Best Real Estate Investing Advice Ever Show Podcast

JF996: How to Buy, Hold, and Sell Seller Financed NOTES

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Seller financing is your creative method to cash flow and huge returns, and our guest is able to create, purchase, and hold seller financed notes.

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Dawn Rickabaugh Real Estate Background:
– Owner of Note Queen Capital and specializes in owner-carry portfolio and been an investor for 13 years
– Buys seller-financed notes across the country and helps others get started investing in notes
– Consults in real estate transactions that involve owner financing, and buys & sells real estate
– Based in Carson City, Nevada
– Say hi to her at www.notequeen.com
– Best Ever Book: A Course in Miracles

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Buy Seller-Financed Notes

 

Joe Fairless: Best Ever listeners, welcome to the best real estate investing advice ever show. I’m Joe Fairless and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any fluff.

With us today, Dawn Rickabaugh. How are you doing, Dawn?

Dawn Rickabaugh: I’m doing great, thanks for having me!

Joe Fairless: Well, it’s our pleasure. Nice to have you on the show. Dawn is the owner of Note Queen Capital, and specializes in owner carry notes, and she has also been an investor for 13 years. She buys seller-financed notes across the country and helps others get started in notes. She is based in Carson City, Nevada. With that being said, Dawn, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?

Dawn Rickabaugh: I would love to, thanks Joe. Well, I graduated from college with a bachelor’s in nursing, and I worked in an ER, in an ICU and I raised for babies, and all during that time I would take these courses and think that I think I can be an entrepreneur some day. That day turned out to be 2004, when I put my nursing job on a dime; I still had four kids and two mortgages and three dogs, and I decided “Hey, I’m other gonna think or swim, but I’m gonna go for it.” I fell in love with the note business; I just love the financial calculator, I love being able to work that and figure out how to solve problems, and I just love how private money works; I stay away from bank financing.

Ever since I quit that job, I’ve been doing a variety of things, but what I do most is I buy owner carry paper. That means when somebody offers owner financing and they become the bank of their property, sometimes that want that payment stream, but then sometimes they need cash instead of the $800 or $1,500 that’s coming in per month; they need a lump sum of cash for something, and that’s where I come in with my investors, and we take down these investments.

Joe Fairless: How do you get a deal? Do you usually find it yourself and have the conversation with the owner?

Dawn Rickabaugh: That’s a great question. Everyone wants to know how do you find notes. A lot of people do direct mail, just like you do direct mail to find motivated real estate sellers – you can do that for paper. You can buy lists of people that have carried that paper and want to sell their property. For me, I’ve never done that; it doesn’t mean it’s a bad idea, but I end up attracting a lot of business to me because of my positioning in the marketplace. I’m talking directly with sellers, and I also have people that bring me deals, that are very good note brokers, note finders, and they find them in a variety of ways, whether it’s direct mail, Craigslist… Just other internet-based resources. So that’s the way I find them, and then investors – once you have a good deal, it’s not hard to find the money.

One person gets their friends and family involved, so the private money tends to grow organically, and so do the note leads. But the other thing that I really love is having this understanding the secondary market for private paper gives me a real advantage as a real estate investor, because I understand how to buy with owner financing and how to sell with owner financing, and how to get liquid either way, if I need to, to make the deal work. So to me, the best ever advice as a real estate investor, you need understand the secondary market for notes, because it will give you the edge that most investors just don’t even see.

Joe Fairless: I’d love for you to elaborate more on that in a second, but first, before you elaborate on that, I think what would be good is if you give us a specific example of a past deal, and tell us the story about the individual – how you came across them and why they ended up doing the deal with you in the way that you wanted it to be structured.

Dawn Rickabaugh: Okay, fantastic. I have several I can pull from this week. Here’s an example – it’s not my ordinary example, but it’s kind of fun to talk about… There’s a nice property in Laguna Niguel – a really [unintelligible [00:06:02].22]  of Orange County, California. They’ve been on the market, they need to sell, and they got an offer for their four million purchase price, but the buyer only wanted to put two million down, and he wanted another couple years to be able to pay off the balance. So that’s two million down owner carry, and that’s a very reasonable thing for the sellers to become the lenders and just say, “Hey, yeah, we’ll let him pay us monthly, $16,000/month and within two years he’ll pay us off”, except for they need to cash out because they’ve got an underlying bank loan that’s pretty sizeable that they just wanna get rid of.

So here’s the situation where the note sellers – they’ve got to sell the property for the price they wanted, in exchange for carrying terms; they could have made probably 250k-300k in interest just being willing to do that, but since they don’t wanna do that and they need to sell, they came to me and said “Can you structure this deal in a way that we can sell the note right after we create it?” So that’s what I’m doing in that situation, where they used owner carry to get sold, but they used the sale of the note to liquidate, to get a couple extra hundred grand in their pocket, plus get rid of that underlying bank loan that was making everybody nervous.

So what I get, besides a consulting fee to sort of puppeteer the whole thing, but I get to buy the note and add it to our portfolio, because I’m buying it at a discount. And because they brought me in ahead of time, we could minimize the discount that would be required, because notes can sell for 50 cents on the dollar, or 30 cents on the dollar, or 90 cents on the dollar, depending on how the whole deal is put together.

Joe Fairless: Okay, so you will have the note, and there is already two million paid down on it. It’s a four-million-dollar note, right?

Dawn Rickabaugh: Right. No, four million dollars sale price. Two million down, and a two-million-dollar owner carry note that I’m gonna be able to buy for 1.9. It was a very small discount because I was brought in in the beginning as a consultant to say “How do we cash out of this without being chopped off at the knees?”

Joe Fairless: So it’s a two-million-dollar note, and you bought it for 1.9, so there’s a $100,000 spread, and the best case scenario for you is that you get $100,000 over two years as a result of this person paying down the note.

Dawn Rickabaugh: Right, but you also have the face rate of the interest rate. So between the discount and the face rate that the borrower is paying, it works out about to 9%, and this is a very excellent collateral. The worst case scenario would be the best case scenario where you end up owning for two million dollars, plus legal fees – you end up owning this really killer property in Laguna Niguel. So that’s the best case scenario, if there’s a default. The worst case scenario is that me and my investors get to put almost two million dollars to work and make really a total of about 270k in interest over a two-year term.

Now, the thing that’s interesting about buying notes at a discount versus just I could have made a loan, but the borrower only wanted to pay 5,5%, no more. So most private lenders don’t lend at that. But they could get the owner to carry a 5,5%, but then the owner just has to discount on their side. It’s like the seller has sort of paid the points, in a way, to get liquid out of this, but what they were doing is finally being able to get out of a property that they needed to sell, and this is the best offer that’s come along so far, so it really worked for them on a multiplicity of levels… But here’s the deal – he gets two years to pay off the note, but if he pays it off early, technically on this there’s a $2,052,000, so basically there’s a $150,000 spread. So if he doesn’t ride it to maturity — let’s say he pays it off six months from now, in December, but I still get the whole balance.

So if the balance on the note from him – it still has a balance of let’s say $2,030,000 and I only paid 1,9, that honoring discount that you get when a note pays off earlier than expected, there’s a minimum yield of around 8,5%-9%, but if he pays off early, it will push us over 13% on this really excellent, safe investment. So that’s kind of the beauty of buying discounted paper, versus just making an origination, like a private money loan, or something.

Joe Fairless: That’s fascinating.

Dawn Rickabaugh: It’s about crunching the numbers to make it work. And then I can take it to a real small level too, because that’s out of the reach of most of us. I don’t buy four million dollar homes myself. [dog barking] Sorry about that… Someone let the dog in. [laughter] Okay, that was the best ever puppy in the world, so it actually works for your show. [laughter]

Joe Fairless: Beautiful, nice segue! Good save! [laughter] So on a smaller level…

Dawn Rickabaugh: Yeah, let’s just take it on a smaller level. Here in my hometown of Carson City, Nevada, somebody had a mobile home note. Let’s say they sold their mobile home for $22,000  and they took $10,000 from the buyer, so they ended up with a $12,000 note. Who’s gonna buy a note secured by a little mobile home in Carson City, where the space rent is like $425 and it’s first-lien position…? Well, this kid – he could receive those payments and it could be really well, but the problem was he needed to leave town; he needed to get liquid and just move and never look back. That was a Craigslist, actually. I had created a filter saying “anyone talking about promissory notes, drop it into my inbox.”

I got it while I was at the gym one morning, I called him, and I bought the $12,000 for like $6,000. He was thrilled. So it’s not a huge gain for me… Okay, I’ll double my money in the next four years, but little things like that stacked up really go a long way. So I solved the problem of the guy needing to cash out, and there’s not very much of a market for that. And also, I’m rehabbing and selling mobile homes on owner carry terms. So if someone doesn’t have all cash, I say “Hey, if you can put at least $5,000 down, I’ll carry for you”, so as a real estate investor I have the edge, because I know how owner financing works, and if I get tight, unliquid, I can sell off a piece of my note to get liquid again.

Joe Fairless: Was the actual Craigslist ad “anyone talking about promissory notes” – did you post that?

Dawn Rickabaugh: Yeah, I have this revolving “I buy property, I buy paper”, or anything promissory notes, owner carry – I’ve created filters, so that Craigslist dropped those in to me, and I also have an ad that just says I buy these things. But I keep revolving on Craigslist, and some of the guys that bring me deals, that hustle out there and are good at nailing things down, they find them on Craigslist or they’re just hustling out on the internet, and then others, they spend 5k a month on direct mail campaigns, and we’re able to convert those leads very effectively.

Joe Fairless: How did you get the lead in California, the Orange County one?

Dawn Rickabaugh: That’s all about positioning. I’ve spent my time building my business very slowly and organically, like the turtle approach versus the hare, where I’ve been blogging since 2008, I wrote a book back in 2009. I’m working on my second release this summer, which is gonna be a lot more fun to put out there, even than my first book, and then I did a lot of speaking. So I guess when you position yourself a certain way, then people care about you, they like you, they get to know you, and so they think of your when they have a situation. So a lot of times when a deal is falling apart… Even my neighbor, last year – she’s a realtor and she was double-ending this nice, sweet deal, $15,000 getting ready to drop in her pocket, except for the funding fell through. So she brought me in to save that deal from falling apart, and I know she bought a hot tub with that money and I haven’t been invited over yet to sit in it. [laughter]

Joe Fairless: How did you save that deal? What did you two?

Dawn Rickabaugh: We could have hit it two ways; the reason it fell apart is because the borrower — he had a big down payment, like 30%, but he couldn’t get the loan because he didn’t have the seasoning in the business, because they moved from a California business to a Nevada business, and they didn’t have two years in Nevada yet. So he couldn’t get a loan, which is absolutely ridiculous; he has a great credit risk. He could have gotten hard money, or I could have set him up with 9% or 10% money and 2-4 points [unintelligible [00:14:49].08] expenses. Then I looked at the seller and I was like “They’ve got great existing financing in place. The only problem is they’re 30k behind [unintelligible [00:14:57].08]” so that’s 5% financing. So I said, “Here’s the deal. Buyer has the money to get them all their equity and take over – not subject to, but we did a wrap, so that the people that are on the loan can’t get cut out of the deal by accident; they always have a play. Do you understand what I mean by “a wrap” versus “subject to”?

Joe Fairless: Elaborate, will you?

Dawn Rickabaugh: The borrower actually owes the seller and the seller owes the bank. So we need to make sure that the seller, if they don’t get their money from the borrower, that they have the right to foreclose and get the property back. If you take it subject to, if there’s a default and they start — well, in this case, the credit was crap anyway, because they hadn’t paid for two years, but they had equity still… But anyway, so they couldn’t step back in if they wanted to, because you need to have a way for the sellers to have a play to get back in the deal, so that’s why I use it as a wrap. Borrower owes seller, seller owes bank, and then we have a note servicing company to keep score for everybody. So when the borrower pays the seller, they know that the seller is paying the bank loan because he doesn’t wanna be paying, and then find out that it’s going into default. And the sellers actually want their credit to be rebuilt. So this was beautiful.

The buyer – he brought in a big amount of cash to give them all their equity and to bring the loan current, so then instead of paying 3 points and 10% for a private loan, he’s not leveraging the 5% bank loan that’s still on the seller’s name, and the sellers are gonna win because now somebody is rebuilding their credit. By the time that this is done, they’re gonna have 2, 3, 4 years of perfect payment history and it will rebuild their credit so that when they’re ready, they can go get another loan and start their lives over, and then by that time the guy can get a loan in his own name, because they will have sufficient seasoning of the business here in Nevada. So that’s where it was just like an epic win/win for everybody.

Joe Fairless: Yeah, what a deal… Thank you for this example. These are three examples that are just phenomenal case studies, for different reasons. I wanna ask one last follow-up question about the Orange County deal… You mentioned you put yourself out there, but specifically how did you get in contact with them? You talked about the things that you do, but did they reach out to you via a website, or what?

Dawn Rickabaugh: Yeah, they sent me an e-mail… I guess they’d heard me speak and we must have met years ago. The funny thing is this guy is actually an attorney, but when it comes to this stuff he calls me, because attorneys — it’s really great when they know that they don’t know everything… [laughs] So usually I’m educating attorneys about the secondary note thing. But he’s also a real estate investor, so he knew about this deal and he wanted me involved to help these people that he knew. This is actually the second referral that he’s brought to me, to help create a win/win solution for all the parties. And it doesn’t always involve a note to get sold, sometimes it’s a lease option, or we put a trust together… There’s not one hammer fits all, but when you understand the secondary market for notes and you can do that dance between property and paper, you just become a killer problem solver. And it’s not only fun, but it’s lucrative.

Joe Fairless: Feel free to repeat the secondary note thing, but… I have to mention it, because I’ve got this whole lead-up music too when I ask you, and it would just kill the whole show if I don’t ask you specifically… But you can repeat your answer, that’s fine. So what is your best real estate investing advice ever?

Dawn Rickabaugh: Learn the dance between property and paper. Learn how the secondary market for private paper works and you will have the edge over every other real estate investor that you perceive as competing with you and your market.

Joe Fairless: That is true. Just hearing you talk through these case studies… It’s 3.0 real estate investing, and it’s something that a lot of people don’t know about, and I’m grateful that you’re on the show talking about it, and I’m grateful that you spiced it up that go around… Instead of “understand the secondary markets”, you gave us a little “learn the dance between…”, so thanks for that too.

Dawn Rickabaugh: You’re welcome. I think people need to dance. Dance, and sing, and laugh, and have fun.

Joe Fairless: There we go. Well, are you ready for the Best Ever Lightning Round?

Dawn Rickabaugh: Oh, I have my little paper here.

Joe Fairless: Oh, okay… Well, I might have to ask you some questions that aren’t on it, just to keep you on your toes.

Dawn Rickabaugh: [laughs] Okay.

Joe Fairless: First though, a quick word from our Best Ever partners.

Break: [[00:19:43].20] to [[00:20:30].21]

Joe Fairless: Best ever music you like to dance to?

Dawn Rickabaugh: [laughs] Well, lately it’s country… Since I moved to Carson City, Nevada, I bought a truck, I bought a Harley, and I can do country dancing now. But don’t tell anyone.

Joe Fairless: [laughs] Well, I think we told a lot of people just now. Best ever book you’ve read?

Dawn Rickabaugh: Course In Miracles.

Joe Fairless: Best ever deal you’ve done?

Dawn Rickabaugh: Buying a non-performing diverse note that was in second position for $10,000 and nine months later getting $80,000 when it paid off.

Joe Fairless: Best ever way you like to give back?

Dawn Rickabaugh: Creating homes for families who are shut out of the system. They don’t have all cash, they can’t get a bank loan, but they still need stability for our communities and they need a home for the family. So that owner carry thing that I help make happen in my own backyard – that makes me feel good. And also sharing information, so people get inspired to do this in their own communities and create those financial solutions just one moment pop to another.

Joe Fairless: What’s a mistake you made on a deal?

Dawn Rickabaugh: Trusting a title company to do the right paperwork, to do it right, and then finding out they didn’t, and then I just wanna hit myself.

Joe Fairless: [laughs] What do you do now to mitigate that risk?

Dawn Rickabaugh: I read things. I take responsibility for all the documentation and paperwork, the due diligence. I kind of read stuff; just sort of reading things.

Joe Fairless: And where can the Best Ever listeners get in touch with you?

Dawn Rickabaugh: NoteQueen.com. And I also have a podcast – Owner Financing & Note Investing Podcast.

Joe Fairless: Alright. Well, we’ve got two ways then – the podcast, go check it out, as well as NoteQueen.com. Dawn, I loved the case studies; that’s one of the best ways to learn. You gave us the case study in California, the case study with the mobile home note, and the case study with your neighbor, and three solutions, all having a central theme of, as you said earlier, knowing the secondary market for notes and being able to structure it accordingly. I learned a lot on this subject in particular.

Thanks so much for being on the show. I hope you have a best ever day, and we’ll talk to you soon.

Dawn Rickabaugh: Thank you so much, Joe. It’s been a privilege. Take care.

 

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best ever real estate pro advice

JF974: Take Notes about NOTES and Debt!

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Taking notes? That’s okay if you’re not, but you should at least buy notes! You’ll hear all about it in this episode! Good debt, bad debt, whatever… Notes are extremely profitable and if purchased correctly, may be one of the most ideal passive wealth generators in investments.

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Scott Carson Real Estate Background:
– CEO of WeCloseNotes.com and the creator of the Note Buying for Dummies workshop
– Purchased over half a billion dollars in distressed debt for his portfolio and assets in over 30 states
– Note Buying Workshop focuses on the 3 F’s of Note Buying…The Find, Fund and Flip
– Speaker on distressed debt, the 2014 Note Educator of the Year, and featured in The Wall Street Journal
– Active real estate investor since 2002 and solely focused on the note industry since 2008
– Based in Austin, Texas
– Say hi to him at http://www.weclosenotes.com

 

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Real Estate Note Advice

 

Joe Fairless: Best Ever listeners, welcome to the best real estate investing advice ever show. I’m Joe Fairless and this is the world’s longest-running daily real estate podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff.

With us today, Scott Carson. How are you doing, Scott?

Scott Carson: I’m doing great, Joe. Thanks for having me.

Joe Fairless: Nice to have you on the show, my friend. A little bit about Scott – he is the CEO of WeCloseNotes.com and the creator of the Note Buying For Dummies workshop. He is a speaker on distressed debt, and the 2014 Note Educator Of The Year; he’s been featured in the Wall-Street Journal, he’s an active real estate investor, been one since 2002, and has solely been focused on the note industry since 2008… So guess what, Best Ever listeners? I think you know what we’re gonna be talking about, don’t ya?

You can say hi to him at his website, WeCloseNotes.com. With that being said, Scott, do you wanna give the Best Ever listeners a little bit more about your background and your focus?

Scott Carson: We focus directly on buying distressed debt, only non-performing and first liens on residential and commercial properties all across the country, from banks and hedge funds. We’re buying for our own portfolio, we buy for students, but we’ve been doing that since everything hit the fan in 2007-2009.

My background – I started off like a lot of real estate investors, [unintelligible [00:03:24].15] Flip This House on AMC TV, we decided we could be landlords; I thought that was a cool idea. We bought our first investment property in 2002, the second one in late 2002 as well, and then the market changed here in Austin, Texas.

Dell Computers laid a lot of people off who were ideal tenants, and the market went South for a little bit. [unintelligible [00:03:45].11] and I was a distressed borrower very quickly. I was pretty lucky enough to get rid of those deals and get hooked up with a couple real estate investors here locally, who taught investing, taught the traditional way of doing things, and I was pretty lucky there to learn real estate the right way – options, subject to deals… They also taught [unintelligible [00:04:06].10] owner financing, things like that. So for 3-4 years I got to work as basically an apprentice and sponge up so much quality information from them.

Then when the market went South again with everything in the mortgage industry, I saw the opportunity and stopped focusing on short sales and subject to deals and fix and flips here in Austin, and I started buying debt all across the country.

Joe Fairless: You’ve been focused on note buying since 2008… What are the pros and cons of note buying, compare to buying rental properties, adding those into your portfolio? Because you’ve been on both sides.

Scott Carson: Yeah, I’ve been on both sides… It’s a great question; we get that a lot. First off, there’s a lot more inventory out there. There are still 6-7 million defaulted loans out there right now. Second, we’re often getting better pricing on the distressed debt than people are buying for rental properties. And then the third thing, you don’t deal with toilets and tenants. When was the last time you called Bank of America (if you got a Bank of America mortgage) for them to come unclog your toilet, or to fix your water if it goes out? You don’t have to do that with a bank, and that’s the beautiful thing about buying debt. We’re buying at a fraction of what most people are buying properties, at 50% of value or less.

We’re working to create win/win scenarios with the borrowers, trying to keep them in their properties by modifying the loan, doing a forbearance plan, and we’ve got a lot of exit strategies, but our biggest bang for the buck is when we can modify the loans, keep them in the property, and they start paying on time for 12-18 months and then we just either keep it for cash flow at a high ROI, or sell that loan off to another investor who’s looking for cash flow.

That’s what I like about it – instead of it being mailbox money, it’s wire money. I get an invoice every month from our servicing company telling me who has paid, and if they don’t pay, they don’t stay.

Joe Fairless: Cool. I wanna talk more about the pros, but then I also want to have – as objectively as you can look at it – the pros and the cons. Obviously, there are cons compared to buying rental properties. What are the cons?

Scott Carson: The cons is you’re the bank. There’s a lot more that goes into a distressed note than buying a property that you can put a renter in. When you buy a rental property, you own the real estate, so you can put a renter in there, you deal with all the management stuff or hire a property management company… When you buy the note, you don’t own the property. Now, you control it, but if you’ve got people that won’t pay, the biggest con is gonna be basically that you’re either gonna have to foreclose, or hire an attorney to reach out to that borrower to try to get him to do something.

Like I said before, they don’t pay, they don’t stay, but in some states it can take a little while to foreclose. In Florida it can take 12+ months to foreclose; in New York/New Jersey you’re looking at 2-3 years sometimes. There are states that are fast foreclosures, states like Texas, Georgia, Arizona, Nevada – they are easier to buy notes in, because you can foreclose so quickly.

I always tell people to expect to probably have to put 3k-5k in expenses along for attorney fees, servicing costs when you’re buying a note, because you’re gonna have to take over that bank’s nightmare.

That’s really the biggest con – you don’t know exactly which way the deal is gonna go. We’ve had deals that we thought would be easy modifications that turned into extended foreclosures of 12-18+ months. We’ve had others that we were getting ready to foreclose on that turned into the borrower just signing the property over to us and walked away, and left the property in clean conditions.

It’s the biggest frustration, but some people dealing with notes try to have one business model “I’m gonna foreclose all the time.” Well, it doesn’t always work that way. That was the biggest mistake I made early on – I started buying notes, Joe… I planned to foreclose in everything, and I left a lot of money on the table and spent a lot of money, when I could have modified loans initially, had cash flow coming in, not had to put up repair costs, not had to put up foreclosure attorney costs, and start making money immediately.

Joe Fairless: Can you walk through an example of what a foreclosure process would look like, compared to a loan modification process? Just trying to get an idea of the costs and the people involved in each of those.

Scott Carson: Okay, well let’s start with a loan modification. Once you’re buying out, you’re reaching out to the borrower. Half the states will let you do that yourself if you want to, other states wand you to be a licensed mortgage broker. I always recommend that you have a licensed servicing company do this; you don’t wanna do this yourself. So you have your servicer, they’re making 4-8 phone calls to reach out to the borrower; hopefully the borrower responds. If they don’t respond, they’re also sending direct mail campaigns out – certified letters, “Hey, give us a phone call.”

We’ll hire a realtor or a door-knocking service to go out and make contact with the borrower. Our biggest goal is within the first 30 days to make right party contact with the borrower and find out what their plan is. If they’re gonna tell us to pound sand or go do something else, that’s fine, we’ll send it straight to the attorney and start the foreclosure process.

If they decide to modify, then it’s a matter of figuring out “Okay, what was [unintelligible [00:09:03].02] payment?” What’s market rent for that same type of property is what I like to look at, because that’s gonna basically be what the borrowers are looking at – “Can I move out and rent something similar?”

We use the market rent rates of the property to figure out, “Okay, your mortgage payment is $1,500, market rent rate is $1,800. You should probably just start making your payments on time. We’re not really gonna adjust that down much for you, because if you moved out, you’re gonna go pay more, so it’s better for you to work with us.”

Then we’re sending the documents for him to sign and send back in. The trial payment plans will be anywhere from 3, 6 to 12 months, depending on what the borrower and we can come to an agreement. Sometimes we’ll reduce the interest rate, sometimes we’ll make them pay 6-12 months on time before we reduce principal [unintelligible [00:09:48].00] but there’s all sorts of creativity with those modifications of trial payment plans to really get some home runs as far as ROI.

We’ve had borrowers bringing anywhere from $500 to the table or $10,000 to modify that loan.

Joe Fairless: One question about that process… Who’s doing the negotiations with them? You said “Hire a licensed servicing company to reach out to the borrower.” Are they also negotiating with them on your behalf?

Scott Carson: They are. They’re notifying us, “Hey, I spoke to John Smith today. Here’s what they would like to try to do. Does that make sense for you?” and we’re going back and forth either via phone call, conference call or e-mails.

When I buy notes, I tell the services what I’d like to do, then I give them some guidelines of what I’m looking for.

Joe Fairless: For example?

Scott Carson: For example if the borrower can’t bring at least four months of back payments to the table, we’re not gonna modify. We’re gonna offer cash for keys at that point. If they bring four months to the table, great, we’ll look to keep them in the property. But if they can’t bring that, they don’t have any skin in the game… Any time that you modify a loan or do a trial payment plan and the borrower doesn’t bring any skin into the game, they end up defaulting later on and you’re on to foreclosing.

So I’d rather just “Hey, instead of us fighting over this, let’s just make this a win/win. If you can’t really afford it based on what you’re telling me your financials are, let me just give you some cash to walk from the property and let you start over.”

Joe Fairless: Okay. That’s helpful, thank you. So you said if they decide to modify, then you figure out what the market rent is and then you either charge them that, or if their principal payment and interest and everything is lower than that, then they might as well just pay that, versus the market rent, because they’re gonna have to pay higher if they were to leave. Then what’s the process?

Scott Carson: If they decide to leave, Joe?

Joe Fairless: Yeah, if they decide to leave.

Scott Carson: Yeah, if they decide to leave, then it’s basically just getting to one of our local attorneys in that state or that city, deciding over documents — we always run title reports to make sure there’s not any other junior liens behind ours. If there is liens, then we may have to do a foreclosure, or we’ll get the bar to agree to a consent to judgment to speed up the foreclosure timeframe.

If there’s no other liens behind the property that we don’t wanna negotiate down or are glad to pay off, like weed liens or even some credit card debt, stuff like that – we’ll just pay those liens off to take the property back, depending on what we paid for the property.

It’s a pretty simple process. They show up [unintelligible [00:12:07].00] they leave the keys with our attorney, then our real estate agent goes by and changes the locks to the property, and we follow documents, now it’s an REO to us and we do whatever we want with the property at that point.

Joe Fairless: I know this is gonna be a tough question because it depends on the particular opportunity, but roughly what are the costs involved with the loan modification process? And I’m gonna ask the same question about process and cost for the foreclosure process.

Scott Carson: Right. Modification – I’ll say you’re probably gonna pay about $1,500 in servicing fees and paperwork. You have to pay an attorney to create the modification documents, to get that filed… You’re probably gonna see $1,500 roughly. If you’re gonna foreclose, you’re probably gonna see somewhere between $1,000 to foreclose in a state like Texas, all the way up to $5,000 on average in Florida, which is like 12-18 months to foreclose.

We have had situations where it took longer… I’ve had one asset take two years to foreclose in Florida. It cost me 6k in foreclosure fees, and then I also paid 10k to the borrower to expedite it and quit fighting with him. I was buying the asset at 35k, it was worth 100k, so it made sense for me to pay him 10k to walk away.

Joe Fairless: In that case… In Florida, as you mentioned, it does take longer, but how does it get strung out to two years?

Scott Carson: [laughs] That’s a good thing. One is sometimes they hire attorneys that will drag stuff out. Now, Florida was taking about 12 months or this timeframe, which is you’re just waiting on a judicial foreclosure timeframe. The attorney for the borrower filed a couple delays. My attorney showed up to court one day and didn’t have all the original documents that she needed to have to proceed, so that delayed it 90 days.

Joe Fairless: Oh, gosh…

Scott Carson: Yeah, especially they requested me to fly out there and show up as a witness. So it was a little frustrating, because I had some airfare costs and hotel fees, but it was still a win/win, because we bought the note at such a cheaper price. But you have delays that happen like this… Sometimes you’ve gotta re-file assignments. Now, we’re foreclosing a couple properties in Chicago right now… I call it Crook County, because it’s just taking forever to foreclose, the judges have given the tenants and the borrowers extra time upon extra time upon extra time, the sheriff doesn’t want to enforce the evictions of the tenants… I will never buy another note in Chicago. I’ll buy in other areas in Illinois, but never in Crook County again.

Joe Fairless: Yeah, it’s interesting how different counties and states approach this process.

Scott Carson: It is. Some are really easy, some will do everything online, show up, bam! It’s easy, done. Other times you’ve gotta show up in person and drag stuff out… But that’s what keeps it so interesting, Joe. There’s a lot of great things. I always tell people to start investing in five states, pick up five states. You’ll learn a lot about the different foreclosure laws and things like that, but you also have plenty of opportunity with deal flow, as well.

Joe Fairless: I believe you have access to distressed notes, and you mentioned earlier that you have people who invest, or your students, who go in the process… But let’s just assume your program doesn’t exist. For an investor who’s listening to this and they wanted to do distressed note investing, where do they go to find those notes, and where do they go to get the licensed servicing company?

Scott Carson: Really easy – there’s specific departments inside of banks and mortgage companies all across the country. That’s what I started off doing – calling these banks, and real estate funds and mortgage companies. If people get one thing out of this podcast with you today, they should get this – the individuals inside of the banks, they go by the names of either special asset managers, or secondary marketing managers. They also have a chief credit risk officer… It’s often sometimes the name of the department. So those three names: special assets, secondary marketing and chief credit risk officer.

You’re not going to call customer services. You can go to LinkedIn and search for special assets managers or secondary marketing, and literally, LinkedIn will show you close to 8,500-9,000 special assets managers from banks and lending institutions all across the country.

I like reaching out to those guys and gals because they are the people who handle the portfolio, they know what’s performing, what’s non-performing, they know the nightmares, loans that the bank is looking to get rid of, and that’s a great source to find assets. We do it on a regular basis here, and it’s actually helped us build a large database of bank asset managers that we reach out to on a regular basis.

Servicing companies – all you have to do is google “loan servicing companies.” You’ll find them all across the country, there’s hundreds of small companies that will service loans just in that state, or other larger companies that will service loans all across the country. They’re there to help assist you in getting your loans performing; they’ll also handle performing loans, if you set up on payment plans.

Those charges will run you from $20-$75/month/loan. If you’ve got a performing loan, the servicing company will charge you $15-$20 just to collect the payments and set up the statements. If it’s a non-performing loan, they’re gonna charge you somewhere between $75-$100/month to handle [unintelligible [00:17:11].23]

Joe Fairless: It seems really inexpensive.

Scott Carson: It is when you consider what your time is worth. [laughs] Some people – I won’t say a lot – try to do that themselves, and when the CFPB and the Dodd-Frank laws and all that stuff — you don’t wanna mess around with it. So if you’re not a licensed mortgage broker or a licensed debt collector in a state, your time is better spent finding assets or raising capital and closing deals.

Joe Fairless: What questions should you ask a loan servicing company that you reach out to about doing this for your distressed note?

Scott Carson: Good question. 1) What states are you licensed in? There are some services out there that aren’t licensed in all the states, but they’re still trying to service loans, which is a big, messy thing. 2) Do they have a list of real estate attorneys across the country that you can use? 3) Can you speak to the real estate attorneys that they recommend? Some servicing companies wanna be the go-through, where you’ve gotta deal with an account rep and they’re the middle man to give any information. I will not deal with servicing companies that want to be that filter. I wanna speak to the real estate attorneys directly. I’ll often hire my own real estate attorneys; I use attorneys I’ve been using for years, and the servicing company will just charge me $35/month to board their loan and wing in all the loss mitigations to our attorney’s offices.

Joe Fairless: Do you still look for new loan servicing companies?

Scott Carson: I actually have three different loan servicing companies right now that are managing our portfolio. I do get bombarded with new companies here and there… It depends on the situation. If I’m buying loans from a source that was with a new servicing company that I am not currently using, it depends on where it is in the foreclosure process. If it’s almost all the way through the process of being foreclosed on or less than 90 days out, I’ll just leave it with that existing servicing company.

Servicing companies are a lot like vendors – sometimes they’re good, sometimes they’re bad, like anything else. Sometimes you do start looking for other vendors, especially if your servicing company starts to lag behind, starts goofing up on sending out documents and notices and things like that.

I haven’t had to look for a new one in some time, because I’m pretty happy with the two out of three that I’m using right now. The third one, basically they’re just boarding our stuff and we handle everything with our attorneys on a direct basis.

Joe Fairless: Just to get a sense of the type of typical profits that you’ll make on a deal… Can you give us a case study of just not your best, not your worst, but a typical deal, and the amount of money you make?

Scott Carson: I’ll give you a very simple formula that we look at doing. We buy assets at — I don’t go above 50%-55% of value. 55% is when you add in taxes owed. If I’m gonna be at 55% and I’m gonna end up having to foreclose, I’m probably gonna see another 3-5% in fees, so I’m gonna be at somewhere around 60%.

If I sell it 90-95 cents on the dollar, either a foreclosure auction, or if I have to take it back and sell it, I’m gonna see somewhere around 15%-20% of fair market value profit. Now, that’s often a really good return, because a lot of times we’re doing this in six months or less, so it’s doubling up our ROI when you annualize it. That’s via the foreclose.

If I’m gonna modify, I’m always looking to see around 20%-25% yield on the payments that are coming in for 12 months. That’s what makes it worth my time, that’s what makes it worth my investor’s time, any joint venture partners that we work with, if we’re having to split payments on that stuff.

So we’re looking for a 20%-25% yield on a modified or a potential modification, all the way up to a 25%-30% yield on our money, if we have to foreclose in a 12-month timeframe.

Joe Fairless: You mentioned earlier 3-12 months of trial payments – why only 12 months? Why not 36 months, or something even longer?

Scott Carson: Usually after 12 months they’re gonna wanna change; borrowers are gonna want some change to happen. Either the market value of the property is gonna go back up, or the property value may decline. So anytime we try to do a  36-month trial payment plan, it never succeeds.

Another important thing is once you’ve gotten 12 months of payments on time, that loan is now considered a reperforming loan again, and the value of it is much better or higher now, it’s worth something more. You’ll have people that will pay 85-90 cents on the dollar for a reperforming loan with 12 months of seasoning. If it’s got 36 months of seasoning – that’s great, but after 12 months you can sell that note off at, like I said, 85%-90% of value, pretty fast. Plus, I’ve been in [unintelligible [00:21:42].01] I’ve helped plenty of people modify the loans; 12 months they’re paying on time, they’re taking care of the property, they like it now that they really kind of own that property again and the bank is working with them, especially if they brought some skin in the game; if they brought four months of payments or 5k down to reinstate that loan, then they’re much more willing to work with. They have some private ownership again and they’re taking care of the property, keeping the insurance paid on it, and dealing with some stuff.

If you start looking at three years of trial payment plan, that’s tough for people sometimes. I’m not saying people are always gonna be on time; there’s times people are gonna go late anyway, especially around Christmas or January… What we have built into our modifications is we [unintelligible [00:22:19].23] and forgive the December payment if they pay in advance for 12 months, and I tell them “Go have a Merry Christmas on us.”

Joe Fairless: I have found that with my properties also, with the apartments…

Scott Carson: Yeah, exactly.

Joe Fairless: And then in March the money all comes back, because they get a tax refund…

Scott Carson: Yeah, exactly. It’s always funny — that catch-up usually comes around the middle of February, after they gather their tax returns.

Joe Fairless: Yup, absolutely. Last question and then I’ll ask you the money question… When you have the 12 months of payments that was on a distressed, non-performing note and now it’s performing – okay, you’ve got it; where do you go to sell it?

Scott Carson: Good question! There’s a variety of different hedge funds out there that are looking for just reperforming loans; they like the yield. There are banks that will buy reperforming loans, there’s a lot of IRA investors looking for a solid, steady return inside of their IRAs… We’ve sold our performing loans anywhere from like a self-directed IRA event, like Quest IRA or NewView, all the way to even listing it on Craigslist, say “Hey, we’ve got a performing note that’s been performing for 15 months. We’re looking to sell it at 50k. It would be a 15% return on investment based on the payment stream to an investor, if you’re interested. It’s pretty easy going to local real estate investment clubs, LinkedIn in the different real estate groups, Facebook groups… We’ve sold performing loans in a variety of places.

Joe Fairless: Based on your experience in real estate, what’s your best real estate investing advice ever?

Scott Carson: Best real estate investing advice ever – I would say be focused… [laughs] A lot of real estate investors go to different workshops and seminars and they’re trying to do 3, 4, 5 things, and they can never get any traction because they never focus on one thing. We see that a lot… We see people going “Oh, I like the idea of notes. I’m a landlord” or “I’m a fix and flipper, I wanna buy notes for fix and flips.” Well, they never get around to being focused on one thing to develop those relationships, develop those habits, develop the systems to find success. It’s the whole 80/20 rule – if 80% of your income is coming from 20% of your focus, well if you were to focus all your focus on it, your income would be basically 400-500 time what it is. I think that’s the best advice I can give anybody.

Notes aren’t always for everybody. If you like the tangible side of going out and using a hammer and a nail, you’re rehabbing a property, you like apartments, you like things like that – that’s great, stick to that. If you’re having trouble with that, notes might be a great way to do it if you don’t wanna deal with the headaches and toilets and tenants or the fix and flip aspect.

Joe Fairless: I love that advice. Alright, are you ready for the Best Ever Lightning Round?

Scott Carson: I am, hit me up, Big Ben! [laughter]

Joe Fairless: Alright, let’s do it! First though, a quick word from our Best Ever partners.

Break: [[00:25:03].20] to [[00:25:44].25]

Joe Fairless: Alright, here we go – what’s the best ever book you’ve read?

Scott Carson: Very easy, Outwitting The Devil.

Joe Fairless: Really?

Scott Carson: Yes! Outwitting The Devil, by Napoleon Hill and Sharon Lechter. It is an amazing book. We give dozens and dozens of this book away to our friends and family [unintelligible [00:25:59].04] It goes in line with what I’ve talked about earlier, my best advice about being focused. The book talks about – if you’ve never read it before – how Napoleon is having a conversation with the devil, and why is he so successful at having people fail. The devil says, “Well, I’m successful because I get people to drift. They get the shiny object syndrome, they’re never focused… They’re never able to achieve that type of success if they aren’t focused.” That’s hands down my favorite book of all time, Outwitting The Devil.

Joe Fairless: Alright. I’ve read that, and there have been multiple people on the show who have mentioned that book. I just couldn’t get into it, but maybe I need to relook at it, because clearly some smart people are enjoying it.

What’s the best ever deal you’ve done?

Scott Carson: Best ever deal we’ve done… Man, I’ll say probably the biggest deal we’ve done individually – we bought a portfolio of 200+ assets that were worth about 12 million that we picked up for just over a million bucks. It’s been great, we’ve been modifying those loans, we had some that we foreclosed on, but it’s been a really growing period, going from buying one-off loans to small pools… That’s been one of our largest pools so far of assets that we’ve bought.

Joe Fairless: What’s the number one risk for an investor? Say you found another 12 million dollar portfolio, you bought it for a million and you brought in one investor with a million dollars. When she asks you “What’s the number one risk?”, what do you tell her?

Scott Carson: The number one risk is not knowing our property values or checking taxes. There’s three things with notes that you’ve always gotta double check. You’ve gotta make sure your property values are accurate – and that doesn’t mean going by Zillow photos; that means literally having somebody drive by the property.

We made a mistake early on in our business where we trusted a realtor to drive by. She took great photos of three sides of the property, but she missed the big, gaping hole on the other side… [unintelligible [00:27:50].18] So using realtors, making sure that we tell them, “Hey, please look at all sides.” We wanna make sure it’s a Blazing Saddles house. That’s the biggest thing, knowing your values.

Second thing is double-checking taxes. You’ve always gotta double-check the taxes owed, and you wanna make sure that the borrowers’ name on the note matches up with who’s on the county records. If it’s a different name, that property was probably gonna [unintelligible [00:28:11].24] and your note is now worthless.

And third thing is checking title. That’s pulling a title report, or as we call it, an O&E report – Ownership and Encumbrance Report is kind of a watered down title report that just shows us what the condition of the lien history is and if there’s anything else on title that might be blocking our ability to foreclose. Those three things are the biggest things.

Having your vendors in place is also critical. If you buy a lot of notes, you wanna make sure you have your systems down, because you don’t wanna sit around for 6-12 months figuring things out while your fruit is [unintelligible [00:28:42].13]

Joe Fairless: The 12 million dollars worth of property, you said over 200 assets, so I assume over 200 homes…?

Scott Carson: Yeah.

Joe Fairless: How long did you have from when you were notified that there was a potential to buy to when you actually wired the money?

Scott Carson: We had 60 days. 60 days to do the due diligence, and then we also wrote into the contract a six-month buyback period. We had six months to finish up our due diligence. This was an end-of-year closing, so we had to fund by December 27th… And we had six months to review the assets. If they were trashed out, [unintelligible [00:29:19].17] We also got a credit for the taxes owed over that six-month period if we had to send them back. That was a really nice [unintelligible [00:29:26].29] this property is trashed out or just an empty lot now, we swapped it out with new assets.

Joe Fairless: And you said you’re still in the process of turning that thing around, so you don’t know what your returns are as of yet?

Scott Carson: Our returns have been very, very positive. The investor got their money back in the first six months after our six-month timeframe. So within 12 months we got their  money back, and we’re splitting profits on this stuff. I still own some of the assets still to this day, and they’re performing; we’ve got some that have been performing for a while that we’ve sold off, others that we have taken down and foreclosed and kept them as rentals or turned them in REO sales. So it’s been a very phenomenal return.

The assets I still own are worth – on my side – four million, and I don’t have a penny into the game. It was all with private money when we funded the deal, so I got basically four million dollars worth of assets for nothing.

Joe Fairless: What’s the best ever way you like to give back?

Scott Carson: Best way I like to give back – we have a big, big passion for two sets of individuals: we work a lot with young kids, we always like to donate to Toys For Tots at the end of the year, along with different children’s charities. We do a lot with a [unintelligible [00:30:31].29] in San Diego where they go out and perform surgeries for children with face deformities, and we also have a big passion for helping past and present military and first responders. We love working with those guys, whether it’s Wounded Warriors or other charities that help out with our past and present military.

We provide education classes for free to those guys, and just really love helping those out because they’ve done a big job in helping us have the freedoms that we have today.

Joe Fairless: What is a mistake you’ve made on a deal, that you would do differently if presented the same opportunity?

Scott Carson: I think probably a couple of those would be with our Chicago deals. We bought stuff and we foreclosed on stuff in Chicago before, around Chicago, Illinois… I would probably have talked to my attorneys a little bit more [unintelligible [00:31:18].02] and what they expected the timeframes to be, and double that timeframe. If they said six months, plan on a year; if they said a year, plan on two years.

We’re still gonna come out making our money back and giving our investors a good return on their money, but some of the things that have happened up there have been outside of our control and outside of our trainees’ control. It’s just kind of ridiculous.

Joe Fairless: Where can the Best Ever listeners get in touch with you?

Scott Carson: The Best Ever listeners can get a hold of me at WeCloseNotes.com.

Joe Fairless: Well, I loved our conversation. I am always educated whenever I talk note buying with someone, and you certainly educated me a lot, from questions we ask loan servicing companies to the three primary things we look for during due diligence, which is the property values, the taxes and the title, as well as the cost implications and timing implications for loan modification versus a foreclosure, and then even sprinkling in some of the states that are more and less friendly to the process.

Thanks so much for being on the show. I hope you have a best ever day, and we’ll talk to you soon.

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JF936: How to Raise MILLION$ to Buy Notes #SkillSetSunday

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Raising money to buy debt, that’s correct… Sounds strange but it pays off! Our guest has been a previous guest on the show and he is a successful investor with many hats, and today he is sharing with us how it’s possible to raise millions of dollars to purchase notes. You don’t want to miss this!

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Dave Van Horn Real Estate Background:

– President of PPR Note Co., managing several funds that buy, sell, and hold residential mortgages nationwide
– Over 30 years of residential and commercial real estate experience
– Also is a Blogger, national speaker, and founder of Strategic Investor Alliance (SIA)
– Began as a contractor and has done everything from fix and flips to Raising Private Money
– Based in Philadelphia, Pennsylvania
– Say hi to him at http://www.pprnoteco.com

 

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Chris Clothier and Joe Fairless

Joe Fairless: Best ever listeners, welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We don’t talk about any fluffy stuff, we only talk about the best advice ever. I hope you’re having a Best Ever weekend.

Because it is Sunday, we’re doing a special segment called Skill Set Sunday. By the end of our conversation you’re gonna come away with a skill that maybe you didn’t have before, or perhaps you’ll hone your skill. The skill that we’re gonna be talking about today – I love this topic – raising capital.

We’ve got our Best Ever guest, Dave Van Horn, who is going to raise at least 50 million dollars this year, and has already raised 50 million dollars. Dave, how are you doing?

Dave Van Horn: Hey, thanks for inviting me to the Best Ever podcast, Joe.

Joe Fairless: My pleasure. Well, if you recognize Dave’s name, you are a very loyal Best Ever listener, because Dave was on episode number 39, way back 12th October, 2012. You were one of the first episodes that I did when I started doing this thing daily. I started being a psycho about it, and I was like, “You know what? I’m gonna do  the podcast daily and see how it shakes out.”

In episode 39 he talks about his best advice ever and more of his background. We’re not gonna talk about that in detail, we’re gonna talk about raising money and what he raises money for. He’s based in Philadelphia, Pennsylvania. You can say hi to him at his website, it’s in the show notes page.

Dave, do you wanna give the Best Ever listeners a little bit about your background, just to get some context?

Dave Van Horn: Sure, Joe. The last podcast was more about my real estate background. I started in construction, became a realtor when I was 26, then became an investor, and then did fix and flips and buy and hold. Then I became a lender, and then got into notes. My primary role in the notes space is as a fundraiser. Then I did a bunch of stuff in-between: I sold insurance, I did property management, I traded options, and then I had a wife and two kids, too… But all those things played a role into what I can do today.

My actual fundraising started over time through the real estate side. I started out with the typical real estate investor, where they’re raising money for one deal, or eventually drift into private money or hard money, and then it just morphed and morphed and morphed, and I eventually got into raising commercial real estate capital. I did that, and then off into the notes space. So it kind of evolved.

Joe Fairless: Right now, in your role, you are raising money for what?

Dave Van Horn: Primarily – I wear a few hats, but primarily I’m heavily into the notes space, which is one of the four family residential mortgages nationwide, and we buy from the big players and the banks. We buy large quantities of distressed mortgages mostly, and we don’t deal in commercial and we don’t deal in unsecured or student loan debt, or that type. So we’re in the debt space, basically.

Joe Fairless: Let’s add some context to that for perhaps some Best Ever listeners who aren’t familiar with note buying. I’ve never done note buying, so I don’t have direct experience in it. When you raise a million bucks and you buy a million dollars worth of residential mortgages, it’s different from, say, when I raise a million dollars and I buy an apartment community, because I’m raising a million and I’m putting a loan on it, whereas you’re raising a million and you’re buying the loan, is that correct?

Dave Van Horn: Yes, you’re right. We can’t really leverage like you could. When I raised capital for commercial real estate in the very beginning, I was doing it with mobile home parks, for example. We bought 32 million dollars worth of mobile home parks and we raised 8 million dollars for down payments, closing costs and fix-up. So you can see, you’re able to leverage to financing – whether it’s owner financing or bank financing; in the resident note space, you’re putting it up cash, but you’re buying it at a big discount.

Some loans can be releveraged; first mortgages are easier to releverage for the bank, but it is much more difficult buying distressed assets and saying, “I want a loan on that”, because think about it – they wouldn’t get their mind around “How can you collect on what they can’t?”

Joe Fairless: So you’ve raised money for mobile home parks, and you’re primarily raising money for notes. Who are your business partners who are bringing the equity? I’m not looking for names, I’m just looking for — yeah, I want their social security number, they bank account number… No, I’m looking for how you know them, that’s the root of the question.

Dave Van Horn: It’s funny that you say that, because my fundraising started in the real estate side, and in the very beginning I actually started a group called REING (Real Estate Investor Networking Group), and actually it still runs today. There’s a branch in Chicago and one in Philadelphia. When we first started, it was 12 people at lunch, and over a six-year period, we ended up in five states and six cities, from Baltimore to New York. Obviously, it grew, and we have about 8,000 people in our database. That was before the crash, in around 2008.

We had this real estate group, and one of my roles in the group — we did networking, we had dinner, people would bring their deals to the meetings that we did monthly, and I used to interview the speakers. What would happen over time was people would come to me saying, “Can we present to your group?” and a lot of times I’d get an opportunity to raise capital for them. I had a large network, so they would say, “Hey, would you help us raise money for mobile home parks [unintelligible [00:07:59].15] and commercial offers, condos, and things like that. That’s how it started.

Then one of our speakers happened to be a gentleman out of New York who was raising capital for pools of distressed mortgages. Of course, he came down and spoke, and everybody thought it was a great idea, and of course I didn’t do anything for like three years… But I had a partner who did, and then around the time of the market changing, we were like — my one partner today was a former lender and I was a real estate guy, and we were like “Hey, which side of the fence do we wanna be on in this downturn?” We reached out to the guy in New York and he showed us the collection side of the mortgage space; he knew we can raise capital, because we were doing it for commercial real estate.

So it’s definitely a little bit harder to raise money, especially… We started out in second mortgages, so I’ll give you an idea, Joe… You know what it’s like with an apartment space, for example – it’s much different to raise money for apartments or mobile home parks than it is to raise it for delinquent upside down second mortgages with no equity in bankruptcy. [laughter] If you can raise money for that, you can raise money for anything.

But I was fortunate and really blessed that I was able to learn from this one company who was in New Jersey and they were raising money for mobile home parks in Michigan and Indiana, and they did have one place in Pennsylvania. The beauty of that was by raising capital for them, I was able to learn how to raise capital and get paid to do it. That part was really cool.

It was a situation where the deal was good, but their partnership turned bad. But I learned a lot… The new venture appeared in the REING group with the note space. It was like a blessing in disguise. I think the reason I have the success I have today was through some of the hiccups along the way earlier on.

Joe Fairless: I wanna focus on the delinquent upside down mortgage in bankruptcy raising money part, but I do have a question just to close the loop on the mobile home stuff. How were you compensated? How did you know what to charge them for helping gather everyone to raise the money for their deals?

Dave Van Horn: Most of the time it’s through points or a salary plus bonus, that was typically how we were set up. We have different entities. The one deal was like four mobile home parks, and then some of the other mobile home parks were individual parks, but they were all over a hundred units. Then one storage center sat by itself, and the other storage center was part of a park.

There’s a lot of owner financing in that space. That’s a fundamental difference I see today between mobile home parks and apartments – the apartments are easier to get financing on. It’s kind of the same way in the note space… I said seconds are hard to leverage, but first mortgages are easier to leverage; well, it’s the same way if you compare mobile home parks with apartments – apartments are much easier to leverage (the banks can get their mind around that), whereas mobile home parks, it’s a little riskier, it’s a motor vehicle title, it has all this nuance to it, so it’s a little different animal.

Joe Fairless: Just to give a Best Ever listener an idea of what they could make… An example where you raise money for a mobile home park and you’re part of the LLC and you get a salary plus bonus or points – how much is that? How do you know to say “Yes, I’m worth this much because I’m gonna help you raise a million bucks”, or whatever you did?

Dave Van Horn: Well, I was pretty naive back then. We were typically paid points, or… What we were really doing was a lot of times the minimum investment was pretty high – a quarter million dollars was the minimum investment in some of these vehicles… So we didn’t always have a quarter of a million dollars, so we would start our own entity and maybe create 11 shares at 25,000/piece, but the 11th share is my share, and I didn’t really put any capital up. That was one way.

Then sometimes we were bonused from the company for raising money from them, so it was a combination of things. Sometimes we were paid for our marketing expense, and then on the other side we were paid through a piece of the action by putting the deal together, so to speak. So you can get paid both ways… We were fundraisers and investors as well, me and some of the other people raising capital for the group.

Joe Fairless: Now, I love how you said earlier “If you can raise money for delinquent upside down mortgages in bankruptcy, you can raise money for anything”, and I agree. Tell us what insights have you acquired that help you raise money for the perception of what I just said?

Dave Van Horn: [laughs] It’s kind of like “what’s the best advice on that”, right? It’s kind of like honing in on what you’re best at, and that took me a while to figure out in my life. At the time, I did all these crazy things… You’re like “This guy’s unbelievable, how can he do all these things?”, but it was really like a search to figure out what you were good at. What it turned out was that I was really good at this capital side of things… It’s not so much what I do, but how I do it, and it’s about focusing on my strengths, not my weaknesses. I’m not very good at guitar or speaking French, and I could study my brains out and I’ll probably be mediocre at best…

So it’s focusing on what I’m good at, and it’s really about the way I do it – I think it’s by helping people. In the beginning I almost went down the path of the typical guru at first, and gladly switched gears, because what I realized was it’s really about me sharing and helping other people build and preserve their wealth, that type of thing, whether it’s through education and things like that, or low-cost information, books…

It’s really that “give value first” type of thing. I think if you focus on what you do best… And the typical business of raising money is really “Me, me, me, me, me! Hurray for me! I wanna make a lot of money”, or something like that, whereas if you notice, the people that really are good at raising capital have a bigger purpose a lot of times in themselves.

Even when we were doing the mobile home park thing, they were actually building a Christian academy and they were funding it from the proceeds of the parks. So they had a purpose that was bigger than them. You’ll see that today with some businesses, startups where they’ll be digging wells in third world countries. Actually, my assistant’s doing that – she’s going to Nepal this summer. It’s part of the business model, and the charity is built into it. That’s always a cool thing, if you can do that right at the outset.

I think sometimes there’s some good ways to do things to raise money, because it’s much easier to raise money for charity, for example, than to raise money for Dave or Joe. But it’s really about giving value first and helping others, and I think with all the different experience I’ve had, it’s easy for me to do that. It’s really through this content creation and experience that I share with others, and I think people get to know you and it builds trust and confidence. People start to become more comfortable, they become more confident.

Joe Fairless: Okay. I’m taking notes, and I’m hearing that, and I also want to dig in a little bit deeper, because I would love to know… People are investing in delinquent upside down mortgages that are in bankruptcy… So I hear you that you’re adding value first, you’re creating content, you’re educating people, you’re building the relationship; the bigger purpose – I understand how that can be positioned and hold true, where you’re helping people work out their mortgage so they stay in. You don’t wanna repossess it, so you’re doing what you can there – so you do have an altruistic angle that you can talk about. That being said, delinquent upside down mortgages in bankruptcy – how do you position those conversations specifically when you’re talking to people?

Dave Van Horn: Well, obviously you have to do a little bit of education, because people are only gonna invest in what they know. In the beginning, we would relate notes to real estate, and most [unintelligible [00:16:07].03] an investor, and we have three types of investors. We have an investor who would invest in a note, and then we have people that invest in a fund, and then we have people that need more information, and you provide free or low-cost information. It’s really to get them to understand the investment.

In the beginning it’s kind of simple because everybody’s in the note business already, they just don’t know it. You have a credit card, you have a student loan, you have auto debt, you have medical debt, you have mortgages… The country is just loaded to the gills with debt, but people don’t think about receiving a check, they just think about writing checks every month. I’m talking in general… I’m sure the Best Ever listeners are a lot more savvy, you get the idea.

Joe Fairless: I get it, yeah.

Dave Van Horn: So it’s really about “How do I come across the aisle and start to think like the bank, or becoming the bank?”, and what are the advantages of that. And one of the things that intrigued me from the investment side was if I could buy something at a discount with a high yield that’s backed by a piece of real estate, “Hey, that’s pretty intriguing.” And by the way, it fits one of Maslow’s hierarchy of needs, because everybody needs a place to live, right? So there’s more to it than just equity, for example.

There’s things like emotional equity, for example. With a junior lien, why would somebody stay if their house was upside down, and the reason is because they need a place to live. It doesn’t have to make sense, other than what do they pay monthly and what would it cost me to move from here. Or there’s emotional equity – “I raise my kids there, I finish the basement, I know the neighbors, what will my family think, it would cost me more to move into another place with first month/last month security, pay for a mover… Or do I just figure something out on my junior lien and stay here?” So there’s all that going on.

I always describe emotional equity as “Joe Fairless at his mid-life crisis, buying a red convertible. He drives it off the lot, it drops ten or twenty grand in value, but he looks cool… The girls like it, so he buys it.” Now, does it make sense financially? Hell no! [laughs] That’s emotional equity, right? When you apply that to a house, it’s even more powerful.

Joe Fairless: The number one thing – for a lack of a better word, because I can’t think of a better, bigger word than that – that investors want to make sure of in their investment is they don’t wanna lose money. Studies after studies prove that out, that if you ask someone or do an experiment with someone and you either take 50 cents from them or give them 50 cents, they’re much more pissed off if you take it, than they are happy if you give them 50 cents. And if you give them 75 cents but take 50 cents, they’re still pissed off about the 50 cents. How do you address that with your business model? Because that has to be a question that comes up continuously, or at least the thought process of “I don’t know if I wanna invest in upside down mortgages that are in bankruptcy…”

Dave Van Horn: Well, first of all they’re not all upside down, and they don’t always stay upside down. There are assets that are covered with equity, like first mortgages, and then there’s assets that are partial equity, and then obviously there are some assets that are no equity, but they’re priced accordingly and they have different yields. And then there’s different ways to spread the risk.

One of things you mention is how do you sell an asset that’s partial equity or upside down, and what we found was we listened to the buyers and they were concerned, too. Part of it is track record, and part of it – we actually have a warranty on our performing notes. The warranty puts some people at ease. Now, the warranty is only as good as the company, because if the company goes out of business, then the warranty would be very valid, right?

The other side is some people will go “You know what? I have a portfolio of 20 notes, and 15 or 18 of them all have equity (I feel good about that), but here’s a note with partial equity. It’s a lot cheaper, it has a lot higher yield – maybe I’ll take a flier and invest that. Or I’ll invest 10% of my portfolio in this crazier asset class with more yield.”

Then other things happen too, like for example phantom appreciation. If you had a note that was partially covered by equity, and the market comes back. Maybe it’s a note in Phoenix, or Florida, or whatever, and the real estate market comes back, and now all of a sudden that note I got a great price on, the equity comes back and the property behind that note, and all of a sudden the note’s worth more, and I didn’t really do anything, the market did that. And I was collecting payments all along, and I could sell my note for the same or more than what I bought it, and I might have been collecting on it for three or four years. That’s a neat phenomenon, too.

Joe Fairless: If I buy a note that is upside down, what’s the warranty cover me for?

Dave Van Horn: Our warranty was investment principle minus payments received, and still is, when you buy a performing note. It could be first or second mortgage.

Joe Fairless: When you buy a performing note…

Dave Van Horn: Yes. Now, if you buy a non-performing note, we only warranty the lien position and that it’s a valid lien, and it’s in the lien position as advertised.

Joe Fairless: Okay, got it. So if you buy a non-performing, then it’s…

Dave Van Horn: You’re a more savvy person, usually you should know what you’re doing. It’s a little more dangerous game.

Joe Fairless: Okay, that makes sense. What else, if anything, should we talk about as it relates to raising capital?

Dave Van Horn: I guess it’s really about focusing on your strengths, getting to know your true self, what you’re good at – for me it was raising capital. I think a lot of it is how you do it. When I think about my best ever deal – on the raising capital side it has been where people have invested a couple million dollars or something, and I haven’t really met them yet. That’s just a testament to the systems and processes you have in place as far as your web presence, your profiles, your content creation that you do, the stories that you tell, the experience that you show… Because you know how it might take several touches for someone to feel comfortable, to move forward with an investment; it makes sense, right? But if you can become more efficient at that, maybe…

It’s sort of like a podcast is – a podcast is more efficient than me flying on a plane to a hotel in Ohio, so I can reach more people, potentially. So it’s kind of like that… It’s “What can I do more efficiently to provide information, comfort, advice, everything from paperwork — it’s really the systems and the process of facilitating investors, giving them the information they need in a more efficient way, maybe that’s what I’m saying.

It’s really not a salesy type thing, it’s finding ways for them to get to know you better, sooner. It’s kind of interesting when some people invest with us…

Now, the other thing is we do provide outlets to connect with them, though. We do make ourselves available, whether that’s Q&A conference calls, or actually have events for our ideal customers, so to speak. I run a group called Strategic Investor Alliance, and that group is really a venue for high net worth investors to meet with me and people that I know, and also to look at other investment vehicles and other experts. It’s like a group that I put together — it’s different than what I used to do with that real estate group years ago. I used to facilitate and network with all these real estate investors.

Today, it’s a little higher level group, but very similar in the concept of we just share resources, and we vet investments, and I bring in other investment vehicles, other funds. Some people look at me kind of strange and they go “Well, why would you do that? Why would you bring other investment vehicles? Aren’t you raising money?” and the answer is “Yeah, but my investors – and myself; I’m an investor – like to look at a lot of investment, and I like to vet them”, and we all have different strategies. Our group acts like a Yelp for various funds, investments and other types of alternative investments that we all like.

Then we bring in experts, too: lawyers, accountants, asset protection, legacy planning and all that stuff. We do all these things that we have in common, and I think that by sharing that type of value, that shared values approach – I don’t know if I raise more money from that, but I think people see the value in it. We don’t sell anything at this group, for example; it’s just information and shared resources.

I think a lot of investors like that because they can validate their investment strategy, they can help to build a solid portfolio of investments, and they can see what other investors like them are doing. I think it’s a unique way to do it.

Joe Fairless: Dave, where can the best ever listeners learn more about you and get in touch with you?

Dave Van Horn: Probably the best way is through my site at pprnoteco.com. Anybody can reach out to me direct at biggerpockets.com/users/davevanhorn.

Joe Fairless: Dave, thank you for being on the show, talking to us about the lessons that you apply to raising money in a perceived difficult area of raising money (that’s for sure)… How you help people first, through education, content creation… I love this money quote: “Find ways to get them to get to know you better, sooner.” I think that’s really the epitome of — well, adding value… I think there should probably be an added value part in there too, in that quote. What you’ve talked about before, that’s great stuff.

Also, identifying your core audience – as you said, you have three: an investor who will invest in a note, an investor who will invest in a fund, or an investor who needs more information, and seeing where they are in the marketing funnel, and then giving them what they’re looking for.

Lots of great stuff… If you’re raising money for delinquent upside down mortgages in bankruptcy, then you can raise money for anything, and that’s why I’m grateful that we had our conversation, to share that with other Best Ever listeners who are raising money as well.

Thanks so much for being on the show. I hope you have a best ever day, and we’ll talk to you soon.

Dave Van Horn: Thanks, Joe. Take care!

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Best Ever Show Real Estate Advice from experts

JF823: How to Delegate Everything and Become a Nomad While Running Your Business #SituationSaturday

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Have you ever wanted to live outside the country while still running your business? Seems impossible doesn’t it? It’s not, it’s a matter of selecting the right team to hire, setting an expectation, and preparing yourself in the business accordingly. Hear how our guest had closed her biggest deal while living in Thailand.

Best Ever Tweet:

Micki McNie Real Estate Background:

– Owner, Broker, Investor at 33 Zen Lane, a Denver real estate team that focuses on “investment-minded” clients
– A commercial leasing broker and a residential broker
– Owns rental properties, hold notes, and flip houses
– Based in Denver, Colorado
– Say hi to her at www.33zenlane.com

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JF790: Why You Would Buy an $86 MM Note Portfolio and the 5-3-2 Method

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Buying notes can be scary if you don’t know what you’re looking for, especially when you know you are buying a package with some mobile homes in it without land. You’re about to hear from our guest who purchased an $86 million note portfolio for pennies on the dollar and made a great return, you also hear about his 5-3-2 method of selling.

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Troy Fullwood Real Estate Background:

– Owner of Pinnacle Investments, A note buying company for over 20 years
– Author of 25 articles on real estate investing, covering issues on note buying
– Has been involved in over 13,000 secondary mortgage transactions
– Real estate investor in 1996
– Based in Chandler, Arizona
– Say hi to him at www.pinnacle-investments.com
– Best Ever Book: The Alchemist by Paulo Coelho

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JF768: What You CAN and CAN’T Do with Self Directed IRA’s #skillsetSunday

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You’ve wondered what you could and couldn’t do, now you will know! Cure all your doubts about this this peculiar little entity and hear why you should have one. You can’t miss this one!

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Kaaren Hall Real Estate Background:

– President, uDirect IRA Services, LLC
– Helped thousands of Americans invest their IRA into real estate, land, private notes & more
– Educating individual investors and professionals is the cornerstone of uDirect IRA
– Based in Orange County, California
– Say hi to her at www.udirectira.com

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JF572: How to Read a Tape of Notes to Buy #skillsetsunday

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Ever wondered how investors purchased NPN’s (non performing notes)? Our Best Ever guests pull thousands of properties from banks and creditors in the form of an excel spreadsheet. They look at key indicators such as Senior Lien Balance, AVM, and Unpaid Principle Balance. This is a comprehensive show, and you will learn how to determine a note purchase!

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Cathie Jeffs & Cathy Cray real estate background:

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Are you committed to transforming your life through Real Estate this year? If so, then go to http://www.CoachWithTrevor.Com and claim your FREE Coaching Session.  Trevor is my personal real estate coach and I’ve been working with him for years. Spots are limited, so be sure to do it now before all the spots are gone.

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JF492: Take NOTES…Then Sell Them!

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You may be tired of tenants and toilets…but never paper. That’s right, paper that makes you cash. Our Best Ever guest is a note buyer with extensive experience is all things real estate. Hear how he is able to acquire steep discounts with high equity!

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Bob Malecki Real Estate Background:

  • Real estate investor located in Kingston, Washington which is 30 miles north of Seattle
  • Experienced in the analysis, acquisition, repositioning, and disposition of distressed properties
  • Established power teams in key markets to facilitate the repositioning of those properties
  • Say hi to him at rcm.company
  • His Best Ever book is Three Simple Steps by Trevor Blake

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JF426: How Investing in Multiple Markets is Possible!

Our Best Ever guest has seen over $100,000 on some flips, but has kept a laser focus on note investing. He started as a landscape contractor and evolved into an investor in several different markets including Ohio, Indiana, Maine, and now currently resides and invests in Phoenix. He has a seasoned background so be sure to absorb some wisdom!

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Dave Franecki’s real estate background:

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Made Possible Because of Our Best Ever Sponsors:

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JF406: Noteworthy Tips from Two Millionaire Note Buyers

Tired of tenants and toilets? Well what if you were to earn the same cash flow every month and not lift a finger? Buy notes! That doesn’t mean it’s an effortless investment…no way! You may find yourself with non-performing or distressed notes that include higher risk, if you have a fraction of the experience and know-how of our Best Ever guests you can mitigate most of these risks…hint, invest in higher equity NPN’s!

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Cathie Jeffs & Cathy Cray’s real estate background:

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Made Possible Because of Our Best Ever Sponsors:

You find the deals. We’ll fund them. Yes, it’s that simple. Fund That Flip is an online lender that provides fast and affordable capital to real estate investors. We make funding your projects easy so you can focus on what you do best…rehabilitating homes. Learn more at http://www.fundthatflip.com/bestever.

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JF380: How to Raise Capital, Buy Cheap Notes, and Fund Start-Ups

Today’s Best Ever guest set out to raise money to fund…well, just about everything! From business start-ups to breakthrough inventions, he has been the key to business execution. Our Best Ever guest is a big player in the note buying game; he’s able to acquire a note package for UNDER half price…he’s also going to share 12 ways to profit from note deals…you MUST see his article here: http://ezinearticles.com/?12-Ways-To-Profit-From-Non-Performing-Real-Estate-Notes&id=9153373

 

 

 

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Christopher Winkler’s real estate background:

 

  • Manager of Silverwood Capital, LLC, a real estate investment firm specializing  in discounted residential distressed and toxic assets

  • He has over 30 years in raising venture capital, sales, marketing debt mediation and collection practices

  • He has helped raise over $20 million in private equity for early stage companies

  • Based in Costa Mesa, California

  • Say hi to him at http://www.silverwoodllc.com 

      

 

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JF373: How She Bought a Condo UNEMPLOYED!

Cash flow is KING! Our Best Ever guest is creative, which is why she was able to make the cash FLOW from start to finish in a hot market! She shares her Mid-West flips, locally owned acquisitions, and her most exciting project that will transform an old retail building into a unique space you wouldn’t have expected…tune in!

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Micki McNie’s real estate background:

             

  • Real estate investor who focuses on buy and holds, rehabs, and note buying
  • Started career as a tenant rep for commercial leases then moved to help clients buy and sell residential properties
  • Based out of Denver, Colorado
  • 33 Zen Lane
  • Say hi to her at www.33zenlane.com

     

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JF352: Why to Buy a Non-Performing Note Instead of Buying the Property

Today’s best ever guest is the note expert. He has had tremendous success buying non-performing notes, and explains to us exactly what it is he does and why YOU should buy a note instead of buying the property itself.

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Eddie Speed’s real estate background:

–           Based in Argyle, Texas and is the founder of NoteSchool

–           President of Colonial Funding Group and principal in a family office fund

–           Since 1980 Eddie has been focused  on strategies that positively impact the way the seller financing and non-performing note industry operates today

–           Closed on over 40,000 transactions

–           Say hi to him at http://www.freemeltdownbook.com

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Made Possible Because of Our Best Ever Sponsor:

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JF265: EVERYTHING You Need to Know About Buying Notes

Get out your pen and paper to start taking notes on…NOTES. Today’s Best Ever guest shares with us everything you need to know about buying non-performing notes and once again, just how important doing YOUR due diligence is.

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Paul Birkett’s real estate background:

–          Founder of Automation Finance and is based in NYC, NY

–          It generates growth by returning non-performing assets to performing status

–          Buys pools of non-performing residential mortgages and works with the borrower to address the cause of their distress

–          Was in the Guinness Book of World Records for building and mailing the largest greeting card in the world

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JF207: The THREE Keys to Profitable Note Buying

Note buying, baby. Today’s Best Ever guest shares with you the THREE keys to successful note buying. PLUS, he gives tons of great tips for marketing your real estate biz.

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Bryan Ellis’s real estate background:

–        Has over 10 years of experience as a real estate and mortgage investor based in Atlanta, Georgia

–        Host of Self-Directed Investor Radio and publisher of Bryan Ellis Investing Letter which has over 700,000 subscribers

–        Listen to his show at http://sdiradio.com/

–        Loves hanging out in Las Vegas more than anything even though he isn’t a gambler

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Sponsored by Patch of Land – Could you do more deals if you had more money? Let the crowdfunding platform, Patch of Land, find investors for you and fund your next deal…and your next deal…and your next deal…and…well, just go find out more at http://www.PatchOfLand.com

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JF178: TWO Ways to Structure an Agreement with Local Team Members

Want to invest in a market outside of where you live? Want to learn how to structure partnership agreements with local team members? Today’s Best Ever guest shares with you TWO ways

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Anthony Dadlani’s real estate background:

–        President of A Plus World Group based in New York City, New York

–        15 years as an equity markets trader and portfolio manager

–        Experience buying and selling private liens, notes and mortgages

–        Actively buying single family homes

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Sponsored by Patch of Land – Could you do more deals if you had more money? Let the crowdfunding platform, Patch of Land, find investors for you and fund your next deal…and your next deal…and your next deal…and…well, just go find out more at http://www.PatchOfLand.com

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JF168: The Best Ever Bandit Sign Strategy

You putting up bandit signs? Then listen up because today’s Best Ever guest shares with you a bandit sign strategy that is incredibly effective. Plus, he talks about how to build your business from the CEO seat.

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JP Moses’s real estate background:

–        Real estate investor who is based in Memphis, Tennessee

–        Strictly a wholesale operation – only does wholesale deals

o   Done note buying, wholesaling, flipping, and property management

–        Done more than 250 deals and been a real estate investor for over 15 years

–        Started the REIA group in Memphis and now has over 600 members

–        Say hi to him at http://www.reitips.com

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Sponsored by Patch of Land – Could you do more deals if you had more money? Let the crowdfunding platform, Patch of Land, find investors for you and fund your next deal…and your next deal…and your next deal…and…well, just go find out more at http://www.PatchOfLand.com

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JF162: Insider Scoop on Blind Pool Funds AND What You Don’t Know About Note Buying

Today’s Best Ever guest shares how blind pool funds work and gives you info on next level financing advice based on his extensive experience in the real estate finance industry.

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Dion DePaoli’s real estate background:

–        CEO at Secure Debt Exchange Systems based in Miami, Florida

–        Direct experience with real estate and mortgage investment fund management, asset management and disposition

–        Over 15 years in real estate finance and you can say hi to him at http://www.sdxs.us/

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Sponsored by Patch of Land – Could you do more deals if you had more money? Let the crowdfunding platform, Patch of Land, find investors for you and fund your next deal…and your next deal…and your next deal…and…well, just go find out more at http://www.PatchOfLand.com

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JF130: Top Note Buying Tip Revealed

Ever wonder what people are talking about when they say they are note buyers? Well, today’s Best Ever guest clears it all up and shares how and why he went from time shares to note buying.  And…he shares with you his #1 tip on note buying.

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Steven Soto’s real estate background:

–        Founder and principal of Higher Trust Investments based in Orlando, Florida

–        Identifies distressed real estate assets for high net worth clients  with a focus on tax deeds and non-performing notes nationwide

–        Say hi to him at http://www.highertrustinvestments.com/

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Sponsored by Cozy – Simple, free online rent payments, tenant screening and credit checks. Get Cozy for free at cozy.co

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JF63: Revealing Five Profitable Exit Strategies for Note Buying  

Note buying. Buying notes. And more note buying…you want to hear from a note buying expert? Listen to today’s Best Ever guest as he shares how to do the due diligence on note buying and the reveals five exit strategies for note buying.

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Val Sotir’s real estate background:

–        Founder of Watermark Capital Partners (http://www.watermarkcapitalfund.com/)

–        In 2009 he was featured on the cover of Forbes magazine as one of the mortgage survivors on Wall Street

–        10 years of experience as a stock broker

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JF39: Pssst…Check Out This Note

Welcome to the wonderful world of note buying. Where you become the proud owner of paper not property. So basically you are now a bank. Want to hear how the heck one of the most successful note buyers is approaching this investing strategy?

Dave Van Horn’s real estate background:

–        President of PPR Note Company based in Philadelphia, PA

–        Owns 18 investment properties

–        Licensed real estate agent for over 25 years

–        Visit him at http://www.pprnoteco.com/

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Sponsored by: Door Devil – visit http://www.doordevil.comand enter “bestever” to get an exclusive 20% discount on your purchase.

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