How to Make Six Figures as a Note Investor

Foreign this is the no Closer show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars worth of property for panties on the dollar. Get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same. Now here's your host CEO of We Close Nodes, Scott Carson. Good morning, good afternoon, and good evening, everybody. Welcome to this episode of the Note Closures and our Money Mondays webinar here for our coaching students. And I've gotten a lot of questions over the last few weeks especially it's been interesting as people get into the first of the year. They're wanting to make good returns, they're wanting to get started investing, they're wanting to take action. And if you've been through my workshops or you've been to my, at least my note weekend, you always know that I'm telling you, hey, get out there and network. Get out and talk to people locally or online. I mean, especially if you're not going to go do it locally in person. You got to be online. You got to be sharing information, sharing how to really capitalize in today's market and what you're focused on. And I don't care if you're sell, you know, invested in tiddlywinks, crypto or whatever it is, you've got to be out there sharing what you're looking for and telling people what you're looking for. But I've gotten questions from investors like, well, Scott, how do I make money as a note investor? How do I make six figures? Because I don't want to go from my job paying me 50 grand a year, create another job that's just going to pay me 50 grand a year. And I'm, I'm like, I totally understand that. All right, Totally understand. They don't do that. So I wanted to go back in. I kind of every year we usually record this kind of episode because always a good thing, how to make six figures as a note investor. All right? And six figures is just the starting point. Okay. That's not, that's all you're going to make is 100 grand. That's it. We've got quite a few of our coaching students are making quarter million a year and more because if you're going to do something, it should do something that makes money. It is not too much work. And this has a way of really helping you to do it, to do it passively. Yes, you've got to do a little bit of work. You've got to kind of log in. You've got to spend some time finding deals. You guys spend some time marketing. If you don't have your own money, you got to really market for private capital and. But this is not a difficult concept and this presentation is one of those favorite things. Now I, I've tweaked it a little bit. If you've heard me talk about how to make 6 figures or how to make 100k as an investor and watch before, I really want you to hang around because yes, a lot of it's similar things but the very end I literally went out to a platform hold a list available today that you all could purchase today if you had money. If you don't have money, you can still use opm, pay them a good return on their money, IRA investors, friends, families and stuff like that and still put six figures in your pocket on an annual basis on almost a passive level with performing notes or non performance. I like non performing because it's higher returns but there's great ways still to make double digit returns in the performing paper size especially a couple different ways to do it. So I'm excited about this episode. I'm excited to share with you. Look, there are no dumb questions. If you're watching this live or watching this on the replay or join me live in zoom as one of the WCN crew members. Ask questions. That's the only way that you're going to get educated and understand how to do the voodoo that we do. All right. Good morning, Paul. Good morning, S.K. good morning. A lot of other folks out there I see. We've got a good group joining us online here. So let's get into it. Let's talk to how you make some bank as a note investor and why I think it's the sexiest side of real estate. Okay. And it's, it's important for you to understand, ladies and gentlemen. Will this happen overnight for you? Probably not. This is not a get rich quick scheme. This is a build wealth, build wealth strategy that if you stick into it and use it, you totally can do this and really change the way your life is, change your trajectory and, and get rock and roll. So let's dive into this. So anyway, so first and foremost that says making six figures in 2012. I got tweaked the side. But anyway, you get what I'm saying In the next 12 months, let's break it down to basics. Okay? Let's just assume, and I'm just saying assume that you need five grand in cash flow per Month to cover your bills. Okay. Not five, that's. Well, Scott, five grand times 12 is only 60K. Yeah, yeah, yeah. Just chill with me for a second here. I'll discuss this and just follow me on this. So five grand per month just to. Basically you need ten grand per month. It's 120 grand here. Then just double these dumpers right now. One of the great things about what you're going to want to do is you're going to target assets whether you're using your own money or using other people's money. Assets with at least a fair market value of 50,000 plus. Okay. A hundred thousand plus. Okay. Doesn't matter. Whatever you want to set your base, your floor level of assets. I wouldn't go below 50, so that's why we're doing it. 50. Okay. Now if you're buying non performing notes at roughly 50% of fair market value on a one off basis, which is about what you would see on a $50,000 asset, you pay about 25, 25k for it. That's kind of normal. We're still seeing stuff like that especially they're non performing. It's occupied that you get back on track. That's a big cake. Okay, you want them to be occupied. It gives you the most amount of flexibility. Okay, let's buying at the 25. At 25k and 50, that gives you plenty of money. If you have to foreclose, you've got money to foreclose and make money as an REO sale or do some like upkeep and then still sell it and make a profit. Okay. Obviously we want to see where rent rates are higher than existing payments. That's pretty much the case now these days. In some cases rents can be lower than existing mortgage payments, but it's preferable if rent rates are high because that's the thing is if you're dealing with owner occupied, they're already looking to see what rent is. If they've got that, they're behind their mortgage payment. I had a conversation with a guy today who was called in and was looking to potentially modify his loan because he'd been out of work. And I'm like, well what's, you know, what's market? Well, market rents a lot higher. I'm like, well then there's not really a lot of room for me to justify reducing your interest rate, reducing your payment because it's already about, you know, 60 cents on the dollar rates. If I, if you get foreclosed on, you will pay a whole lot more okay. And this is a base model. I only say this because you want your payments to be at least probably in the 500 range. 500 in a month range. You know, sometimes lower, sometimes it all varies how the mortgage structured. But that's kind of the numbers that we're going to run off of here. Yeah, sometimes it could be under that at 400, some of the times be over that at 600 or 700. I mean, we had a coaching student, bought a note right the other day, a week ago today, actually closed on it. His monthly, the monthly PNI on it is 792amonth. He paid 35 for the deal and the house is worth 70. Okay. So these are very feasible deals that we see all the time. All right? Now when you buy these notes, it's not to foreclose. When you buy these notes that are owner occupied or have 10 cent, part of the servicing side is to reach out to these borrowers and say, hey, let's get you back on track. You're behind by more than six months or greater. That's why we get a bigger discount. Let's get you back on track. Can you bring four months to the table for us to do a forbearance agreement, loan modification kind of aspect if they allow you to get back on track? So four months of back payments at 500, that's basically about $2,000 you wanted to bring to the table. That's not a lot. Okay. If somebody's going to move, get up and move, they're going to spend more than probably 2,000 bucks on moving costs, deposits and all that fun stuff that go along with it, right? Give or take a little bit. All right? And here's the thing. Well, Scott, I don't have 25 grand. I don't have 100 grand. Well, okay, that's fine. You're going to use op them other people's money, okay? Investor money, and you're going to pay them anywhere from 6 to 12% to purchase the note. All right? And the reason we say 6 to 12% is because when you're talking to these investors, you don't want to just go out and offer them 12%. Now, some people, yes, we have it 12%, others we have at 6. This is why we teach so much in our day two about the conversation, the mental side of the money raising side and asking potential investors, IRA investor, hey, what's that money been doing? Where's it been sitting? How's that perform for you? If they're getting zero percent on their money it's been sitting there for two years. Don't give them 12, give them six. You can always increase it later on on deal number two or deal number three to see if they're a good fit. But if they haven't done squat with their IRA funds in two years, then don't go out and give them 12%. Because they could, if they want to find 12% or greater, you know, they really need to go do it themselves. Okay, but I'm just giving you that scenario. So let's just say we're getting low. Okay? You borrow 25,000 at 6%. That's basically 6% just flat interest only. You're paying 1500 dollars per year out to these investors and that's $125 per month. If you break it. 1500 divided by 12 months. Okay? Now if you're going to get 5,000 in cash flow and the, you know, the monthly payment roughly is 500 minimum that we're looking for. You take the 125, that comes to $375 a month net to you. Well, if you divide that into 5,000, that equals roughly about 14 deals, it's like 13.3. Okay, but we round up because you're not going to do a third of a deal. Okay, you 14 deals. All right. Okay, so 14 deals. And just so you know, 5,005. 375 is 14. What's. Well, 375. Well, that remaining $125 is being paid to your investor on a monthly basis or quarterly basis is what I would prefer. Okay. Now if you do that in a year, 3, $375 a month times 14 deals, times 12 months, that comes to $63,000 in annual cash flow on the front side. Okay, that's the, the pay in monthly basis through a servicing company. Okay. Now one thing we didn't add to this was that extra $2,000 at a minimum. Okay. So we take four payments of 500. That's $2,000 skin in the bank. That goes in your hit national bank, all right, right here from your bar to modify, to forbearance agreement, stuff like that. And then if you take that 2000 times 20 times 14 deals, that's $28,000 in income that goes to you off of that. So if you add those two together, 63,000 plus 28,000 skin in the game, that's $91,000 in income. Just off the, on the, basically the buying side, I'm buying a non performing note and we're getting the borrower back on track. Now here's the great thing. Yes, not every borrower is performed, but if you're coming to somebody who's occupied and they're living in the property, you're going to probably be able to get them back on track about 70% of the time. All right. Especially if it's in fast foreclosure states. Definitely. If it's a longer foreclosure state, they may drag it out, but that's going to happen. But still, if it's occupied and you look at the servicing notes, you can find people that will want to get back on track. Pretty relatively easy. True story. Able to do that. All right, now moving on. If you want to make talk about this. So you buy these notes, you get them reperforming and you want to sell them all off. Well, if you bought 14 assets at $50,000 in value, I'm obviously going to be probably more than that, but let's just do that. Okay. That's a $700,000 portfolio that you're holding in fair market value. Okay. The UPB is going to be greater than the value, so they're a little upside down, but still you're sitting in a good spot. Okay. Remember, you're only at 50% of the fair market value or UPB, whichever is less. Right. So 25,000 of what you pay purchase price notes times 14, it comes to $350,000 funded. The funding partner is getting, remember, 6 to 12% payments that you're making out to them quarterly. All right. Not once a month, but quarterly. All right. So how do you return your investors principal if at 12 months they want to get back out? If you get the bar back on track. Okay. Well the great thing is once you have a borrower who's made 12 months of on time payments or 12 months of performance, that's a reperforming note. Okay. That's reconsidered. A performing note or reper performing note. 12 months of on time payments from skin in the game. Why not? They're committed to staying back on track. Whatever kind of hiccup they got into on the front end, guess what? They're here for the long term in a good way. Okay. Now you can sell your reperforming Note now at 80, 80% of fair market value. Remember, the UPB is a little bit higher, but roughly 80% of the fair market value. Now if you're buying loans where there's equity you wouldn't be paying, you'd sell it. 8% of basically the legal balance in that case, in a lot of cases. But for the what we're trying to make here is underwater notes. Okay, so you sell it at 80%. Well, if you take that 80% and multiply it times the $700,000 portfolio you have of those 14 notes at 50,000, that comes to $560,000 in note sale proceeds. Okay, that means you sell them all. You get 560 in, you pay back your investor or investors the 350 you borrowed at 6% or whatever it is. Remember, they're getting their monthly interest paid back to them. So guess what? You would net. All right, 560 minus 350 comes to a whopping $210,000 plus in note sale proceeds. Now if you add in the $63,000 in monthly cash flow you've gotten plus the skin in the game from these 14 borrowers, that's a pretty good chunk of change. That actually comes to $301,000 in total income. Now this is gross. Well, that's grossly high. I'm trying to be as conservative as possible with these guys going off raw numbers. When I looked at backup portfolios that we've bought, yeah, 500 plus was where the numbers came in. 500 was the, basically the minimum number in a lot of cases. Now there's notes that you, if you're using your own money, you can go higher, lower. You'd be differently here, but the idea here is that you're paying somebody else's money. Now if you're using your own money on this, guess what, you're netting in that cash flow on a monthly basis. You don't have to worry about splitting with anybody else. Okay? Your ROI is higher. You're not have to pay back your investor because you're paying back yourself basically and still making a great return. Okay? So the ROI on this is actually to you is infinite because you didn't use your own money. Your investors made 6% or greater whatever you wanted to pay them. And that's a great thing. Flat interest rate loans and you still got plenty of money there at the end for that's a pretty good day. That's pretty good. 12 month salary. Can we agree to that, ladies and gentlemen? A chunk on the front end with skin the game monthly cash flow and boom. A big payout in approximately 12 months, give or take a little bit. So let's say that it takes you 18 months to sell your notes. Okay, it sells 18 months. So you're making 100 grand net every six months. If it takes you 18 months. Okay, just to give you a little bit of an idea on that. All right, let's move on here. Now what does the funding partner get? Well, your funding partner is just getting a flat return on investors. They're getting their 6 to 12% on a quarterly basis. If it's in self directed IRA, it's going in passively. They can't be active. It's a beautiful thing using IRA investors, okay? It's not paying zero to them and they're not getting a negative return with costs and things like that, actually putting some money into it. And that's a great way to get the ball. Rock and roll. Savings and CDs are paying less than 1%, often 0.01% right now, unless they put in 100 grand and tied up for 10 years. This is what your competitive, this is what your competition is, CDs. Okay? Now if an active investor comes out, well, I want to make 12% or greater. And I'm like, well, what have you done? Well, I'm fixing properties, I'm private lending. Okay, then you're probably not a fit for what I'm trying to do. I'm looking for passive investors who want to make it above average return than what they're used to getting. Okay? And you're not doing these long term deals. You're doing 24 to 36 month deals. That gives you time getting back on track and turn around and sell them all off. Biggest mistake I made was setting up my agreements at one year initially. I get it done and just drags that a little bit. But that's, that's the thing. You are doing short term 24 to 36 month deals, not 30 years. All right? When you start, people start talking about mortgages. Oh, I'm gonna be tied up for 30 years? No, no, no. We're talking 24 to 36 months buying non performing, working to rehab the borrower. Once they're back on track, making payments, we're gonna turn around, sell that note off and cash out of the deal, okay? They're making 6 to 12% without having to do anything. It's a pretty good day. Like I said, flat interest rate loan agreements, not difficult to do. No joint venturing, no violating securities laws, selling CDs or selling certificates. I'm selling securities. That's not the thing we're doing here. Now here's the thing you got to keep in mind. 33% of all self directed IRA accounts roughly are at 0%. There's money sitting there, not Making them anything at all. Ouch. All balance, all balance sizes. Okay, now could this be one investor that funds the 354? By all means it could. Could it be 14? Yeah, it's not going to be anything greater than 14 because you're not going to pull people's money together. You're gonna do one investor with 50k to buy one note and get rock and roll. Okay. Using your, using either, using a, an LLC as your main entity. Maybe It's a series LLC. Maybe you're setting, you know, setting up one or two LLCs for every 10 investors that end up funding the deal. Just there's a variety of ways to do this. Okay, so now let's recap. What are you getting? You're basically netting 375amonth after cash flow. At 12 months times 14 deals is $63,000 in cash flow to you. Okay. You're collecting at least $2,000 of payments from the borrowers. Getting the game hope, sometimes more. All right, but usually that's the minimum we're looking for. So that's times 14 deals. You're paying your investor 6 to 12% flat return on a $25,000 funding amount. Okay. You keep for cash flow or sell the reperforming and cash out. That's the thing. If you're getting a great return, some of these deals you may want to pay off the investor so that you keep the deal for yourself. Or if you've got them in at 10, maybe you get somebody at 6%, you cash, you refinance them out of their deal. Okay. You rinse and repeat and go and rock and roll. Now here is basically a spreadsheet I put together showing you if you were to buy one note netting 375amonth to you, okay, that's your net and you did one per month for 24 months. Okay, one performing note, that's the same thing. Maybe it's not a non performing note. Maybe you go find a performing note on a platform or in the Facebook group or you get a list of notes sent to you from a lender who's willing to sell some stuff at a discount. It happens, okay, but at 375amonth in 24 months down here, 375 times 24 comes to $9,000 a month in monthly cash flow. Now over this 24 month period you would have also made an additional $108,000 in cash flow because it grows every month it compounds. First month is 375. Second month at 750, third month is 1125, fourth month is 1500 if you're buying one note per month. This is not rocket science. This is not 40, 50 hours a week to find these types of deals. But we all know, ladies and gentlemen, how many of us are going to be around for at least 24 months? Well, most, most of us, right, A few of us are probably going to pass away or have something weird happen. But for the most of us, real estate investors don't die. All right, but this is how you build $9,000 a month in cash flow coming in on a monthly basis. If you did this for four years, that's quite a bit of chunk of money. That's 18 grand a month. That's a, you know, 18 times 12 is enough. You know, that's $216,000. That's just under a quarter million dollars a year. And just on the, this is not them bringing anything extra to the table. This is not them paying you off or anything like that. Okay. This is just holding it for cash flow. Yes. Well, you will have some notes that they refinance out that pay you off. Will they go non performing? Yeah, let's talk about that. Let's say you like to buy non performance, which we kind of talked about and instead of you looking at cash flow model, you'd like to make roughly 120k a year. I've had several students that come to me like, well, how do I make 100k a year? Well, you figure it this way and this is from somebody who's been in the business for roughly about 20 years. If you're buying and make sure of performing and non performing, you're not performing is going to kind of go a couple different ways. And unfortunately not every non performing note will re perform. I mean if you stay in that higher profit range, I mean higher property, like if you're saying at 300 and above most of the time it's not going to be in your best interest to reinstate those guys and gals or modify or work with them in the forbearance plan. Your bitter bang for buck is probably going to foreclose on that because they're going to have a lower interest rate, tends to be harder. So the profit margin on that really the quarter million loan and above is really the foreclosure side. But under that it can basically be performed. But let's say if you take 50% of the loans that you buy will reperform, they'll turn into monthly cash flow for you. The other 50% is going to be some sort of deed in lieu cash for keys. Or you foreclose. All right, you work with a bar to get out of the property because they can't pay, they can't pay on time, they don't want to pay on time. Or if they stick their head in the sands or you find a property that the borrower has moved on or reverse mortgage, you just foreclose on the deal. Okay, now that's just kind of a quick 50, 50 aspect. Now we see it's higher about if we're buying occupied assets, it's going to be closer to 60, 70% get re performing. So that means 30 to 40% won't pay you at the foreclose. It just adjusts by what you're doing. Now if you're targeting vacant assets, guess what, you're going to foreclose probably 90% of the time and go that route. But if you're wanting to get 60k in cash flow annually to 5k per month to split this 120,000, so it's 10,010 on average, 10 grand a month, remember? All right, you've got that cash flow. We talked about building Those notes, okay, 60k in big checks means it's going to take you about 10 if you, if you're getting 10 to 15k per deal, minimum on the lower balance, I wouldn't do a deal where I could foreclose on it, make less than 10 grand, that's not a good sign. I prefer 20 grand. But if you're going to make 10 to 15 grand after your money costs and it's a pretty clean property, that means you're going to do 10 to, you know, four to six deals on the side. All right? And remember we talked about the 60k cash flow in the previous slide. So that's 14 deals to get to that. So if you figure in, you buy 14 non performing notes that get re performing plus six notes that you actually end up foreclosing on, that's 20 deals. Okay? Everybody who's watching this is capable of doing 20 deals this year. Now whether you do or don't, that's completely up to you. All right? Completely up to you on what you do, how much you market and of course, oh, I don't have that much in private capital. Okay, that means you need to go out and market for private capital. Gonna dive into the postcard systems, the self directed IRA system that we teach to connect with people. Okay, so that's 20 deals. Now how many offers do you need to make to hit that 20 deal mark. Well, most students, most new people who've gone through our class and listen to what we say have about a 10% closing ratio to begin with. You make 10 offers, maybe you get four or five accepted. You end up closing on one because the due diligence kills everything else. Let's just assume a 10% closing ratio. Some will be higher, some will be lower. Okay, well, 10% closing ratio time. 10% times 20 notes means 200 offers you need to make in 12 months. 200 divided by 12 comes out to 17 offers per month. That's four and a quarter per week. So you need to make an offer about one a day. I mean, one a day is pretty easy. I mean, you may make five on Monday and that covers your whole week. But that's what I'm getting at. This is not all. I got to make hundreds of offers every month. No, no, no, you make 17 offers per month. It's pretty feasible if you'll understand how to market and how to stand, to reach out to things, to make some things happen. Okay, now let me show you a way that you could do this right now, okay. With the platform out there, that it's out there. Sometimes there's deals on there, other times there's not deals on there. Okay. But we in the, in the spirit of making it easy where there's zero excuses that why you can't do this. All right, so we went over to an online platform that we downloaded what their available notes were available for. We got rid of some things off it. But after we got rid of the low interest rate, the low yields, we got rid of the offers of the properties that were non performing or they didn't have a solid sales price like making offers. Great. But I wanted something that I could physically show you. And we also then got higher, get rid of higher assets that are over like a half a million in price. Okay. So when we narrowed it down from 140, 160, I don't remember exactly was we narrowed it down to 57 performing notes. Okay. And they had the sales price. So out of those 57 performing notes, it's a 2.69 million sales price which is at 77% of the loan to balance. Now, it didn't have values on there, on these. A lot of these were newly originated loans in the last year. Some of them were land loans, but they were all performing and basically underwritten. I actually know some of the sellers. I've actually am interviewing the seller of a chunk of them in a few minutes on the podcast. So basically, if you come in at what they want to sell these for the firm or flexible price? Flexible, we'll get to in a second. It's a 3.5 million UPB unpaid principal balance. Okay, now if you take the 57 loans and multiply the monthly P and I payment times 12, that's $658,000 in annual cash flow. Okay? Now just taking the 658 subtracting, we'll just say $25 a month in servicing costs. Because it's a performing note. You can do that in a couple different servicers. You take 658 minus, that's your net cash flow. Divide that by the 2.69 million sales price. That's a 24% ROI after servicing. Now, let me show you the spreadsheet. Let me go through this with you. I don't mean to blow you away, but. Well, Scott, I don't have $2.7 million. I know you don't, but let's talk about how you can do this. Okay? You've always heard the analogy, how do you eat an elephant? Well, one bite at a time and not the asshole in first. Okay. But I can show you how to do this. This is not difficult. We've helped plenty of our students do this and this is one of our focuses of doing. This is why you can. It does. Maybe you don't need to buy 57, maybe you need to buy 10, who knows? Or maybe you need to buy your first one to build some confidence in putting systems together for it. So let's go through. Let me bring up my spreadsheet here. All right, so I think this is it. Just making sure you can see. Yeah. Okay, so this is all for sale. You can see the list prices on these are anyone from like 49 all the way up to like 146. But there are a lot of like lot loans. Okay, and here you can go, you can see the performing, the unpaid principal balance, the interest rates all over the place. The interest rate on these is anywhere from 7% up to 15%. Okay? That's the interest rate. Underlying interest rate of these loans yield is anywhere. If you just figure the yield is anywhere from 15 to 20.5% based on it. Now the average term of this is 84 months. Oh, no, I'm sorry. The average term was actually less than that was. You've got some all over the place. 56, 59. Yeah. 57 month average. Some are longer than less. But this we're talking, that's five years. Okay? You'll be in and out of these deals in two or three years, the way I teach you. Okay? But if you go over here and I just add these numbers up. So 57 month average, if you take this total UPB is 3.504 million. Okay. The sales price, if you add these up based off the website, is 2.7 million there. Okay? So 2.7 divided by 3.5 is 77% loan to balance. Okay. Now the average sales price, obviously, if you take 2.7, divide that by 57. There's 57 notes, not 58, because the first one there is that. So basically, average purchase price of these is 47 grand. 47 grand. Okay. All right, then you're at 77% loan to balance. Okay. So you got 23% of equity. So average is about 60 on these. If we. Let's just do this here real fast. So I did not do that. Divide that by 57. So yeah, 61 is the usual average UPB on this. There's about 14, $14.2K difference between the sales price and this. We're selling at a 23% discount on average across the board. Okay. Now if you figure $57 loans times $25 a month in servicing costs, that's 1425amonth in servicing cost that you're paying to the servicing company. Okay. Now if you take the annual cash flow, all right, total cash flow 674, 960. Where did I pull that from? I went over here to the p. I. Payments. Here you go. Monthly is 56, 246. If you add them all together and payments on these are anywhere from 160 all the way up to 90. Yeah. 9,300. Because you have some big loans on some of the stuff here. Okay, let's see here. Let me check. You get a big condominium there in Georgia. It's a big payment. Okay. We can even get rid of some of these off brand ones so you can make it more vanilla. But I'm just saying, pretty simple. So taking that monthly cash flow, all right, total cash flow is $674,000. Just under 675 net. After we move your annual servicing cost, it's 657. 657 divided by the purchase price of 269 or 2.7 roughly is a 24% cash and cash return. Pretty good. Pretty stinking good. Okay, Now a lot of these are flexible. So let's say you can negotiate an initial 10% discount on these, all right? 10% of what you're paying. So 2.69 means you're buying it for 2.425. All right? Just under 79 or under 60. Sorry, under 70% loan to balance. Okay. That means 42. Five hundred and forty eight would be the average purchase. It drops another 5,000 roughly off. Okay, so now you're at almost $20,000. Eighteen five, eighteen six in equity. Okay? Now if you bought these at 2.4 million, your new ROI is roughly 27% on the gross side after servicing and stuff like that. That's pretty good. Okay? Now that's if you use your own money. You got 2.5 million sitting around. Here you go. Here's some opportunity for you, okay? Now if you don't have 2.5 million just sitting in your piggy bank, okay, that's fine. Let's say you've got to pay money to your investor. So you are getting money at 8% interest. Let's just say that 8% means you're paying off 8% on the 245. Let's see here. B67. Yeah. So you're netting 194. All right, I'm sorry. 194 is what you're paying your money. You're netting 463 on that deal annually. You're paying 10%. You're paying 242. You're netting 415. You're paying 12%. That's 291. You're netting 366 on the cash flow. Now let's take it back. Let's do a different thing. So this is at the 10%. Let's do it at normal amount. So let's just do here, we'll just copy this down. Boom boom C is equal to. I didn't do. The net is equal to. Let's go here. Times 0.8. Yeah, that's right. Is equal to just a total sales times 0.1 is equal to the269.2.7 million, basically times 0.12. So that's what you're paying323. You deduct that number from the cash flow and there you go. So it's a little bit less. So if you are paying, you don't get the 10 discount. You're still paying 2.7 for the 57 notes and you're paying 8% money. That's 442 net to you. 10% is still 388. 12%, it's almost a split right down the middle at 334. Do you see that, everybody? Ladies and gentlemen, that's buying average one note at 42, 548 average. Okay, now some of these we could get rid of. Some of these definitely, if you want to go stay below that, right, we can stay below that. But you see these, on average, most of these are purchase prices. There's nothing Greater. You know, 144, 163, you got a couple larger ones on there, but you're getting a little bit, a pretty good little discount there too for you. Everybody can go do this, all right? But it comes down to if you have your own capital, guess what? Go put the money to work and make a phenomenal return on your investment. Okay, hold these for a while. Sell them all off. Now, one thing that you would want to do, obviously if you're buying this at 42, you like the bigger hit, like the bigger spread and the balance you have to pay your investor off in two to three years. So this is not for 30 years, but hey, guess what? I would be taking a chunk of the money that comes in and putting it to the side to pay off some of these higher valued assets or continuously keep marketing. So as you get good investors that come in that like a lower, are happy with a lower term, six to eight, you can then suck that money aside and refinance out your more expensive investors. Okay? One thing you would definitely want to put in the funding agreement is that you have the, the right to refinance them out at any given time. Okay. And do that without a penalty. Their minimum is investment is being in this and I would say at least 24 months for you. Okay? And the thing that you'd want to go do is look at each notes amortization table to see, okay, we're buying it here. The balance is this right now. We're buying it below this. As they pay down, how many months do I have until that balance equals what I invested or borrowed? And that's your kind of. You're like, hey, you got to get rid of it before now and then or sell it back to them, give them complete cash flow, get the whole payoff back to them. In a lot of cases, you could do that too. Okay, any questions, any comments, any concerns about this type of strategy? I mean, this is not meant to be difficult, but ladies and gentlemen, you can all do this. Maybe it's not 57 at once, maybe it's not 20 at once, but maybe it's one a month, maybe it's one just to get the ball rolling. That's going to put some cash flow in your pocket. Because if you're making cash off other people's money, it doesn't matter whether it's 7, 8, 12% net, it's actually technically infinite. All right? And the confidence that you will build from close on your first deal is so worth it. Just get the ball. Rock and roll the trigger. Look, I've had students that have bought small balance notes, four grand, two grand, three grand, just because they were scared. And they went out and did that and like, oh, I could do this. We put it with a servicing company, the borrower doesn't pay, there's plenty room there to foreclose. You're buying some of these land notes. A lot of times the sellers may even put clauses at the borrower stops paying that they'll buy the buy it back from you. And then you don't have to worry about having go through the foreclosure process. You get paid, they go out and sell it to somebody else because they're in the development space, stuff like that. So something think about for you, ladies and gentlemen. But that's what I want to go through with you today, which is talking about how to make six figures as a note investor. Show you a way to do it. Show you it's not rocket science, okay? Everybody can do this if you just will market. And that means talking to IRA investors, getting out, networking, finding people. Because if you find a deal that's going to pay 20%, hey, put somebody into it at 12% for a couple years. You know, that's the thing to do, or a year and see what happens. You know, it comes in from talking with people. The more you talk with people, the better off you're going to be in getting better interest rates. When I first left banking years ago, I approached a lot of my clients there that had CDs making 1, 2, 3, 4% and started talking about making 12% and they got scared like, oh, that seems risky, really risky in the stock. You know, I'm, I'm happy making my 4%. I'm. That was a big learning factor as I came across the top. And they sounded like they weren't educated in real estate, they weren't educated in note investing. And none of them want investment because they thought it was all 12% was too high, too risky and go from there. So you guys, that's why talking, whether or not investors or talking with other IRA fairs, going out, networking, going to Your real estate clubs, networking, whether it's online or posting things like that. Look, your success is all at your fingertips. It's up to you to dive into those deals and go make some stuff happen. Otherwise, if you can't, if you don't take action, nothing's going to change. You're just going to be disappointed. So get off your ass, get off your keister, go out and take some action and hopefully we'll see the top. Thank you for listening. Thank you for joining in. Thank you for the comments and question guys. I highly encourage you. Come on out to Austin in two weeks. Here, the February 14th, 15th and 16th we have our three day workshop live in person here. We don't do these very often, may do a second one this year back in next August. But come on out Valentine's Day and we'll show you how to fall in love with note investing. Go to Note buying for dummies.com get signed up. There's still a discount code. Get signed up today before it goes away. Otherwise we'll see you at the top. Bye everybody. Hey real estate investors. If you have ever wanted to dive into the sexy side of real estate and become a note investor, not just somebody that owner finances properties or buys and sells on terms, but somebody who's actually buying debt from lenders, mortgage bankers, hedge funds on distressed real estate on both residential and commercial properties, now is the perfect time. And guess what? We have our upcoming three day workshop here in just a few days on July 25th, 26th and 27th. That's right, that's a Friday, Saturday, Sunday. You can join me live on Zoom on our Note Buying for Dummies workshop. We'll go through the Fs of how to find fund and flip non performing notes at huge discounts without having to use your own money. And we'll show you all the different ways you can make money being a note investor. Day one's all about how we find these deals from banks, hedge funds and how you can automate the process of connecting with these people and get tapes and listen to you over and over again. Day two is all about raising capital and marketing. We'll show you how to tap into thousands of IRA investors who are looking for deals to fund and how to communicate and how to contact them and get them to fund your deals. And day three is all about the flip the exit strategies putting deals together. We'll mix in due diligence. We'll mix in the marketing side along with the structure side. So much stuff in three days. Live on Zoom with yours truly, the Note guy, Scott Carson. Make sure you get signed up by going to Note buying for dummies.com or click on the three day workshop tab on our Workshop. Get signed up today as we're still running discounts and you too can soon become a no buyer.