72 Note Portfolio Deep Dive: Mastering Note Analysis for Maximum ROI

Foreign this is the no Closer show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars worth of property For Panties on the dollar. Get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same. Now here's your host CEO of We Close Nodes, Scott Carson Hey Real estate investors, this is Scott Carson. I'm known across the country as the Note Guy and I've been an active note investor focused primarily on the niche of non performing notes, distressed mortgage notes on residential commercial properties for almost 20 years now. My company is we close notes.com and I know there's a lot of different things when it comes to the note world. Are you buying performing notes? Are you buying owner finance notes? Are you buying institutional debt? Like I would focus on Are you buying first seconds contract for each There's a lot of questions and it can be very confusing about what you can or cannot do. So one of the great things that we've hosted for the last couple of years that we do on just about a regular monthly basis is we host our one day class called Note Weekend. If you go to noteweekend.com you can register for our free three and a half hour class. We'll talk to you and share with you how you find fun and flip non performing notes. And yes, you can buy non performing notes from banks, hedge funds and a variety of different hard money lenders out there for your own portfolio. No, you don't have to have millions of dollars to dive into the non performing note game. We've got students that have bought plenty of deals with 2530 grand getting their ball rolling using their self directed IRA who are tired of dealing with toilets, tennis trash desks, tired of battling contractors and GCs to get properties rehabbed. We all know the market is changing and while it may not be like 2008, 9 and 10 again, it we do see a lot of distressed debt out there on both the residential and the commercial side. So if you're thinking about diving into the note game, becoming a note investor, a lean lord as you'd like to say, versus the landlord. Or you just want to figure out what it is about the sexy side of real estate in the note space. Well, check it out. Noteweekend.com doesn't cost you anything. We host it live usually the first or second Saturday of each month. You can go today. Register at the website noteweeking.com Register for the next live class we host. You'll get sent A replay to the previous class so you can start learning about the note business today. No questions asked, no credit card needed. This is a great way for you to dip your toes in the water and see if it's warm because I guarantee going through Art three one day class. You want to dive into the deep end and become a note investor. So check it out noteweekend.com you can also go to our website. We close notes.com check out our podcast. Check out our YouTube number one YouTube channel. We are here to help support you. Whether you're experienced investor or you're brand new investing Note weekend is a great place for you to get the ball rolling. People often say we cover more in our three hour class than most people cover in their three day class. So check it out. Love to have you be part of our note family but get signed up today@noteweekend.com thanks and have a great day. Good morning, good afternoon and good evening. Hey welcome this episode of the Note Closure Show. As always, Scott Carson jacked up to be here with you today and on today's episode. And probably this is probably going to be a double feature not only on Note night in America, but also on the Note Closure show podcast. Because I know we subscribers to both, but we're going to be diving in and breaking down this list of 72 first liens are called legacy liens because they've been around for a little while. Nothing brand new and it's a mixed bag of notes. I get this from one of my sources, one of my hedge fund sources sends me lists on a regular basis and I can cherry pick from this or I can buy the whole portfolio. And I wanted to go through it because it is a mixed bag of performing and non performing first liens and it kind of breaks down. I mean it's a tape of stuff all across the United States. You've got stuff, you know, and if you're listening to this, you may want to watch the video in the link below. But we've mapped it with batch geo by the performing stuff and the non performing stuff and you've got stuff all across the country. Now the 72 breaks down is 29 non performing notes and 43 performing. Okay? And like you said, got some stuff in Texas, you got a couple performing notes out in California, one in Oregon, you got stuff up in the Midwest, you know, New York, couple in Florida. It's a mixed bag of stuff across the country. And so I thought since you guys already love it when I break down these tapes, I thought I would go through and share with you how to make an offering on the full tape if you wanted to, or also how to break it down because it really is two different tapes and you've got to adjust your price differently whether it's a performing note or it's a non performing note. And it's not very difficult to do 72 first liens. We've bought plenty of portfolios that were greater than 22 first link. Now you could also do a carve out. I've already made an offer, I think on. On about 15 of the non performers. If it comes back available, I'll probably make some more offers on some stuff. There is some low, low balance of the non performing stuff. Some of the performers have higher balance stuff. So it's a, it's a different aspect of it. But I thought it'd be valuable because we've got a coaching student who's got some deep pockets and they're looking for tape like this. So I thought I would record it on their behalf, kind of talk through the deal and, you know, kind of come up with an offering basis and then go from there so that you guys can learn and peek over my shoulders while we break this down. All right, so let's dive into the spreadsheet. Let's pull it up. Here we go. 72 Legacy first. You can see the map across here. So it's kind of small here. So let me go ahead and make this a little bit bigger for everybody so it's not hard for everything. So basically what I did, the tape came to me, all right? And basically it was this red and black, you know, the red being non performing, the black being performing. Okay. And you have the loan number, you know, the address of the property, street address, the city, state, zip. Originally, the fund just sent out a sanitized lip where there was no addresses. I went back and asked for them and they provide to me, knowing that I'm a legitimate buyer. Okay, but you've got the zip code, original balance, the current balance. If there's a deferred balance on that basically means if it's been pushed to the back. Now, it had zero deferred balance. A lot of these numbers that were in here were my actual offers. Okay, so let me go ahead and just delete those off Clear. There we go. Deferred. It was just a vacant thing. You got the, the appraisal BPO or AVM number. The first pay date on these. And you can see these range anywhere from 20, 21 all the way back to 1995. So some have been around for a while. You've got the first pay dates and then you've got the paid through date and then the next pay dates and the next pay dates. Basically, you know, some are relatively current. They, they're new, they're due for January of this year or some are going back to 2021. So it's still within that aspect of things like hey, four or five years, I like if they're not performing because then you can basically, you know, make some money on that stuff. They give you the maturity dates that these are all fixed rates. There's no arm index, arm margin, first arm reset. Now the thing is I like tapes where it's got the stuff in it because I know it's a direct download from their, the lenders servicing information. Okay. Delinquent change cap. It's all direct from. Okay. Loan status. You can see how many days behind AR in red. If it's, if it's flag as in delinquent, it's flagged. Yes. True or false. BK status, foreclosure status. So none of these are in foreclosure right now. And then you see this was all pulled as of like March 13th. So it's relatively new. It's March 20th right now. So it's basically this information was pulled a week ago. Bids were due yesterday and today and we got those bids in. So what I'm going to do first do is it's got enough information now. It doesn't give me the P and I payments. All right. It does not give me that. Wait a second. If I go to the raw data, I bet it does. Yeah. So here's the other raw data. Okay, this is better. Sorry guys. You know, that's kind of the basic information. Okay, so single family. These are all single family homes. First liens, property value, the ltv, the combined loan to value the purchase upb, you know, what's left of the loan. Okay. Hello, this is Scott. Yes, hello. Yeah, I'm not interested. All right, then you've also got the original loan amounts. You've got the loan term. You can see these are 20 year to 30 year. You got even a 15 year in there? I don't see any. Oh, I see something that's been modified so it says 480 down at the bottom down there. Okay. Amazing. FICO scores, the P and I payment, the first pay dates, the maturity dates, all that good stuff. Current upb, last payment received. All right, so it's got two tabs on here. One is basically Most of the day. And the other stuff is the raw granular data which is what we have in here already. Okay. So I'm actually. Let's see, do we have values? Yes. Do we have current upbs on this tape? Yes, I make. Give me one second here. These are all first lean. I want to make sure P and I payments is important. Maturity dates, due dates, current. Yep. So we have that. Now most of these. What, what's missing on here? Oh, we have the property values. Okay, good. And like this is if this was a tape of second means there would be an amount for the senior amount. But we don't have. These are all first links. Okay. So we are going to go off of this tab the raw data because it gives us more granular information. All right. And what we can do is we can get rid of some stuff. We'll leave the loan number, the state, city, state zip on there. Obviously they're all single family homes. Make sure and filter this so we can see this stuff. All right, they're all first. They're all one single family. So we're going to get rid of a couple, couple tabs. We're going to get rid of the class because they're all single family, all first lien. So we don't need to have those columns in there. There's no senior amount because these are all first liens. We're going to delete the senior amount purchase upb original one amount loan term. They're all. Oh, there is one adjustable in here I think and this is, you know, we'll leave that in there. You got FICO scores we don't really care about because we're in the first lean position. First paid date, last payment received. Okay, so now where's our delinquent status here? Warehouse line days past you. Okay, so what we're going to do is go back here and we're going to sort it between the performing and the non performing. That's what we need. So we can split these up into two takes on. Let's just do the assumption now while we can cherry pick this, let's talk as if the seller wants us to buy the full thing. Okay. And all in bid is going to get you a better acceptance ratio and then if you fade some stuff out, you fade some stuff out. But what would you bid on all of these to make it happen? So let's go over here. I'm going to work custom sort these custom sort and we're going to go by my data has headers and change it to the last tab which is statistic past dues. We're going to do largest to smallest. Right, so now you see we've got the red on top which is the non performing and we have the performing in the bottom. Okay. All right, so now let's look at these. The property values LTV purchase UPB original loan amount, current upb. So let's do this here and this one's like, this one's like 1200 days past due. This first one up here, 1272, it's probably, it's in New Jersey. Gloucester Township, Staten Island. Those are two of the longest ones. Okay, that's not a problem. Okay, so let's do this though. Let's look at. Since we have the current upb. Yes, this is going to be small amounts. All right, so let's do, let's insert this here. We're going to say equity amount or equity dollar dollars of equity and we're going to insert a column because that's going to affect your stuff. If they're underwater, you're going to offer differently than if there's equity. Okay, if there's equity on these, it's going to be a pretty simple thing to go across there and we're going to say percentage of equity. All right, so this is really simple. All we're going to do is just do for the formula is go over to what they gave us, the value property that I don't know the date for that. So that could be high or low, but that's all they're providing. We'll do that in due diligence. And you know the bids comes in below will fade or bid. Okay, so the property value minus the current upb. Okay. And so then what we're going to do is take that number, whatever the equity is and divide that by the full value and you're going to change that from a solid number just to a percentage. All right, so then you're going to go over here, hit control C and you should be able to copy that all the way down. All right, all wait. So now we've got our numbers. They all got equity. They've all got a sizable amount of equity. All right, all right, so they've all got equity. So if we look at the red here, oops, we want these to be black going forward. Let's change these down here, changing the font from red to black on the ones that are basically perform. Okay, so if we look at these, the non performing stuff, 14% equity, 34% equity, 91% equity. I mean there's a lot of like 90%, they're low balance stuff, right? Okay. So when they have an, you know, a bunch like that. So equity, you're probably going to need to be at 80%. You see equity dollars, huge amount of equity on this stuff. All right, so let's just do this. So let's go in here. Now, the non performing side, we'll get to that later on with a little bit of difference with New York and New Jersey, stuff like that. But if they're non performing, we'd offer less. Let's see 80% of the up. Let's just do 80% of UPB. So that's me. Release current UPB times 0.8. That's a dollar amount. We're going to copy that number all the way down, change that from black to red. Okay, now we have the P and I payment on here, right? So let's insert another column in here. Let's say P and I12 is equal to. Let's go over to the P and I payment where we have that at P and I times 12. We're going to copy that formula all the way down again. We're going to change these down here that are in the positive to black again, so they'll be in red. Red stands for negative, black is for positive. Okay. So we're not figuring it. Okay. So now what's great to do this is you can see some of these. We get these bars back on track. Now these interest rates are a little bit all over the board. That's the nice thing about having the stuff here. Where were the interest rates on these things? These were at like anywhere. Yeah, some of them are high and some are low. So if we look at the interest rate tab, it's anywhere from 2.75 all the way up to 14. Okay. And if we look at the weighted average. Okay. Weighted average coupon rate, the whack, the whack attack, right. That comes to basically it's 7.82. Some are higher, some are lower, but that's what weighted average coupon wax stands for. So some other high rates are lower. You're going to adjust this ticket. So if you're making an all in offer, you would change things up. So, okay, so you get P9 times 12. All right, so the first thing to look at is, okay, take your 12 months of cash flow to get the bar back on track divided by what you pay. Does it make sense? Okay, so remember, 80% of UPV, that's kind of what our technical purchase price because these all have equity right now. Some are low balance and we're going to adjust that number down to make sense because you get to foreclose on the non performing side. It's going to take some cost to do that. Okay, so let's just go here though and let's do this. Let's do our. We'll just say, I would say mod or let's just say if you haven't paid on time for 12 months, let's just say TPP ROI. Okay. Or actually let's just. It's because this is a mixture thing. So we're going to say if we get these 29 to start paying 12 months on time, divide that by what we paid for it, the 80% of up. That should give us a rough idea. Same thing on the performing stuff. We. They continue to pay on time for 12 months, divide that by 80% of the. The unpaid balance. What's the yield on it? So it's a pretty simple calculation. So we'll put TPP for the. That TPP slash PN for performing note roi. Okay. So that is just going to be. Is equal to our P9 times 12. Divide that by our 80% EPB, which is our purchase price technically. Okay. And we're going to make sure that's a percentage and we're going to copy this number all the way down we go. Okay. Same thing, Control V. We're going to change these last numbers here to black. Okay. So now you see on here, some of the numbers are all across the board. Like if they, you know, like some of these lower balances, like I'll give you an example, like this one. You know, the 80% of equity, they only owe 2900 bucks. So yeah, if you paid 80 cents, that's 2300. Of course, the P and I payments to something a month. Well, yeah, it's going to be a pretty good deal. I wouldn't go back and offer 80% as low balance just because. Yeah, it just doesn't make any sense. Right. All right. Same thing down here on some of these performing stuff where it's low, low balance stuff. I'm not going to offer on the low balance side of things because it just doesn't. I mean, it does. I mean if you start looking. Okay, let me rephrase it. So if we go back here to the performing stuff. Okay, Performing stuff, you really need to be at 80 cents on the dollar. Now the performing stuff we look at this is if we offered 80% of UPB. Okay, so let's Go over here and just add. So we'll just say total UPB performing total UPB npm. Okay. I want to add a different tab to it. So we can look at these. So if we go to these 23 do current UPB. So on these 23, the average is 68,159. It's basically 1567 654. 1567 654. I think that was it. So 1.567 million 6 by 4. Okay. Yeah, that's a dollar amount that say we're taking it all. Okay, now if we go back here to the total UPB on the spreadsheet again, whoops. Tab. That's actually. Sorry, I said it in the wrong one. That's actually the Non performing 1.567654. Is the. Is the performing. Nope, that I had it right. Sorry guys. I hit it right. That's right in the right tab for the non performing. Okay, so we go to the performing side. The UPB on the performing side is 1.554854. So a million and a half as well. Okay. All right, so if we look at. Let's do this. Let's say BNI times 12 for the performing. Basically we're gonna take the 12 months of the performing stuff that comes in. So p and I times 12, add that number up. So that number comes to. It averages $5,038 in 12 months for each one. So its average is about. Just under about $450. Tom. Or it's 2462-4688-2246-8882. Coming in in cash flow, the stuff with the non performing stuff would be. If you get the bar to come back to the table would be 16809-616-8096. And that's the pi12 of the non performing stuff. Okay. Forming 80%. All right. So it's pretty easy to run a number off of this. Like if the performance of. If you bought it at 80 cents on the dollar, what would you get? So if you take your cash flow, the 246882 and divide that by your 1.554 million on the performing stuff, that's about a 15.8 yield. Okay. 16% if you round it up. Actually, let's go down two columns. So. So 15.88. That's before servicing costs. Okay. Performance, it's rock and roll. Okay. And that would be. What would you say? 49 performing notes? Yeah, it's 49 notes. Okay. If you could get the bar back on track for the not non performing. So same thing if you offered. If you got them just making their 12 months of payments. So this is going to be equal to our 12 months of cash flow. All right. Divided by the 80% of the UPB, that comes to a 10.7%. Yeah, it's just under 11. 10.72%. That's, that's not considering. Let's do this. Insert one more. That's 49 notes and then on performance 23. Okay. Now obviously that yield is going to go down some with servicing cost but you know it could be. So here's the thing. If you could get the borrowers back on track, let's do this another thing. So let's go p and I times 16 for the NPN. So you got 12 months. 16 months. So basically we add this by a third. So it's equal to the 165 times 1.33. Right. Is that right? If you get a third? If you get four. Yeah. 1.33. 1.33. So they pay their 12 months plus you have them bring four months which is a third of the year. That's why you put 1.33. So that now bumps it to 223. 576. Okay. Which is equal to now that bumps it up to about a 14.26%. It blows up a little bit for you though. They're watching. Okay, so you see the total UPB on the 49 notes if we bought at 80% of UPB is 1.554. The cash flow on those performing notes is 246882. So basically you step into about a 15.88% if you bought those at 80 cents on the dollar. Not bad performing notes. There is a. Oh, let's go back here. Can do the. The values of these. Okay, so let's look at what they say value wise is. Now obviously value wise, this is the non performing stuff. It's 5578-7557-1857-1875. That's the total value of let's say property value. They save the 23. If we look at the 23 non performers. If we look at the 49, the value of the 499 9589. 904,9 million. Is that right? 9589 804. I got 100 bucks more in there. Okay, so what we're going to say is this is the fair market value. That's the npn. Fair market value of the performer. Okay, so if you bought this at 80 cents on the dollar. Let's do, let's insert a column in here. 80% of UPB in your LTV, you're buying this at about 80% of UPB is equal to the 1.554 divided by performing value. So you're basically buying the performing stuff at 16 cents on the dollar. Okay. Right. Same thing. If we do this is equal to the 1.567 which is the 23 non performing. Divide that by the 5.7 million. You're buying at 27% of value. Okay. All right. Weighted a number. Wait, let's do this is equal to. Just add these two together real fast divided by. Basically you're buying it for just like 3.1 million divided by 15. Right. So you're basically buying at a weighted average of 20 cents of value. That's a pretty secure position to be in. Can we agree that ladies and gentlemen. Yeah. 20 cents a dollar you're controlling. You're in the first link position on a 20. Yeah. 14 million dollar. 15 million dollar thing. You're picking basically 3.1. Okay, that's not a bad day. Right everybody? You know if you got 16 that's great, you know. Now let's look at what's the weighted aspect of this. So let's do this the same thing again. So let's do over here. It's a percentage FMV combined both. And let's look what your cash flow is if you just paid for this. So cash flow both. So once again we're going to take the same formula. So if we take our cash flows over here, let's just say is is equal to that plus change the formula. We're add the cash flows together and then we're going to divide that plus we paid for it. Right. So together. Yeah. It drops it down to about a 13% cash and cash return. 13.3 basically. Now if we got to all the bars back on track. Let's take that and look at that number. What would it be? Both. So is equal to the 242 on the performing. That's normal. But let's do. If we got them back to this to the 16 which is a 223. Divide that once again by that plus that. So if you get them performing it would bump it up to roughly a 15 yield. 15 point. That's not including servicing costs on those 72. So that would be your gross stuff. That's if you get a back contract pre legal. All that kind of stuff. Right. So now what if you don't know if you're just buying the, the performing stuff. Okay, that's a 15.88% yield based on D4 divided by. Yeah. So basically cash flow by what your 80% of PB is, right? Yep. Perfect. Fair market value. The non performing fair market value of the performing stuff. Not bad. So there's where you come in. Your offer at 3.1, 3.2. So if we look at this, so total is equal to that plus that. So at 3.122 that'd be your total for 72. And your total cash flow is 414. If you get the two just if you get the bars, just start paying on time again. Now some of these are low balances. You're probably going to be better off getting paid off on stuff like that. And this is all legit. Now if you go back and look at this spreadsheet here, there's some stuff that would probably. Now if you could cherry pick, wouldn't make sense for you to do that. So we're going to label this. Okay, let's see these labels label this. Buying all 72 if you have to buy doing all in, you know, total 3.1 million. You offer 3.1 million at $0.8 on the dollar and you're going to yield somewhere between a, you know. Well what if you don't? Well no, your ROI would go higher if you had to foreclose because you're buying them cheaper. Okay so but that's just a quick. That would be. This would probably be the highest I would go. I wouldn't go above 80% and not performing, I would probably go down a little bit less. But there's equity. So that's the thing you look at is if there's a ton, there's a ton of equity above these obviously. Okay. You know it's valued at 14 million. If you're buying it at 3, that's you know, know that's like I said, 20% of the market value. Now are you going to end up with a property? No, on a bunch of. But let's go back to the raw data here. Okay, now that we've got that information, let's look at the non performing stuff here. Okay, so let's look at. That's the equity amount, equity percentage. And if we start looking at these dollar amounts. So let's change this up a little bit. Now this performing stuff, 80 cents of the dollar, they're probably not going to budge much from it at all. Okay. They only owe like on this one they only owe 3200 bucks. I'm sorry. They only owe 4000 bucks. Going at 80 cents of the $32. What kind of yield is that going to get you? Yeah, you'd get paid off in a year based on the payments. 322 months. So you would probably fade that down maybe a little bit something. You know, look at that stuff. Some of this stuff's pretty good. You know all these legacy first liens, all. Most of them have lower balances. Okay. Yeah, you can make it. You know what's this 47 they only owe? Yeah. Like this one you're not going to offer. Yeah. See this is 398 return. Yeah. They only owe 1100 of 90. So they're going to pay that off. And basically, you know, their monthly payment is 394. So they can pay that off in five months. You're not going to get a full year. So you don't worry about that. Okay, but this is where he's. Okay. If you could cherry pick these it might make sense for you just to get rid of the smaller balances. Okay. If we were never going to cherry pick versus buying the whole thing, let's go that route. Okay, so let's look at the balances. All right, so P not we get rid of a low balance stuff. Line all 72. Let's do this one more. So raw data, whole tape. So what I like to do before it start messing around with it. Let's go over here. Copy everything on this tab and let's open up another one. Control V. Right. So we got everything transferred over dollar amount formulas all look good, right pni Yep. All right, so let's make these a little bit bolder and make it a little bit bigger. All right, so this is going to be. Let's drag this. There we go. And we'll just say cherry picking. Okay, so now we got a cherry picking aspect. Now we can slice and dice if I'm looking for something smaller. Okay. So first thing we usually do with cherry picking, we still got all the same numbers in here. I don't want to buy non performing in New York. New Jersey. Right, ladies and gentlemen. Okay, so the states I'm going to get rid of. First and foremost. Let's get rid of these New York, New Jersey ones. Let's look at Oregon. Let's look at California. I know some California folks. Let's just see if that. So you can see. Yeah. So ones in Sacramento performing Visalia, California, Sweet Home Oregon. I really don't want to own those properties. Okay, so we're just going to delete these off. These are not properties I want in states I do not like. Okay. All right, so then we got rid of those. Let's look at what else. So also Alabama. Let's look at this. See here Alabama stuff. Because if Alabama is non performing, it's got a one year redemption period. It's performing. We'll leave that be. Okay. All right, so Florida, Georgia. This is a single family home. It's not a bad looking house. We'll leave that in there for the time being. What's the balance on that? Non performer. So they only owe on this one. They only owe 29,000. The value on this is like 350. It might be if you can get it at a cheap enough price. Great, cheap enough. Let's go from there. Okay. Muskegon, Toledo, Windsor, Hartsville, Grand Prairie, Texas. Muskegon, Rhineland, Missouri, Charlotte. Okay, so these aren't too bad. Pensacola, Florida. Okay. Georgia. All right. I would buy all those non performing areas for pretty much. Okay, we get into the, the performing stuff. This is all performing stuff. I would probably buy it all. Chicago, I really don't like that. I'd probably get rid of Chicago just because if they ever did go. So what. Let's look at this here real fast. Hang on here. View freeze panes so we can see everything. All right, so Chicago value at 267. What they owe. They only owe 18 and some change. They're performing. You know, leave it in there. Might as well leave it in there. It's perform. Mission, Texas, Brock Mart, Georgia, Florida. They're all performing. So the thing you got to worry about if you're buying stuff is obviously in Georgia you're going to have that state licensing website, either mortgage broker or license with somebody. This one on Georgia, you could get away. Whether you're going to use your IRA because it's value, property value is only 65. Loan that was 52. They only owe 7,000. You could fund that in an IRA and it'd be exempt. So you're. Okay, fund that one with your IRA or fund it with a company and then transfer to your ira. You're, you're, you're sitting okay there. Okay, so now Miami. Yeah. All right, so let's go over here and look at these low balances, current upb. Let's get rid of some of these small ones are just going to be a waste of time. All right, so a thousand. I mean you could offer like I would Go and offer like 50 cents on the dollar maybe for those they're going to be a pain in the ass for a little bit but maybe it does make sense. So like we start getting up into. Yeah, he's non performing stuff. So anything that's under 10,000. Let's see what so yeah, so you got some performing and non performing. 80% of UPB Toleda Ohio okay. Equity, plenty of equity in these. 80% to equity on these. Of these. Let's change these. It's too at 820 for the transfer docs you're going to lose couple hundred bucks. It's not going to be 507. Yeah. I'm just looking at the numbers on your current upb. Let's change this to a dollar. So what I'm doing, I'm just looking at the current UPB versus the P and I some 12 so most all of these. So UPB is only a thousand on that one. We're going to change this to just one. 26-7088. This is 3905. So where the. Yep. 2442 3870. So the thing is I'm letting make sure that my payments like this one over here is a current EPB of 1488. Well I'm not going to collect $4735. So I'm just going to type in 1488. That's what I collect. Right. Everything else though in the first year I would collect more. Yeah. So that's adjuster numbers on the performance side a little bit. Not much but a little bit. Okay. But since we're cherry picking these now this would make more sense for us to do that now that we've got our making sure 80%. Yeah. On some of these, especially these non performing side. Let's look at these. Let's change this all here. Okay. So perfect. Okay, so now we have everything. So we have. All right, so we got 80% of the UPB where there is a ton of equity. Equity percentage. Equity percentage. So non performing. We're gonna have to Change this to 65. Yeah, there we go. Because look at this, this is what I'm trying to get at. So this one here, they owe 20, you know, 30 grand. They've got a ton of equity. This is that Largo, Florida one. But to offer 23 is too high if foreclosure has a start because it's in Florida. Right. So this one we probably need to be closer to 60 cents on the dollar.70 and that gives us a little room if we foreclose. We can still make some money on that. You know it's only. It's 12. Okay. So it's kind of skinny at that. Same thing with this one here. So we're going to drop this down to 60 cents on the dollar. Okay. And this other one is worth valued at 90 of the current is 90. 77. 97 and 77. That gives us 20 grand if we have to foreclose. What state's that in? This is in Michigan. All right, they owe 149. I mean the value of property is 149. Okay. So yeah, that's not so bad. We would leave that one be 20 grand potential, get back on track. Yeah, they got 52 grand above. So you can make 20 grand either at the foreclosure. You take it back and you make 70 grand. Okay, great. Yeah. So they won UPB, they've got some equity. So you're buying these. They all have. Okay, so like this one here, UPB's 12. They got a ton of it. They're not like 90% equity. So it's worth about a hundred 123,000. Sorry one one 30. It's 132 if you add those two together. Okay, that doesn't make any sense. Let's change that from 80 cents on the dollar down to 50. Okay. Same thing on this one. We're not going to pay 43. We're not pay 35 for 43. So let's jump that down to 60 cents. Same thing. We're not going to pay 25 for 30. Change that to 60 cents. Let's just copy this down Control. Cuz these are some more balances. Yeah, we're just gonna do that for the rest of the way down. Control. V 60 cents on the way down. So many was 80 cents. There's a site like 34 grand. You're not gonna adjust that in profits between what you paid for and the legal balance. So there you go. That's a probably better aspect of things. Looking at this non performing stuff, you cherry pick it. You depend the condition it's in. You know the performing stuff you leave probably 80 cents a dollar because I got a ton of equity. Okay. Like some of these that we start diving. This non performing stuff obviously you're still going to set stuff up. So let's do this. Let look, the Largo Florida one is a not a bad looking little condo. Just gonna do this. We're going to share our. There you go. So this is One of the larger floor we talked about, they've got a little balance on about 30,000 worth more than that. This is a photo from a few years back. You know, definitely some pride of ownership. We go back to our spreadsheet. Let's look at this one. So this one in Largo, it's non performing. It matures in two years, two and a half years. They only owe 30. See they're do they're due for February of 2023. Okay, what's going to be my action? So this would be to either, you know, it's insane, it's gonna be either to foreclose or we're gonna look to mod bring somebody to the table. You're two years behind as we sit right now, you're two years behind. This next one down here, same thing. Two less than two years, about 18 months. Foreclosure mod. This one's June of last year. So it's, that's going to be a foreclosed mod. January of last year. They're 115 days behind foreclosure mod. If they don't do something we're starting to get to 120 days. You know some of these were there only like, you know, that's another thing they probably are not going to let us get. Well they might get a 60. They won't get them off their table. Okay, so these we would probably look at just reinstating because they're less than 120 days. Yeah, we get 120 under 120 days. That would be the first thing. Hey, you haven't paid and in 90 days or less. Let's get you back on track, shall we? Now these others down here like less than 30 days, you're not going to bid. They're probably just late. So that's the thing. I think on a big chunk of this list you could get the borrowers back on track or pay have you pay you off. These three, potentially five would be your ones that you're going to be foreclosing on. Potentially three to five foreclosures. They're at that 120 day mark but there you go. So that's the thing to look at. They're not the biggest default but they're getting it now. They're getting past due. They haven't paid since last year, since January this year. You know that's the thing, non performing stuff. They're probably going to still want us to come back looking at that, which I probably should have looked at a little bit earlier. My apology. But if they come back at 80 cents the dollar. Okay, 80 cents a dollar. But if you can offer and get it 60 cents, why not? That's why it's important for you to know your marketing and know your numbers on that. So let's look at just some of these quick non performing ones, especially these foreclosures. This one's in Danielsville, Georgia. So based on photo, if it still looks like it does. Now this one is Hallman Autry Road. Because this property, this does not look good. This. Well, this is for February of this year. Let's go over here to the driveway. See we can't peek down the street. Probably not. Let's look at two. Let's go back and look at the overhead view. There you go. That's the house. That's not. I mean Georgia's a relatively fast foreclosure state where that one is located at compared to like major cities. So it's north of Athens and northeast of Athens kind of in the boonies. Doesn't really excite me too much on that one. All right, so let's go back to your tape. You might just get rid of that one. Let's look at this one in Muskegon, Michigan. And this one doesn't look too bad. Look at this property. Yeah, this is May 2, 2024. That's looks vacant though, doesn't it? Side here. Oh, you get the bird feeder there. So you get a little maybe occupied. You got a tarp over that extension. It's not too big a deal. It's not the roof. Get the covered garden. That's the house next door, I think's backyard. Yeah, it could be a whole lot worse. All right, let's go back here. It's not a bad looking one. Muskegon. There is another one in Muskegon if I remember correctly. Let's jump down here to this339 enmity. Oh yeah, I looked at this one earlier. It's not a bad looking. Yeah, see 339. Get some. Hopefully it's not overgrown. This is from June of last year's photo. Yeah, it's. It's a nice looking property. Well taken care of. Relatively newer roof. Maybe it is vacant. Maybe it's a little older. That's why I haven't paid. It's not this yellow house. Yeah, I mean it looks like maybe it's. Maybe the bar has passed away. Who knows? Maybe that's why they're late. But yeah, it's not a bad neighborhood. A little older from older Homes. But hey, that's a pretty good looking little house. Okay, let's go back here to our tape. This one in Grand Prairie. Let's look at this. 846 timberland. This is barely behind share. Everybody likes Texas. Grand Prairies outside of Dallas. And there you go. This is from November of 2023. Oh, pumpkins are out. That's November. I really don't like that different colored brick but that's a pretty easy fix. It's okay. Same brick across the streets. The builder got a discount. It's not so bad the performance if you can dive in. Let's look at see if there's anything else here. Texas. Look at the floor, the Florida one just for the heck of it, you know, Florida's obviously it's Pensacola. You gotta worry about insurance. You know, they haven't paid in a couple months. Yeah, not it's occupied. Roof is a little older. Yeah, not so bad. And that's the thing, these properties and look at the next one to it. It's missing it. It's got a tarp on the roof. That's probably vacant. A little rougher neighborhood but somebody's. If we look at the. If we go back to the spreadsheet on this one we see on this one, this Pensacola one, it's worth 150. It's a 12% interest rate. They owe. They bought it for 56. Current UBP is 18. Yeah, I mean you get it. Somebody's gonna pay you on time. They don't want to lose that. Yeah, bar on this one I'm getting notes on the borrower. Yeah, they're only 54 days behind. If they don't they're going to miss out. I mean you foreclose and. Or cash for keys. That's what you could do with some of these too. So the Texas one. There's a few in Texas here I know everybody always wants. Let's look at the one in San Antonio. San Antonio, Texas. Over here, share. Now this is a performing note, not a non performer but so they've got a. So this is from 2016. If we move over here. Here's a photo from 2022. Okay, they got a gate. What's the neighborhood look like? I got a few gates. So maybe there's some Rob. Maybe not the nicer part of San Antonio. Let's. Let's see what the overhead map looks like. Yeah, that's a rougher part of San Antonio. But still made money. I made money there. Definitely in the south side. Okay. No Problem. So there you go. If we go back here one last time to our spreadsheet, you know, this performing stuff, hey, you know, you could get rid of some states, you know, maybe the Florida, you know, the, the, you know, but they're paying. So as long as they're paying on time and they've got their insurance paid up, not so bad. Let's look at the Houston one. One last thing here. Okay. Houston you have to sometimes worry about. So this is was it. Yeah. It's only like a 1400 square foot house. And this photo is from February 2022. Okay. It's occupied. They're paying not the greatest. But if you can make a nice yield on a performing note. Let's go back to that. Yeah, so if you bought the performing stuff, just the performing stuff on most this, it's a pretty good yield. Buying it 80% and getting a 15 year old and performance stuff. Why not borrow money at 8%? Hey, you know, even pay your servicing costs would be cheaper on that. You know, that's a pretty good 49 notes at that. So let's do this. So let's take 49 notes over here. 49 notes. Let's just say you're getting them at $25 a month servicing. So it's actually three, $300 a year. Right. 25 times 12 is 300. So that is equal to that times that 49 notes times $300 a year in servicing. So it's 14,700 in costs. So the cash flow on that. So if we figure, so we take equals to our cash flow on the performing is 246.82 minus our 147 per year for servicing costs, that's 232 a year to your net is 232. Take your net and then divide that by your 1554. That's just. Just under a 14.9%. There you go. But you're buying stuff. Fair market value is worth 5. You're buying it at 30 cents of the dollar. That's a pretty good day at 27 cents on the dollar basically. Or right. Yep, there you go. So buy 40 notes, get you know, 14.93%. If you borrowed your money at 8% from an investor, you're paying out 124 a year in interest and you are pocketing 90 grand. No, you're making more than that. Sorry. You're making 107, $108,000 on 49 notes passively for a while. Now obviously you go back and look at some smaller Numbers, but this is off of that buy the full thing. I'd get rid of some of those smaller balances but there you go ladies and gentlemen, that's a way to make a six figures career. Buying 47, 49 notes of performing or buying some non performing stuff and getting a pretty good yield on the foreclosure as well. All right, so hopefully you find that valuable. Like I said guys, if you're listening to this, go on over and click on the link in the description. So watch the YouTube video. If you have questions, feel free to type them in. Me, shoot me a question. If you want me to dive into an asset with you. I'm glad to do that as well. On a deal that you're looking at. We're always here to help you guys. Always want you guys taking the next step in closing deals, making offers and going from there. All right, so as always you can book a phone call, Talk with Scott Carson.com, that's Talk with Scott Carson.com and we can book a 30 minute phone call. If you're going to go through a deal or something, just put a notes in there, we want to talk about breaking down a deal, something like that. Or we can jump on the phone and then I can shoot you to Zoom link and we go for. But go out, take some action everybody and we'll see at the top. Bye everybody. Hey real estate investors. If you have ever wanted to dive into the sexy side of real estate and become a note investor. And not just somebody that owner finances properties or buys and sells on terms, but somebody who's actually buying debt from lenders, mortgage bankers, hedge funds on distressed real estate on both residential and commercial properties. Now is the perfect time. And guess what? We have our upcoming three day workshop here in just a few days on July 25th, 26th and 27th. That's right, that's a Friday, Saturday, Sunday, you can join me live on Zoom on our note Buying for Dummies workshop. We'll go through the Fs of how to find fund and flip non performing notes at huge discounts without having to use your own money. And we'll show you all the different ways you can make money being a note investor. Day one's all about how we find these deals from banks, hedge funds and and how you can automate the process of connecting with these people and get tapes and listen to you over and over again. Day two is all about raising capital and marketing. And we'll show you how to tap into thousands of IRA investors who are looking for deals to fund and how to communicate and how to contact them and get them to fund your deals. And day three is all about the flip the exit strategies. Putting deals together. We'll mix in due diligence. We'll mix in the marketing side along with the structure side. So much stuff in three days. Live on Zoom with yours truly, the Note guy, Scott Carson. Make sure you get signed up by going to Note buying for dummies.com or click on the three day workshop tab on our Workshop. Get signed up today as we're still running discounts and you too can soon become a no buyer. Sam Sa.