How to Find Distressed Apartment Notes

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This is the no Closer show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars worth of property For Panties on the dollar. Get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same. Now here's your host CEO of We Close Nodes, Scott Carson.

Hey Real estate investors, this is Scott Carson. I'm known across the country as the Note Guy and I've been an active note investor focused primarily on the niche of non performing notes, distressed mortgage notes on residential commercial properties for almost 20 years now. My company is we close notes.com and I know there's a lot of different things when it comes to the note world. Are you buying performing notes? Are you buying owner finance notes? Are you buying institutional debt? Like I would focus on Are you buying first seconds contract for each There's a lot of questions and it can be very confusing about what you can or cannot do. So one of the great things that we've hosted for the last couple of years that we do on just about a regular monthly basis is we host our one day class called Note Weekend. If you go to noteweekend.com you can register for our free three and a half hour class. We'll talk to you and share with you how you find fun and flip non performing notes. And yes, you can buy non performing notes from banks, hedge funds and a variety of different hard money lenders out there for your own portfolio. No, you don't have to have millions of dollars to dive into the non performing note game. We've got students that have bought plenty of deals with 2530 grand getting their ball rolling using their self directed IRA who are tired of dealing with toilets, tennis trash desks, tired of battling contractors and GCs to get properties rehabbed. We all know the market is changing and while it may not be like 2008, 9 and 10 again, it we do see a lot of distressed debt out there on both the residential and the commercial side. So if you're thinking about diving into the note game, becoming a note investor, a lean lord as you'd like to say, versus the landlord. Or you just want to figure out what it is about the sexy side of real estate in the note space. Well, check it out. Noteweekend.com doesn't cost you anything. We host it live usually the first or second Saturday of each month. You can go today. Register at the website noteweeking.com Register for the next live class we host. You'll get sent A replay to the previous class so you can start learning about the note business today. No questions asked, no credit card needed. This is a great way for you to dip your toes in the water and see if it's warm because I guarantee going through art three one day class. You want to dive into the deep end and become a note investor. So check it out noteweekend.com you can also go to our website. We close notes.com check out our podcast, check out our YouTube number one YouTube channel. We are here to help support you. Whether you're experienced investor or you're brand new investing Note weekend is a great place for you to get the ball rolling. People often say we cover more in our three hour class than most people cover in their three day class. So check it out. Love to have you be part of our note family but get signed up today@noteweekend.com thanks and have a great day. Good morning, good afternoon and good evening everybody. Hey, welcome to this episode of the Note Closure Show. As always, Scott Carson, Excited to be here with you today. Today's episode comes from me actually appearing earlier today on Multifamily Investor Nation. And Multifamily Investor Nation is obviously one of the largest groups out there helping investors dive into the world of apartment investing. And they asked me to come on Today this morning to talk about how we leverage the note business in finding distressed paper, distressed notes on apartment notes. And that's what I want to go through today's episode with you guys. I think everybody is doing. We're trying to do a kind of a live stream at the same time on Instagram as we're doing this here in the recording. So feel free if you're watching the comment there or if not, you can always watch the the replay video and comment on YouTube, stuff like that. But you know, one of the great things and I is that is a note investor. We've been getting phone calls, we've been getting asset managers, hedge funds reaching out to us for a while now. Not just the last like 90 days, but literally the last couple of years, last two years. Especially since COVID where you couldn't foreclose, you couldn't evict, where hedge funds, institutional lenders and stuff like that were wondering what are you paying for for apartment paper now? Buying the note is different than buying the asset. Let's just go ahead and clarify that. That's one of the biggest mistakes that real estate investors make when they think they're buying the note is they think they're automatically going to walk in and own the asset. And that's not the case. You don't own the property yet you own the note, you're the bank. So the value doesn't really make sense. I mean you've got to understand the value of the property, but you're not getting the cash flow from the rents. When you buy the note, you're really only entitled to what's owed on the debt and the monthly mortgage payment that's supposed to be making made to you, plus any rearranges that hasn't been made. So when you're evaluating mortgage notes, depending on where you're coming from, that's the thing to look at. What's the yield going to be if I get them re performing? Either just start paying on time again or if they bring everything that are past due on which we know there's quite a bit of past due payments these days. Or we also know that there's a lot of distressed multifamily syndicators out there who bought three, four or five years ago with the idea that they were going to do what? Well, they were going to regentrify the asset, take it from a D to a C or a C to a B or a B to an A asset class, get the rents up, update the rents, add some amenities, increase the cash flow to increase the end of line, increase the sales price. Right. With the idea that they increase the value, they could go refinance out, get a new loan and pull a lot of equity out of the property. Now they pay off their investors, they've made some money and they've got a cash flowing asset still making. Well what happened with interest rates? Well interest rates going up really killed that idea that these not only just apartments but commercial lender borrowers going to refinance out their property. Right. Just didn't happen and it doesn't happen. And that's why we see more big multifamily projects really in distress. It's starting to fill the papers of these big 300, 420, 100 unit portfolios where the borrowers are literally dealing the property back in a lot of cases to the lender because they don't want to foreclose on. They're just walking away from the asset. Or the lender is tired of playing shenanigans with the borrowers. Like listen, you've got your three years or five year term your balloons up. We need to do something either a, take the property back or refinance. And it all varies with the lender. So how do you Find these types of distressed deals. It's a little bit different process than you say going out and trying to find an apartment complex because I do get like literally get phone calls, emails from apartment syndicators or apartment investors at least once a week. Hey, I, I'm, I'm an apartment buyer. I want to buy your distressed debt. I'm like, no you don't. You have to understand the difference. Now yes, it can be a lead into getting some great multifamily deals, apartment deals, but you've got to understand the workout process. So let's start first at the beginning. All right. How do you find these deals? Well, it's any type of non performing note. There's a couple different ways to go. I, and I teach this in our three day workshop, stuff like that. But if you go to LinkedIn right now, LinkedIn and type in Special asset Manager, Secondary marketing Manager, whole loan trading desk, Chief Credit Risk Officer, Those four job titles, depending on what the institution or how big the institution is, is a job titles of the folks that handle the distressed note sales. Distressed assets, special assets. Special. They're special because they're non performing. Okay. In some banks will have either one asset manager handles their stuff or they'll have a portfolio. Okay. I've seen banks where they have one or two commercial special asset managers and they have several residential. But I've also seen it where some big banks have just one person in charge of the residential non performing and then 12, 13, 14 people in charge of the commercial assets across the country. It all depends on roughly how that bank is set up. Now what do you do? You reach out LinkedIn. Hey, you're a special asset manager. Are you in charge of commercial assets or residential assets? I'd love to talk to you about maybe potentially buying some of your non performing debt. That's one thing that we do on a regular basis with LinkedIn and that works to get tapes in. And a tape is a spreadsheet basically outlining stuff in and we've been getting these tapes in like that. Now it all depends on what the sellers want to sell the debt at. Sometimes they're deals and other times they're duds and we just move away. If they, if they're marketing a distressed apartment, it's distressed, it's not performing, it's not making the mortgage payment. I don't care what the cash flow should be on the rents. We're not the actual apartment owner, we're the bank. And if you're not getting paid on your mortgage, I'm not going to pay you par for a non performing note, just not going to do it. Par means full value. So they owe 5 million, they want 5 million for the note. The full unpaid, unpaid person. Well I'm not going to pay that. If they're not paying on time, I'm not going to pay a full value. Don't care even if there is equity because equity obviously in commercial varies depending on rents and expenses and stuff like that. So we all know the true appraisal of commercial property can change on cap rates dramatically, right? Everybody cash flows king on it. So you've got to do your own due diligence, diligence on this. But anyway going back to finding distressed commercial notes, LinkedIn is a great place to do. We also you will job. I'm sorry, we'll track job postings like one of my buddies, Michael Sauceta from Exchange Loans likes to go on there and post like once a month. How many job postings for special asset managers or whole loan traders are popping up on LinkedIn and the companies that handle those because that tells you if a company is hiring for more special asset managers, guess what? They have a distressed portfolio they need help with and taking care of it. So instead of originating hiring originators and loan officers, they're hiring servicing people to help with the workouts. And the paperwork goes along with the stressed assets. So it's not anything to be surprised. But it's also an indicator like who's hiring at these positions and what banks have open positions for these type of employees. These are potential deal flow or banks to target or lenders are target for potential non performing notes. Now that's LinkedIn. There's some other services I like to use. Very very passionate and I enjoy using CRED IQ. That's cre-iq.com crediq.com these guys, Mike Cost and his team out of Philadelphia are plugged into all the commercial servicing companies, the special servicers. So you can literally go on to their website credit IQ and look for different commercial asset classes, apartments, multifamily, self storage, industrial, whatever you want. It's a really great search engine by geographic. If you're looking for apartments you can do by number of doors values. You can literally search and it literally looks like opening the kimono. They've got the servicing notes from the special servicers. They give you all the information on the borrower, like the borrowers, the llc, their contact information, any general partners and stuff like that literally gives you that information. Plus you can see what's going on with the servicer. Now who's a servicer? The special servicers, these are companies are called in by the bank to collect payments. And most banks will have a servicing company collecting payments on their behalf. A special servicer is somebody who's going to come in when the bank isn't getting paid. The bank will hire to then reach out to the borrower, say hey, what's going on? What's the issues? How can we help you get rock and roll? And many banks will track obviously the financials when we use apartments for the thing where the, you know, the borrowers or the entities that are operating may have to provide financials on a quarterly basis or if they start falling behind to initiate some type of workout, trial, payment plan modification or something like the forbearance agreement. The operators are going to have to provide financials to the lender so that they see that they maintain that debt service coverage ratio of 1:1.25%. And you'll see this in the notes on the servicer, especially with that credit IQ of the notes. So they had the, the asset or the borrower's falling behind that debt ratio, they're still above it, but they're default or they've got a balloon coming up and we don't think they'll be able to refinance out of the deal. Okay. Because especially when values drop, rates go up and the value of property drops, a lender will often require that borrower to bring some cash to the table so they don't end up at 80% LTV, they're at 70% depending on operating costs and things like that. So they may require the borrower to bring some money to the table. If the borrowers don't have 10, 20, 30% to bring to the table to write down that loan, they're technically in default. They still could be paying on time, but they're distressed because it's not meeting up with the other portfolio. And many of your lenders will have specific portfolio guidelines if they want to do and they'll start to look to shop that now. We did a episode on Monday on the Note Closure show podcast talking about crack sellers. You know, where asset managers want someone ridiculous amount and that's fine, if they want it, they can ask for it, but it doesn't mean they're going to get it right. And we often find the more in default a note is, the more motivated that seller becomes to sell the debt off their books. We've had this happen multiple times where it was a 30 day offering and it turned into a 60 day offering and then a 90 day offering and 120 day and 150 and 100 days. So six months goes by and the value changed on the asset, hence our bid changed on the asset. And if they would accepted our first offering six months ago, they would have got a better price. But it was distressed and now it's became more and more distressed. Six months of payments had reduced the value of that asset to non performing where we now know that A, we're probably going to have to foreclose on that borrower. Right. So going back into. That's why I like creditq.com it's, there's a monthly charge for it. I think they got a seven day trial but I think it's 297, something like that. But it's well worth it if multifamily loans is something that you want to target and that's or commercial assets are what you want to target. Okay now another source that we like to use is Bauer Financial, bowerfinancial.com, now Bauer Financial is a third party kind of a reporting agency that tracks all the quarterly reports that banks and institutions will file with the fdic. So if you're a bank to keep your FDIC protection you've got to file a quarterly report. Now if you're a private company, an LLC or something like that, you're not going to file the fdic. But this is for banks only banks, credit unions will file their quarterly reports with the fdic. Bauer Financial goes in, pulls up those reports, scrubs them. And one of the great things that you can do with Bar Financial is you actually can purchase that scrub data in the form of a spreadsheet. And this is one of the things that we like to do basically on once a quarter basis and it's usually around this 14th to 17th of the month, the month after the quarter. So like right now as I'm recording this, we're the end of February, so in Q1, so Q1's numbers won't be available till the middle of April. Right. Because that's the start of Q2. So if I basically I could get by January 21 Q4's numbers and what Bauer Financial do, like I said, they'll, they'll scrub all the quarterly file reports and we request to say hey, give me the quarterly reports on all the banks have at least five branches or greater across the country. Now the reason why we focus on banks have five branches or greater is that they're a little bit More flexible in their lending. They've got multiple branches, they make take care of anything under five. They're really too conservative and they can't take selling a note at a discount most of the time they've got to go through the process before closing. Taking as not saying you can't sometimes get good assets. You can on some of the smaller banks, work out with them to keep them on the books, but they're just not going to have the deal flow that you're looking for. Remember, we're not sending out postcards, letters, doing any of that crap. We're not jumping on LoopNet, which is where deals go to die, commercial deals. But Bauer Financial will buy this report and it literally will list in percentages and dollar amounts, it'll give a five star, you know, a one to a zero to five star ranking of the bank where they were last quarter, where that this quarter and we'll share what percentage of their portfolio is good, what's underwater, what's in default. And that means if anything is default, what's more than 90 days late, what's 30 to 89 days late. So you literally will get a number of this bank has this many million in loans and residential, this much in commercial and even this much in multifamily loans, apartment loans. So that's a good thing. Just going through that list identify bank, then what do you do? You jump over on LinkedIn, you look for a special asset manager, secondary marketing manager at that bank. You start contacting them to see hey, I see you've got a non performing loan on your books. Under non performing loans are you interested in selling some of this stuff off? And here's the thing, the borrower is making payments even if they're in default, like from debt coverage ratio or they their term, you know, their five year fixed term and now they're beyond that balloon payment. Banks don't necessarily want to sell this stuff at a discount because it's performing. So to get a bigger discount it's got to be really somebody who can't perform, it's not paying anymore to get the bigger discounts. And remember, you're not getting the asset, you're getting the note. All right? And then you've got to go through the foreclosure process or the workout process with the borrower to either get the borrower back on track making payments and that's your yield, basically figuring what your payments are off of what you paid for it or two if you can foreclose or the borrower has already started Filing foreclosure. What are you going to sell at auction for above what you paid for the note. Now if they owe five million, you bought it at four and a half and you sell it for five million because the department's worth seven. Great, you just netted a half million dollar profit. Okay, if for some reason though we all know a lot of these other large assets don't sell at auction, you end up taking it back and then it's an REO or a real estate owned asset, then you need to work out with the the borrower, not the homeowners, but the property owners, the management of either a getting the borrower back on track, have them deed the property over to you. A lot of times these borrowers may file bankruptcy so you have to take it over receivership going through the bankruptcy and we've done that before taking over an asset and receivership, operated it for eight months, got it updated, new management site, new new tenants, new cash flow, really boosted the value of it. And then later sold it at the foreclosure auction for full value because the fact that we had done some good and if we hadn't sold the auction, guess what, we would have held it back and it been an operating asset. But we've had to go through that route, that eight month process of buying them and working it out, going through the courts and then finishing the foreclosure to actually own the assets. So that's what you got to keep in mind. So what we Talk about using LinkedIn to find asset managers to find banks that have listings for more asset managers. Credit IQ Bauer Financial. Now another golden opportunity for you to find servicing companies or master servicing companies is to look at the Mortgage Bankers association quarterly file. When it comes to commercial and multifamily servicing reports, you literally just Google it. Multifamily commercial servicing update or servicing. Yeah, servicing update Q Q4 Q1 and like the most recent one for Q4 of 2023 came out February 12th. So it came out about two weeks ago. And this is a free, doesn't cost you anything. Just go to mba.com and type in multifamily servicing. You know, report it will literally give you a list of every commercial servicing company out there, ranks them, who's got the most number of loans, dollar amount and will give you this list of servicing companies that are handling foreclosures or handling the special servicings. That becomes an ideal list to what to pick up the phone and dial for dollars. Or guess what, jump over on LinkedIn to find somebody at that institution or that company that fund that servicing company to get on the radar to see what they might have available. Like I'll give you an example. We a while ago we found that Crown Point Northrop was a servicing company for a multifamily. Now well, we reached out to Crown North Corp. Specifically about one asset they won. They were servicing on behalf of Wells Fargo. Wells Fargo didn't want to take a discount at one, but Crown North Corp had a portfolio of other loans that were in non performing that they were knew that their banks that they worked for would sell at a discount. So we worked with them to take down a couple assets to buy some stuff with the idea that we knew we were going to have to foreclose. Now that's foreclosure is one of the big things you got to realize is going to happen if you want to end up owning that asset. You always got to make sure that if you're going to buy the note at a discount that the return on that renew reperforming note is going to be valuable for you because you may not end up ever taking the asset back if the borrower reinstates the loan or they get a cash infusion. Whatever the situation is, your stock being the bank. So make sure if you're buying a discount that it makes sense for you to hold that asset for a period of time and cash. Now of course if it's going to go through the foreclosure process. The great thing about this, ladies and gentlemen, part of your due diligence is not just on the property, but also on the borrowers, their llc, other assets they may have, and the collateral file and the servicing and attorney notes. So one of the great things to ask is hey, can I get a copy of the servicing notes, the special servicing notes. And you will literally see all this valuable information of the bar provided financials or they didn't, or they were friendly or pounded sand or they're willing to do a deed loo. There's a lot of things to take a look at when it comes to working that stuff out and that's a whole different process. But you do need to understand, especially the commercial space, how to evaluate an apartment complex versus a single family property. The big difference is you're not when you're going to go buy a traditional apartment complex, what are you doing? You're going out, looking the property, walking around, walking in and inspecting each unit. You're not going to necessarily be able to do that as a note buyer. Yes, you could walk out and walk around a property. Yes, you can kind of walk in like you're undercover going to rent a place. We've done that before. Call to get rent rates, to figure out occupancy. Those are some things you can take a look at. Looking online for pictures of units and seeing where they're at, or looking at old financials and figuring out rent rolls. One thing that I have always loved doing is when I have a property, a multifamily property note we're looking at, I want to find out what the issues are with the property. And there's no better way to find out the issues and talk to tenants. Right now I can't go out and somebody's got a non performing. I can't necessarily go out and knock on doors. But what I do do is we'll jump and type that address in on like white pages and we'll pull up a list of people that live in an apartment complex. And oftentimes we'll have a number. Well, we'll call that number and say, hey, we're looking at buying the property, not the note. Don't talk about that. I'm trying to reach the property manager. Can you. Do you have their information? Of course. Guess what? The tenant's going to have a property manager. Where do they send their check, where they send their rent to, that kind of stuff to or who picks it up? And I always like to ask them. I said, well, thank you very much for providing that. How long have you lived there? Do you like living there? If you could improve anything in your apartment, what would it be? And you will have these tents that will go on and on about all the different things that need to be fixed. Oh, like little Johnny's dealing drugs or the washing machines don't work or there's gang activity or no, it's a beautiful place. I mean, they will tell you all the good, the bad and the ugly, all right? And that gives you a lot of the due diligence that's helped us identify opportunities and how to find deals and not deal with duds. Okay? And of course, here's the thing. If it's a class A apartment complex, it's going to be a class A. You understand that? It's probably pretty good. Class B. All right? Your season Ds are where you're going to the bigger discounts. But you're also, guess what? You're going to deal with more work, rougher tenants, rougher places out there. So be cognizant of the area that you're buying in, what's it look like? Who do you need to have on your team is definitely important. You got to have obviously a servicing company if you're buying this distressed debt or have a team with you of operators that know how to work that stuff. You need to have attorneys that are foreclosing in that state. It's really good to make friends with a commercial realtor, commercial broker specializing in multifamily and apartments in those cities that you're buying so they understand what's going on, they can give you true values, they can give you some ideas, they can go be your eyes and ears and knock it on or make a few phone calls that understand the relationships on that stuff. But here's the thing. How do you finance these things? You're going to need cash most of the time. You need to raise capital. So that's why it's very important to understand what you're buying and what kind of yield that you're getting. If the borrower reinstates or if they, you know, they start paying on time, you do a forbearance plan, understand that number. And then of course, if you do take the property back, what's the strategy going to be at the very end is operated to hold it for a period of time or are you selling at the auction? It just varies asset by asset. So there's not a black and white hard number about that. And then also same thing on the pricing side. The only really people ask me all the time like what kind of discount can you get? Well, it varies. Is there equity? Has it been performing? Is it already in special servicing? What's going on with the underlying debt? What's going on with the underlying property? Vacancy rates, that kind of cash flow, that's a different animal than just a single family property or condo as we can all agree to that. Right. So you got to know that things know what's going on with the servicing. And honestly, one thing that we like to do, which we don't see very often because most people that get in apartments, they have a special entity set up for that commercial property. But seeing what type of other properties that LLC or operating company may have that you can use as leverage to potentially get them to work with you to do a deed in lieu of cash or keys, depending on what's on title, obviously there may be other liens, other mezzanine loans, stuff like that, that you may have to just go and foreclose to wipe out that second lien or other subsequent debt on the property. Okay, now what else did we discuss today? We talked about how to find them basically. Obviously like I said before jumping on LinkedIn and looking for those, those job titles. We talked about Bauer Financial, we Talked about Credit IQ. You also do Crexy. Crexi.com Crexy is a great website for finding listings of commercial deals. They also offer a service and upgraded service for 297amonth. I think that you can actually go and find maturing loans across the board. So that's another alternate for you to look at as well. If you're finding, looking at commercial at maturing loans, those are potentially near, near the default stage if they can't get refinanced out in some sort of fashion. So let's take a look at it now. Going back to the financing side. Obviously putting a fund together, putting a syndication is something you may want to do. Some banks and I say that some banks may be willing to carry financing or offer you financing on a note purchase. If the operator or the asset is already vacant or the operator is going to be moving on. Like if you're doing a deed lieu cash for keys, borrower wants to leave the property, bank doesn't necessarily want to operate it. They may be willing to actually finance the purchase of that note and move it from the non performing side of the bank to your side. You know, you may need to bring some money down 10, 20%. Okay, that might be something to think about doing for you if it makes sense. I've we've got several students who have been able to use that aspect of getting the bank to carry financing on the actual purchase of the note. It just takes knowing hey, what is the bank looking for, what does the asset have? And you having a knowledgeable team with you that can handle that operations. Because just because you buy that note doesn't mean you're a great apartment. Like I don't want to be in charge of management an apartment complex. We want to bring on a team and operating team to help you operate that and take the deal down. Honestly one of the things that we do is if we're looking at a multifamily note and looking at the details of it, what can we buy for what kind of yield be they get it going but what's the opportunity? What's the true value asset, what's the expected roi? Sometimes you got to be like Sherlock Holmes and calculating cash flow and rent rates and stuff like that. But then also what's great is oftentimes the notes from the bank on the servicing side Will give you information on when that property was last updated. Rehab, new roof. Those things are usually pretty good. Like the bar went in, they bought it, they started rehabbing the, you know, the units and then they ran into issues with obviously interest rate fluctuation or something else. So oftentimes you'll have the true soap opera, the story behind the story from the special servicing company. And that's one of the important things. But here's the thing. These things do take time. They're not going to be able to buy something and work around and get it re performing in 30 days, six days or even 90 days. It may be six months or a year or longer to do this. And here's the biggest kicker. If I'm buying a multifamily note, I know I'm going to be into it for a period of 12 to 24 months. Don't call a note seller, say, hey, I'll buy all your apartment loans once you take them to foreclosure. Why would I do that? Why would I do all the heavy lifting to give you a cherry deal? Now it may make sense in some cases, I get it. But if I'm going to do the foreclosure, take it back and there's value above that I now just inherited by foreclosing and nobody overbidding. Guess what? I ain't going to sell that asset to you cheap. I'm going to turn around and put a team in place to drive the cash and hold it. So it what's great about this, this is a way to find distressed assets by using the note strategy, by using the distressed servicing companies to find deals for you that you can take a look at and leveraging the free data out there. I mean if you just want to do it, jump on LinkedIn, start contacting or pull up the, like I said, the MBA Quarterly Multifamily Apartment Servicing report and take a look at the banks that are on there, start contacting them and seeing what they have in their books and going from there. And that's, that's the beat of it, ladies and gentlemen. Remember you buying the note, you're becoming the bank, not the actual property owner. You've got to go through the legal process of foreclosing, getting a deed loan, cash for keys or taking the property over receivership to the borrower files, bankruptcy to then to work through that stuff. But there's, it's a great strategy. I mean I've gotten lists from banks that are huge. You've got in a tape which is a Excel Spreadsheet or it's been a PDF of all these assets. They're small balance stuff, multifamily loans across the country. And we're starting to see more of that taking place. But Covid first kicked in. I started getting phone calls from banks on their multifamily stuff in New York State because I knew it was going to be two years or three years before they foreclose or the eviction stuff. So there are specific states you probably want to avoid. New York, New Jersey and then probably the west coast states. Oregon, Washington state, California. Those are difficult to foreclose and they're not lender friendly. I'm not opposed to buying in judicial states. Just understand what the foreclosure laws and really understand it's going to take a while. Like one of my biggest mistakes was buying a apartment complex in Chicago. It was a class C and it really was a class D and it was just a big ugly pain in the ass POS piece of shit that we took down and luckily we got rid of it. We bought it at the right price. We will move it to somebody and break even on it. But it was still a pain in the ass to deal with. Understand the assets, leverage teams, leverage relationships. If you're already an apartment investor, business indicator is maybe something to look at. Leverage relationships like that through like Multifamily Investor Nation or the other conferences that take place on multifamily side. Don't be opposed, but understand it's a different, different strategy, different philosophy of buying the debt to control it. And understand that you need cash or you need to basically have some stuff lined up or be willing to work with the bank or hope that the bank's billing to work with you. There are literally some of the major institutions out there in the commercial sideways because when you make an offering you're usually going to be making what's called the letter of intent, a true letter of intent, where you're filling out what due diligence you need, how long you need to close, pricing that stuff. And some of the banks that we have bought from literally on their sale agreement or letter of it. Say if you looking for partners or wanting to partner with a bank on this asset, outline what you're you have in mind. And that's worked. We've worked with some folks that have taken an apartment complex and kind of converted it and owner finance out the individual units. The bank was willing to carry financing for stuff honest to do that. They even provided the rehab budget to make some things happen. And we sold the off individually. It's an interesting time right now. I'm gonna tell you right now it's not. We're gonna see more inventory. But the thing is that's just what Wall street is hanging around for. They're waiting. They've been having cash in the sidelines. They understand buying this stuff on the debt side and then not ever having to foreclose, but taking the asset over or becoming a partner in the actual deal, which is something you may want to think about doing. Hey, we'll, we'll basically buy this now. We'll allow you to start making payments. But we want a piece of the pie, a piece of the cash flow piece of the operation side when it comes to multifamily side. And you can get kind of creative on that if a borrower wants to avoid a foreclosure and a black eye. But pay attention when you see these news articles or these big institutions selling off or foreclos, you know, foreclosing on an apartment complex. Do some research. Who's the lender? Who's on the underlying lender on it. What are their plans for that property? Do they have anything else in their books? They look and get rid of and go from there because there's so much free information out there that you don't have to pay to get. Just need to spend and understand how to uncover it and know where to look. And if you're interested, love to help you out with that stuff guys. You can always check out our podcast, the Note Closure show or you can book a call with me by going to talkwithscott carson.com that's talkwithscottcarson.com you gotta understand the note game's different than buying the real estate side of things. So keep that in mind. It's a bit of a process, but guess what, it can be very rewarding, very enriching. And why not buy an apartment complex by buying the debt and taking it over? Plenty of those things have happened over the years and they're going to continue to happen. So hopefully you find this episode valuable. Make sure hey, like subscribe, leave me a five star review if you're listening to it. But check out more information by going to the Note Closure show on wherever you listen to podcasts or go to our main website. We close notes.com and you know, check out our episodes or blogs. We do have an upcoming workshop March 22nd through the 24th where we'll be diving into how to find fun and flip non performing notes. Take advantage of to use the code weekend when you sign up for. It'll knock it down to half price for you, so hopefully you enjoy this. Guys, we'll have, if you're watching live on Instagram, we'll have this video on YouTube and it'll also be a podcast as well for you here. Going live tomorrow. So go out, take some action, have some fun, ladies and gentlemen, and we'll see you all at the top. Bye.