If you haven’t heard, the latest hot investment is supposedly sales of individual loan notes, something that the average Joe with a little dough might be able to afford.

For the past few years, many thought the real estate bargains were in foreclosed properties. But bargains haven’t panned out as much as some expected because many lenders and financial firms seem to hold off for top dollar on foreclosures or have been taking a long time to accept offers.

At the California-based LoanMarket.net, founder Jeff Freud said there’s a two-week backlog of for-sale loan notes waiting to be listed. Recently, a financial firm with a “household” name asked about posting 40,000 of their mortgage notes a month, he said.

Also, he's seeing a lot of loan notes originally made by firms that have gone bankrupt or went out of business during the subprime collapse, including American Home Mortgage, formerly based in Melville, and Delta Financial Corp., once headquartered in Woodbury.

This year, New York state loan notes have been selling at 56 to 65.3 percent of broker-appraised value on his site, he said.

That’s a better deal than in most states, Freud said, because the New York’s foreclosure process can take more than two years now, making loan notes here less costly investments compared to other states, where foreclosure can be wrapped up in months. In his state of California this year, LoanMarket data show, the mortgage notes have been selling for 64 percent to 74 percent of the broker appraisals.

This public market of individual loan notes is so new to many mom and pop investors that LoanMarket has been flooded with questions, its founder said. Even though theses amateur buyers make up 20 percent of his sales, he said, four out of 13 loan sales people have been reserved to educate them.

Just as many people started loan modification firms because they saw a need -- some scammed troubled borrowers -- businesses have cropped up to act as brokers and consultants, matching investors with loan notes from lenders and financial firms holding mortgages.

There are risks and uncertainties for the amateur buyer of loan notes, but Freud has some basic advice: "Assume the worse case and bid accordingly."

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