Investing In Notes With Scott Carson From the Be Legendary Podcast: Rugrats & Renovations With Josh & Krystal Galindo

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All right. Good morning, Josh Galindo. Here we are recording another episode for Going Galindo Rugrats and Renovations. And today we have a special guest. I was on his podcast and I really enjoyed my time there, so we invited him over to be on ours. A little bit about this special guest is he's an active real estate investor and entrepreneur since 2002, focusing on the niche of distressed mortgage notes. Since 2008, he's purchased over $1 billion in distress notes on residential and commercial properties all across the country. He sells thousands of real estate investors. Entrepreneurs create wealth through his debt buying tactics and classes, helping his students close thousands of deals. He also hosts the nationally syndicated radio and podcast Note Closer show podcast. An avid sports fan, he spends his free time traveling, gardening and making memories. He calls Austin, Texas his home and his better half is Stephanie and their four legged kids.

Great.

So let's go ahead and welcome Scott Carson, AKA the note guy. Hope I did you justice there.

Great. Good stuff, man. Good stuff. Thank you for the intro. Glad to be here, everybody. I haven't, I didn't get back out to Vegas. I used to spend almost every October in Vegas for like back to back to back conventions for like five years straight. October was just out there and my liver is probably thanking me more now that I'm not.

What were the conventions about real estate?

It was debt, debt investing. We had like a noteworthy summit. We had a Association of Private Lenders conference. We had the, the Fetish ball, which is always fun on Halloween at that neck of the woods that the Palms. That was, it was at the Palms once. Is that Hard Rock? Then they moved out to Red Rock. They bounced it all over because they, as they, they screw stuff up. But Vegas is always one of my favorite markets.

Oh, man, it's a great time. It's a great, I love it out here. You know, I feel It, I wish I had a Vegas to go to is what I tell people. I really do. You know, like when Chris, I are like, my wife Crystal and I are like, oh, let's go somewhere. You know, you show up. It doesn't have the, the customer service that we're used to here doesn't have the 24 hour access that we're used to here. And you can't get, you know, you go to California hotel, 600 a night, you know, you could literally go to the Cosmo, have the best of everything for $160 on a, on a, you know, Wednesday, Thursday, Friday. It's just crazy how spoiled we are here. So, Scott, I love what you do. And when I was on your podcast, I was itching to start asking you all the questions about you because I'd love to really get educated on what it is that I know what you do, but I'd love to understand how you do it. And then obviously for my listeners, there's a thousand ways in real estate. When I first got into real estate, I'm going to distract myself here. When I first got into real estate, the gentleman that taught me the game sat me at a table and said, here's what I'm going to teach you. I'm going to teach you there's a million ways to skin a cat. Have you heard that one? Amen to that.

Yep.

Okay. And I, at the time, I had no clue what that meant. I thought it was just a really wild analogy. But, you know, that's what he did. And he was an expert in all facets of it. Hidden development and buying distressed notes, which is where I learned about it from, you know, cash flowing assets. He's obviously in much bigger stuff. He was buying commercial buildings and so forth. But, so I like to preach to everybody, there's a lot of different ways to make money. What's, what I often see people do is they see me flipping homes and they are ready to abandon what has been working so well for them and jump over and go, I want to do what you're doing. I want to flip homes. It's like, wait, but you're a successful real estate agent making, you know, 500,000, 700,000 million dollars a year. Like, if that's working for you, stay in that space. So anyway, hopefully today we could talk about something that, that could help us all make a little extra money or another way that it can be done.

So.

So, Scott, I'm going to tell you what I think I know about your game and then I'D love to hear you get into some detail. Long story short, you have a borrower that, you know, owes the bank $300,000. The house is worth 350. They haven't made payments in forever. Or they make payments and they quit making payments and they start making payments long. And then, you know, now they file bankruptcy and they get out of bankruptcy. But the point is that they become a real nuisance to the bank. And the bank says, I, I'm over, I'm over this property. Servicing this loan or owning this note, I'm going to sell it at a discount to somebody else to take over this headache. And then you can choose to do what you want with it. Either continue to work with that borrower, pursue all your rights under the deed of note and deed of trust, and foreclose, and then take the property and go. So you tell me, real life stereo, that's my hypothetical. What, what does it look like in real life?

That's, that's pretty close. You know, most people think about note investors as somebody who's originating notes, they're doing owner financing or wraparound mortgages. And that's a small, small facet of what we. I mean, I've done it for years, going back 17, 18 years now. And in the origination side, being a previous financial advisor and a mortgage broker back in the day. But since 2007, that's what I've basically focused on is we deal directly with banks. We're not going after borrowers individually. That's a nightmare.

I can imagine.

Drama show. We don't want to be involved with that.

Did you ever do it? We've done a little bit that way or something.

Oh yeah, I've been a fix and flipper, a rehabber, subject to deals, done just about everything, had very similar mentor teach me all the different ways to make money. And then I was doing fix and flipping the rentals here in Austin. Besides running a mortgage company, you know, I was investing aside. And then when everything hit The Fan in 2007, 2008, the mortgage industry, I was very fortunate as a mentor say, listen, this is the time you've been dabbling in the note space with all this distressed debt. It's like the RTC days, the Resolution Trust corporations, the savings and loan defaults that took place in the late 80s, that was just a huge amount of distressed debt that hit the market and billions was made, a huge wealth transfer taking place. And so I said, okay, I, I'll do what I need to do. So I started dialing for Dollars and started calling the same banks and lenders that I used to originate for to see what they had in their books because they had all this distressed debt. And so that's what we did. We literally will get lists from banks on a monthly quarterly basis of all their, their problem child, the problem borrowers, whether they're, you know, they got equity or they're upside down their houses, I mean, we're getting lists. I'll give you a great example. Just made a offering on. We had a listing of 231 assets from a bank. Made an offer on 58 of them yesterday. Average bid we made on was about, was 57 cents on the dollar of current market value. Yeah, a lot of them hadn't been paid on in three or four years. So they owe more than the property is actually worth, even with appreciation. So we buy that debt at a big discount. If bank agrees to our price, we then become the bank and then we have the same rights to work out with the homeowner. Like listen, hey, thanks for not paying ABC Bank, Josh, but you got now got to pay me and I know you've been paid in two, three years or 12 months or whatever. It's usually six months or greater than we target. Can you start paying again? Can you get back on the right track? If yes, great. Can you bring a little bit extra to the game? If you can do that to get caught back up? Great, do that for 12 months and then we'll remodify, recalibrate your loan to forgive anything you're over encumbered on or adjust your rates if you got a higher interest rate, stuff like that. The whole goal, what we do is really not to own the property. It's actually just to own the debt.

I'm basically ask you that what was your best case scenario? So you, you prefer to stay in just collecting the money.

Oh man, if I, if I can get a bar back on track and they bring some skin in the game and they pay monthly and I don't have to pay attorney fees to foreclose, I don't have to do rehab costs. If I bought it at 57 cents on the dollar and after 12 months of on time payments, I could sell that note at 85, 90, 95% of what's owed or value and cash out without even doing rehabs with any sales, painting commissions or anything like that.

And that sounds like a beautiful model.

It's. Well, that's why banks are so big. They understand borrowing cheap money and they go out and make loans and Exponentially, you know, the velocity of capital. It's like banks are always trying to make loans every month or they're trying to go out and leverage it, not make, you know, they lend money at 1% and you know, taking in at 1% and then lending out 5. They're not making 4%, they're making 400% on their money.

Giving education, their why it sounds like you really understand that space. Clearly you do. Will you give me an education? I'd love to hear. Understand that in better and better depth. How do they. Because yeah, if you would have asked me, I'd have said, you know, yeah, you put a million bucks in their bank, they pay you 0.3% and they're lending it to me at 3% and they get the vague. And they just have so many people that do that that it allows them to pay their bills. But that sounds like a very amateur, not maybe not amateurs, not the right way. But there's a much more complicated way where they're making more money.

Well, that's where it comes down to is they're making exponential difference between what they're paying out at 0.01% and then, you know, charging 1 per. Even in the mortgages they're paying. Let's look at this, a cd, a certificate of disappointment, as we like to say. Okay. Even if they're lending it out 1%, they're making 10 times what they're paying out. That's a, you know, that's, that's ridiculous. And if they, that's just on that now if they're lending out in credit cards making 18, 19, that's a different story. It's. But that's the same thing. They're arbitraging that funds. This is why banks want to be in the lending business, not in the property business. If a bank has to take a property back, it's actually a non performing asset to them because now they've got to fix it up. Now it's not generating any type of income. This is the one thing to keep in mind. This is why banks aren't in the rental business. They don't want to deal with the manpower. This is what I like about being in the note business is nobody calls the bank at 2 o' clock in the morning when the AC goes out in the middle of the summer. Nobody calls the bank when little Timmy flushes his rubber ducky down the toilet and it's flowing. You know what I mean?

Our little Jagger the other day.

Yeah. You know, there's advantages and Disadvantages to each one. But what we like this fact is in the note business, we're seeing deals usually six to 12 months ahead of when it hits in the MLS or it's traditional investors out there because we're dealing with the debt and we've got some time to buy. And depending on where we're buying it, like I'll give you an example. We love Florida, love God's waiting room, as I like to call it. Okay. It takes about a year to foreclose there. So if we buy it six months in default, great. It's still six months before anybody would see it as a traditional reo. And often that time we'll have worked out that loan, got the borrower back on track, and they're performing at this point now that we just retained for cash flow without any of the crazy overhead. Or if we do, hey, we'll give the bar somebody to walk and then it becomes a reo, our own asset that we could sell on the open market, keep it as a rental, or do whatever we want with at that point.

So how much do you have to buy? There's quite a few questions here because as a, as a, as a newbie sitting here, understanding your game, I'm actually experiencing probably what it sounds like or what it feels like for someone that is experiencing me. Talk about my game. And then they want to slow me down and go, wait, wait, wait, okay. And I'm over here going, it's easy. You just buy a house, you fix it up, you sell it, you know, you do 130 of them a year, you know, but so, okay, so I want to ask good questions. One, how much money do you have to. Because if you're holding these, you almost have to have an unlimited amount, not unlimited, but a ton of money to be able to tap back into to buy another round. Do you recycle it? Do you reuse the same capital?

Do you.

And then is there a minimum? Like can, can, can I come in with a million bucks and buy these things or do I need to have $10 million?

Let me, let me clarify all these are really great questions. So first and foremost, yes, you can buy one off notes, but you can't go buy a one off note from bank of America, Chase, Wells Fargo, Citibank, the bigger institutions, it's not worth their time to sell a one off note.

Sure.

They want you to buy a $50 million portfolio. Wow, okay, that's fine. There's a lot of other individual lenders, REITs, portfolio lenders out there who have originated loans over the last forever that have stuff on their books that they're looking to get where there's other REITs that have, you know, originated notes and, and then turn them into a portfolio that'll sell a one off note. Like I said, this, this portfolio of 231 notes and, and 2530 states. I made a bunch of offers, you know, 48 plus. I could have just made one if I like the asset on there, you know, there was three in Albuquerque, New Mexico. It stands out to me. I mean it's offering all three of them. There was a couple in Las Vegas, Nevada. Actually, actually let's, let's run through this. This would be a really good idea.

Here talking about it. I would love that. Please give me the Vegas scenario.

Okay, so this is an individual bar. I just, I don't remember the numbers on it. So I actually have the spreadsheet pulled up because is any of this recent.

Relevant like today or this past?

This is like literally been submitted last night at 5:00pm I love it.

Please tell me.

Okay, so it's my Excel's work getting warm here, but borrowers behind. We get this tape in and these borrowers haven't made a payment anywhere from six months to six years. Okay, here we go. This house, it's over on Timber Horn Court in Las Vegas. 89147. Okay.

Okay. Zip code.

Yeah. Borrower hasn't made a payment since May of last year. So they're, they're literally 17 months behind their full payoff. Full payoff is 338 occupied single family home. The BPO came in at roughly around 399. Okay. We made an offering at 200 grand on that yesterday. This, you know, they haven't made a payment 15, maybe 17 months. We made an offer at 200. The value 399. I'm not going to bid really more than 70% of what's owed on that note. Now there's equity. According to what our online value shows, there's roughly about $50,000 worth of equity which we all know that can go here and there depending on the market, but really believe that the values at that 399 mark. So if we get it at 200 even, we get it at say 275. It's still a home run for us because we can modify the interest rate on this thing. The borrower's paying. Hang on. Pull it over. Do I have that up here? I don't have that on here right now. It's on a different spreadsheet. But the loan was originated back in 2015, you know, so it's not going to be a really low interest rate.

For the most 5%. Four and a half.

Five percent. Exactly. It's not a government backed loan. So it's not. The lender had done a forbearance agreement but it wasn't required like the government backed loans are.

Right, right.

So if we buy this at say we'll just say they counter back at 250, we'll buy it at 250, we'll reach out to the bar and say hey, let's either pay us or we'll start the foreclosure process. If they won't pay us, they could list the property for sale and move out and we get paid off in full at the auction. Or if they sell it off, we get our full payoff at the 338. So that turns into an eighty thousand dollar profit for us without having to, for, without us having to foreclose or rehab the property.

These are unbelievable margins. It's like making me salvate. I mean this is still. How big of a package do you mind? And I don't want to dig into your. Okay, so let's just say focus on this Vegas one because I remember these tapes back in the day and you'd get a tape and there'd be 10 in Vegas and 64 in Oklahoma. You know, it's like I don't want anything in Oklahoma. Well, you got to buy both, so.

Well that's different now if you don't.

It's not.

Don't get me wrong, there are some banks that want you to buy it all. You just don't buy those. More banks realize that there's plenty of investors in other areas that could buy onesie twosies. Now I buy in about 30 states. So my offer to buy a bigger portfolio versus just one off in Vegas actually adds value. I've got a bunch in Ohio I'm buying that are like worth $50,000. I'm picking, I'm going to hopefully pick up for somewhere between 15 and 25,000 that were part of that bid too. So if I make a bid at 48, my bid stands out stronger because then the seller's only dealing with one investor versus 48 investors. But that's the people thing about the note business is there's a lot. It's a smaller market than your fix and flippers or your landlord. So a lot of times we had. I've got five of my students that co bid on Smashes. They submitted individual offers that we attach to our bid. So it's kind of like we're buying in bulk. They get a bulk discount versus trying to go out and buy the best asset and paying through the nose so you can buy one off notes. The more you buy, usually the better discount, the stronger the bid is. Who knows what the seller is going to come back. They gave us some rough pricing estimates. But the thing I love about notes is that I don't usually pay over 70% of value. It's just not worth it. At that point, it makes more sense to go buy an REO or chase down on the mls. Kind of like what your strategies are sharing with on my show, you know what I mean?

I want to bang on you a little bit more on this Las Vegas home. So is that one house in Las Vegas. Okay. That wasn't a part of a bigger package.

It's. It's part of 231 assets that were sent to me that I could cherry pick from and only.

Okay. And then you only got one in Vegas.

There was only one in Vegas.

Interesting. Okay.

And then we, we. There's. There was. I like there was 25 in Connecticut, which I didn't like. There was a 38 in Florida, which we made offers on. 15 in Florida. Like I said, I love God's waiting room down the neck of the woods.

I love the tone.

Yeah. And my biggest goal is I don't want to do rehabs because that's not.

A use of my time. Yeah. It is a pain in the ass of flipping. Selling is easy. Buying is easy. It's a construction.

Exactly, man.

You really. Yeah. Okay. So where do you get the money?

So we raise private capital from investors. Okay. We do a big marketing push to self directed iron investors that will fund our individual deal. We've got a fund that will be up and running by the end of the year. We're excited about that.

You want to plug it or does it. Does it help you?

It's not ready yet. I can't plug it yet until we get ready there. But thanks though. When it is, I'll come back to. We can replug it or whatever.

All right.

What I'm getting, there's a lot of people out there that have IRA accounts that aren't doing anything. So they're making zero. They can't buy anything in California. They can't buy anything in Vegas individually because they only got 50 or 100 grand sitting there. And so we use a lot of other People's money to borrow it, give them a decent return, 6 to 8%. Passively, we go buy the asset. We either a get it back over making payments. And part of our structure is when we buy, if we're going to keep it in a cash flow, it's got to bring in at least a 12 to 12 or greater ROI in the cash flow. Otherwise it's not worth it to us. Otherwise it makes more sense for us to foreclose and go there. And I. This is also why we chase occupied assets versus vacant assets. A lot of cases, you know, we have the more opportunities to get the borrowers back on track. If it's vacant, doesn't mean we won't buy it. If it's an area you like, but we just. If it's been vacant for more than six months, you know what happens? The air conditioner walks off, the copper goblins show up. If it's in a cold market like Ohio or Michigan, you have now an interior water feature. It turns into an ice sculpture. You know what I mean?

Yeah.

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Scott. Man, I'd love if you come across vacant stuff in Vegas. I would shoot it my way, and then I could tell you what to pay for it. You buy it, you peel it off, we'll buy it from you. You know, we make it a win win. That's the dude. We can make so much money together.

And that's the thing. It all comes down to. This is one of the things we teach our students. Like, I find somebody who's an active investor, really knows their market, because you don't have to be. If I was in Austin, I haven't seen. I've seen maybe 10 notes in Austin the last 10 years. This is why I buy outside of Texas a lot of times, because Texas is a fast foreclosure state. So everything's overpriced here. The banks know it's a faster foreclosure state. So I like targeting states that have a longer foreclosure process than the Lone Star state. Yeah. And we usually. That doesn't mean. If I see something that makes sense in Texas, I buy. But I've, I've been buying in Florida, which had a year plus foreclosure rate. I don't mind it because that means I'm going to buy at a bigger discount and it may never go to foreclosure because I'm going to end up working out and working with that bar to get back on track, give them some time to get back on their feet. And I'm not on the hook for the full 400 grand in debt. I'm only on the hook for 200. So I'm a lot more flexible in working out the payment plans really.

I mean, it's, it's, it's quite impressive, the model. I mean, it sounds like there's a lot of outs, there's a lot of room for error because you buy it at such a discount that the mistakes can be made. Things that can, could go, don't have to go your way and you don't get smoked, you know, flipping. I think it's such a, at this point there's so much competition, specifically in Vegas. Maybe there's other markets that are a little looser. You've. We've really got to be precise and accurate. And you know, our margins, you know, we are, we are razor thin, you know, and that's why we got to do so many of them. And we, you know, we have years like this year that were outrageous and, you know, shocking and then you've got, you know, regular life. But so what I kind of want to do is, is I. You keep saying you have students. So did you build a business around teaching people this model as well?

Well, yeah. I started back doing this back in 2008. All right. When I started, I stopped my fix and flipping business. I sold my last rental and I just started like buying notes. I mean, I bought.

So you don't own any rental property, you don't own any real estate. You're just, you just.

I do. There's stuff that we take back that we foreclose and we take back. Yeah, there's other assets. Like we bought a portfolio of contract for deeds from a couple funds. So we've got a portfolio performing contract for deeds where my entity is the owner. So yeah, I own real estate, but I prefer to own the Note, preferably with a bank on that I would.

Imagine because all we're in real estate for is the cash flow.

That and also the depreciation. The write offs are good there for you. But here's the thing. I started buying these notes, I started getting these lists from banks. I'm like giving your capital one. They sent me a list of all their small balance commercial assets back in 2008. It was 34 page PDF and it was all the font was in like six point font. Wow. All the stuff that they had, I mean everywhere, San Diego, Cal, you know, Vegas, Florida, Texas, all this stuff. Well, I couldn't buy it all, you know what I mean? It was so many assets. So I started seeing these deals and people understand the fix and flip. They understand the landlord minds, but they're like, I don't understand that note game thing. So I started just sharing webinars, started sharing videos of me talking deals or me in my office doing whiteboard, break down the deals and started having people like, I like the deal and I want to invest with it, but you got to teach me how you're doing. And I'm like that's fine. So we started teaching classes a couple of years into it and that's blown up. I was the educator of the year a couple times. We've helped thousands of people. That's the biggest thing is that, you know, I love it. I'm buying for myself first and foremost. We like teaching people how to do it, but a lot of people, they get an education side, that's all they do. That's, that's never been the case. It's always about we close Notes, not we teach. Notes is my company, you know, I love that. So yeah, we're constantly buying, we're constantly reviewing assets. We're still the. One of the best ways to find the people that have these assets is contacting the internal departments at banks. I mean you're not going to walk into the office down the street and say I want to buy your notes. It's a different department. It's not, it's not customer service, it's not loss mitigation. It's actually most banks will have one of four names. You like the special assets department or the secondary marketing department, the whole loan trading desk for like REITs and insurance companies that have done a lot of stuff. Or your smaller banks will have like a chief credit risk officer that manages the non performing notes. And it all comes down to how the bank is leveraged too. There are, what's beautiful is that if a bank is FDIC insured, they have to report quarterly their earnings, their losses, their defaults. So there's a third party source that we use called Bauer Financial that we buy report from every quarter where the banks, they literally send us a report. And every bank that has more than five branches across the country shows us how many notes and defaults that are more than 90 days late, how many are in sub performing, 30 to 89 days late, percentage of the portfolio. And so that gives us kind of the hot, hot deals or hot banks to reach out and talk to, see what they have on their books. And you know, they may have one deal a month, they may have a thousand deals a month. It just varies from bank to bank. You know what I mean, Josh?

So let me ask you something else. I loved what you said there is that you, you don't just teach. You, you teach. And do you teach what you do what you're teaching? I love that too, because I never want to teach something that I don't, I don't want to sell bullshit is probably the better, the better thing because I'm organically and I know this about myself. And I would argue you are too. You could just, the second you interact with somebody, if they have the ability to communicate, you could argue that they're pretty good salesperson. So I could just simply sell bullshit. And I never wanted to do that. So I'm a big believer in whatever I am selling or whatever I am preaching that I'm actually doing as well. And it's a proven method, so I think that's awesome. Something that I like to talk about on my podcast is as far as flipping goes, because that's what I'm specific to flipping and then owning rental properties is everybody always asks me, how do you do it? How do you do it? How do you do it? And they're big believers in the mechanics of it all. They want to know the mechanics. They want to know like the step 00 and a half 1 1.215, you know, all the way down the road. And what I tell these people is it's important to have your mind right first. Because if your mind is right, then all of these, these objections that you're creating in your mind as to why you can't get into it, which is why you're, you're begging me for information because you think I'm just the key to it. When reality. There's a thousand flip books out there, there's a flat a thousand flip YouTube books out there's a that there's so much free content that doesn't need to be paid for on how to flip. But you're creating these mental barriers that are keeping you from getting into the game and thinking that I can answer them for you anyway, so I'm a big believer in mindset is what I was ultimately trying to explain there. It's not just the fundamentals of how to do something. So you're extremely successful. You're teaching people how to make themselves successful. I'd love to know, is there something out there that was a pivotal moment for you? That's a good piece of advice that taught you to persevere, to be creative. Something I don't want to speak for you. Is there a moment that or something you'd want to share with your people and my people that I think could be of value.

You're always going to learn more from taking action than learning. I mean, you could be the most educated doctor, 12 years of education, PhD, but if you've never actually gone to surgery or performed anything, you're just an educated idiot. And that's the biggest thing I've gotten from my mentors is if you're going to a workshop or you're going to a class, you're doing anything that you're learning, learn to implement that in the next 24 to 48 hours, no matter what.

Repeat that one more time. If you go to a class, if.

You'Re, if you go to any type of class, workshop, seminar, conference, don't try to take it all in. Try to find one, two or three nuggets, but then implement in 24 to 48 hours. That's the number one way that we tell people are successful is we see them taking action immediately. Unfortunately, the education space is full of about 90% of non doers.

Yep.

People that want to learn, but they, they don't want to actually roll their sleeves up to learn how to do it. I mean, it's great to watch to have a steak, but if you don't know how that steak is butchered, you can't call yourself a butcher. If you're gone in there and cut it up. That makes sense. You know, you got to roll up your sleeves and do things. And that's the hardest thing is people get scared of taking an action and you're going to learn more. What do you do? Your role play? Yeah. You make some offers. You, you have to start doing the things. If you're worried about Z and you've never even stepped onto part A, B or C. You're just wasting time. And that was. I think one of the biggest things is I had great mentors. You got to have mentors who are actually doing it and have been where are at where you want to go and been through this shit because they will save you a lot of amount of time. But if you're asking stupid questions about, maybe not stupid question, but repetitive questions about how do you make sausage? Well, no, you just get in there and do it. You know, that's the biggest thing that most people struggle with is you got to show up, you got to get off the bench, you got to get in the game and start missing shots. You're going to make mistakes. The idea of perfection does not exist. I mean, iPhones, think about this. Our iPhone, Samsung, what are these are what version 14. If Apple had waited to make the perfect cell phone, we would never be around. They had that. If you look at the first iPhones, they're pretty shitty compared to where they're at now, right? They got it out, they delivered the product and then they updated as they went. And that's what estate entrepreneurs that you get in. You got to give yourself time, you've got to market. You got to allow those seeds to grow roots and sprout and just stick with it and be focused. If you try to do 12 different things, you'll be a jack of all trades and a master of none. And that's really the downfall of most investors as they try to do too many things versus just sticking that one lane and going with it. It's, you know, and master that one lane. Once you've mastered, okay, add something else. But you got to give it time to master.

Yep. Man, that was all incredibly valuable. I mean, that, that so that stuff gets me excited, you know, I love hearing that. That is, that is all so, so accurate and so applicable and so valuable. Man. Yeah, that was really good.

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I mean, I could just ask you a zillion questions about this stuff. So how big is the biggest package you ever bought?

Biggest package we bought was 100, and actually it was, it was 175. But we immediately bought the same package, another 44 from the same fund. So it was basically 200. And what is that, 215, 216 notes all across the country, you know, we, we will average somewhere between, I don't know, 100 to a couple hundred a year, depending on what's on the market. Last year was a little light because the forbearance agreements and defaults and cobit, the banks weren't selling as much stuff because they were protected. But we're already seeing more in the last six months than we've seen the last, like three or four years. And we do this not only on the residential side, but we also do it on the commercial side. And if you think about how hard commercial's been hit, there's a lot of opportunities. If we know a specific asset class, know how to evaluate specific assets. You know, we've, it's a, it's an interesting game. It's an interesting game. Everything's a lot of the same things in marketing, reaching out to asset managers and doing stuff like that, but you never know way a deal will go. We've had borrowers that we thought would get reperforming right off the bat that we know before closing on. And we bought portfolios that we thought we're going to foreclose on that with one phone call. The bars all wanted to get back on track and modify or reinstate. And that, that was a beautiful day as well too for you.

So I would imagine. How many notes do you own right now?

I've got a portfolio of 65 right now because we sold a lot off.

Oh, that's right. I keep thinking that you hold these, so your game is to kind of right the ship and then you could sell these back, you could resell these to. Okay, that's how you're keeping the money turning.

Yeah, or, or basically they foreclose, then we sell the asset back and then we'll double down on the money we're borrowing. So, you know, our deals are often 12 to 36 months in a lot of cases, because that gives the most amount of the season. I know once it gets back on track, I mean, yeah, I wish they were all 90 days fix and flips. But a note business, you're a no investor. It's a longer Play model versus a quick and fix and flip. That makes sense.

Do, do you get more money the longer that they've been current?

Well, it adds more value to that loan and depending on what you bought it, right? Yeah, you could sell it at 85, 90% of the dollar. And if depending on what that end buyer is looking for, like a lot of REITs, you know, they're looking for 4 to 8% on an investment. And if we bought cheap enough, I'm like heck, we can sell it at par, sell it pretty close to par or value and stuff like that. And then even if we've got a trouble borrower in a lot of cases in some of the longer states like Illinois, others, if we know that the bar is a pain in the ass, it's going to be a dragged out foreclosure. It still adds value to what we paid at. So our biggest model is if we get the bar back on track in 90 days. Great. We'll keep, keep them in there. If they don't respond to things then we will, we'll send it to legal to start the foreclosure or we'll look to offload it for a, you know, 10 to 20% upcharge of what we paid for. To somebody who wants to take on.

That exit strategy, I would take it. All right, let me ask you this. So if we go to. Is there a website, Is there some. How does, how did, how, how do, how does Josh Glendo become a student of Scott Carson?

Well, Josh, I'll send you my stuff. No Char, because I like working with people like yourself. But if those out there are interested, you can always go to we close notes dot com. That's our main mega, you know, that's our main website. You'll find about our podcast or education, some of the different deal flows that we do. We've got ton of videos. I believe in education is great, but you got to take action.

Yeah.

So we close nuts dot com. Check out the podcast. The Note Closer show podcast is over. We just celebrated episode 700, I think is what you were the magic number 700 on the show.

No way. How fun is that? That's incredible, man. These are a lot of work, these podcasts. So good for you to be able to do that many of them.

Well, it's our fourth year and I wouldn't be able to do without production team and I gotta give a, gotta give kudos to your production team. Brittany's been awesome along the way, so she's working there but she does a great job. And I'll tell you what, guys, if you're listening right now, do Josh and the whole going Galindo team a big favor. Hit that subscribe button and hit that leave a review and leave them a five star review. They're kicking ass and taking names with their content and we as podcasters, we love to get that feedback from our listeners audience. So do that right now. They didn't pay me to do that. I'm sure the checks in the mail.

Yeah, that was awesome. Thank you, Scott, so much. And you're, you're, you're, you're. You could talk for days about how much you it sounds like you about this, this game and we appreciate you sharing it with us and I hope to see you again.

Sounds good, Josh. Looking forward to working for you in the future, man.

All right, brother.

Take care.

All right, guys, that's going to do it for today. Thank you so much for listening.

If you enjoyed the show, please rate, subscribe and share our podcast. You can also connect with us on social media or@galindogrouprealestate.com until next time, thanks again for listening.