Dumb Note Money: How Main Street Investors Can Beat Wall Street

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.

If you have ever wanted to dive into the sexy side of real estate and become a note investor and not just somebody that owner finances properties or buys and sells on terms, but somebody who's actually buying debt from lenders, mortgage bankers, hedge funds on distressed real estate on both residential and commercial properties. Now is the perfect time. And guess what? We have our upcoming three day workshop here in just a few days on July 25th, 26th and 27th. That's right, that's a Friday. Saturday, Sunday. You can join me live on Zoom and our Note Buying for Dummies workshop. We'll go through the Fs of how to find fund and flip non performing notes at huge discounts without having to use your own money.

And we'll show you all the different.

Ways you can make money being a note investor. Day one's all about how we find these deals from banks, hedge funds and how you can automate the process of connecting with these people and get tapes and listen to you over and over again. Day two is all about raising capital and marketing. We'll show you how to tap into thousands of IRA investors who are looking for deals to fund and how to communicate and how to contact them and get them to fund your deals. And day three is all about the flip the exit strategies putting deals together. We'll mix in due diligence. We'll mix in the marketing side along with the structure side. So much stuff in three days live on Zoom with yours truly, the Note guy, Scott Carson. Make sure you get signed up by going to Note buying for dummies.com or click on the three day workshop tab on our workshop. Get signed up today as we're still running discounts and you too can soon become a no buyer.

Foreign Good morning, good afternoon and good evening everybody. Welcome to this episode of the Nutclose Show. What is going on? Note Nation? Hope you are doing well today. Today's special episode is called the Dumb Note Money. And if you've not been to the movies lately, you should really go and check out a movie called Dumb Money. Now. It's definitely a hilarious comedy, but it's actually based on in real life on what happened A few years ago with the whole GameStop Robin Hood run up of GameStop going through the roof and really regular Main street investors fighting against Wall street hedge funds. And to give a bit short synopsis, there was a few years back that there was a Reddit thread called Wall Street Bets or Wall Street Bets where this guy who's played, you know, played by Paul Dano who plays Keith Gill, who is known as AKA Roaring Kitty, he was the de facto king of the gamestop traders. He ran a Reddit fed and what he did, he would get on and talk about his investments. Now he was a financial analyst at MassMitcher. He did this on YouTube and we'll just get up and talk about stocks and what he liked about stocks and what helped him out with his Roaring Kitty. He wore usually a red samurai headband and wore a cat T shirt. You know, I had a cat poster behind him and he would literally show his portfolio behind him on his green screen so people could see what he was trading about. And he talked about how he liked GameStop and how a lot of the Wall street traders have, were shorting that stock and he expected to go up. Well, all the people on Reddit took it to consideration and they kept buying it. And the more that they bought it, the more that the stock price went up against Wall street winning. And a lot of Wall street firms lost billions of dollars because they couldn't short the stock or they lost billions because the stock went to the roof, went to the moon, as they say in the movie. And I, I drew a lot of similarities to this movie for a couple of reasons. First and foremost, the fact that Wall street calls retail investors money, dumb money. That really sticks to me because I see a lot of that in the note investing space. Yes, Wall street, they're buying up 50, 100 million pools, tranches of this residential debt. Or you have all the ibuyers, you know, the big hedge funds, Blackstone, Chase and all these other want to go buy these, all these rental properties because they're going to run the next rental portfolio out there. But they're getting beat, they're overpaying, people aren't paying rent. Mainstream Main street is revolting against Wall street because here's the thing, ever since banking was around, Wall street has been lying to Main street. Lying. I, I used to say that same thing because when I was taught as a financial advisor, when I was getting my series six and 63, was looking at my seven, I was working, you know, selling mutual funds through Solomon Smith Barney and then working through a division of Citibank and then back at Chase bank and Bank One. Those institutions are preying on the ignorance of Main street individuals, individuals like you and I, individuals trying to get ahead, putting money into our 401k or IRAs on a monthly basis. They're looking for opportunities. And the stock market is rigged. We all know that. These blind pools and all these bailouts and this that happens. It's ridiculous. It is. So you can't get ahead. Trying to be a small fish against in the big C of Wall street stock market on one whisper or one twit, tweet or one post can affect the stock price dramatically. And that's kind of what the movie's about, is that Paul Dana was basically helping affect the stock price by just talking about, hey, hold the line, hold on, hold the line. And all these memes that popped up from gifs and stuff like that. Talk about people, hold the lines. And you had regular Wall street investors from your college freshmen all the way up to folks, nurses and regular everyday Joes buying Gamestop stock as it quadrupled and kept, you know, went from three bucks I think at one point to several hundred dollars a share. Even Elon Musk got on the thing at the end which really ent up like 400 share, something like that. But I, I wasn't involved with. This all happened pretty much during lockdown for the most part. But like I said back to the similarities, we as note investors, your regular Main street investors who are buying your onesie 2Z, your small tranches, your small pools or your one off note deals. You can tell Wall street to go F themselves. You can give them the big middle finger. Because here's the thing that you have to realize as an individual investor. Most of these hedge funds are playing with other people's money. They're playing with loaded debt. They're not. These guys these days aren't using their own funds. They're getting paid some big salary. They're getting incentivized. They're just all these bonuses to stick it to you or to use your money that you're putting into the banks or in the funds making a paltry 1, 2, 3%. I guess T bills may go to 5% before too long, something like that. Very low single safe investments. That's the brainwashing safe. 0 to 4% mid risk 5 to 8 aggressive 8 to 12. That's a bunch of BS because if it was really risky, why are the banks giving credit cards out at 19% car loans? Now the average car Loans over a thousand dollars a month for a hunk of metal. Okay. If you know the finance rules that Wall street plays by and you apply them to your Main street investments, guess what, ladies and gentlemen, you can play that game and make great returns like Wall street is making and give them the middle bird that they don't get the opportunity that you guys do. And that's the thing that we as note investors, we get the opportunity. We can cherry pick individual deals. We ain't got to blind buy 500 or 50,000 or $50 million of assets at a time. Now, yes, there is some aspect to buying in bulk and systems and things like that. I won't argue against that. But the thing is, when somebody buys a portfolio of a thousand notes, it takes them a few months to understand what the heck they got going on. I'll talk about my good. My buddy Troy down in Florida, he used to work for a, a family office. And if a family, you know what family office is? This is where a wealthy family hires a group of advisors to manage their money. Usually it's when you, a family has a billion dollars invest. Well, in this case it wasn't Troy, Todd, actually, Todd, Todd worked for like five families. And the families came to him and said, hey, we're buying a portfolio of notes in Florida. Five million dollar portfolio. You're going to manage it. Well, what did he have to do? Well, he had to get a team of two or three people to buy some cars and they drive around Florida, look at all these assets, figure out values, look at the debt, look at the loan numbers and figure it all out without really any knowledge about the note business. Now he's a, you know, Todd Billings is one of the brightest guys I know. Great guy, used to run US Debt and ventures. He still runs a mortgage fund down there. Well, he's not spending his time hanging out in his wife's bakery doing some great things down in South Miami. And a great guy, but that takes time. Whereas us as the little guy, the dumb money as we like to say, or they like to call us, is that you know what an asset will do, you know what it'll rent for, you know what the mortgage is, you know what the foreclosure timeframes are, you know what the true value of that asset is? Much better and far faster than what Wall street can do. When Wall street, all they're able to do is look at a spreadsheet and figure things out. Yes, we're looking at spreadsheets, but you can jump on and look at individual assets and carve out and, and cherry pick and still make double digit returns. Dumb money with your stupid dumb money. I call it lazy assets because it's been sitting on the sidelines for most of us. But that's the thing is most people don't are afraid to pull the trigger to make an action because they don't know where to put and they're afraid of getting burned. Well, that's what I love about the notes business. As long as you're buying first liens that are true first liens, you're not getting wiped out of taxes and you're making sure you got insurance on the property you're buying at the right price. Yeah, I know it's a few things but you're going to come out ahead. You're going to come out smelling pretty good if you just do that now, who knows what's going to happen in the market. Next 12 to 24 months are going to be rocky out there. But that's what I love about the note business. You're buying at a bigger discount. You're buying below the value of the property, below what's owed on the debt. You've got some flexibility to make some things happen in a much, much faster time frame than what Wall street does. It takes them months to figure out what the hell they have and all the stresses that go on. Whereas us, we're able to carve and choose and pick our own plays. We're not dumb money, we're smart money. And the dumb money is Wall street overpaying for these assets. They're overpaid for rental properties. They paid above the nose and guess what, they're having to get out of that business. Do I know if Chase and some of these other funds are getting into these big portfolios of rental business? They're going to see, I don't know, I doubt it is just not their business to own the asset. There's a whole aspect of that. They've got to spend more money. And this has always been the case for the note side. If you're in the residential, if you're in the real estate side of business and you end up taking these non performing assets back, you've got to hire licensed and bonded mechanics. You can't go do the work yourself. You, it costs you more to rehab the property and you can only have a few plays that make sense or you, you, you know, you're locked into a property versus being able to say I need to drop it down or I need to adjust rent or you, you're not relying on an hourly employee talking to a borrower. You actually can understand talk that bar yourself or have a much faster return time of like I'll accept that, I won't accept this or give you a B and C. So here's the thing ladies and gentlemen, if you're listening to this podcast episode or watching this episode, you're not dumb. Wall street may think we're dumb. We're not. We are actually the smart note money. The smart money plays in being the lender. We can be the bank. The bank always wins. We know that from Wall Street. You can be the bank by being an investor. You can be that on the winning side on a smaller scale, but a much a great ROI by buying performing notes, by buying non performing notes, whatever your risk factors is and targeting, it's not unheard of to get an 8, 10, 12 ROI. Passive in the note space. I, I've talked to several people who are like, oh, I'm gonna buy some of this rental properties, I'm gonna fix it up, I'm a turnkey, rent it. I'm gonna create a note first and second, I'm trying to sell it, not off. I'm like, that's too much work. That's making too much work. Just be the bank. Go buy non performing performing notes and get a cash flow without all the work, without all the headaches. Be smart, not dumb. And that's where the dumb money is. If you're trying to do too many things, make it too complicated, keep it simple. Stupid kiss. All right. And like I, I, you know, thinking back the movie, I feel a little bit like the guy. I feel like Keith Gill on there. When we break down 100 assets or we break down 50 essences, nobody else is doing that. Showing what I would buy should I would make an offer at or what we are making offers at. Nobody's doing that. Even the bigger guys in the industry aren't doing that because they don't want to give. They want to hold you hostage to bidding at what they're willing to sell it at. Well, guess what? You ain't got to be hostage to anybody if you're willing to do a little marketing. Jumping on LinkedIn, dialing for dollars, picking up this master computer and, and making some phone calls to ask managers, guess what? That smart money is hoping that the dumb money bails them out because at some point they're going to have to sell. And who are they going to sell to? Individuals like you and me. Now they may sell it from Some of the funds, but you're going to have folks that, you know, some funds that have put some cash and go gobble some stuff up. But there is this huge, huge gap and divide out there. The biggest opportunity I see right now, it's been this way for a while. Wall street isn't interested in the lower valued commercial assets. They're not really interested anything below 5 million. But guess what, ladies and gentlemen, that's a big opportunity for dumb money investors, Main street investors to gobble up. And the banks are going to buy this stuff. They want to offload that to folks like you and me. And they're willing a lot of cases to carry financing on that distressed commercial debt. That 5 million below asset class. They're not going to carry no, you know, financing on an individual residential note. I get that, that's fine. But guess what? There's plenty of other dumb money investors out there, as we say, Main street investors who want to invest like Wall street, that you need to talk to, teach them about the opportunity, teach them that they don't have to put money into a stock or a mutual fund and hope that it goes up and play. Playing at a losing game. All right? Because in this world, in this niche, it pays to be considered the dumb money. So you don't have to be dumb. No money. You can be the smart money. As long as you're educated, you know where to go, know what you're looking at, know how to do diligence and actually pull the trigger and make some things happen. Because really, the only dumb money right now is folks who are sitting on the sidelines, not doing anything to take advantage of what's going on in the market. There's more distress, there's more withdrawn listings. If you're not into the note investing space or taking over, subject to deals or working out situations for distressed borrowers or distressed homeowners who can't sell their property, they can no longer afford it. You're missing. You're missing the boat. You're missing the opportunity comes along once every 10, 20 years. Are we going to see 2008 again? No, not extreme. I don't think so. We may see the commercial side mirrored than what we saw on the residential side. But there's stress in the markets. There's stress in the markets. And honestly, it's up to us dumb money investors out there to step in and save America, save Main street from Wall Street. I don't care if you got 50 grand, 100 grand, half a million. A million, great, That's Awesome. Go raise you some capital, Go talk to your friends, go talk to your family and get in the game. Looking at distressed assets, reaching out to banks, making offers and stuff. We've seen deals are phenomenal. Small deal investment, get the ball rolling, can be great. Phenomenal. Like a Wall Street IPO return, it's going to the moon. So I challenge you. Listen to this. If you want some opportunities, reach out to me. I'm glad to talk with you. Glad to help you, point you in the right direction. Help you. Glad to help you find the deal. Am I gonna get paid for my time? Yeah, I'm paid for my time. But I'm gonna leave plenty of meat on the bone for you and some of the opportunities out there. Or you can take just our class and learn how to do what we do by going to note buyingfordummies.com or checking out the website for the class and sign up for it because we got one coming up in a few weeks here to help you take your dumb money and make it become smart money out there and help you help mainstream investors beat Wall street investors. Because you guys know it. You're more agile, mobile and hostile than Wall street is. And that's part of the thing too. If you think back to history, history repeats itself. For those folks a few years back, HUD foreclosures are a big thing. You'd bid on a HUD foreclosure. Be a lot of HUD foreclosures out there. Well, HUD basically got out of the foreclosure game because they want to take that property back that they got in the note selling game because they knew that notes buyers had more opportunities, more flexibility than they did as an organization into working things out. That's important to keep in mind. Whether it's a one off basis, you're buying 5, 10, 20 or whatever, you can do a lot of amazing things. You're going to wait on some guy to hold the line total or bet against some hedge fund guy. You can bet on yourself. And that's what we all should be doing is betting on yourself. Don't wait on somebody else to come bail you out. Uncle Joe's not going to do it. The Donald's not going to help you out. You have to take advantage of what's going on. No matter what the politics it is, whatever it is. I don't care if you're a donkey, an elephant or a giraffe, no matter which way you vote. Don't care who you sleep with, don't care what color of skin you are. Okay? Don't care what pronoun you identify as. None of that means anything in the investing space. What makes sense is that you're knowledgeable. And guess what? You pull the trigger and take action for your own investments. So go out there, take some action, and we'll see it all out there. Note Investors or the new smart, dumb money Sam Sa.