Baldwin Advisory Group: Your One-Stop Due Diligence Spot

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. All right. We are honored to have. Just joining us here from the thriving metropolis, Montgomery, Texas, which is just down near the big H town, our good friend, mentor, an amazing individual, somebody you're going to want to add to all your Rolodexes or speed dials. If you don't know what a Rolodex is back in these days is the, the one, the only incomparable Mr. Dicky Baldwin. Good morning, Dicky. How you doing this Saturday?

Doing fantastic. Glad to be with you. It's sunshine.

Sunshine. Exactly, exactly. You get a little bit of rain there.

Oh, I'll tell you what, Houston has been pummeled with rain these last couple of weeks.

Yeah, definitely. And then now we got, I was at this morning, the humidity kicking in and the mosquitoes starting to show up, which is just, you know, the second national bird of Texas is the mosquito behind the mockingbird.

But they, our mosquitoes in Texas can carry you away.

Yes, they can. Although I will, I will tell you this little story. When I was up in, in Minnesota last month visiting some family. This is the land of 10,000 lakes, right? And there's some pretty big mosquitoes. There's one wall against this convenience store that had one of those big signs on it. I was like, what the hell is that layer? Is it all dirt? And I kicked it and it was literally like an inch and a half layer of mosquitoes that it all died there from the marshes. And I was like, okay, great, that's why everybody's wearing off. So. But anyway, let's dive into why you're here and why everybody that's on here needs to know Who Bald who? Dicky Baldwin and Baldwin Advisory Group is. Take it away, bud.

Thank you, sir. Really, really do appreciate it. I realize that a large part of this podcast is about marketing on a regular basis and I, I do market, but I'm really there for you guys to help you be successful by basically doing and assisting you with your due diligence.

Yep.

And how did all this come about? Real quick introduction as to what my company is all about. Baldwin Advisory Group. I've been in the industry longer than Scott's age, 40 years. And I did retire in 2018 because I had turned 70. And after being a realtor, a loan originator, a correspondent lending, wholesale lending, warehouse lending, just a little bit of everything, been in the title business. But more importantly, I have been in your shoes as an investor. And that's where I realized that due diligence is the, the key to success. Because the little bit of money that you're going to spend on due diligence can literally save you thousands and thousands of dollars for making a mistake. So 2018, I retired. In fact, I kicked bag off with Mr. Scott Carson and at one of his masterminds. And what did I do? Retiring at 70. About three or four days after retiring, I called Scott and told him that I was bored reminding me about my, my Rolodex. Well, it's huge, needless to say. So I went to all of my vendors that I've worked with throughout the years and told them, look, there's a lot of brand new people coming into this industry and they just don't know where to go to get something done. So basically what I've done, I've put a one stop shop together for you as, as the investor, as our slogan, one bag for all your real estate services.

And.

Am I sharing the screen?

I shared the screen. You want, do you need to, did you want to share your screen instead?

Yeah, if I could.

Yep. Let me, let me drop it off. I just pulled up your website so everybody can see what it looks like. Okay, there you go. Take it away. You should be able to share your screen now.

Let me, I'm getting there. Hey, I'm old.

Okay, There you go. No, you're not. You're more seasoned. You get a little bit seasoned there for you. So we see your, we see your desktop screen.

Okay. And, and I'll, I'll go.

Yep, click on there. There you go.

There's the website. So basically what I did, guys, I went to all the vendors that, that I have, thinking primarily of, of the, the note Industry, which I've been associated with for years and realize that if you're living in California and you want to buy a note in Liselle, Georgia, do you know where to go to get something done to do that due diligence? Chances are no. Come to bag. Yes. Because BAG works nationwide, both residential and commercial. And I'm highlighting commercial Scott, because you brought this up earlier and I'll get into it in just a second. But realizing that you need a bpo, you need a title search. I mean those, those are obviously the, the basics of due diligence when you're getting that note. But once you have that note, sometimes that property may be vacant, you need an occupancy check or you need a door lock change or you need to have that house cleaned out or you need to cut the grass because you're in California and you're getting code violations in Lazelle, Georgia because the grass is up over the roof. BAG does all this for you. And just to real quickly and what I'm going to do is highlight the, the, the basics, what I feel of due diligence and give you an example.

Yep.

But I want to show you these are all of the different services that you as an investor need. You may need one, you may need two, you may need them all, but BAG is here to help you do that. So today what I, I, I want to do is give you an example of what I feel are the two highlights in due diligence. That's in the BPO valuation side of things and the title search side of things. I'm going to give you an example of what these products look like so you can analyze whether or not you want to move forward with the purchase. The other reason that I'm, I'm doing this and let me give you this little, it's going to come here in just a second and everything's really slow in Montgomery.

No, it's a, it's, it's a good thing. There's nothing wrong. There we go. Perfect.

So this is how you get a hold of me phone number and there, there's my email. And the reason I'm giving these items as a sample, this happened to be an investor and this was a couple years ago that came to me to do a broker price opinion of BPO and a title search. And about six or eight months later he was selling that note as a partial and so he was able to do an update of the product. So let's look at what a BPO is. A BPO is a Broker price opinion. That is done by a vetted real estate agent through my third party vendors. Why do I like using third party vendors? Yes, you can get on the Internet and you're in California and you're wanting a note in Lizelle, Georgia. Trying to find a realtor in and around Lizelle, Georgia can be challenging. And the other thing is if you had that realtor on the phone and asked them to do a BPO, a lot of times realtors just don't like doing BPOs. I have third party vendors on the other hand that have vetted agents all over the country. Why do I like that is because their job is to go out and do one thing and one thing only, and that's to get a value, not to try and get a listing. And so once the realtor completes this bpo, it then goes into a quality control. And if for whatever reason QC does not agree with what that realtor had to say, then it is sent back to the realtor for revisions.

And by QC it means quality control. Everybody just sorry, got that.

I'm sorry for the lingo.

No, no, it's good. You said it before. But I just want to reiterate it, you know. Yeah, for folks.

And that's very important because it's sent back so you basically have an extra set of eyes. Also if you try and go to that local realtor, you're probably just going to be getting a cma. In the back of their mind though, they're thinking, I'm going to be able to get a listing. And sometimes realtors may fudge a little on value when there's thought of a listing being involved. So what happens on a BPO is the agent physically goes to the site and takes pictures of the site. Now there are some restrictions. This is an exterior BPO for their own safety. Because of what's happened in the world nowadays, agents on an exterior are asked to take pictures from the street because we have had agents shot at and, and, and so for, for their own safety. So keep, keep this in mind. On the other hand, if I have permission with a point of contact, better known as a POC or a lock box, then we can go inside and take pictures of the inside as well as the outside. And that's called an interior bpo. So what happens, the agent goes out, they take pictures of the property, they come up with an as is value. Keeping in mind this is an exterior. If they happen to see any exterior visible damages, then in the workings of the the calculations it will adjust to an after repair value ARV. So this little property as is 48,000. The realtor felt that with the repairs that they've listed the the property on a list price would be around 63,800 with a estimated sales price at 56,8 and a lot, a lot of variances. But what they do on the bpo, they give a lot of information, general market conditions, the subject marketability in order to arrive at the AS is value. They have three comparables that have recently sold within the neighborhood and they also have three listings hopefully within the neighborhood. And there are restrictions that they try and keep the the property six months or better. They try and go within the neighborhood. But if you're in Liselle, Georgia, you may have to be going 40 mil away to to get a comp because there's only maybe one or two properties in lel. But keep this in mind, guys. Everybody's got to live somewhere. So with that being said, and here for instance, the realtor who is not a contractor, but they said that the roof needed repairing guttering and siding and that is what took the as is value to an after repair value with these estimates of cost. So with that there's a map of locations the Google and then here's more pictures of the subject and then property across the street. And these are all the comparables that were in the bpo. So any questions on a BPO question.

Here from Steve asks what's the average price for what's the. What's the difference price between an exterior and an interior bpo?

Typically, as long as a property is not considered rural or has limited agents in the area that they have to drive to get to the locate a far distance. An Exterior typically is $100, an interior typically is 130th. Those are what I consider my nationwide prices. I'll let everybody know that if for whatever reason when the order is put into the vendor and it happens to fall under that rule and I get a, a quote before moving forward, I will always get your okay to, to get that done.

Yep. And that's true. We've sent some stuff to Dicky and he's like, hey, the ones came back at rural is like 200 bucks. I'm like, we need it, let's get it done. You know, just. Yeah, that's what you run into with rural properties. And like we had somebody ask me the other day, would you buy a note on a real rural property if they've got seasoning and the values there and a lot of equity? I said, well, it all depends you know the number one rule do you want to buy when you buy notes or buy real estate, make sure you're happy if you end up owning the property. That's one of the biggest things you know. Absolutely. And this, you know the 100 bucks, 130 bucks saves you also if you see that the condition is not the same. You know, I looked at, you know, property down south Texas down by Mission performing up online pictures look pretty good. When the BPO came back, extra BPO grass was almost as tall as the roof. Whole paint, whole walls of me size like no, it's not worth me to buy this one. So that 100, 130 bucks saved me from making you know, 25 $30,000 mistake in buying the asset.

So absolute. Well what let's assume Scott that you're doing this note and you are okay with the spread in the note. You're okay with the value from Zillow and Redfin and and all the others. We also have a product which is called a PCR or a property condition report. Now once again this is the same property that the BPO is done on when my client wanted to do a partial so he wanted to update. So here's the pictures eight months later with the property condition report. And in the report there's pictures of the subject. Then there's a list of questions about the subject and the neighborhood and then a full array of of photos showing the current condition. Real quick story had a client real excited about buying this property, not this particular property but another property and ordered a PCR. Got to him like in 24 hours get an email from. He said my God, you, you are wonderful. You are the greatest. You just saved me thousands of dollars. Well, curiosity. I picked phone up, I called him. What do you mean? He said you sent me a PCR and there was no house. Un unbeknownst to the seller of the note and the buyer, that property had been destroyed.

Yep.

And I saved him $20,000 with a $45 investment. That's what these PCRs run, $45.

And it's really good too. If you're buying an area. We talked about flooding, joking about this morning flooding. If you got property every six months especially you're holding notes long term. One of the conditions we put in the funding agreement set. We'll take a look at the, you know, we'll make sure and have somebody go by and do a property inspection every six months of some sort of, you know, it's a good touch base knowing too if your property's in good condition or bad condition or if there's junk on the lawn or if it's staying. If you've got tenants out of state, can be a pretty easy thing to do for them.

Absolutely. There's, there's a lot of clients that I have that have performing notes. Their portfolio is full of them. But about every six months, even though they're getting payments like clockwork, they will order a PCR just to see what the property looks like. Because the picture's worth a thousand words. Because if that house looks like garbage on the outside, you can imagine what it's looking like on, on the inside.

You could eat off the floor, I bet you.

So in the valuation side you have the opportunity with bag of being able to do a broker price opinion. You can do a property condition report. You can also do if warranted, a full blown appraisal which obviously each of those pricings are different depending on, but you're more in the couple of hundred dollar plus range when you're doing a full blown appraisal. Keeping in mind that a BPO is done by a real estate agent, an appraisal is done by a licensed appraiser.

Right. And that's the thing too, the note business. You're not going to be doing too many appraisals. It's going to be most of the time it's going to be a BPO or the PCRs here for the most part because you're not getting into your access. And a lot of these, you know, if they're occupied, it's going to be just exterior drive by basically photos from you know, three or four sides if they can get it for the most part.

Well, and, and you know where appraisals also come in place, Scott, a lot of our industry utilizes their self directed ira. Yeah, there's a lot of times that that self directed IRA wants a value on, on the property.

Yep.

And here, here's the issue. It used to be that the agent could sign a document saying this is for, for the self direct IRA or for the courts. This is what the property is worth because of the liability that these vendors have. They are not allowing that. So I'm seeing a surge in full blown appraisals to complement the the value and satisfy the self directed IRA or even the the courts.

Makes sense.

Yeah. Along with the BPOs, PCRs and appraisals, I can also do a drone flyover.

That's new. I did not know about that there.

I did one in Georgetown last week.

Very nice.

Right Right by you.

What is it? What's a, what's a drone flyover cost?

This particular flyover, 360 degree video as well as still pictures was $240.

And you can do that on occupied or vacant properties or has it got to be.

In fact, I've got a lot of banks that are doing construction loans on the outside and they'll order a drone flyover just to see if work is actually being done or not.

So I, I gotta ask you a question because this is something I'm curious about now. Okay. So we had this property down in Cutler Bay, Florida we couldn't get into because the gate, it was secure. Could we have ordered a drone flyover if it was gated like that and they go over and.

Yes.

Oh my gosh, that's like, that's changing. That changes business on there.

Let me give another example real quick. Yeah, I had a BPO in California that had a chain link fence with tarps all over where you couldn't see through the, the fence. They ordered a drone flyover and it ended up being a marijuana farm.

That's cash flow and commercial baby. John asked a question here. How often do we need to order a PCR with an ira? So what happens John with that when you're dealing? Because John's from Canada. When you're here in the United States, every self directed IRA company around April 15th is going to ask for evaluation, report, evaluation update in the asset. And depending on where you're at, like with we're using other people's money and that we're using a self directed ira, we get an email from Quest or Equity Trust, we'll just send back in a spreadsheet, say okay, here's where the updated aspect of isn't and they'll make a notation of that. Or we send in a PCR with a either a BPO or our opinion of it on where it's at that you just send it back in. So it's gonna be once a year if you're using self directed IRA investor money.

Let me give you another good thing about a drone. I had a client with three parcels, ended up being around 10,000 acres. And he wanted me to get an agent to walk that 10,000 acres and take pictures. Well, instead I did a drone flyover of all three parcels. It was a little over $500, but he had every inch of that 10,000 acres under video.

So here, that's a whole. I love this. I am so tickled pink about this because I was, I was Looking at a, a non performing note down in The Florida Panhandle. 39 acres with a single family home, but it was way out in the boonies, you know what I mean? And I was like, I can't. You know, nearest airport I think would have been Tallahassee, been an hour and a half away, and that's still not a big airport. And so if I'd have known that, I'd have like, you know, I'd order that because we were. I'm looking at buying land if I can buy a house on some acreage. You know, that's why I'm getting excited about these days. Maybe the end of the world, you know what I mean? But now I know that that's a phenomenal tool. We might need to do a whole little marketing piece just on drone footage to share it going forward. That's phenomenal. I love that. It's giving an idea to so many different things that are available out there.

Oh, the, the technology is wonderful. Now, there are a few caveats. I mean, I, I have access to about 95,000 pilots, but the federal aviation has some restrictions in some areas. And then there are obviously some areas that even though I've got 95,000 pilots, there may not be one right there.

They totally get you. But it was worth checking out.

Absolutely.

That is, that is so freaking cool.

And, and commercial is where it, it's really huge. Real quick on commercial, I get calls every day. I want a BPO on this commercial property. You don't really have a BPO for commercial property.

Right?

It's an entirely different system. Yeah, it's not in MLS where a BPO gathers their data, but BAG is to the rescue. BAG can also do a valuation exterior or interior on commercial properties. And I can do it on a cost approach or sales approach. You're looking at Approximately exterior, around $500. Because these are done by commercial agents, not your typical residential.

Right.

Or I can also do an interior, which is in, in the neighborhood of 750, depending on if it's a sales approach or cost approach. So keep, keep that in mind on commercial. If you need a valuation then. Because you're not always comparing apples to apples like you are on a house.

Well, that's the thing, especially if it's commercial. It comes down to the cash flow, you know, you know a. What's coming in the annual, you know, net operating income versus expenses. It's a whole different ball game. And each asset class has different. That's why I was mentioning yesterday, if you're Wanting to focus on apartments, you got to understand how to evaluate an apartment complex. And I figured that versus self storage versus mixed use versus, you know, industrial versus, you know, whatever it might be. Every asset class in the commercial side has a whole different ball of wax to it.

Absolutely.

Versus just pulling comps and rents on a single family home.

Now, now, one thing about drone, it does not give a value.

Yeah, of course.

Okay. And eventually it may.

Right. Well, but the thing is, that's great. Like, I'm thinking about the one property, the BPO that I had from the bank was two years old, and that was the most recent thing. And it would have made sense for it to go fly in a drone if we had somebody there to take a look at it to see the exterior of the property, the roof. Especially in areas like Florida or stuff like that, where there's been hurricanes and stuff, you know, you're not often to get stuff from, you know, the driveway or from the car. It's good to have it overhead approach in some cases.

I'm glad you said hurricane, because obviously, you know, the season is upon us. Yes. I can also do inspection reports after storms.

So that. Just exterior inspections or interior.

Exterior or interior.

Okay, good.

And, and I might mention on. On the pcr, I can also do it as an interior. It runs approximately $110, but they, they can even lay out the measurements of the rooms.

Oh, that's nice.

Yeah. So that pretty well covers the. The, the valuation section. Oh, no, it doesn't. There's one more in valuation, avm, and this is called an avm. What is avm? Automated Valuation method. I love this product because there's a lot of times investors will order a PCR and an avm, especially when there's not an agent directly in. In the area. But what happens is this gave an estimate of $55,000. Well, we look back at the BPO, it was like $58,000. But what happens on the AVM is the value is not specifically on the subject property. They take the whole neighborhood in, in consideration.

It's. It's like a. I won't say this is like a Zillow Red Redfin approach. A little bit of what sold recently in the neighborhood without being so specific to that asset condition.

Correct. And, and what's great about it, it gives property information, legal information, the sales history, the tax information, and then. Whoa. Remember, the BPO only did 3 sold comps, 3 listed comps. What are all these little dots here? These are comps. Maybe or maybe not. This is where you have to do a little bit of work on your end. But here's the subject. And then these things are labeled 1, 2, 3, 4, 5 etc and many times it will even show a picture of a comp. I think this is a really, really cool product.

Yeah, I really love. I'll give you an example. This is. Works really well. Like condos. You're not going to get interior approach in a lot of cases. You know, this is one thing I use for condos all the time because you know, basically the exterior is going to be pretty good. So you need to get an idea of the comparables in the, in the area gated communities. 55 plus to me, especially down like south Florida, you know, I'm pretty. The confidence scores in those are pretty high. They're all very similar in nature in a lot of cases.

Yeah, I mean, you know, right here it gives a list price, it gives the listed date. You know, it gives a lot of information. And if you didn't want to do a B BPO and you wanted to do your own valuation, then do a PCR and an avm.

Yeah.

Which I think is pretty cool.

Yes, sir, totally agree. And then you can kind of see there's, see if there is some distress in the markets too, like that one.

Because the great part about the avm.

Yeah.

A lot of times there's off market entities in here. This is just not all M. MLS stuff.

Yeah. That's especially important like, like a city like Memphis where every block is a little bit different. You have to know street by street in a lot of cases because of. Some streets are great, some streets are bad. This would give you a better fit to kind of see where it fits in and seeing a map of those things.

Absolutely. And then it gives market conditions, median prices, etc. Charts, etc. So this is really a cool product.

That's nice. Very cool. All right, and this runs how much again? AVM runs how much?

$25.

Very nice.

So you can do a PCR and an AVM for $70.

There you go.

Okay, real quick. Oh, what's this? Oh, Jesus. I have been so honored in 2020, 2021, 2022 and 2023 to be nominated and elected or winner of the best balance in the note industry. So I, I there, there's my, there's my marketing.

That's congratulations. That's congratulations.

All right, real, real quick. I know we're probably. You're good, you're.

You've got plenty of time. This is one of the most valuable Aspects of folks that we want to go through. That's why it's good to have you on the morning session here because these are things that especially people never bought a note before is one of the most valuable aspects of it. So no, you're good. Don't worry about time. You're good, Dicky.

Okay, title report, title search. You're going to hear the the letters O and E. O and E is a title search. Typically an O and E relates more back to what is called a current owner search versus a two owner search. What, what's the difference? Okay, this is my humble opinion and I hope you agree. Let's assume that you have a performing note that has not changed hands multiple times. I would feel very comfortable in telling you to get a current owner search and that takes care obviously of what, what's happening right now. On the other hand, if you have a non performing note or a performing note that may have changed hands multiple times, I would suggest getting a two owner search. Why? Because it goes further back into deed history.

Yeah, like a contract for D definitely would be something you would definitely pull a multiple owner search on for sure.

Now there are several other search vendors out there. What I have done, because of the volume that I do, I've been able to basically get a nationwide price for you guys on each product because what, what happens? I mean there's sometimes in other companies you have to know the county, you, you have to know the city, etc. Etc. And it adjusts the values or the cost of doing the product. I on the other hand can do. And this helps you in your due diligence when you're figuring your cost. I can do a current owner search for $85 or a two owner search 400. So it's $15 difference to have a more comprehensive search of, of the property. There's also a full search which very very seldom is used. But a full search goes back to day one of when that property existed and those can run several, several hundred dollars. I might also mention though on the title search I can also do click commercial title searches.

Nice.

Now those will vary. I mentioned $85 and 100. The only time that the price will be different is if an abstractor has great distances to travel with complicated documents. Then that price will increase. But I once again will not move forward until I'm able to get your okay on approving a, a higher fee. What is it?

But, but that's the thing on a commercial deal. It's obviously bigger numbers and it's going to cost more on the due diligence aspect of things. And so. Oh, absolutely. That's, that's where these things are even more important in a lot of cases.

Absolutely. What is a title search? Why do, why do we do a title search? Well, you, you want to know about taxes, liens, judgments, bankruptcies, anything that could have a cloud on the, the title. Keeping in mind, as we all know, you're buying notes, you're not buying the title, you're doing the assignment. But you can lose a property as a note holder because of the law. And that's not a scary thing. You just need to be prepared. So a title search will pull up all recorded keyword recorded information of the subject. Now, when I get an order for a title search from you, I always like to have the borrower's name, if possible, because we always are able to use that for cross references so many times. And Scott, you said the three contract for deeds, a lot of times those aren't recorded.

Yep, exactly.

So you, you need to really tell me who. And you can see this in your collateral package who the owner of the property is, because those are the ones typically that are paying the taxes. But it's always as a cross reference.

Yep.

But in the title search, it'll give you tax information, deed information, judgment information, lean information. And what I like about my particular vendor is they do this little, what we call it a blue form. It's a quick analysis of, of the taxes, but then also in the title search, like this one, I believe has 80 documents in it.

Yeah.

And the other thing I like about my vendor is here's a breakdown of the documents for quick reference. But here are, Here's a quick claim deed, all the exhibits, another quick claim deed.

Now, this will also show recorded assignments, too, on it.

Yes, yes.

Which is a key in the. When you're looking at a note to purchase, you want to make sure that all assignments of mortgages are there in the collateral file. And if you pull a title report and you can see all the assignments from when that note was originated and it's been sold three or four times, you can see it's been filed. That's a, it's like, okay, that's the county. I can check that off the list.

Correct. And I might mention you set assignments. I'm also able to, once you get that assignment, it's got to be recorded.

Yep.

Guess what? You guys do that.

Exactly. Record. And that's the same thing too, is document recording. And also you've got a vendor too. That Will help create assignments and launches and, and assignment of beneficial interest stuff as well too for you on that.

And, and let's say that you get to the point of being an investor like Scott and you got thousands of properties and you've got the original file in your bedroom closet. I can also do, I can do storage of original files.

Yeah. Yeah. I don't have my, I don't have my closet. I, I have a watertight fireproof safe on the, on the fourth floor of a storage unit. So if it does flood, we're okay.

But this, this is a very, very important item.

Yeah. Now let me ask you a question, Let me ask you a question about this item. If there's an HOA lien filed, this will also reflect that too. Correct?

If, if, if it's filed. But a lot of times and we'll get into another product that is called an MLS multiple lien search. There's many times that water and sewer have the ability to put a lien and let's say that the water bill is late. It hasn't been filed yet. My MLS product which is not part of a title search, remember that because it's not recorded. Right. I can do an MLS which is water and sewer code violations and multiple lean on a property for 35.

And that's really, I would order every one of those that when you get a bar that says that they're willing to do a deed or cash for keys, the one great thing to order to do that. Now here's the reason I ask about HOA liens. Because there was a proceeding in Pennsylvania where an HOA wiped out a first lien on an HOA foreclosure wiped out a first lien. It's in the courts right now because they're like, well it shouldn't been allowed to. And what the court is saying, well, since it was a refinance or cash out mortgage, it they gave the HOA right to, to, to wipe out the first lien that's going between before the codes and they said the only based on what they, they understand the law to be a purchase money mortgage wouldn't have been wiped out. But a refinance or cash out is a different story, which I don't agree with. I mean we, for years, the last few years we've had issues with like condo associations in Nevada wiping out first lien mortgages and stuff like that. In Florida, if there's an HOA lien or condo association fee and you bought the note and you foreclose, you don't have to pay the full HOA fee. You're only paying either 1% of the original sales price or one year of the HOA fees. That's called safe harbor. And that's also in Colorado for six months. I think Nevada as well. It's got some sort of law in the books for six months there too, versus one year.

You know, Scott, you, you bring up a good point. And, and I, I get questions every day about some of the things that you're talking about. Not number one, I'm not an attorney.

Yeah.

And I, I, there's no way that I can stay up with every single state law. So if you don't have a mentor like Scott, you need an attorney. I can help you. I've got a nationwide network of attorneys that I enter, introduce you to.

Cool.

That way you can speak with them one, one on one.

Yeah, exactly. And it's good to ask their questions.

And you need foreclosure because every, every state's different. Let me give you an example. And you mentioned Pennsylvania. And, and there's going to be a form that I'm going to show you here in a minute. But Pennsylvania is a nightmare on taxes.

Yep.

And on the report, sometimes there'll be a little comment on this and in this little section, additional comments where it'll say mail in. Well, there's some counties in Pennsylvania where you have to mail for the tax certificates because it, it's not available on, in this type form, you can go into one county and there's no charge to do it. You can go to Allegheny county and you can spend up to 200 plus dollars to get all of the tax information out of Allegheny county. And they're in the same state. So it's not only just states that have their own niches, it's the counties.

Exactly. Exactly. So.

And that's why so many investors pick states that they're comfortable with and may or may not have a lot of legal proceedings against a particular subject. Do you agree?

I totally, totally agree. Totally agree. Trying to do it all yourself and jumping on Netra Online or the Canada Recorders, it's not an effective use of time. And yes, in some states, it's a pain in the ass. Some areas, some small counties are paying the asses. That's why we usually like to say when you're starting off sticking some of the bigger areas, you know, bigger cities of 50,000 or greater and make it a little bit easier to get your systems down and get rock and rolling.

Or try and deal in new York and New Jersey.

Yeah. Don't, don't do that. Don't say those evil words for note investors. All right?

Absolute.

So John, John, John asked a question. Does tax analysis address, address upcoming tax increases? No, John, it doesn't. It just gives you a snapshot of where it is right now and what's owed or what the taxes is at this point.

Correct. Now keep in mind this title search was also for that investor that bought the note and they were selling it as, as a partial. So what did he do when it was like six months later, what did he do? He did. Ordered an update. Now what is an update? I can do an update off of anybody's O and E report and it gives what has happened from the date of that OE report or title search to the present. And this shows that a new certificate was entered, the release of a deed. So this is once again an update of the existing O and E. Now we. It used to be a year that you could do an update. Well, because of so many different variables, they really like to do it at six months. As long as it's not six months old.

Right.

On the other hand, I can do an extended update. And an update typically is, is $45.

Something to keep in mind, especially if you're looking at buying notes and you see that this, that the seller has pulled title reports relatively recent and stuff like that too for you. If you see it's with Baldwin, then reach out, get an update, save you some money. Because you'll have that happen is sellers will come in and they'll pull titles to help expedite the sales process.

Let me give you another example of why a title search. And this happened in, in Dallas, I was at a show years ago and a brand new note investor had bought a performing note. Boy, he was getting payments like clockwork. He didn't know about a title search. So he ordered, while we were at the convention, a title search and got the report back. Lo and behold, come to find out the homeowner hadn't paid taxes and he had not been informed for whatever reason.

Right.

If he had not run a title search, he could have very easily lost that property to a tax sale.

Yep, exactly.

So even when you buy an asset, do the due diligence for your own protection. It's the cost of doing business. Do a. If you don't have a title search, then do a title search. Or six months, you've got a title search, do an update. Because things can be filed against the property that you may not be aware Of. Do you agree?

I totally agree. Totally agree. And same thing too. The sellers may not know it. I bought notes where I pulled title reports and saw that it had gone a tax sale. But that, that there was. It gave us the insight to call and reduce our bid because it was basically wiped out. So we bought it for a lot cheaper. But we found out that there was a tax overage sitting at the county, you know, of 50 grand, 100 grand that we claimed that was, it was, you know, that we ended up buying the note for pennies on the dollar because the seller didn't do their. Dude didn't do their own due diligence.

You know, Scott, and we're talking about costs.

Yeah.

Think of it. And, and here's what I tell people, especially new people. Okay. You, you, you live in Houston, Texas, or you live in Montgomery, but you need something from Harris county courthouse. Well, you know that, that's 45 minute hour drive. You get down to the courthouse and you try and find a place to park and then you go in to the courthouse and, and you start rummaging through documents, but you don't know what the hell you're looking at, but you're getting document, document, document. To save $85, you're doing this. Then you get back in your car, you drive 45 minutes to an hour, and you get home and then, oh, wait a minute, you realize that you're missing something. You got to go back to the courthouse. So bottom line is deal with the people that do this every single day. And, and I've got clients that have portfolios. They don't have jobs, but it's easier to come to bag in the one stop shop. And Scott's one of them. He gives me an address and he tells me what he wants done and then he goes and backyard garden. So yes, due diligence will cost you a little money before you buy the asset. And even when you own it, you still need to protect that asset performing or whatever. So you mentioned tax sale. Okay, let's assume that your title search shows there have been delinquent taxes. Now all of a sudden they're paid. Unfortunately, a lot of times on a title search, it does not tell you who paid. Paid those taxes. What could that mean? It was a potential tax sale.

Well, or tax c. Sale. Yeah.

Correct. I've come to the rescue. I have. This is a separate report where I can go in and find out if that property had maybe been into a tax sale. Look at this big red right here. This particular product. Now this Isn't the one that we were doing all the examples of. This is just a sample of this statement. But this shows what the redemption period is. There are two different buyers on the tax. I mean such valuable information and tax lien amount $9,000. Last day to redeem the property was in 2022. This little product runs $35 plus any hard cost. Sometimes there's no hard cost to get this information. Allegheny county was the 200 plus dollars to get all of the tax information.

Good stuff. That's in. I didn't know I could. I forgot that you'd had that actually.

Yeah, it's in fact I've got a client that buys massive seconds and instead of running a title search on everything they do this report to find out what the tax circumstances are.

Right.

So that's okay. So let's real quick. We've gone over the BPOs, the title searches. We covered everything that's in. In this, in this little section there's a form that you can complete and it lets me know if you are a a buyer or a sell. And I might mention on my website each one of these items has its own very specific order form. Although I would much rather you email me the address and what you want versus the form because technology that form may not for whatever reason the website may not come through. You email me something, I will respond, let you know that you're in in order. But this little form gives me the date. Your company information lets me know if you're a buyer or a seller, are you private or institutional. If you want to invest in notes, you check off performing non performing contract for deed etc. What states do you want? And then there's also a section for reos. Why do I do this? Well, I work with a lot of folks, literally thousands of investors. A lot of them are sellers. Well, let's say that Scott completed this form and he wanted a non performing note in Idaho. And one of my sellers that's asked me to help them sell their inventory has a note in Idaho. I simply put Scott directly with the seller and if a trade goes down I collect a small fee. So great, great little product there. I lost my website. Turn it. Oh talk. Talk about marketing real quick please everybody. You, you got my contact info. I. I love to post on LinkedIn and I do all types of posts. This one is about a multiple lien search and when I post I do specific items. I may do one on BPOs, I may do one on attorneys, I may do one on skip tracing. I may do one on door knocking. I might mention I do door knocking also. But let me, let me. I deleted my website because I want to go back to that real quick. Oh, I'm right at the top of the Internet list there. You can also scroll down on e each of these items as. As I said and I'll do it real quick. I can introduce you to a nationwide rmlo if you want to originate a seller. Finance, mortgage, property preservation. You own a property, you want to change the door locks, you need the house cleaned out, you need the grass cut. I just got finished doing an $80,000 rehab in Birmingham, Alabama.

Nice.

How, how can I do that? I have in my network well over a thousand real estate agents that I can introduce you directly to. If you need feet on the ground. I also have thousands of handymen around the country that you reach out to me. They can change that door lock, they can clean that house out, they can cut the grass, they can rehab. I've got various money lenders. We do. If you need a title and escrow company. Scott, real quick, how do you feel about a lender's title policy?

I think it's important when you're originating for sure. If you're definitely originating owner finance notes you. I think you need to have one. It's one of the things that's most important things.

Well, this is where my title in escrow. I introduce you to my nationwide title vendor that if you need a lender's policy or if you're doing a closing, a regular residential type closing, they can help you out. We looked at the. The title search and the update. You're a brand new investor. You got all these papers in front of you. You don't know what you're looking at. I can help you with a collateral review. What is the collateral. Bingo. What is a collateral review? It's where my vendor will go through and tell you what. What you do have, what you don't have and what you should have in order to make an intelligent decision.

Yeah. Make sure you get clean collateral that you can foreclose on. It's what was a collateral.

If you run these days, it varies on the files. I will say this. An attorney who also can do it typically will charge you their hourly rate. Yeah, you can get some collateral reviews as cheaply as 50 bucks depending on. On the file. Yeah. What I do so everybody understands I'm very, very transparent. This section, in this section, typically, you give me the order, I personally handle it. You give me the order, I place it. I get the PDFs, completed reports and then email them to you. All these other items, there's no way that I can keep up with the, the cost of doing this or the cost of doing that, etc. Etc. A lot of times I will put you directly in touch with whoever that vendor happens to be. That way, number one, you don't have to try and find somebody in Lizelle, Georgia, but you're able to talk with them one on one. When the service is completed, you pay that vendor, not me. And I've got a referral agreement with the, with the vendor. Very transparent.

Yep.

But on the BPOs and the title searches, yes, I do get them at a great price, which I'm able to pass on to you. But believe me guys, my margins are very, very thin. Mine, mine is helping thousands of people. So it's numbers, assignments and recordings. I can help you there. You need a servicing company, I can introduce you. You need a self directed ira. Right. Door knocking Real quick. I can do a one visit or a three visit to a property. You, you have a. Scott needs a, an intro letter or something like that or offering cash for keys. You give me a document and I can have an armed individual, not some guy off reg list but an armed individual approach that property and hand that document to the individual. If they're not there, they will leave it in a sealed envelope. They'll also give a little report to let you know if the property appears to be occupied. They also take a picture of the subject. Now the one visit, they go out one time, hand it or leave it on the door. The three visit, they'll go out, let's say nobody's home. Then they'll work in their schedule and figure another time where the individual may be there. If they're not there the second time, they come back a third time. So a one, one visit is $80 and a three visit is a hundred. Well worth it.

Yeah, definitely. Especially if you're dealing in the non performing space. Getting things rocking and rolling is one of the most important things you can do. You're, I mean that's what, that's cheaper. Most servicers are going to charge you 85 to 100 bucks to do that too. So if you can, one of the things that we like to say is expedite that a little bit. Don't wait the 30 days for servicing to kick and go ahead and make the introduction so you have a better absolute.

Or if you want to do a cashier, keys.

Yeah. Get the ball rolling. Get the, get in contact with the borrowers. You know hey, your mortgage been sold. We're just delivering this, let you know your mortgage has been sold. This is who you need to contact now and see about staying in the property. You know those.

I wouldn't be surprised how many times the report comes back and somebody does answer the door. But it, it's, it's a cousin of a friend who he thinks he's renting.

Yeah.

I mean so you, you, you got to know.

Yeah.

Skip tracing. Scott and I have done this several times before. I'm able to do bulk or individuals. Let me give you an example. Now it, it cost about $2 for this one little sk. Yep. But there was an investor that had had a property I believe it was in Kansas and he lived in California and but the property was vacant and so but he had the occupant's name, phone number. Well I was able to do a skip trace and find out where this new person was living and he was able to mail the documents to the guy and the guy did a cash for keys and it cost him a couple of bucks. Now it's not an overseas vendor that does this. I mean this is right, right here.

Right. It's also become important we talk about IRA investors tracking down lists and stuff like that. This is one of the most effective besides going after your borrowers are non performing. You know stuff like that. Your real estate, it's also in the raising capital side can be very effective.

Absolute can also assist you entitled curative release tracking where something may have been released but for whatever reason it may not be recorded. So can assist in that record documentation. So Scott doesn't. Well he's got his on the fourth floor in a seal say but it's waterproof. But not everybody.

Yeah.

Nationwide realtor you need feet on the ground. If you've ever tried to get on the Internet and find an investor friendly realtor good luck.

Yep.

I have built a huge, huge network of realtors, attorneys and even if you need a, a cpa. So and, and the great part is too many of my realtors are also investor friendly and they're able to go in and change that door lock for you because they're investors and or they got crews that, that do that. So it's, it's a one stop shop for real estate investing. And there I am. Everybody write that down. I really hope that everybody on, on the call will go to LinkedIn, Facebook and ask to join connect because I, I'd like to. I don't send out mass emails. My Mine go more individually, but I, I've got a lot of buyers and believe, believe me, out of sight, out of mind. And, and I don't want to just, I concentrate on the, on the people that are doing business. But on the other hand, that LinkedIn and, and Facebook post has brought in a lot of new clients as well as podcasts such as this.

Yep. That's the beauty of it. You've got a warm investor database already, which is good. Which is, and they refer people to you all the time. We always talk about, you know, one of the things on here is we highlight you whether it's the one day class, the three day class. Everybody calls me. Hey, make sure you call dicky one bag for all your roombuster needs.

Well, Scott, I really, really appreciate it, guys. Please do, do not feel that you're taking up my time. If you got questions. I mean, I'm going to be 76 in September and you know what my favorite drink is? Scotch, September 17th, so. But I'll be 76 years old. Should I be retired playing golf? What I tell everybody when I, that three days that I was retired, I went out, played golf and I realized that I couldn't get a hole in one every time I played golf.

What's your handicap anyway?

It's still low, believe me.

There you go.

Yeah, I, I, I still work on it. Let's still work on it a lot. I, let me tell you real quick, talking about golf, I've got six kids, 12 grandkids and two great grandkids. One of my grandsons, 15 years old. Liz and Bernie not too far from you.

Yep.

He won. He goes to private school. 4 4A taps and in Bernie, he won state individual golfer for the state of Texas at 15 years old.

That's awesome. Congratulations.

This past year at 16, he won it again at 16, he shot a 64. 66 at 16 years old.

Wow.

And in that he had two eagles back to back and two birdies back to back.

What course was that? Was that in San Antonio? Where was that?

Yeah, that was Breckenridge.

Oh, really? Nice. That's a tough course. That's a tough course.

Yeah, yeah. And these, and these kids play from the tips. And he just got finished playing in Arizona and Arizona state was watching him. He was in Pinehurst to watch the U. S. Open.

Yep.

His mother and he flew to New Jersey to Seton Hall. He played golf with them for two days and on the spot they offered him a scholarship.

That's awesome. And congratulations.

But he's, he's got lot. Lots of way to go.

Yeah, exactly.

And, and, and the great part is I beat him a year ago.

The young. Well, that's the thing. Everybody on here. You can learn something from Dicky here. Definitely. We all can. And that's the, the great thing is due diligence is the most important part when you're actually getting around to buying a note is you got to go through these things. You don't need them all, but they're dependent on the situation. You know, you're going to need a bpo. You know, you're needed some sort of valuation. You know, you're going to need to take a look at title and that's definitely. Is the thing that's going to save you. Yes. It's going to cost a little money. One of the things I always tell folks is like, look, budget for $500, give or take a little bit for your due diligence costs on the front end. When you're looking at notes now, you don't pay that until. You don't order that until you've got a signed contract. And, and then because some people have changed prices, some people have canceled stuff last minute, some people said it was sold and it wasn't sold. So you never order that stuff until you've got a signed contract or you know for certain, certain that you're the winning bidder and you're dealing with a replicable seller and stuff like that. We'll talk.

Or, or the, the, the cheaper route. Once again, a picture is worth a thousand words. Yeah, 45. Investment. Find out if you want to move forward real quick. Let's, let's talk about how I get paid. Once you order something through me, please always send me your company name, all, all of your contact info because I will invoice you once it's done per asset. In other words, if you've got four assets and one asset, you only did one service, another assets, you did three services, etc. I will invoice individual invoices per asset for everything that was done on that asset. You could either do payment by check or Zelli, and I love Zelli. It's like doing a wire. It's free and it's instantaneous.

Exactly.

Talking pricing. And I'll. Scott, I'll let you give out the code. You give a code to people on the call and I'll give them a 10 off on their first order.

Just the code will be called Scott's Dummies. All right, Dummies, because you're on the note. Buying for Dummies workshop here. So we gotta start off somewhere.

Okay. And. And you guys that are using me all the time, forget that 10%.

Yeah, exactly. You're not making enough off it to do get everybody. But that's the thing. First round. Hey, that's a good starting point for you. Get the ball. Rock and roll.

Hey, and you mentioned learning something. 40 years in the business, you and I been kicking together for a long, long time.

Yep.

But I'm sure that you'll agree you learn something every day just like I do.

Yeah, exactly. Exactly. You're not going to learn this in 3 days, but you'll get most of what you need in three days here. And it's an ongoing learning process because the market's always constantly changing and their services are changing. They can help you be more valuable and learn more about the deals that you're doing with Dicky. Offers up to.

Absolutely. Well, guys, I gave you the. The what? I felt the core of due diligence. But there's a lot of other things. Once. Once you get that note in your pocket, there's still work to be done.

Yep.

To protect that asset. And that's why I'm here.

Exactly. Thanks so much, sir, for coming on here. You got a big plans for the rest of your Saturday?

Got a golf tournament tomorrow.

Well, there you go. Go, go. Rest up. All right?

Absolutely. Oh, I definitely need the rest.

Yeah. Hit. Hit them hard. Hit them hard. Hit them straight, buddy. We'll talk to you later. Okay.

Thanks, guys. Bye.