Finding Note Deals In The Different Texas Markets

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 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. Welcome to this episode of the Note Closure Show. As always, Scott Carson. Excited to be here with you today. I want to give a big shout out to our Note Nation listeners all across the country and our podcast listeners that listen across a variety of different platforms and then everybody on our radio station network as well. With this episode, what I wanted to get to is talking about the Lone Star State Notes in Texas. Now, I know a lot of people get excited in the note industry or when they come into the notes space, like, ooh, I want to buy deals in Texas, the fastest foreclosure laws in the nation. I mean, we can foreclose here in 21 days as long as you publish the notice of default within 21 days of the first Tuesday of the month. Because that's there in Texas, all the foreclosures happen the first Tuesday of the month. It's not every week. It's not every day, it's not once a week. It's the first Tuesday of the month, no matter what it is, no matter how cold it is. First Tuesday of the month of the county courthouse, you see foreclosures taking place there, tax sales, things like that. So I wanted to talk about what's so good about Texas, what's so great about Texas, and also what's so bad about my Lone Star State. Now I live in Austin, Texas. I love it here. It's been my home since I really graduated college in 2001. I grew up in Corpus Christi, Texas, which is down the coast. Parents moved there when I was young. I was born in Minnesota, but I call Texas home now. One of the great things about Texas is Texas does a really good job of Texas history and really indoctrinating kids with the pride of Texas. You know, that's why everything's bigger in Texas. We have a whole year of seventh grade in our middle schools where they it's just Texas history where a lot of other states don't teach state history. Texas is very proud of our background. But like Texas, we have so many different kind of niches to what we've got available here. And that's what this episode is all about. Kind of Talking about, hey, where there are opportunities, where we don't see opportunities. And really talking just kind of about the Lone Star State. You know, where can you find deals if you're here now? I've lived in Austin, Texas since 2001, primarily, except for about, you know, three, three and a half years of traveling across the country and then my short stint of living for about nine months in San Antonio. But I grew up primarily Corpus Christi. Moved to Dallas where I went to school and played football at Texas A and M Commerce and then I transferred out to West Texas San Angelo or Angelo State University before coming to Central Texas and finishing up at Southwest Texas State University, which is now called obviously Texas State University, San Marcos. Great university. Loved it. It's smack dab between the middle of Austin, San Antonio. So I was able to enjoy both areas. Worked in New Braunfels, which is a very growing market. I mean, some San Marcos, which is Hays County, I talked about on one of the previous episodes being one of the top 50 counties really growing in the country because why you have San Antonio and Austin people moving there because they don't want to get away from the crowds. So let's share a little bit about. You've got Houston as well. I've never lived there. Not a fan. Humidity. And then the floods are horrible. Of course it's been hit, hammered hard by floods and also by hurricanes. Corpus Christi was hit a few years back as well, especially on the coast there. But where are there opportunities in Texas if you're a note investor? Well, if you're looking for non performing institutional debt, it's going to be harder to find assets here. Why is that? Well, it's the same reason we got fast highways, fast foreclosures, fast executions. You're not going to see as many deals priced at numbers that make sense. More oftentimes than not, banks are going to take the assets back and go ahead and do their own foreclosure and sell it at the foreclosure auctions. Now, in rare situations, it doesn't mean you can't find deals. Our good friend Kristin Gerst from Capricorn Mortgage, she buys owner finance notes that are performing and packages those, often sells those and makes, you know, makes a split in the middle. We have bought loans in Texas, we have not bought. I think you're in Austin, I'm at 10 notes or less. 10 notes, I think is what it is. San Antonio's got a few, Houston's got a few. Dallas's areas got more around there. You'll see Occasionally down in the Valley more so where the more of the default rates are. We've done some short sales where we bought the note and then sold the note out from that here in Austin or Houston, San Antonio. But here's what you have to look at. I mean, I'll give you an example. Austin itself, everybody likes to move to Austin because it's the metropolitan. Austin's really kind of divided into areas. You have the older area of south Austin, keep Austin weird. And then you have the north area of Travis county, south Williamson county of Austin, which is where I office at, which is more the families, the minivans for the most part. When you add in geographical areas, about 1.2, 1.3 million people here in central Texas, that kind of call it Austin area home. Very, very hot. Now, medium home price in Austin has escalated about 390,000. We have less than two months of inventory on the MLS. And what does that mean? Well, the normal sales, all the homes will be bought up and sold in less than two months. There's nothing added. We have new construction going on here, people trying to build new homes. We have a lot of apartments. They're trying to be built up here because occupancy rate, or I should say vacancy factor is less than 1% annually in the apartments. And that keeps going up there. A medium rent keeps going up, climbing to. I don't want to say exactly like Austin is turning into what we've seen in San Francisco or San Diego or la. But we are starting to really start to price up the middle class here. We do have an affordable housing issue, although it's nice is that we do see some Austinites kind of working to do something about that. I've got a friend who does tiny houses, building those houses and communities. We see a lot of people that would rather drive an hour, drive 20 miles for an hour in traffic in the mornings or the evening to live outside of Austin and some of the surrounding communities, Leander, Hutto, Pflugerville, Round Rock areas, Manor as well, just kind of south side of things, or even Columbuta, which is south of Austin, because they can get a much more bang for their buck. They can actually get a bit newer built house a lot of times on a half acre for a half to third of the cost of what a downtown condo or downtown home might be. Now. A few years ago when I first got into real estate investment here, actually about 15, 16 years ago, we had a lot of these older shacks that were getting bought and then regentrified, rebuilt up on the east side of Austin, Austin is Basically, it has i35 that runs from the Valley all the way up to Minneapolis. That's our major highway. And you have east and west Austin, East Austin, east of 35, you saw a lot of stuff take place, like for a lot of communities. It put a strain on water septic, things like that. And you saw lots that would sell for 10 grand, go for 100 grand in a matter of about 24 months. So I have bought and sold a lot of real estate here in Austin and surrounding communities and a lot of fix and flips. Early on my real estate investing career had some rentals. There's opportunity, you just got to know where to look. But the way Austin is as being a pretty good sized mid sized city, we don't have a lot of the opportunities that other places have. Since the downturn in 2008, 9 and 10, we did not see as much of a decrease in value as other places out there. We stayed pretty, pretty level for the most part. I mean, there were some areas that got hit harder, communities over there doing zero down, $500 down payment, stuff like that. And those areas had more short sales. I mean, we involved with the longest short sale in all of Texas, that was over four here in Austin, trying to move it from 2009 to 2013 before it finally sold. If you're looking for opportunities here, here's where I would look at here in Austin, Texas. I would not be in Austin. I mean we have less than 90 foreclosures every month, usually less than like 20, but it's starting to creep up a little bit. I would be targeting short sales, but don't expect to get too big a discount here. What I would be doing in Austin is I would be looking for subject to deals. I would be looking for property where the homeowner is looking to move out of the property. They maybe have some equity but don't have enough to sell a property, but it still would rent. Well, you've got a low interest rate on the property because they've got decent financing. And you turn around and either a wraparound to a wraparound mortgage via your subject to deal, turn around and put a renter in the place. Short term rentals aren't an option here in Austin anyway because they've ruled against that. They've actually built a law, created a law, approved a law that outlaws Airbnb. So your short term rentals aren't an option in Travis County. If you're outside of Austin, outside of Austin, in Travis county, you have the opportunity to do the short term rental thing, but it's not been a fun thing here. The city councils here in Central Texas not been the most friendliest with Uber or Airbnb. Uber was not here for a while, probably about nine months and then finally it's come back in. But what I'm trying to get at, if you're investing here in the Lone Star State, you're probably actually going to find more deals in Houston because of a bigger market. You're going to see also people defaulting finally on their hurricane homes. You're going to see little bit more affordable to live in Houston. So you can see especially as the refineries, the oil systems and stuff like that increase or decrease layoffs. You're going to see people struggling with that. Just got a lot more other areas around Houston than you do necessarily here in Austin. Dallas obviously being so big with the dfw, Dallas Fort Worth network, you're going to see stuff around that neck of the woods more likely to fall into that. So that's an important thing. Now San Antonio people ask me about San Antonio all the time. San Antonio is probably the most affordable spot outside of Corpus Christi if you're going to live in Texas. But I would rather live in San Antonio than Corpus. Corpus, while quite affordable, does have the worst gang problem, doesn't have really good school districts. San Antonio is built a lot better. They built up the city. They have an inner and outer loop. Inner loop is 410, the outer loop is 1604. And they've done a really good job over the last 20 years of filling in with infill between those two loops and things really growing. You have a lot of growth going out in the west part of San Antonio and there's a lot of opportunity out there. We bought quite a few notes in San Antonio over the years and I got a couple students that bought a portfolio from a local San Antonio bank. That's the thing that I would look at, I would look at banks, it doesn't have to be huge banks, smaller regional banks that have had some pretty liberal lending practices, maybe lending to people without a green car or without a social some of those programs because oftentimes if they've got some non performing, they would rather sell that stuff off versus looking to foreclose and be the bad guy because they're usually embedded into quite a few neighborhoods and they don't want their local people coming in and you know, pick forks and you know, axes when they start foreclosing on Stuff. So that's an opportunity. We've seen that happen with a couple of students bought it. They bought a portfolio in San Antonio. Notes. The bank didn't want to be the bad guy. Those are sold off. And that way the bank is like, well, we don't own your mortgage anymore. Sorry to deal with such and such. It's an opportunity there. Our good buddy Jason Bible in Houston is starting to get into the Corpus Christi market. It's still affordable, especially the Texas Riviera area. Same thing like what happened in Houston. You had a lot of homes destroyed or damaged with the hurricane a few years back, people been fighting that stuff, looking to build back or not. And finally just like, heck, enough's enough. With enough rainstorms that come through, I want to move somewhere where I am not wet every weekend. So that's the thing I want to get at with you guys is there is opportunity here in the Lone Star State. You just got to know now one of the most important things you can look at, and I've seen this mistake happen pretty often. I mean, you have to double check your property taxes. That's the one thing with Texas. We don't have a state income tax here. Yay, more money in our paycheck. But our taxes are lower. Oh, I mean, our taxes are higher, not lower. Our taxes are higher roughly somewhere between 2, 3, 2.3 and 2.7%. Then what's going on? Which can be a pretty good chunk, especially if the taxes are not escrowed in the loan. If you don't see that happening, always double check the taxes. Now, most counties make it pretty easy for you to log in and see what's owed, if there's any back amounts owed or not. Most of the time, the tax sales are publicized on the local county websites as well there for you, so you can take a look and see what's going on, see if there's any overages and work that market as well, too, if that's something that you like looking at an asset that maybe there's a tax overage out there. We've used tax overages here in Texas to our benefit in a couple of ways. We bought a note in Houston a couple of years ago. We were missing an assignment from bank of America to one of the lenders in a lodge. Well, we took forever. Took forever. Took forever. Still no update assignment. The borrower was willing to deed the property over to us, so we did that. As we're working through getting this assignment so we can go through and do a foreclosure property kept getting busted into multiple times, three, four times we'd evict, boom, somebody break back into it. It was just not fun. Then we started getting tagged by the zoning department, the guy leaving trash out there breaking in. So we eventually just said heck with it. Instead of paying taxes on this and what we were into it, let's quit putting more money into it. Let's just work a creative tax foreclosure situation. And that's what we did with the tax foreclosure. We knew we'd get bid up at 80, 85% of fair market value. And sure enough it did. And we ended up netting a nice 45, $50,000 profit between the proceeds of the tax overage of what was owed left and then what we paid for the note. And so while it was longer than expected, it was a lot less headache than what we were dealing with trying to fix that property up and get it sold and flipped and things like that. So you'll see that it happened occasionally. We've had that happen also in Dallas and used it once in property in west San Antonio as well. Now west Texas, you'll probably see some opportunities there. It's just that the houses are probably spread out a little bit more and I'm talking non performing notes. There's a lot of banks out in West Texas with the oil refineries and oil companies, stuff like that. Occasionally you'll find some stuff out that neck of the woods. If you're targeting banks of the area, bank of Azona, bank of Sonora, some of those are pretty good sized banks for where they're located, but still regionally in nature and oftentimes will have some stuff on their books. They're looking to move now with Texas. You don't see lease options in Texas. This is an important factor. Several years ago we had lease options get banned if they're longer than 180 days or to a primary supposed to use as a primary residence. You can use lease options with investors all day to entities all day, that's a different thing. But if it's going to go to an owner occupant, it's got to be 180 days or less. Had a situation years ago where somebody's state representative's cousin, nephew, I don't remember who, a relative put down a large option fee on a lease option, didn't make the payments, didn't fall through, was evicted and lost their option. And since he ran up the poll and the investors didn't show up to fight this and so it got made into Texas law. Once something's a law on a Texas books, it's very difficult to overturn because our state legislature only meets every other year, I think for like 170 days, 160 days. So they don't, they're not in session every year. And they did that dating back to the Civil War. After the Civil War the parties acted better. They want to go in and create laws that make it difficult for the carpetbaggers to come in from the north and change things. And so that's why they made Texas really has the weakest state legislature almost, maybe not the weakest, but pretty close the weakest state legislature in the country. So that's the thing about laws changing. It takes a lot of work. There has been some multiple talk over the last couple decades of working to admin that change it up a little bit. So we have a different state legislature. But it's a difficult aspect. Texas obviously is a large state. Takes about 8 hours for you to drive across it from Houston. Basically all across to El Paso. There's an area we'll get to in just a second, El Paso or driving from basically Brownsville, Laredo all the way up through like Lubbock, Texarkana. Texarkana is the east. Lubbock, Amarillo to the west, or to Dallas if you're there in the neck of the woods. But El Paso with being its own zip code. I rarely see stuff out in El Paso. Occasionally I'll see a non performing mountain. With it being on the border. You would think you'd see more like we do down in Brownsville. Matamorous areas. We'll see some non performing down there. We'll see that pop up. If we see stuff on bank takes from time to time it still has the same law, still faster foreclosure. One of the things that's a little difficult about El Paso is it is on the border there with Mexico and you see a little bit more gang activity, drug activity in El Paso. So you gotta be careful about when, where and when you're buying. And the same thing goes for the Valley as well. Be careful where and when you're buying. Make sure you're buying a cartel note or something like that. There's a lot of, you know, gang violence, stuff like that. Your borrowers, that's the thing. We have found some cases where we bought in the Valley. Hey borrowers brought money to the table to stay in the house and we're gonna make, make it up. Those that didn't buy that Left, just left. And so it's often an easy thing. And that's the benefit of buying notes in Texas. If they don't do something, start your foreclos, you can get things done. Now what does it cost to foreclose in Texas? There are attorneys that can do it roughly about a thousand bucks, maybe 1500, depends on the situation. It's a relatively inexpensive process to do. Basically we're a non judicial state so all you do is to publicize it and your attorney can go to the county steps and the crier basically on the first Tuesday between 10am and 4pm and foreclose there. Now the thing about Texas, you have to have the full amount of your bid in cash there. What we have found that has been a beneficial way to raise capital is going to the foreclosure auctions and networking with people, passing out cards, getting cards, talking to people that are there. Why? Because they often have a lot of money in their briefcases or cashiers checks ready to go and pay and take care of things. Now you'll also find people that are also packing heat because it is legal to carry concealed weapon if you got your concealed permit here in Texas. So keep that in mind when you're out talking with people. Another thing that's beneficial about Texas, pretty nice weather most of the time. We'll see some cold in the northern part of the state, some snow from time to time. Don't see it very often. It's only a few bad days. Austin's a really mild climate compared to others. Yes, we do have 90 days to 100 days of three figure temperatures. 100 degrees is not uncommon. 100 plus for 100 days throughout the summer. But that's what they made air conditioning for. I'll take that. We're not nearly as humid as you would say in Houston. Houston on a hot summer day you're going to go through two or three shirts. Same thing in Corpus Christi. San Antonio's humidity is a little bit worse than it is in Austin, but still roughly two hours from the coast. While it is much more humid here than it is say Arizona or Phoenix, it's not nearly as bad as along the coastline. Now here's some opportunity. Here's the places that we see. I've talked briefly about opportunity outside areas, secondary markets around your major cities. Short sales are starting to increase. I would be targeting, I would be looking at the major cities and targeting the outskirts. Take a mile out from the major cities or where things and then within the next five years that area will be Grown up. I learned that from Bob Leoneni back in the day and Ron Legrand as well talking about, hey, in the path of progress, don't go where it's at right now. Go a mile out in the next year or two years, sometimes five years, it'll grow out to that aspect of it and your property values will go up. Very nice way to do that is to reach out to those property owners on the outskirts of town or those residential commercial owners and see about putting an option on the property, a 5 year, 10 year option on the property, locking a price. And as the property value goes up you've got an option for five years to exercise that option to buy that property at that amount. In that case maybe take over the subject. The financing subject to has worked out well. So we've seen some opportunity in the self storage markets on those outskirt communities. You know, Mom PA companies retired or running a business or leaving one job for another job when they wanted to retire more. You'll see some opportunities out in that neck of the woods outside of your major cities. There is also one of the things you have to keep in mind as well is your travel time. If you're buying assets. If you're buying somewhere and you've got an asset in San Antonio, it could take you in Austin for an hour to hour and a half to get to San Antonio, depending on where you're at in Austin, depending on traffic. We have toll roads around here in Austin, especially between Austin and San Antonio make things a lot faster. I could be in San Antonio in roughly an hour versus an hour and a half especially depending on the time of the day that you're traveling there can take you here in Austin, it can take you two and a half hours to get to Dallas, it'll take you about two hours to get to Houston, take you roughly three, three and a half hours to get to Corpus Christi depending on which way you go. El Paso be about a five hour drive, a good drive out there as well. But the nice thing is that we do have pretty easy. Southwest Airlines flies to just about anywhere in the country and that's the nice thing that I like to call them about Austin home is I'm usually a 2 1/2 hour to 3 hour flight from 90% of the country depending on how Southwest flies. I don't have to go through Dallas or Houston most of the time either to connect I can use. There's a lot of times a straight shot somewhere here to Chicago or New York or here to say Tampa, Orlando Here to San Jose, San Francisco, here to San Diego. Usually there's a straight shot nonstop in the morning or in the evening. During the middle of the day there's often more connecting flights, so you may have to layover. But that's the thing when you're an investor is that you want to try to find something within two, three hours of it. And the thing is, I like using Southwest as an opportunity because I can fly to those areas and be there in two hours, three hours if I need to be. So my market is bigger than what it would be normally here in Austin. I have not bought anything in Austin in, golly, five years, at least. Six years, at least. Steph's seen the value of our house increase quite dramatically in the last couple years. We're just seeing for the most part it's pricing affordability out for a lot of people out there. So if you're looking for stuff here, we do have a lot of banks and we do have a lot of companies, a lot of mortgage companies enjoy coming into Texas and lending here because we have the friendliest foreclosure loss, pretty easy to evict, easy to foreclose here. And one of the most beautiful things, and I've used this thing I'm about to share with you guys out there is the Texas Savings and Lending Department, which is the department here in Texas that handles the licensing of mortgage brokers. Mortgage bankers publicizes their list of licensed mortgage companies and mortgage brokers and servicing companies that are licensed to do business here in Texas. And that's a free website to go to to download a free list. Just recently downloaded the list with one of our new students, Bob, who was here last week on a two day, one on one coaching with me. And that list is, once we even filter it down, getting rid of the other auxiliary stuff that we're not using. So leaves there's almost 3,000 contacts, company names that we can reach out to. Beautiful list, company name when they were in business, if their license is still good or bad, where their home office is located at phone number, fax number. Who uses fax these days? But then also an email is usually either half the time it's with the person in charge or half the time it's with the licensing department at the company. So you probably say, well, Scott, why do I want to talk to the licensing department? Well, they're calling the phone number using email. It's an easy way to say, oh, I'm looking for somebody in your secondary marketing department and then get transferred to the Right. Department phone calls, emails. I'm looking for somebody in your secondary marketing or your special assets or your whole loan training department to do that. And that's a beautiful list. It's free. The only thing you have to pay for would be your email campaign. But I have been using the Texas Savings and Mortgage lending website straight on there to download it, clean up that list. And it adds 2,000 contacts directly that you can email out to. Now obviously the mortgage companies are going to be a lot more hit and miss because they're not all originating their own loans. They're being a broker broker. But the mortgage bankers, the servicing, there's 278 or 268 or 270 licensed mortgage loan servicers who are lending here and are servicing here in Texas. That's the one thing too. Texas does not require you to have a servicing license if you're going to be doing loans here in Texas. Now we do have the thing in Texas that if you do more than one owner finance note, like with Dodd Frank, they want you to be to go out and use a rmlo. They're trying to get that pushed back to four. That's okay. But we do see a lot of opportunity here with that list that you can reach out to the bankers, mortgage bankers and the licensed servicers to see what they have on their books here locally or even other states using it. I mean that's the thing. If it's a honey pot here, as I guess you'd say, honey attracts more flies. Well, you just need to reach back out to the flies is the way to look. Or in this case sometimes bears. Okay, but that's the thing. If you have a note here and say here in Texas, you don't have to service it, that works for you and against you as a note investor here in Texas it works for you because they save the 20 bucks a month. You only have an extra license to do that. You can handle it yourself. It works against you though because you don't have a license and you don't have a third party servicer to handle that payment collection and tracking and mailing out notices, stuff like that. I've actually seen this happen with some of our clients. Students had an owner finance note and it wasn't service was anybody and it cost dramatically more so because they offered a 5% interest rate to the borrower but they still cost them extra because they didn't have a servicer who was collecting the note, collecting the payments and handling that stuff as well. That's the big thing. And I get phone calls from people all the time here. Hey, I got a note in Texas. I'm like, okay, have you been servicing? No. Do you have payment stream? Well, I got hit and miss. The payment cash. Each week they give me a check. I'm like, that doesn't help. It's a lot more work on our part to see if it's an actual true deal or just something that's kind of ugly you got to step away from. So if I'm living in Texas, do I have a big Texas community of note investors? Not really. I mean, I would say the majority of our note investors fall in line around Houston or Dallas for the most part because of the Quest IRA offices of the neck of the woods. Austin. We've a couple smaller meetup groups meet occasionally. I don't even know if they're still meeting or not. We just don't have that big a note invest because a lot of people, they want to touch and feel. They want that sensation. So there is one real estate investment club that meets here in Austin on a monthly basis, pretty much focused directly on the leader of that group. The people run that group, they try to forward everything in business into them. So they're not really note space. So they don't spend any time on the note business, which is unfortunate. It's all about what they want to focus on. And that's fine, totally fine. It's their business to run. We have started some meetup groups here in the past and they just kind of fizzle off. So we just kind of. We'll just focus on where most people are at out there. Although Austin is our number eight, San Antonio's number nine and Dallas is our number 10 off markets. For people that watching Houston is number two or number three consistently, the people that listen to the show or watch our videos or tune into our trainings and things that also comes from us spending a lot of time with Quest Trust Co. The last couple of years. Some of the things you have to look at obviously is property values. A really nice thing here locally in Austin and also across most of Texas is the county appraisal district. Especially here in Williamson and Travis County. They're a little low, but they're usually about within 5 to 10% of your true market value since everything is annually updated. Some neighborhoods it would not be that depend on appreciation. But for the most part, your online price values can be within 5 to 10% of what your true value is now in Texas. Here we don't have a sales disclosure so when you buy a property and it's filed at the county, a lot of buyers of property will get a letter in the mail from the county hoping that you'll fill out and tell them exactly what you paid for. It is not required to fill out the form. It's just the county trying to figure out, oh, hey, what'd you get it? So we can adjust your taxes. Now another thing, it's pretty easy since we do have higher property taxes here, is we also highly encourage you to go in if you're an investor here and own real estate in Texas, to go on and fight your appreciation, fight your property taxes. Not too difficult a thing to do, pull some comps, talk about your property, take it before the county. And they're often pretty good. Now, they won't always meet you eye to eye and see what your value is, but they sometimes will meet in the middle. That's unlike that. There's not really an appeal to it, except the first time around appeal. There are companies that will do that for you here. Locally, I think it's a good idea if you don't have the time to go do it because that money can save you money year on year on, year in and year out. On your property taxes. Even though your property taxes are something you can write off, you still need to make sure and look at them and make sure, well, that seems high. Sometimes it's a simple procedure to take advantage of that they get dropped down. One thing that you'll need to do a little bit different here, some of the counties, Houston or Harris county, and a tax overage. If you're looking to claim on a tax overage, you will need to often hire an attorney to go in and do that. The Harris county is not the most friendliest about releasing information about how much is in the overage and things like that. So like I just recently had to hire an attorney and pay him a thousand bucks to go in there, get a tax overage that we were fighting on taking care of. But hey, I got 50 grand coming back. I can afford to pay the grand to get it taken care of, right? Everybody. Most people are pretty friendly here in Texas for the most part. But you're going to see, like with any type of real estate community, you got to be kind of keep your close to the vest. I will say this, that I have found that the San Antonio real estate community, I think is probably some of the friendliest and nicest community of people working together and networking and things like that. Don't get me wrong I've seen great stuff happen in Dallas market. Seeing great stuff happen in Houston market. Just have found San Antonio market to be a little friendly among the professionals. Now what's also weird though is that you don't have a big self directed IRA community in San Antonio. I mean Cuesta, I know they were working with stuff, but a lot of people just don't take action a little bit. I don't get don't get what it is. You do have a military and call center focused base in San Antonio. Austin's gonna be banking technology with Dell, Samsung, IBM here. Dallas is gonna be obviously oil and natural gas. Houston's be oil, natural gas. Houston's a one of the top 10 channels. Houston Ship channel Corpus Christi is doing a lot of work to their ship channel area down there. Expect to be a large area close to rivaling Houston when everything's done here in the next five to ten years as well too, you'll see a lot of stuff happening, especially in Corpus Christi. Any type of military activity. We have Fort Hood, which is north of us about an hour and a half here, north of Austin, one of the largest military bases in the country. And so anytime we start going to war, you see a lot of vehicles going down to Corpus Christi and being hauled out of there where the Lexington aircraft carry museums at down the neck of the woods as well too. Things that I like about Texas, love friendly, love the weather, I love the environment. I do like being kind of centrally focused here locally. Although there was a period of time that I did live in San Antonio, live outside the state as I was traveling a lot of time in Florida, Southern California. If I could move somewhere, I might move to San Diego. Probably not south Florida possibly or even somewhere else. If we do end up moving here, we probably will be moving somewhere a little more tropical. But Austin's been really nice. I'm fortunately very spoiled that my office is very close to where I live. I have less than a usually a minute commute in the morning coming from the house. The office. Don't usually drive around Austin that much because it's here. Grocery store, right. Movie theater and dentists and other stuff like all within less than a mile radius of where we live at here in Austin. So very on the north side. Very blessed that way. Now things to look at too. Williamson county, which is on the north side of Austin, was one of the fastest growing counties in the country two years back. Still going well. You'll have Georgetown is the major, kind of the biggest city inside of Williamson County. Round Rocks A part of that aspect too. They're just a few minutes apart from each other off of I35. Those areas are great to invest in. I think if you're in the landlord business, buying notes during rentals, I would be looking in the Pflugerville, Round Rock, Georgetown, Leander, Cedar park areas to find those because that's where homes are much more affordable than being in actual Austin. The thing that you look at, we have so much influx coming in from other states too, particularly California. Well, we do get a lot of influx of outside people. It's obvious you see it all happen all the time, but a lot of times those are inflexing. And coming into the kind of out near Lake Travis, which is our main lake out here, and other, you know, they can sell their house, a million dollar shack for coming and buy a $300,000 house or $400,000 house near the lake. Hey, who wouldn't do that? Put a half million dollars money in your, in your pocket. So the thing to keep in mind when you're doing that stuff is that helps you identify opportunities and where you need to avoid. Don't market to those higher end areas because they often will. You see, we see very few foreclosures, very few short sales in that neck of the woods, commercially speaking, we are seeing more commercial space kind of popping up, mixed use, just like any else. Other places in the country, big box stores, even some of the malls are having a difficult time. We see we had a major mall in middle of Austin shut down a couple years ago because they just couldn't keep anybody in there. It was a tough time. So we're seeing that here on the north side of Austin where we have, we have a mall not too far from here. And you're seeing a lot of the major chains pulling out or closing, you know, the store, the retail outlets, because they just aren't getting the business and can't afford it. So the beautiful thing about Austin is with us having such a high tech community, a lot of people do work from home, you have that option. A lot of times the employers here that I've talked, other people I've talked with, employers are open maybe one day a week working from home, two days a week working from home. So if you're coming to this area, keep that in mind as a possibility. But the thing is, as an investor more so than anything else, what's really nice, we do have a lot of money here. We do have the appraisal districts make it easy for you to log in Online and track down people that have bought a Property with their IRAs over the last couple years. I would usually go back two years, three years. We see about 120 to. Actually, I'm sorry to take that back, about 250 people. And if you use their IRAs, we do have roughly about 45,000 people that have an IRA of some sort here. Roughly in Austin, in Travis County. I've pulled those numbers and we've marketed those directly here and there. Rent rates are a little higher, but rent rates keep going up because of the. For two reasons. One, apartments are getting packed. Less than, you know, 1% vacancy factor. That means you get up your rent because there's a need for housing here in Austin, Texas. So pretty easy to bump the rent up. $100 a year, $50 at least. And looking to make that work, we see some people having success with short term rentals outside of Travis county and Austin. Like I talked about earlier, I've seen that happen. People with students coming in for our masterminds and stuff like that. Living being at short term rentals and saving a lot of money versus a hotel nearby. That's great. Nothing wrong with that at all. I know that Steph used to use that as well before they banned Airbnb here in Austin, Texas. So obviously, big trucks, we have low gas costs here, so it makes it not so hard to have a big truck and drive across Texas. But the thing is, guys, what's great about the Lone Star State, going back to kind of what we talked about before is you just have a lot of bigger cities here. Several bigger cities. Dallas, Fort Worth, Houston, Austin, San Antonio, Corpus Christi, you could even say Waco. Throw Waco in there in between. Kind of a lot of growth going on in Waco. You go to El Paso if you want to drive out five hours after a fly out there in an hour. And that's, that's a nice thing, kind of going back. I could be in Houston in 30 minutes. I could be in Dallas in 45 minutes once I hit the airport and jump on my plane, because it's a pretty fast flight there. So it's not too difficult. And I've seen it happen. I've actually done that myself. Flying up to Dallas for a meeting. That's when he picked me up and dropped me back off the airport. I didn't have to spend the four hours, five hours driving. I was able to get some stuff done and go back and forth from there. Same thing in Houston. Dropped off, picked up boom, rock and rolling opportunities here. Going back to this subject to deals, we saw a lot of subject to deals 10 years ago with a meltdown. A lot of opportunities for that. Subject to wholesaling is difficult here because we do have such stuff. So we're priced. The tax foreclosures, we don't have that. Well, we do have tax foreclosures, but they often get bid up at the foreclosure auction above. Really where you want to be as an investor that in the foreclosure auctions, it just doesn't make sense. It either gets pulled or it's overbid. You have to be much more selective in what you're doing. So that's why I think if the smart play here, not only in Austin, but in other areas too, is tracking down banks and looking at your defaults. Anyway. Now the thing, it's a little bit difficult here in Texas. The default is we do not publish the nod. The notice of default lists in Texas. A lot of states will have the list penance or the notice default list. We don't publicize that. I mean you see the foreclosure list, but then you got to scramble. Okay, one thing that we use here or used to use here and still available is the notice of substitute trustee. This is kind of the pre foreclosure list. A lot of times your notice defaults, you got 90 days list penance. 90 days or longer here in Texas, which is so fast you got to jump on the notice of substitute trustee list. That's often a listing that's filed in the county where the bank is hiring a new trustee to handle the foreclosure aspect of that asset. And that's usually closer to a 90 day or less procedure. So that's a good list to use. Seeing who's starting in the default rate and working that if you're an aggressive person. I've seen door knocking work. I've seen letters work and postcards work. But I see you've got to really invest in that aspect of things here. We don't see as many bandit signs as you would see in Houston or Dallas. Just as you don't see a lot, we see more of those on the outskirts of Austin than we do. I see a very busy, very busy intersections of where I I'm at right now. I can literally see them both and don't see too many bandit signs out there. Now I will tell you that though, that the zoning department and the code enforcement department of Austin are very aggressive in taking those signs down. Taking down those bandit signs in other Areas those departments would be really great places to reach out to to see what kind of properties may be in default or distressed. I think it's a winning list, especially in Houston, Dallas and San Antonio. Especially on the lower socioeconomic areas, people just don't have the money. A little bit more home affordable. But here in Austin, we don't see a lot of that. So checking out the zoning departments and code enforcement is a great place to go in the bigger cities here in Texas because they'll give you a list and those will often be great ways to reach out to for potential subject to deals people can afford to fix up their home. We see some opportunity in the probate lists here, especially Georgetown, Texas. North of us here has a big retirement community. It's a Del Webb Sun City place. You see a lot of people getting old. So you see probates working there and a list that we used quite a bit. Pulling the obituaries up on a weekly, daily basis and mailing out yellow letters to the obituaries to get properties or other things. Seen quite a few deals confirmed as families don't have the money to either a pay taxes or take care of things. Now one of the things that's important here, lending cash out, refinance finances were not available in Texas till 1995 and now they still set a present where the homeowners can only pull up to 80% of the equity out of their loan. Now where in other cities, other states, they can pull to 100% of the equity out in a refund. Here in Texas, since the real estate laws are written by realtors, they wanted to make it more difficult if you're going to sell your house or pull the equity to sell your house, which in turn you had to hire a realtor to do that, right? So most you can pull out is 80% of loan to value and a cash out refi. Once a cash out, always a cash out. So that's the thing to keep in mind. If you see loan balances being at 80% of the as is value, if somebody's done a loan mod, but they can't necessarily tap into that 20%. There's a few creative ways that we were able to help some people with things, you know, divorce decrees, IRS tax liens and then also paying off, you can get into that if you have a lien that you're paying off. If you had a private lien or a second mortgage that was slapped on, you could do a cash out refi to pay those off. And that's a Different way. That's one way to exceed the 80% LTV aspect of loan. But for the most part, if you're doing a cash out refi, the max will go to is 80% of the appraised value. It still leaves 20% equity in the house, which is not a bad thing. But it also leaves a lot of people looking for equity deals here in Austin and people will fight you for that because there's that 20% or more equity in the property that they work to pay down. You know, we do have, we see a lot of stuff. We're starting to see more and more 0% financing, 100% financing. I actually talked to a Bank of America mortgage broker last week out of Vegas who was talking about how they'll pay the 3% down payment to Fannie Mae. They'll pay up to $7,500 in closing costs. So it's truly 100% financing on people with decent credit to go ahead so that bank of America can originate those loans so they can get them on their books because they realize they'll make that money back faster than they will do other things. So that's something to keep in mind. True 100% financing is back. It's just scary. Somebody's not supposed to be in a loan, getting a loan and oh, hey, we'll just go ahead and give you, we'll go ahead and give you the string and the knot will tie the note and loop it around your neck for you. How's that sound? All you've got to do is just step off and sign. Very, very, very, very sad out there. But anyway, Texas is a great state. We've been very lucky. We didn't see a big decrease in values. I wish I had a crystal ball to figure out what's going to happen here in the next 12, 24 months. I think it's be more micro changes, companies laying people off and having a default in that. I'll give you an example if I could track. Recently iheartradio laid off a bunch of people across the country. If I could find those people, that would be a great place to target is potentially maybe being in trouble. But more so here it's more around the bigger businesses. When Dell laid off people 15 years ago here when they were moving their manufacturing over to Memphis, that affected me with my first couple of investment properties where my tenants now were unemployed and couldn't pay the rent to me. You also look at like refineries laying off. I doubt they'll be doing any soon. But conocophillips was going and going, going up, up and up and a lot of people getting excited about it and then they had a dip. I don't think BP's got too big of an office, but at British Kryptonian they did. They probably take a big hit here locally, but it happened in the Gulf years ago. So look, if you're looking for Texas notes, that's great, kudos to you. But I would not make Texas one of your or four or even five states as a note investor. We just don't see enough compared to Ohio, Michigan, Indiana, Illinois, the Carolinas, north and south, even Florida, we just don't see as much as we used to. And Texas, like I said, fast foreclosures, fast highways and fast executions, you just don't see that much. The banks are willing to foreclose and take it back, but that doesn't mean you can't work it. It doesn't mean you can't use a distressed pro, can't use Texas Savings and mortgage lender. Reaching out to these lenders doesn't mean you won't see stuff from time to time. But just make sure that it's not the bottom of the barrel of something ugly that you end up regretting that you end up buying the note on. So I love it here. You know, I had a friend who was buying a note in lagrange. Yes. The hometown of ZZ Top. Lagrange is about an hour east of here. They were all excited to buy this note. The value of the house was about 100. They're picking the note up for 50 and they need about 25 grand in repairs. And I was like, that's awesome. Okay, that makes sense. How are you financing? And they're like, oh, we're going to use hard money to finance. I got a hard money lender willing to lend the money to us because we can get a foreclosure so fast. I was like, okay, what are the days on market? And they go 365 days. And I'm like, whoa, kill it. Don't do the deal. And they're like, why not? I said, your hard money costs are gonna kill you financing that. That doesn't mean you can't get foreclosed. That doesn't mean you can't take it back. Ultimately put some rehab into it. But if it's a 300 days on market in Lagrange, Texas, you gotta be very careful because that could kill you right there. The money costs. So always look at your days on market. Always look at your things. Like I said before, sometimes the values are pretty in line with the county appraisal. But do yourself a favor, hire a professional. If you're buying notes here, get a servicer. If you're going to originate, get a servicer. We got some great attorneys here that understand owner financing and put it together for you relatively quickly. But anyway I want to wish you all the best of luck guys out there if you're looking for stuff in Lone Star State. Hey welcome as always feel free to reach out to me as well. And guys and gals if you're listening out there, hey you're looking for more information, always feel free to text the word notes N O T e s to sending 2000 text the word notes to sending 2000 and we'll make sure and get you added onto our list for great updates. Otherwise have a great day and we'll see you all at the top everybody. Bye Sam.