EP 458 – Note Mastermind Member: Michael Slawin

Foreign. This is the no Closers 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 pennies 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 notes, Scott Carson. Good morning, good afternoon, good evening, everybody. Welcome to this episode of the no Closer Show. As always, Scott Carson here. Excited to be with you today. Got a special guest. We got somebody who's actually been learning like straight out of the fire hose the last couple weeks. Right. It's our buddy Michael Slaywood joining us from all the way from St. Louis. Right.

St. Louis, Missouri, born and bred.

Born and bred, yeah. There we go. Good stuff here. So Michael, take a second, tell them a little about your background and kind of before your new note phase.

Sure. I studied at Indiana University. Go Hoosiers.

There you go.

Lifelong St. Louis. And go Cardinals.

There you go.

Have always loved business. I'm actually a fourth generation entrepreneur. So business was always in, always something that we talked about, always something that we, I was always around that, talking about dinner time, talking about business at the dinner table. And that's what we did. So my great grandparents, although entrepreneurs as well, were gone by that time. But my grandparents, my father and mother. So I come from a long line of entrepreneurs. I believe I am the first one that's this heavily into real estate. I started investing 20 plus years ago, 1996, I bought my first duplex and lived on the top and the bottom. Paid my mortgage. After renovation, it paid the entire mortgage. So I was basically living there for free and appreciating the duplex. So I got tax benefit as well. So I was hooked. And I had been hooked for a long, long time. I just never pulled the trigger until 1996. So that's my backstory. I owned five businesses thus far.

What kind of businesses?

Let's see, I had a printing company I bought in 1995. That was the first one. I had an SEO company that I started in St. Louis prior to SEO.

Coming to St. Louis pre SEO days. Right.

So a lot of business owners didn't really understand the importance of being on the first page of Google. People do now. And now I don't want to say I was ahead of my time, but in St. Louis things happen on the coast and then they kind of come into St. Louis. So I understood the importance. I was having to resell the service every month to the Business owners that I had, I felt that it was a successful business. Just frustrating because of that aspect. I've owned an E commerce business that sold Asian martial arts DVDs and Blu Rays.

Oh, nice. That's a little different. Interesting, huh?

Yeah, it certainly was. And not that I have an interest that much in that, but I saw that as a good business. I. Opportunity 2014, I applied for a permit for a. Not the dispensary, but the grow farm in Illinois who had just legalized medical marijuana. And unfortunately, we did not get that permit, but it was a great experience. Again, another business plan that I wrote, I was able to raise $10 million in funding, put an option on 10 acres of land next to a jail in the middle of Illinois. And the economic development people in that county were thrilled because they could see how much money would be coming into the area. Especially, it was advantageous for that area because the average household income was $40,000 for family of four. It's a very poor community and still is unfortunate.

I imagine they're excited that somebody's gonna be developing something next to a prison, which is probably not the most desirable place to. I mean, imagine you could sell some weed between the links to a little bit, but, you know, that's probably not what you're focused on.

Yeah, it was not part of our business plan, but, you know, it was something that we had thought of.

Sure, sure. Exactly. So that's curious. That's definitely. I'm gonna come back to that, though. Okay, Come back to that there. But you've also. You've been an active, Active real estate investor. You're a realtor in St. Louis.

Yes, I am.

But primarily for your own investments. All right, that's correct. That's correct.

I did try the retail route, and I realized that, oh, my gosh, that's a hard gig, and there's a lot of people doing it, and it's very cutthroat, I imagine, all over the country.

Oh, yeah.

And I just didn't want to do retail. Very nice clients slash customers that I had. But I just. I tell you what, it's just a tough gig, and I feel like I got more to offer. I've got more potential than that. That may sound like I'm bragging, but I, you know, I feel like, well, I know who I am, and I can achieve more by doing other things.

No, that totally makes sense, because a lot of realtors, people get into being a Realtor often like that as, like, a first step to learn real estate and real estate Investing as a kind of a stepping point to get to where you're at, but with your background, you're using it just as a tool to help you on your own investments. Correct.

And I also have access to the mls, the multi listing service, which is incredibly valuable, especially because there are different tools on there that the general public and a general real estate investor does not have access to. We talked recently about realness tax, the application realist, and that gave me kind of an insight into who owns the property, who is actually on the deed and who owns the note. So that's very valuable.

Very much so. And you've bought and flipped and had a variety of different real estate deals the last couple years. 20 plus deals. Correct. For your own stuff, what's been the primary makeup of those fix and flips or rentals or what's the. I mean, you talked about the first one being the duplex. Yeah, great house hacking.

Exactly.

But what's been kind of the bread and butter over the last couple years?

I tell you what, the rentals have been very profitable for me, especially because of the way the tax code is written. So that's been really good. The rehabs have been a lot of fun. I've done, I've had houses that were $5,000, $5,000 and $700,000. So I've done the gamut.

That's a bit of a range for sure.

It is, it is. If someone has passed away and they have a house across the street that has a dirt and they want five grand for it, and it's in a neighborhood where the homes are selling for 150, I'm buying that house every day of the week. Right. And so I did, I bought that house, I sold it to a wholesaler, I believe for 25,000. Yeah.

Cha Ching, where's my, where's my cha ching button? Right. 20 grand, basically. I mean, that's the thing is knowing what you've got, knowing what seeing comps are, knowing that A I can make 20 grand or I could put a little bit more into the deal, put some flooring in, bring it up to kind of what the rest of the neighborhood standards are and make some money that way too.

Right, right. There's several houses that I wholesale I never walked into because, you know, I wasn't sure about this structure itself. It was sturdy or whatever. Anyway, there's a ton of ways, as you know, to make money in real estate. Wholesaling is very good. That's about getting out and talking to people and all the rest I recently had a home across the river in Illinois, and it was a mother's home. She passed away. This is a friend of a friend. Has now become a very dear friend of mine. Julia, we still need to go. Dirty gin martini bag.

Dirty gin martini. There we go. There we go. Definitely.

Yeah. And I was able to take that house clean out. It was a hoarder's house, basically. Sorry, Julia, but you saw it too. So it was her mother's house and her sister lived there. And it was a great house. It was really a great house. After I bought it, I looked around, got some contractors bids, and it was 45 minutes away from my home. And it wasn't a home that I was really willing to go through what I needed to do with the contractor to get it done.

That makes sense. And wholesaling, it was still a win. Win.

Yeah. Julia and her sister were able to collect some cash. I was able to make a profit. So, yeah, I feel like it was. And it got, especially emotionally, I think it really helped get that out of their hair, you know?

Yeah. Whenever families are left with property, especially they're not in the real estate side, it becomes an anchor, really kind of a thing around there. Like. Well, we don't know what to do. Many people don't have the extra money to rehab a property, bring it up, spice up with new fixtures and things. Bring it up today.

Right, exactly.

And sometimes in those cases especially, and I'm not saying this was the case, but sometimes when you have siblings or family, sometimes a closing, a quicker closing makes. Helps with the estate being cleaned out and things like that, and can avoid fights and things like that along the way, too. Right, yeah.

And the sister that I was dealing with, like I said, we've become good friends and she's a lovely person. So not only did I gain a house and a profit, but I also gained a friend.

That is also a nice bonus, definitely. So now, transitioning in and out, what's attracted you to the paper game, Michael?

Well, so I've rehabbed a number of houses within that range that I was talking about earlier. And the most challenging part of that. Well, there's two challenging parts of it. Right. Right now, the property values are very high. There's a lot of people in the rehab business, they call themselves rehabbers and they don't know what they're doing, so they're overpaying or ask for properties themselves, and then they're in over their heads. And actually, one of the last ones I did was a property. This quote unquote developer had four properties, he was four foreclosed on. And I bought this from another wholesaler who had taken all four. I took one of the properties, rehabbed it. This guy was almost done. It's really kind of a shame. Let's see, I bought it, rehabbed it, and sold it fairly quickly. So, yeah, there's that. But the biggest problem is, number one, the rehabbers that are overpaying for these properties. And yeah, overpaying sounds kind of ridiculous, but they're inexperienced. So not only are they overpaying and making it harder for those of us that have done a few of these, but they're really hurting their families themselves and their families by overpaying. The second thing that was challenging is, quite frankly, the contractors. I met some really great people that did some really good work, and I met some other people that did not do some really good work and also charged me for it. I had a contractor tell me one time, I swear he told me this. He said to me, you know, Michael, I called him on a Tuesday, and by Friday he hadn't called me back. So I called him again and I was like, just give me an update on what's going on with the checklist that we agreed on. He's like, so three days have gone by, right? Snuck called me and, you know, he always calls me when he needs a check.

Is that what always happens? Oh, yeah, I need to get paid for what? To do anything.

So he actually said to me, I wish I would have recorded this. Michael, if you expect me to call you back when you call, we can't work together. And I was like, paul, what did you just say? And then this guy actually Talk about cahungas. This guy actually said to me after we were all done and we had parted ways, actually, I had parted ways with him and brought in another gc. He asked me for a recommendation. And again, he's a really nice guy, really nice guy. But I thought to myself, I didn't know what to think with this guy. Anyway, we got the house done, we got it sold. Moving on. So that's when I transitioned into notes and started investigating different note gurus, as they say, and realized very quickly through bigger pockets, that Scott Carson, we closed notes, was who I wanted to go with. And every interaction I've had with you has been one of those where I realize that, number one, I made the right decision. Number two, you genuinely care about people and you genuinely want them to succeed. So, yeah, we're all in sales and we all want to market our Businesses and be successful and do the things fulfill our whys.

Yep.

But you're the real deal as far as concern.

Well, we try to. I mean, we always serve. I'm big, big believer. Everybody starts off putting their pants on them on one leg at a time. We all have a starting point. We all begin somewhere.

Right, right.

And I'm a big believer that there's plenty of inventory to go around. Not everybody believes that. So hey, if you're bidding on assets, great. You're gonna get some, I'm gonna get some. Vice versa. A lot of us work together on. And you were very nice when you first started. You're like, hey, I want to get a little bit of learning. Anybody got an asset within like 30 minutes of St. Louis I could go take a look at. Right. And I know I reached out to you. Did anybody else reach out to you for that?

Yeah, I had, I think I looked at four assets and one of the assets, I looked at this, the guy who owns the note came back to me and said, would you mind going back and knocking on the door? And I looked at the zip code, I looked at the crime, and I remember the asset itself. And it was a couple months after I first looked at it. And it wasn't someplace that I was willing to do that.

No, that makes. That's total professionals that do that on a regular basis. I won't say come packing, but they're used to that to do that. Now you went out and looked at an asset for me.

I did.

Let's talk about that.

That was an interesting experience. So went up to, I would say a marginal neighborhood, but the street itself was a good street. I looked at the property. I still look at properties through rehabbers eyes. So I'm calculating as I'm going around how much it is to Tech Point and do all these different things. Right. And start taking pictures. And you know, I thought more is always better.

Right, right.

So I started taking pictures and started taking pictures of the meter on the side to make sure that's running to make and the H Vac is still there and the copper goblins haven't come and. And all that. And then I go to the back of the house just to see, you know, what the deck look like, looks like and all the rest. And out comes this guy with this thing in his hands. I wasn't sure what the hell it was at first. And he was using his iPhone to take a video of me.

That question, was it like a chain link fence or a wooden fence? What do I Mean, you can go in around to the back. Were you able just to walk, like, down an alleyway or down a driveway or whatever there?

I was able to just walk right into the backyard.

Okay.

Yeah. So I wouldn't have opened a fence, I don't believe, because you don't know if there's dogs or, you know, whatever. So anyway, the guy comes out. I think he was more scared of me. I'm not the most imposing guy in the world.

But still, like, somebody's taking a picture of my house.

Right, right, exactly. So he's like, who are you and what are you doing? I was like, oh, you know, I'm just taking some pictures and just showing these to the investor and blah, blah, blah. Which I learned later was not the bank.

I always said. I say, hey, you represent the bank or the insurance company.

But anyway, so, yeah, learning lesson there. Right? And he's like, you need to get.

Out of my back blankety blank blank. Yeah, yeah.

Like, okay, I'm cool. So I start going around the other side taking more pictures of more utilities and seeing that those are on. And he then follows me with his camera. He runs to the front of the house, and he's still taking pictures. Now he's on the phone and taking pictures. I'm not sure how you do that, but. So anyway, he started doing that. I got in my car. I believe he ran out to take a picture of my license plate. Okay, dude, go for it. You know, I haven't broken many laws lately, so. Just kidding, Mom. Just. Just kidding. And drove away. And what I realized was, like I said, I think he was afraid of me than I was of him. And I don't know what that was about, but he did not want me taking pictures. Very clear.

So I can tell you a little bit about it because I've done a little more research on that asset he hadn't been paying.

Got it.

Suddenly he's caught up to date. Suddenly he's calling to make payments to get caught.

Today I should call that investor. Get a spiff.

Spiff. Yeah, you got a learning spiff there for your Michael. But that's the thing. So you learn from that. Yeah, you know, Occupy. But you also put your realtor eyes on it to understand. Okay, I'm not gonna go in. I like the neighborhood. Like the comps going on, stuff like that. Those are important things that a lot of people maybe miss out on. They look at the numbers solely just the numbers.

Right.

Versus. And that's why, my big believer, you always need to put eyes on an asset of some sort.

Very true.

Now, what's your goals with the no game? What are some of your stuff that you're focused on?

Well, I'm looking at non performing assets and looking obviously first liens. Some people buy second liens. I personally think from what I've studied that that is harder. Depending on the situation, or at least with my skill set, I would find that harder. So again, given my skill set, given my finance background as well as my real estate background and sales and marketing, blah, blah, blah, that I believe that owning notes and being the bank is going to be much more profitable for me, my joint venture partners and investors as well as I feel very strongly about keeping people in their homes. And what is most people don't realize is if a bank would actually work with the borrower, it's more profitable for the bank. In this case, it would be me. Their ROI is going to be higher than evicting someone or foreclosing on someone. It's just how the numbers work. So I've had several friends who've gone through foreclosure. It's emotionally and financially devastating, these folks. And I also feel it's immoral, quite frankly, with some of the loans that have been done by some of the bigger banks where someone's earning $50,000 a year and they're given a loan for $300,000 home, that's immoral to me, but that's where we're living in. So not only do you have a homeowner in a $300,000 house that they cannot really afford, not only the mortgage payment, but also given the utilities. My gosh, a $300,000 house in many neighborhoods, especially in St. Louis, that's a big house.

Right.

So it's expensive to keep up. So I do. Look, it sounds like a cliche, but it is a win, win, win situation. I've got the knowledge to renegotiate and help through my servicing partners, Madison, Singer Law, several other vendors that I work with, I'm able to renegotiate some of those banknotes and help people either keep their home. And sometimes people don't even want to be in the home anymore.

Yeah.

Because the, you know, the electricity bills, $900 a month, they just want to get out from under. So that's why I'm doing what I'm doing for multiple reasons.

So it's $900 a month electric bill. Is it a grow house?

That would be 9,000, 9,000.

Okay, yeah. How utilities and that.

Yeah.

So what's been probably the biggest surprise here in the last few weeks of learning because you've really dug your heels into learning. You came into Austin last weekend for the fast track. Were you here this weekend for the Note Mastermind group? What's been the biggest kind of aha moment for you?

Well, you know, knowing the Austin airport as well as I do, it's a.

Pretty easy in and out airport though, isn't it?

You know, I'm directionally challenged, so as well as vertically challenged, quite frankly. I knowing the Austin airport has been a surprise for me. But as far as notes go, I would say the ease of entry, if you have the right skill set, was a surprise for me. I had several attorneys that I Talked to in St. Louis that talked about getting into this field of real estate. They're like, oh my gosh, there's regulations here and then can't do this there and blah, blah, blah. And I was like, well, I don't know. There's some really bright people doing this. You know, Scott Carson's Mastermind. Yeah.

But you also have your vendors. I think that's what a lot of attorneys they are. Correct. There are a lot of regulations. But if you have your vendors that are helping you out with it, that solves it for most of it a lot of times.

That's very true. That's very true.

Depending on the state, of course.

Right, right, exactly. There's certain states, certain counties that you just don't want to operate in. The other thing that I that feels very reassuring to me is all the folks that are in your business Mastermind and you being able to text you and all the other people doing what I'm doing at different stages of the game. So that's been good.

You've got a great relationship, got good family, basically, hashtag notefamily, as we like to say, reach out to and a good network. And that's really what it comes down to. But especially being from a real estate background or a realtor, your riches are in your niches. But there's also it's all about having a network of people you can reach out to. So big goals for you the next 90 days.

Yeah, I plan to take down a dozen notes and bid on at least 100 contact start calling asset managers on a more regular basis. That's one of the things that I have not done. I have been emailing on a pretty consistent basis and if you'd like to get on my email address, you can email me@michaelotesconnect.com or send Scott a Text or put a comment below. I'm sure I'll be looking at that. And I'd be happy to add you to my email list.

You got your Facebook profile notes connect as well.

I do.

Okay.

And liking that page also is advantageous to getting on my investor list or my prospective investor list. Yeah.

And I wouldn't be calling Michael if he needs me to go out and walk around a property in St. Louis. His days of doing that are kind of over. A little bit more experience.

Right, Michael, you know, I have to tell you, I really, I actually enjoy doing that because it takes me into neighborhoods that I may not be as familiar with that I should be familiar with.

Awesome.

So St. Louis is a great city.

Good stuff. So are you looking to get some notes on some dispensaries or grow houses in that background?

You know, I don't know.

You don't know. Depends on what you get from the banks. Right?

Right. Exactly.

Good stuff.

Exactly. So my end game is commercial. Commercial. I think small apartment complexes as well as some mixed use commercial is also nice. Awesome. Yeah.

Well, we expect some big things from you. Thanks for being on.

Absolutely.

Once again guys, go check his out his website, Facebook definitely. If you're want to get more information of his information. Also at the bottom back on the blog and weclosenotes.com with all his direct connection and social media stuff as well. But Mike, Michael, thank you so much.

Thank you, Scott.

Excited for having you and look forward to what you're gonna accomplish the next 12 months. All right, thank you. Thanks.

Appreciate it.

You too. All right, that's gonna wrap up for this episode of the no close show. Everybody go out, make something happen and we'll see you off top sa.