. Nick, welcome in, man. Glad to have you.

    Nick Disney (02:10)
    Hey, thanks

    for having me, man. I appreciate it.

    Micah Johnson (02:13)
    Absolutely, I’m excited for our talk today. I think our listeners are really gonna take something away from how you’ve approached the shifting market, right? We live in a cycle and what I’ve learned the pros do is they adjust their strategy to make sure that you’re being effective. You’re actually investing and not just gambling, right? So excited to dive in. So if people may not know you yet, what is that main focus y’all working on right now and what markets you operating in?

    Nick Disney (02:39)
    Right, so single family real

    estate investments, San Antonio, Texas, or some of the cities surrounding there is really where we’re based out of. And the majority of our business is on the owner finance side. So we’ll purchase a property, rehab it, and we’ll sell it, but we’ll carry back the mortgage. And so we’re creating mortgage notes. We can hold on to mortgage notes, and then we’ll also sell those mortgage notes as investments to people who want the passive income. That’s the bulk of our business.

    Micah Johnson (02:54)
    Hmm.

    Interesting and what led you down that path? What was the shift or pivot that you all made to shift into that mortgage note method?

    Nick Disney (03:10)
    It was to create as much passive income, real passive income as we could in what we already knew and what we were doing. Had a bunch of rental properties and as any seasoned landlord will often tell you, the passive income isn’t as passive as it was promised. and um But with mortgage notes, when they’re set up really well, the payment comes in. You’re not doing a lot of the things that landlord would do. And so it’s really, really passive. ⁓

    Micah Johnson (03:25)
    Thank

    All right.

    Nick Disney (03:38)
    Once you have them set up right, there’s not a lot of energy for you to put into it, so that frees you up to grow and to do other things that you want to do.

    Micah Johnson (03:45)
    I think that’s powerful too. I want to dig in on that particular point. You will hear a lot in this industry how real estate gets sold as passive as it’s this thing you can just, it’s simple to do. can actually, I won’t say simple. It’s easy to do is how it’s sold. And that’s not easy at all. and it’s very few forms of it are actually passive the longer you get into it. And that’s where it’s funny. We’re talking about prerecording. You hear the wrong person say passive and you’re like, hmm.

    Nick Disney (04:12)
    Mm-hmm.

    Micah Johnson (04:12)
    Yeah,

    okay. I’m not so sure. And then you get in deep into conversation like, okay, this person does understand there’s layers to this. There is that chance, but not everything is passive.

    Nick Disney (04:24)
    And I have this conversation a lot. I’ve been doing it a long time. You know I’ve done a lot of things in this space. And a lot of people tell me, well, I want to be a landlord because I want to create passive income. Well, do you want to be a landlord? Do you want to create passive income? And and what is really going to happen? We own a lot of rental property as well. We’re not anti-rental property. It works great for what it does. But very few people ever told me like my dream is to be a landlord.

    No, you wanted what the benefits of being a landlord would be and lots of times that really boils down to how can I get monthly passive income? What we found was there’s ways to be much more passive and really create a predictable stream of cash flow outside of it. And there’s just not as many people that know how they could do it or where they could just buy a mortgage note. And that’s when our business really started to take off by helping other people figure out exactly how they could do it.

    Micah Johnson (06:07)
    Nice. So for someone that’s listening, take and they may not understand completely what you mean by mortgage note and that process. What is it that you’re actually doing so they can get a good grasp and possibly if they’re interested in it, right? Open that door.

    Nick Disney (06:13)
    Yep. Sure.

    Perfect.

    Yeah, so what we do in our business is we market for houses just like a lot of people see it, right? We have some, I say San Antonio house, we buy houses, cash for us, we’ll purchase this property, we’ll rehab it, we go to sell it, we’re collect a down payment.

    Picture it just like when you bought your house, you gave the bank a down payment and they structured a mortgage note, you make a payment to them every single month, just like everybody else does. We’re doing that same thing, it’s just those payments are coming to us. Well, people are more or less familiar with the general mortgage note market, but a lot of people have had their own mortgage for a few years and they get a letter and it says, hey, Micah, nothing changed with your mortgage, but now instead of paying us, you pay SunTrust Bank or some other bank.

    Micah Johnson (06:48)
    Mmm.

    Nick Disney (07:04)
    that mortgage note was simply sold to someone else. Nothing changes, but now you’re required to make the payment. Same thing happens in our business. We’ve created it. Now these people are paying us every month on their mortgage. And then if somebody wants to just purchase a mortgage note, all I have to do is transfer that over or sell it to say, you Micah. And now those payments, just like it went to another bank.

    Micah Johnson (07:07)
    Mm.

    Nick Disney (07:25)
    are now going to you. And it’s not much more complicated than that. People just assume because they haven’t had a lot of discussions around it that it needs to be a little bit harder. And then we’re just monitoring you know payments, right principal and interest payments that are coming in. Think about it just like when you make your mortgage payment, except instead of now.

    Micah Johnson (07:39)
    Right.

    Nick Disney (07:44)
    paying the mortgage where you look at it you’re like, man, look how much of this went to interest and not much went to principal. Think about being the person that collects that when you’re like, wow, look how much of this I collected as interest and not much went to principal. When you start to look at it that way, you can really see where if it’s a good fit for you, there can be some advantages.

    Micah Johnson (07:51)
    Bye.

    Right.

    And it is, and I’m thinking through my own journey through mortgages and it’s funny because I see why people would get confused because when you’re the one trying to get one, it’s a relatively frustrating process that you go through. It’s getting better and better, but there’s all those things. And now someone on the other side thinking, Oh my God, now I got to be doing something that they’re going through all that. And that’s where you’re really killing that idea is it’s not, you’re not the one taking out the mortgage anymore. You’re the bank now.

    Nick Disney (08:17)
    It is out.

    Micah Johnson (08:32)
    You’re just waiting for it to come to you. And I love that analogy because that’s really what you’re becoming. And you’re taking advantage of, there’s a reason why banks are in business. There’s a reason they’ve lasted so long. And it’s from Loan & Money.

    Nick Disney (08:35)
    Sit.

    It is. There’s a reason that, you know, you go down whatever city you’re in, when you go downtown, most of those big buildings have a bank name on them, you know, that banks do make money. And we’re just playing the same game on a smaller scale. And other people can. And it can really provide predictable passive income if you do it right. And

    Most people would tell you like, well, we’re not gonna do all the steps you’re gonna do and right, so just buy the mortgage. If that’s really what your goal is, if you wanna learn all of the steps in our business, sure, give me a shout, I’m happy to tell you. Most people then say, well, hey, I don’t really actually wanna do all that stuff, I’m just gonna do the backhand part and that’s fine too. You know, it’s great, still a win, you know?

    Micah Johnson (09:22)
    You

    Right.

    It is man. And I guess one thing I love about real estate is your ability to access it. There are tons of access points to this industry because you nailed it right there. Honestly, your kind of business is one of the most niche businesses in real estate. That’s been my experience with it. The amount of folks that own a professional real estate investing company that’s at any scale. It’s not that many because it’s a unique passion. Honestly, it’s a unique thing that you like to solve.

    And the more people that get exposed to that, and that’s what I’ve seen through the years, people have gotten in and done different things and realize, my God, I don’t want to be that or do that. And then end up getting out. And what I hate about it is you lost access to something because you got a poor idea of it. When, if you’ll take some time, educate yourself, talk to different people, you’ll realize, wait a second, hold on. I don’t, I don’t have to do real estate full time. I don’t need to get into it that way. Cause you can.

    Nick Disney (10:19)
    Absolutely not.

    Micah Johnson (10:22)
    There’s, if you’re a high wage W-2 earner, there’s this method. There’s other methods that you can get into where that passive actually does become a reality.

    Nick Disney (11:06)
    I mean, I’m biased towards real estate. You everybody knows that I know that but it you know, it has really changed my life But there’s there is a I believe that there is a spot in investing in real estate for everybody Maybe you want to be more active. Maybe you want to be as passive as possible or maybe something in between It’s absolutely something that you can do while you have another job. That’s how I started That’s how most people I know started you had one job and you started to build this business ⁓ the majority people

    Micah Johnson (11:10)
    You too.

    Nick Disney (11:34)
    don’t want to and don’t plan to take the business maybe as far as we have, that’s perfectly fine. That doesn’t mean you can’t be super successful. ⁓ And it doesn’t mean you can’t be super successful in real estate, diversify your investments, find another way to do it. There is probably a spot that fits for you, depending on what your goals are and what you hope to get out of it. But ⁓ I’m a big proponent in finding some way to invest in estate.

    Micah Johnson (12:01)
    Me too, me too. It’s changed my life. It’s like globally America’s real estate market is one of the most fantastic things you can participate in. you don’t have access to stuff like this everywhere. Not every country even sells land to you. mean, like owning your own place, those kinds of things. It is a powerful tool.

    Nick Disney (12:14)
    Right.

    Micah Johnson (12:22)
    And I’m big on that term access because I didn’t come from money. didn’t come from any of family that did anything like this and have just continued to use it, understand it and even pivoted. I’ve done the wholesaling part, the fix and flip part and understood, okay, I don’t necessarily like that section. How do you keep just rolling through the business to understand where do you plug in? How do you keep it in your life? Because it’s like you said, it’s life changing.

    Nick Disney (12:35)
    Thank

    Mm-hmm, it absolutely is. you know, my passion is not flipping houses either. We flipped a lot of houses. ⁓ It’s not my passion. It’s not something I love. You know, I’m more passionate about the long-term income, the predictable monthly cash flow, and how to create that best to sit for each person, right? Because it’s going to be different for everybody, maybe their makeup and their balance. ⁓ But there’s definitely a spot. ⁓

    anybody who’s sitting on the sidelines saying they want to, gotta get in the game somewhere, whatever you wanna do, ⁓ reach out to some people. I would definitely encourage you to get started.

    Micah Johnson (13:26)
    Absolutely. Educate yourself. Get past more than one or two videos. Start digging in deep. ⁓ That’s what I highly recommend. And look for people that are giving it to you straight because you’ll find them out there. That’s one thing I love about real estate too is the really good players, they tell you how to do it. It’s not like a mystery. Once you learn, you realize, okay, this is how you do it. The ones who know how do it this way. And

    Nick Disney (13:30)
    Right.

    Thank you.

    Micah Johnson (13:51)
    Typically someone showed you in some sort of way. Someone shared a little information with you and said, hey, what about this and what about that? It’s just like, wow. And I love that go giving mentality that exists in this industry.

    Nick Disney (14:03)
    It’s absolutely out there.

    Don’t be afraid to ask the question. Most people, if you got a question, they’ll just tell you the answer. Hey, go do this. And then you can go do it. Most people that are, like you said, successful and been around a long time, they do have an abundance mindset. If I help you tell you how to own or finance a house, it doesn’t hurt me. All I did was help you, and one day you’re gonna turn around and help me with something, and we’re both gonna grow together. So ⁓ definitely reach out, ask your questions, get educated, and then just pull the trigger and let’s get started.

    Micah Johnson (14:28)
    That’s it. Eventually it comes to a point where you got to take action. And I can tell everyone doing that. It always has the same kind of feeling. You’re going to feel a little nervous. You’re going to have your, your, your hair is going to feel like it’s on fire a little bit, but that’s what being alive feels like. Right. That’s, that’s what entrepreneurs fall in love with. That’s it. That’s it, man. It’s a good feeling. So going back to mortgage notes for just a second, there’s something I want to dig into.

    Nick Disney (14:38)
    That’s where we start making the change, man. That’s where we start making the change and making a difference.

    Micah Johnson (14:53)
    What responsibility does exist for someone that owns one just so they know clearly across the board, right? It’s mostly passive, but is there anything they need to pay attention to and make sure they’re on top of?

    Nick Disney (15:03)
    So there’s a couple of things that

    you’re gonna wanna pay attention to. Did they pay you, right? Now we set all of our notes up with a third party mortgage note servicer. They work specifically with owner finance notes. What they do is, Mike, you’re not gonna go around and collect all the payments, right? We have people that bought notes from all over, even other countries. You’re obviously not driving this person out to collect the payment. Well, mortgage note servicer will collect the payment.

    They’ll hold the escrows for taxes and insurance, just like when you pay your mortgage note and it holds those. So you have an online account and you want to make sure that the payment comes in. Now, good notes tend to pay just consistently and after a while you may not check every month and you’re going to get a notice if something happens. The other thing that you want to keep an eye on is because you as the lender, right you’re also going to be named as the mortgagee on the insurance. It just protects you. It is rare, but absolutely things do happen. It’s still life. Something was to happen to the property, something catastrophic.

    You just want to make sure, if you know something happens with the insurance, you get notified. So you want to keep an eye, if you get a piece of paper saying, hey, something’s going on there, you keep an eye on those two things. And we work very, very hard to set up performing notes. That is what we specialize in. Most of them are just going to pay. But we’re not perfect, and neither is anybody else. If there is a hiccup or somebody has missed

    you know, multiple payments, then we want to take action and figure out how we can remedy this. And there’s lots of things you can do that are not hard. You do them with an email and get things straightened out.

    Micah Johnson (17:15)
    Right. And that’s good to point out too. It is life. It is life. You’re dealing with people that someday, I mean, in the end, when you’re an investment real estate, when the houses you’re buying most of the time from the front end, they’re going through hard. Like something hard has happened to them and that led them to that situation. So just being sober about that, I think it’s a really good thing to point out because it’s

    It’s not if it happens, it’s when it happens. And when you know that it’s eventually going to come, then it’s not so terrifying. It’s not so scary. It’s just like, okay, this is the next step and this is the next step and you’ll get it taken care of. And once you’re through it once now, when it repeats itself, you know what’s coming.

    Nick Disney (17:55)
    People tend to make up in their head what they think and how terrible the steps are going to be. And one, lot of those things never ever happen. And then two, if they do, it’s like, well, that wasn’t that hard. Because if I’m like, hey, you’re going to have to send two emails, you’d be like, well, that’s not hard. But they made up in their head that it was going to be really difficult process. And a lot of it is just, hey, you just need to be on top of it, be professional, and you know take action when it’s appropriate.

    Micah Johnson (18:21)
    I love that man. Simple, simple. And it makes it repeatable. And that’s what I’ve learned in real estate. If you’re going to stay in a long time, it’s got to be simple and repeatable because that’s the fundamentals that keep you going, right? Not buying bad deals, not out there just giving notes to everybody, right? Like making sure that you’re doing your business right. Because that part’s not a mystery. We’ve been doing business a long time and then dealing with the issues when they arrive.

    Nick Disney (18:34)
    Nope. Nope.

    Exactly, right? Have your systems, stick to them, set them up the right way. ⁓

    You know, we have been making mortgage notes a long time. So we’ve learned a ton of stuff. And of course we’ve made mistakes. But there’s things we have in place now that are absolutely non-negotiable. If you don’t have this much of a down payment, you have this much income, like these people are thoroughly screened because we’re just getting out in front of those headaches that could possibly come. Let’s minimize it as much as we can, control what we can, and run through our system and certain things we’re just non-negotiable on. Like if you don’t fit this, hey, we’re not right for you. And that’s all right.

    Micah Johnson (19:20)
    Right.

    Right. mean, sometimes telling someone knows the most powerful thing you can do for them. Yeah, it really is, because it saves you. It saves them. Right. You know, it’s funny. You typically know up front when something’s going to go wrong later. There’s a little feeling that you get and you’re just pushing it a little bit. You’re you’re one of my favorite quotes is is we’re not deal.

    Nick Disney (19:24)
    Sometimes it’s the best decision you can make.

    You feel it?

    Micah Johnson (19:44)
    manufacturers or deal finders. And when you find yourself in that manufacturer mode, you know it, you know, you’re pushing that envelope and it’s like, yeah, yeah, not clear cut. that’s where, again, behaving like the bank, there’s a reason they’re also still in business. It’s being smart. And a lot of times folks find.

    Nick Disney (19:49)
    You’re maybe it’s okay this time. No, it’s not. It’s not. It’s not gonna be okay.

    Micah Johnson (20:06)
    Well, you gotta have heart, you gotta be compassionate. Yes, I get that, but again, being compassionate to have someone’s life not get ruined due to a poor decision now, because it’s just not a good fit, that’s the most compassionate thing you can do, right? We tell our kids, no, exactly.

    Nick Disney (20:18)
    Sometimes you have to protect them from themselves. You have to protect them from themselves.

    And it’s the best thing you can do. And they may not be super happy about it at the time, but you need to do the right thing. Yeah.

    Micah Johnson (20:29)
    And typically what I found too is the serious ones, they go make the change. If they really want it, they’ll go get the problem fixed and they’ll say, hey, thanks for pointing that out. I didn’t even know I need to get that fixed. We’ll take the time and I’ll see you on the next one. And that’s where one of my favorite billionaires, Jeff Hoffman, he talks about getting your customer to hunt you down. And I have found it super interesting throughout sales in my life, how telling someone no, not yet.

    makes them turn around and say, okay, I’m on the way then here we go. Okay, cool. Now I’m going to get this done. And it’s just like, wow, that’s fascinating.

    Nick Disney (20:58)
    not.

    Yeah, I love it.

    Micah Johnson (21:06)
    Well, Nick, I appreciate this conversation in time today, man. If someone’s interested in learning more about mortgage notes and what you got going on over there, what’s the best ways to find you?

    Nick Disney (21:16)
    So easiest way to find me is shoot me an email, [email protected] It’s a website, sellmysanantoniohouse.com. It’s all spelled out. Shoot me an email. I love to connect with people. ⁓ Even if it’s just, hey man, can we chat for a little bit? I got some questions. May want to work with you, may not want to work with you, may just want to do something. ⁓

    Micah Johnson (21:17)
    Thank you.

    Nick Disney (21:34)
    There’s almost always a way that we can find that we can benefit each other if we both come at it from the right place. So happy to do that. And then we put a lot of stuff on Instagram. So realestate_nick1 We talk a lot about our business, things we do, things we have done well, things that have come up. So if you just want to follow and learn some stuff or ask a question there, happy to connect with anybody and see what we can do to help each other.

    Micah Johnson (22:01)
    Excellent, man. Thanks for sharing. If you’re listening, make sure you check the show notes to find those links to be able to touch base with Nick. See if it’s a good fit for you. If that at that path is what lines up with you. Cause like you said, what do you want to do in this business? And then find the path that leads you there creates the life that you ultimately want. Nick again, man, I appreciate your time today. Thanks for being here. I think we need more folks out there doing business like you’re doing it the right way, making a difference and being successful for yourself and for others, man. I love rising tides, raising all ships. Powerful.

    Nick Disney (22:30)
    I love

    it, man. I appreciate you. Thank you for having me.

    Micah Johnson (22:33)
    Absolutely. For those of you tuning in, if you got value out of today’s podcast, please like this episode, share it with someone else you think could be interested in it. Don’t forget to subscribe. And we got more conversations coming up with operators just like Nick, who are out there building real businesses and changing lives. So thanks for joining us. We’ll see you on the next episode.

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