Ask Me Anything! Scott Answers Student's Questions

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. Good morning, good afternoon and good evening, everybody. Hey, welcome to this episode of the no CL Show. As always, Scott Carson. Excited to be here with you today. It is a gorgeous day here in Austin, Texas and we're calling this episode the Ask Me anything episode. And we sent out some emails from some of our students we posted on Facebook. We've also went through some of our previous emails this past week of questions that people asked that I obviously answered and I thought a lot of them were some pretty good questions to dive into this episode here with you guys today. So stay tuned. We've got some advanced questions, we've got some very new questions. I got about two pages of questions that I thought I could go through in this episode and help answer those questions that you guys may have. And now these are just kind of thrown in no particular order, keeping it fresh and so clean as they came in. So some of these are newer questions that we received in the last couple days. And as we get further down, somewhere within the, you know about the past week or so from people responding in emails or posting on the Facebook or LinkedIn or sending me private messages with these questions as well. So hopefully you enjoy them and help. They're here to help educate you. And we're going to start this off with the first question comes from Todd out of Maryland and he asks where can I find a reverse mortgages for sale or reverse mortgage sellers? And you know, that's a really good question. And without giving away my sources, we only give our sources to our coaching students or one coaches are buying stuff and stuff like that not to increase competition but actually finding reverse mortgages and sellers of reverse mortgages is actually pretty easy. Now with reverse mortgages and hecm H ECM mortgages because these are home equity mortgages, a reverse mortgage, they're a Fannie Mae product is these are sold in large portfolios, not any Tom, Dick or Harry's and go up and buy a one off note from HUD or Fannie Mae. Right? They're HUD sales actually. So every, I don't know, every six months, every year there's been a couple big sales of reverse mortgages. And so if you just go Type in like reverse mortgages sales, HUD reverse mortgage sales. It'll pop up like the HUD website in one of the companies, Falcon Asset Sales that handles the sale of these assets. Right. And what it is, it's a big bidding. And they recently had a big bid, big sale Tom, in December of last year. They've got another one upcoming here before too long. But what they do is they will show. You can actually go to the HUD website and actually see the results of how many notes were totally sold and who the winning bidders were on these different portfolios. And it's anywhere from like a thousand notes down to like 50 notes. Some are nonprofits, some are LLC, some are funds. One of the biggest buyers is the source that we buy from on a pretty regular basis. We get their tapes in from them. And so that's the first thing. Go to hud, look at who's selling, who is the winning bidder on those assets. And that's how you find sellers. Now the thing with a reverse mortgage is there's got to be constant reporting. It's a report back to HUD what happened with the note. Was it a foreclosure? It was obviously a modification because the bar passed away. Right. And what did you sell it for? What was the value of the property? You have to report that stuff back to stay compliant with HUD sales. Now you can actually go back through the last couple years and see all the different entities that have bought these things. Okay. And what we have done is we've taken that list and compiled it for like the last three years of these sales. Three to four years, these sales. And then we reached out and started skip tracing. Doesn't take long to skip trace. Okay. Or you just basically go into the counties and start searching for these specific assets. Or you do a Google search for these llc. It will often then lead you to who the bigger company is because a lot of these are special purpose. So you just go see who the attorney is or where their officer located or whether associated with and go from there or one of the things we also will do, we'll go into some of the bigger counties across the country and search for these asset company names and find if there's any assignment of mortgages and other names. And that's how we've been able to find contacts at most of these companies that reached out to. Pretty easy to do. You can find four or five off the most recent list in just a few minutes by just Google searching to see who the company is and if they've got a website. All right. Now I'm not going to give you the. So I'm not going to give you those contacts unless you're a one on one coaching student. But that's pretty easy. How to find stuff, Google. Google the names cross reference, you know, jump in the county records where some of these bigger deals are taking place. Sometimes they'll list the states that these are in. That's, that's really what it comes down to. Googling and just doing a quick research, going to LinkedIn and looking for a name or looking to see where that LLC is registered and going to the state registration and then reaching out to either the managing member or even the attorney on site for it. So that's how you find it. And then using County Records LLC search and good old Google to find the contacts name. So hopefully it helped answer your question for you, Todd. Ingrid asked. Now Ingrid had a few questions. Ingrid is actually not from here in the United States. She's from Belgium and she is looking to invest here in the United States. And so I choose I would like to ask your advice about good places to network. Now if you're here locally or you're here in the United States, the first place you should go to network would be your local real estate investor associations. Okay. Your real estate clubs and most clubs will meet in the morning, the noon or in the evenings once a month or once every other week or something like that. You can Also go network it like Business Net, Business Networkers International. BNI.com is a good place to network. Going to different conferences, going to industry events. Those are all good places to go to to network depending on what you're focused on. Right. So I would necessarily go to like an apartment complex conference looking for note deals. Whatever your niche in real estate is. Go find out the top three, four or five conferences that take place. See if there's one near you, there's one really close to you. Go hang out in the bar lobby, maybe don't pay the admission, see if it's worth your time and energy to go first and then the next time they have it then pay the ticket and go for them. Most of the time we're not paying to go to events, we're actually going and just hanging out, meeting with people at the event at the local bar, in the hotel or the conference center and go from there. Okay. Do you recommend buying performing or non performing notes? Yes, no and why? So that's a double headed question because I would have to ask you Ingrid more so about what Are your focus or that's where it comes down to your goals, your what you're looking to accomplish. A lot of people ask me that question, which way should I go? I like notes, but which way should I go? Now if you are working a full time job, you don't have a lot of extra time and I'm not saying a lot of extra time. Even non performing you can do stuff like 10 hours a week or less. But if you're working full time, you don't want to get into foreclosures, you don't want to get into workouts, you want something that's more passive then I would just stick with the performing notes side. Now if you are a full time real estate investor, you don't mind rolling up your sleeves and working a little bit or getting a bigger discount which can lead to bigger deals, bigger yield, then the non performing side is a better place to go for you. Either way, you're going to need capital. Now if you're going to use your own money and you want to put 200 grand or so to work from your IRA or your retirement and you just, you want to make a double digit return, 10 12%, you can do that very easily in performing notes. With performing notes, if you don't have any money then you're going to need to buy stuff that was probably once re performing that is now being sold at somewhere around, you know, probably a 16 yield so that you can give your underlying investors, if you need to raise capital an 8% return and you keep the difference non performing, you've got to be a little bit more flexible on that. You gotta spend a little bit more time on. Not a lot of time, but you'd be willing to drag this out a little bit. You're not gonna get immediate cash flow. If it's vacant assets, you're going to go through foreclosure process or cash or keys, the reverse mortgages. That's not a cash flow play, that's a foreclosure reo play. Okay, but that's, that's the route I would go. Either you got to know what you want. If you're okay with the workouts, if okay having to do some rehabs, you know, you'll be willing to evict people who are not willing to pay and also be willing to foreclose on them. Okay, how to do it if I don't have money to buy. Now you need to go raise capital. You need to market your business like anything else. Do not let not having capital or not having money stop you from going out and being the no business? Because I didn't have any money. I just went out and marketed deals and raised capital to fund the deals. I wasn't really a wholesaler. You know, wholesaling a note is more difficult than wholesaling a piece of property because most people that are in the real estate space, when they see wholesale deal, they, and they see somebody list an address, they think they're talking about the property, not the note business. A lot of wholesalers, a lot of fix and flippers don't understand that. And I'm buying the note, I don't own the property and I may not actually ever end up on the property. I have to take it a foreclosure. It's a little bit different separation of mine from what people are used to. So I'm not a big fan of wholesaler notes unless you've already got a buyer's list, because a good buyer's list is what you really need. It makes more sense if you're starting off, in my opinion, and that's just my humble opinion, that you go out and raise capital instead of trying to find a buyer's list, you actually use that to market, to raise capital for your note business. Understand the deal, understand the intricacies of what note you're looking at, whether it's non performing performing, what are the advantages and the disadvantages of either side and knowing the strategies. Hey, our goal is to buy this non performing up. We're buying at a discount and our goal is either A, to get them back on track for cash flow or B, to take the asset back through cash or keys, dean, lieu, foreclosure, whatever it might be, or, or to help the borrower liquidate the property or pass off. So you got to know what's going on and, and market that way. A lot of note wholesalers don't make sense because they're basically throwing stuff against the wall. They don't understand the value of the deal or they end up wanting too much of a wholesale fee when the deal doesn't hold it. So that's a longer question kind of that ties into with where you, where you are at currently, what your goals are, what you want to accomplish. Okay, do you know due diligence is, it's not just the property condition, the property, due diligence and notes. If you're looking at the borrower, you're looking at the obviously the collateral file, the loan docs, making sure you have all the right things in there, all the T's are crossed and the I's are dotted, then you have the right to foreclose and then the property condition is the last thing aspect of things. Okay. And if you're looking for more stuff, you can always check out our upcoming three day workshop that we're hosting here. Actually it's coming Friday, Saturday, Sunday at Note buying for dummies.com or check out our one day free class@noteweekend.com all right, so if I, I'm still looking to wholesale a note due to lack of money to buy the note myself at first. Which documents papers are necessary. So to put a document, to put a note under contract, you still need to have a loan sale agreement. You still need to make an offer that makes sense. Okay. So if you're making an offer on a note, you're going to need to sign what's called the loan sale agreement, okay. With a seller. And then if you're going to wholesale the property, you need to either a, have a wholesaling agreement like a Simon contract, or you could have a fee agreement or you may need to do a double closing if you don't trust the person that you're buying it from. You just got to make sure that your buyer is ready, willing and able to close. And we have them close a couple days earlier than you're supposed to close on yours. And then depending on how much you trust that person, like there's people that I would trust, like, okay, yeah, no problem, just wire me the two grand or the five grand or my wholesale fiat closing. We'll just transfer the contract to you, you know, and I'll form the seller. Okay. But some people are shady out there that once they find who the seller is, they want you to cut you out of the deal. And now they have infinite deal flow with that seller. So I would do a double closing or double contract basically where you know, the seller sell, gives you a loan sale agreement from them to you. You go out and create a separate contract and swap you from the buyer to the seller. And then your buyer becomes the buyer on the second contract with the increased price, the wire instructions and stuff like that being different and the closing to be a couple of days earlier. Just got to be careful of that. Okay. It all depends. And then you would need to also set up an escrow account with an attorney or a, you know, account where they can, where the buyer can wire the funds in for the full deal. And then you turn around and wire the funds directly to the bank. You keep your wholesaling fee. Okay. The I've seen cost for a, you know, escrow account being like 500 to 750 bucks from an attorney. You're not going to get a title company to do that because they're not going to make any money because there's no title insurance being sold. So just prepared to have a real estate attorney do that, and then you'll need to instruct them how to do that. And she also quite asked the question, is it necessary to have a lawyer to look at the document? If yes, is it expensive? A wholesaling agreement? Not really. A loan sale agreement? No, you don't necessarily need to. I mean, it's still good at first. Have somebody review the documents. It's going to cost the attorney whatever they charge to review documents. Sometimes it's 150 bucks, sometimes it's 250. Some attorneys will do it as part of the deal, others won't. It just varies. An attorney by attorney and your experience with that attorney. Okay. Another question here from somebody else was. Oh, this was from Gene. What states are your favorite to buy notes in? All right, and my answer that is, whatever's going to be the best yield. Now, the answer to that is that that geography of states, my favorite has changed over the years. Like I'm in Texas, and Texas is a great state to buy notes in, but they're often more expensive because of the fast foreclosure loss. So if I'm telling somebody to buy notes and like I get tapes, and here's what I look at, here are the states that I'm going to have inventory to look at because that's the most important thing. You could say I'm, I want to buy in Idaho, but if you don't ever see anything in Idaho, you're not going to be a very good note investor because you're not going to hardly see anything in Idaho. Right. So if you want to look at inventory, the best states to live in, if you want to stay in your states looking would be Indiana. It's a judicial foreclosure state, but relatively fast, quick to evict. Ohio is a judicial state, takes about nine months to foreclose if it's an occupied asset. And based on your due diligence, most of the time, you'll see that borrowers want to stay in their house. So like Indiana, Ohio, Michigan, outside of Detroit, for the most part, there are good parts of Detroit. There's some rough parts of Detroit. I mean, there's good spots every city and bad parts every city. Right Just those three states for the most part, I think seem to have a bigger bang for their buck when it comes to roi. Lower values. Rents are, rent rates are a little bit higher compared to what you'd be paying for. Seem to have the most cash flow and then just picking the biggest markets, biggest cities in those areas. The one city that I kind of have when it comes besides Detroit in Indiana would be Gary. Gary. Indiana can be a little rough really, but it is going through a lot of re gentrification. Illinois is a judicial foreclosure state. It's okay to buy outside of Cook county for the most part, specifically Chicago. It's just going to be a longer foreclosure. You know, Michigan's a faster foreclosure state, non judicial. And then you get into the Carolinas, North Carolina, South Carolina. North Carolina is non judicial. South Carolina is judicial. It's a year to foreclose. Missouri, it's a relatively fast foreclosure state. Kansas is a judicial state. But you also have to have a separate debt buyer's license there. Something to keep in mind. But most of the time, you know, in those states, I mean, if you get something in Texas, Oklahoma, relatively fast, Tennessee is great, but can also be overpriced, those fast foreclosure states are gonna also cost a little bit more, but something in those bigger mark markets of those states for the most part. Overall, I like Phoenix, I like, you know, Las Vegas, you know, I also, you know, there's parts of Florida that I like. Just Florida has changed a lot and you got to be prepared for higher insurance costs. And the market there is kind of being hit hard with so many properties available for sale. So I used to be heavy on God's waiting room in Florida, but that's changed. I'm very, very particular about that. I think I only really look at stuff that's in Orlando for the most part right now. Okay, which states should I avoid buying notes in? Another great question. I would avoid buying in New York, New Jersey, right off the bat. I wouldn't buy a note necessarily in, in Minnesota and Alabama. A mortgage in those states because of their redemption periods are a year after the fact. Once you foreclose, you've got to give the borrowers a year to come back. And sometimes it can be shortened down to six months in Minnesota if they're deceased and stuff like that. All right, But Alabama, it's a one year redemption period means you get a hold on the asset. It actually makes more sense to buy a contract for deed in Alabama, because it's treated as a tenant relationship versus a foreclosure relationship. Okay. I would not buy contract for deeds in Pennsylvania. I would buy a mortgage in Pennsylvania, but not a contract for deed. All right. And those are really kind of the bigger things. I don't buy in California. You know, Washington State, Oregon state, just, it's. You need a different license for those areas and they're just not very landlord or lender friendly. So pick your lender friendly states and then look at the foreclosure time frames it takes to foreclose any eviction and figure that out in a state by state basis for you. Okay. Stephen asked. Here's another question. Let's see here. You ask a question. How do you get comfortable buying notes outside of your own market? What tools do you use? And that's a really great question. I get that question pretty often correctly. Steven's actually from New Braunfels. He's been, his dad and his family been buying notes for about 20 years, but only in Texas because they drive by every note that they look at. Now they buy primarily owner finance stuff and land. That's. That's fine. Texas is a big state, though, and Steven told me he got his actual pilot's license to fly up to Lubbock and back to go check out these notes individually. That's a lot of capital expenditure before you go take a look at it. Right? So what we utilize a lot of times, obviously we're going to use Google, we're looking at Street View, we're looking at Zillow to get a quick, rough value. We know it's not a final number, obviously, evaluation, but when you're looking initially at notes, especially residential notes, is you're going to do what's called an indicative offering. You're making an offer based on what the online values are, silo values, you know, AVM value. Of course, you get time for due diligence. If your bid is accepted, do your due diligence, but don't have to fly out to look at everything. You can order a BPO broker price opinion from a company like us that can go out and send somebody out to take a look at it for, you know, 80 to 100, 150 bucks, which is cheaper than you flying all the way across country on Southwest Airlines or, you know, dealing with that. Okay, so that's the thing. I get comfortable up doing that because the BPOs show me basically three to four, you know, parts of the home, all sides. I'm not so worried about the interior because I'm not going to get inside. Interior. I can tell you a lot about the property by what the property looks like on the outside. And looking at the history on Zillow too is really nice. Or Google Maps shows you what the properties look like over specific years. So if it looks good, lawns mode, you call the utility departments and the power, the gas is on, somebody's taking care of it. If it looks trashy on the outside, it's going to look worse on the inside. And that's the whole point, is make offers on the front end based on the online values, online due diligence. And then if your bid's accepted, then you'll do a much deeper dive into picking up the phone and calling the utilities, calling the next door neighbors, you know, sending somebody out to actually view the property. Realtor take snapshots to see if it's vacant or occupied if it's vacant, peeking in the windows, that kind of stuff. Just, you know, start with one and you stick to building your system. So this is the thing I always say is get comfortable with the market. If you're going to buy in Ohio, then it does make sense to fly up in Ohio and drive around the cities that you're going to buy in, talk to realtors, build you a team of people in those markets just like you would have a team here in your hometown. There are realtors, there are people that will go by for you, there's contractors that will give you bids, get an idea what's going on. And that's why, you know, if they sit back on networking, it makes sense to network in real estate clubs that are across the country too, finding people that you can use, leverage and trust as well. Okay, look, I see it here. Todd asked the question. I want to buy notes and just foreclose on them so I can immediately sell the property to an end buyer. Is this the right strategy? And they said is a big whopping no. Now if you're buying reverse mortgages, yes. That's the only strategy you have, is to foreclose and either A, sell at the auction or B, take the property back as an reo, fix it up and sell it. The problem with this is if you get people that are interested in buying a specific house before you own the house, you may not end up ever owning the house. Okay, so an investor that wanted to do this, there was a property in North Carolina. They were, the buyer was willing to pay 130 for the house, but the note was going to be like the offer was going to be like $90,000. Well, the balance was like 117 on the note. So if you buy the note at 90 and take it to foreclosure and it sells at 117 at the auction or above your 90. Okay. Or, you know, 117 was the legal balance if it was worth more than 130. So logically your highest bid at the auction, you being the bank now that you bought the note at 90, would be somewhere above 90. So you make some profit. Right. It's just that a lot of times people do not want to commit to something that there's an oh, they're not tied into that aspect of it. Now, there's nothing wrong with making 10, 15 grand. But if you don't have your own money in the deal, you really need to bring your investors in. Not on a joint venture, but get somebody who's comfortable being in the deal for six to 12 months, who's more about the return not, but the end product. Okay. Because what will happen is you have somebody's interested in buying so much for a house, they don't know a condition and they're thinking about buying the house, not what goes on with the note. And if it takes you six months to foreclose or 90 days to foreclose, people will often, you know, their idea except about buying a specific house is going to waiver as they move on to something else. So I think it's, you need to be buying for your own portfolio first and understanding that if it makes sense that the borrower starts making payments on time, will it make sense to you two, if you foreclose or get cash for keys and sell the, you know, if you have to foreclose, great. And make sure that the number makes sense if you have to. If you do sell at the auction or take it back or if the bar is able to pay again, make sure that all these numbers work. Approaches the bank. If you try to approach it too much from the real estate side, you're going to get confused and it's not going to work long term. You're going to be frustrated dealing with buyers who really don't stick around because it takes longer for you to go through it and you trying to finagle it makes things a lot more difficult than it could be. Okay. Dale asked, questioning is I'm looking at a tape of newly originated notes. Why would the note owner on this, a lender be looking at selling them? And that's a great question, Dale. We get these tapes in from different servicer for different sellers. Some are Wall street. They'll have some stuff that's newly originated. And it all depends on what's going on with that tape. You have to look a little bit closer at the tape. Now in some of these cases you'll get tapes in of people have newly originated non bank lenders who have originated these notes with a warehouse line or their own money or deep pockets. Now they're looking to sell these notes off to a buyer at really what's owed at par. So they're getting paid in full and able to, you know, take that $2 million that they sell these notes for to go back out and re lend it again. Okay. And they're making a lot of these lenders, mortgage brokers are making money on origination points and the difference between yield, spread, premium. Others are. Maybe these tapes may also have some deficiencies. Maybe they're a scratch indent or maybe they're labeled as S and D. Scratching debt means that maybe the borrower's paying in time, but there's missing documents. Or maybe it was a specific lending program that required the borrower to have a 680FICO and that borrower's credit after closing had dropped to 650 or 620 or 675. So you no longer qualify for that third party to buy that note from them. So now the lender is forced to sell. All right. You may also see new notes, newly originated notes that people are trying to sell, which I that's another question we get here. They're trying to sell it and try to get as close to par. And that works in some cases, other times it doesn't work. And I'll go into that in a second with the next question we have to go through here. But if you're curious about why a note seller is selling a tape or why a tape is up for sale, just ask, you know, what does this mean? There's a whole lot of difference. We see scratch and dent, we see non performing, we see tapes of reos, we see tapes of contract for deeds. It all varies. You know, if stuff is performing now but was once non performing, maybe the investor went in and bought these assets up at non performing at a big discount, worked to get the borrowers back on track. They've been performing for a while and now they're looking to sell those assets off. And recapital lives just varies a little bit. But good question. Dale John asks, what's your favorite way to structure an owner finance note deal to make it the most valuable to sell. Okay. So here's a caveat. Okay. And this also falls in line with CJ's question here. You often talk about not chasing or buying owner finance mortgage leads. Can you tell me why you aren't a fan of that? I'll get to that. Secondly, but here, if you're going to, here's the thing. If you're going to owner finance a property, okay, and you want to immediately sell the note, you're going to take a discount, okay? Do not structure that note better than what somebody could go out get. So if somebody needs owner financing, okay, why do they need owner financing? Can they not get traditional financing because of, you know, they're self employed, they got cash and they got cash flow, but they don't have long term financials or they don't have the credit score. Okay, what do you want to do? I. When I take a property back as an reo, people ask why don't you owner finance and create notes? Because I don't want to take a discount. I would rather get my capital back. I would rather get my money, my profits back in so then I can go do what I want with it. I don't want to tie up 40, 50, 60, 70, 100 grand in a note. That's my profits that I can't tap into. Oh yeah, you can sell the note. Yeah, but I'm gonna sell the note now at a discount. 10, 20% discount because it's newly originated and it may not be structured properly. So here's the best way to structure. First and foremost, always find out if you are gonna do owner financing. If you can sell the note regularly and it takes you 30, 60 days to sell it regularly, just do that, you're gonna get the biggest bang for your buck immediately. All these people that are in the owner financing. So you'll make so much more money over 30 years. Not really. Yeah, collecting payments for 30 years will result in a big amount. But if I'm taking that money and I'm going out and doubling it every 6 to 12 months or making 12% of my money instead of the 8% of the note, I'm going to outperform the 30 year mortgage every day. If you just know how to invest, okay. But if you are going to owner finance it and you're comfortable holding that note for a period of time of at least 12 months, then get as much as a down payment you can, 10% at a minimum is what I would suggest. So that then you're only doing a small second and a first of like 70, 75%. Okay. So in this case, if somebody's bringing 10% down, I would do 10% down payment, a 75% first lien and a 15% second. So the combined LTV, the CLTV is only 90% of the LTV. Right. 75 plus 15 is 90. The reason I'm doing 75 first and a 15% second is if somebody pays on time for a year, that 75% second. I mean that 75% first could almost automatically get refinanced at 90, 95, maybe even at full value to a bank. So you're going to get 100% or something in the 90s as long as that borrower's credit score is decent and they've got the right things. Okay. And you can hold that 15% second for cash flow. Now if you flip it the other way, angels do 10% down and a 90% first lien, you're almost automatically going to take a 10 to 15 discount off of that first lien. That you're just going to say sayonara, it's gone away. All right? So it makes more sense for you to do it structured so that the first can be refinanced out. And if you, so you take in a discount, you carry that second for a period of time for cash flow. Okay, that's better than taking a discount. But that's what makes these most structurally attractive. Course the interest rate. You need to have something that's a normal interest rate a little bit higher than what somebody with a credit would get. So rates are at like 6 right now. I wouldn't be doing anything less than 8. Okay. Preferably 9 or 10, just being where it's at. Okay, but that's what I would do. I would do 10% down, a 70 to 75% first and then a 15 to 20% second so that you avoid losing any money on a discount. Because if you went 90 and tried to sell it and you only got 70 cents of the dollar, well, guess what? 70 cents of the dollar of 90 is 63,000. Okay? Now if they give you 63 on a 70, that's only a 7% loss. You still have that 15 to 20% second there for you. Okay? So that's what I do. Also make sure it's with a licensed third party servicing company's collecting. Make sure it's Dodd Frank compliant. It means running the borrower through an NMLO and then also setting up it like automatic payments. You can get away with even doing with the bars, just making piti payments, PITI and servicing pit PIT rolled into that. Okay. But have it with a third party servicer is important. Having to make sure it's doctrine compliant and that way that makes that paper more valuable. Treated like a bank loan. Structure it like a bank loan and understanding that if you're going to sell a property and plan on selling it, just you want to cash, you might as well just sell it at 90 cents a dollar. Take the discount now instead of structuring this all up and then having to get get rear ended without the Vaseline, the back end. Okay. A lot of people talk about owner financing and it can be a great thing if you're planning on holding for a period of time. But if you're not going to hold it for a period of time, you're going to take a loss. Okay. Now some people when they rehab properties, you know, they buy the property such a low dollar amount and then the rehab costs on if they're at 60 cents of the dollar, then they're pretty good. You know, they can take a little bit of a discount because they're still going to get, get paid off in full and pay off their underlying hard money loan and their own investment stuff. Okay, another question here. C.J. s question. You often talk about not chasing or buying owner finance mortgage notes. Can you tell me why you aren't a fan of this? Well, okay, so I believe in working smarter, not harder. There's for years and decades basically people have talked about how go to the county records and you can buy a, a list or download a list of people who've owner finance their house. Just do a deed search and see who owner financed right at the county records. But then that might be one person with one note. So now you're sending out direct mail letter campaign stuff like that. And then we all know direct mail has a very low response rate, 1 to 4%. Okay, so if you buy 500 leads and you get a 4% read, that means you take 20 phone calls. Well, that's probably only 20 individual notes. That's a lot of tire kickers and people that don't necessarily want to sell their note at a discount. That makes sense for you. And you don't know if these notes are structured properly. And it's a lot of the same work to get one lead from one, one seller. Right. I don't think that's effective. That doesn't make sense at all. In these days it makes more sense for you to post something on LinkedIn or post something on Facebook saying that you Buy notes not just in the note investing groups, but posting on your regular profiles and social media wherever you have social media profiles, like, hey, I buy notes and. Or going out and networking with your local real estate clubs. You'll get more leads that way from owner finance. I like dealing with banknotes because once I make the right party contact at the bank, they're going to send me a list of notes every month, every quarter, with either a phone call, an email blast, or stuff like that that cost me nothing. And every time I get a list, it may be 36, it may be 50, it may be 200, it might be 900. Okay, so I get a lot more deal flow coming in with a lot less headaches. And my cost per deal, cost per lead, I should say, is a whole lot less than what people are spending in direct mail. I field hundreds of phone calls over the year. People who have bought leads from some company, you know, some note educator who only does owner financing. And these leads are just like, they're dead wood. I mean, just dead leads just doesn't make sense. And it's. It's a frustrating thing. I would rather put my time into contacting banks, hedge funds, asset managers through LinkedIn or email, or dialing for dollars for that to get much better deal flow. Final question here as we wrap it up here in this episode. This has been fun. We'll be able to do more of these. John asks you a question, he goes, how do you stay so positive all the darn time? And when he asked me this, I had to chuckle a little bit. Here's the thing. I have ups and downs just like any of you all do. All right? There are good days, there are bad days, there are good deals, there are bad deals, there are deals that drag out longer. They're closing, take place, you know, in the, in the words from Full Metal Jacket. Life is a big shit sandwich, and sometimes we all got to take a bite out of it, right? I was very fortunate enough that I've early on as an entrepreneur, I did spend a lot of time on, like, self help, the mindset, overcoming obstacles. And that's the way I look at things a lot of times. For years when we had an office and something would happen, I would always tell my team, look, we got 30 seconds to about it. And then let's quit wasting energy on this negativity and let's find the positive or let's find the pivot from it. And that's still the way I am today. Steph always jokes that I, Mr. Positivity I don't get negative. Oh, I still can have negative thoughts. I can still have stinking thinking. But that never does anybody any good to sit here and just wallow in the mud. Oh, woe is me. It never made any sense to do that to me. Always made sense. Let's overcome obstacles. Let's figure some things out. You know, it's kind of that going back to being, I think, an athlete. When you're an athlete and you're playing, competing against somebody, like in football or basketball or something like that, it's kind of like a chess match, right? There are going to be times that you get. You get pancaked, and other times you pancake, you know, and that's what I think I love about so much about football is kind of that chess match of things, of how they put people in the right positions and how do things. It's the same thing here. You're going to have good days, you're going to have bad days. But the thing is, should not flow downhill, okay? If you've got staff, teammates, a following, you shouldn't have your crappy day flow down. Now, yes, it's okay to talk about when things are going on, all right? But those that wallow in it and whoa, whoa, is me is not going to attract the right type of people to you. You catch more flies with honey than vinegar. So if I'm not having a good day, I sure don't get on here and talk about it, okay? I take the day off or I try to go do something to get my mind in the right spots. One of the most pleasant things the last five years is usually the daily walk I take in the morning. Getting up, going out, walking myself in the neighborhood, sometimes walking my neighbor's dog. That's really nice. I love sports. I love going and watching baseball. That takes my mind off of things. But knowing that if I can fix it and what's there to worry about, or if I can't fix it, it doesn't do many stress. It's kind of that, don't worry, be happy. Everything's going to be all right, you know. And that's the thing, is I think a lot of folks early, you know, Zig Ziglar, Greg Reed, Bob Leonetti, you know, Bob Proctor, Lou Brown, Les Brown, some of the people. I read a lot about mindset early on. T.R. becker, you know, Sharon Lecter and stuff like that. Life is full of hurdles. Life is full of obstacles, and you're gonna have bad things happen. But sometimes bad things happen. For a reason that open the door to somewhere else, somewhere you're supposed to be. Right. You know, that's. That's the biggest thing to take a look at. Good things happen. I mean, good things happen to people who are prepared. Bad things happen to good people all the time. It's just how you deal with things. And I'm a big believer. God never gives us anything that we can't handle. And so I do rely on my faith quite a bit that I know I could get through it. No matter what it is, God will provide. I'll find a way to overcome and it may even be bigger and better than ever before. So that's why I'm always in a pretty good mood, because I woke up six feet above ground and it's a great day to be alive. It's a great day to be alive. You know, sun's still shining when I close my eyes. When I open my eyes. Whatever Rascal Flat song goes. But anyway, I want to thank you guys for that. Submitted questions. If you like this, please feel free to type in questions. Book a phone call@talkwithscottcarson.com I'm always here to help answer your question. Shoot me an email@scottclosenotes.com and we'll probably make this a regular occurrence. I know I've probably talked about that in the past, trying to get people on to do it, but I think people like submitting new questions a whole lot easier because they don't have to be on video or have their voices. So thank you to everybody. Have a great day. Go out, take some action, and we'll see at the top.