Is Note Investing Right For You in 2024?

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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 everybody, Scott Carson here. Just want to say thank you again for listening to the podcast. If you've been listening for a while, you're subscribed to the podcast. First of all, thank you. Second of all, hey, you know, if you're you're not one of our coaching students or you haven't signed up for one of our three day workshops, here's an opportunity for you. You want to check out our WCN membership. This is the biggest bang for the buck of the notice street. Besides our one on one coaching, this is our monthly membership for 97amonth that gives you access to all of our online training, our virtual workshops, our note weekends, our special one day master classes that we've taught in the past, anything that we have going in the future, as long as you're a live member, if I can't make you or save you $97 a month, I'm doing something wrong. But save you paying 997 or 99 bucks or 399 here or anything like that. We make it affordable at $97 a month and like I said, it gives you access to all of our past replays, our upcoming classes, our access to our special classes. We also do weekly coaching calls with our WC members and also our WC members also get first crack at tapes and lists of notes that we get in after our one on one coach to take a look at them. But it's a great way for you to go. You can also schedule call with me anytime to go through deals that you're working on marketing things, questions you got going on about a deal. We're here to help you. So how do you get signed up for that? Really easy. Just go to noteumbrella.com that's noteumbrella.com get signed up there for you 97amonth guys. Like I said, biggest bang for the buck of the nursery and we want seeds of the family. So let's get you signed up today. That's knownumbrella.com welcome to the no family everybody and thank you for always for listening. Good morning, good afternoon and good evening everybody. Hey, welcome this episode of the Note Pleasure Show. As always, Scott Carson, excited to be with you today. Today's episode is for all of you out there thinking about to dive into the notes investing world. How to be a Note Investor in 2024. And is it something I should consider? I've been fielding a lot of phone calls from investors of multiple types of niches. You know, residential fix and flippers, landlords, people who have been wholesalers looking to do something. And it's, it's great. I love talking to you. Please keep the calls coming. If you want to book a call easy go to talkwithscottcarson.com We've also had the opportunity to be on some pretty cool podcasts. Wicked Smart, Sit down. The Stacking Deeds podcast recently, which we're excited to have both Crystal Condo, Crystal and Joe Sol on the show here in the next couple of weeks. But I wanted to go through what you should be considering and kind of help answer some of the questions that I've been getting from people because they're valid questions and I want to give you truthful answers. Right. So one of the big things that people ask tell me a little bit about novice is it, you know, for me, the first thing I'm going to ask you is what's your background? You know, what have you done now? If you, it's not a kill thing. It doesn't kill the deal if you haven't. Don't have a lot of background real estate. But I'm asking to get a better fit for where you're coming from in your experience level. Now some people tell me all the time, like that's the first question. What have you done in real estate? I've had people like, well, I'm new to real estate investing. I'm like, that's great. Do you own a house? Yes. Awesome. What are the classes are you taking? And I get, people come say, well, I've taken classes, but I'm not pulled the trigger. Well, I'm going to dive into that a little bit. Well, I haven't pulled the trigger. Are you working a ton? You know, what do you, what are your goals? What do you want to accomplish? Well, I'm looking for cash flow. That's great. Are you going to be using your own funds? Yes. Okay, that's, that's the case. You have your own money and you're looking for passive income. Yes. Note investment is definitely for you. Be buying, performing or reperforming notes right now. Just got to learn the nuts and bolts behind it. And that's why it would make sense for you to sign up for one of our workshops so that you understand that a performing note is great as long as stays performing. But the minute the bar stops paying, you need to know what to do and how to act to make sure you get your money back and it turns into a deal versus a diet on your own. Okay? Now if you don't have any of your own funds, that's still okay. It's still a okay to be a note investor. But you've got to do more obviously. You've got to start networking with real estate investors. You've got to start marketing to raise capital and that's really important to do. You can't slough that off. You can't wait till I get a deal under contract to do that. You've got to literally start that process of connecting with investors and targeting IRA investors. Specifically how we teach during our three day workshop. You got to do that. You got to expect some time. You can't just go out and start making offers willy nilly if you don't have any capital raised or have any connections. So don't be surprised. Push back a little bit on that aspect of things. And the third thing is like if you've taken other people's classes but not acted, why haven't you acted? Is it you paid for a class that wasn't applicable? Was it one of these big, you know, road shows of fix and flippers going through that, you know, from California or hgtv, you know, all these big educational programs that don't usually work in your area or you don't have the deal flow because you're in a rougher market or for a variety of reason didn't work because you didn't take action? You know, I'm going to ask you, are you doing any of the things that you're taught to do like reaching out to distressed borrowers or doing any marketing whatsoever? Because I'm going to ask that very important because it takes marketing in any form of investing, note investing. You don't have to send out postcards and yell letters to find deals, but you still got to market to asset managers via email, via LinkedIn, and then occasionally, guess what? Picking up a thousand pound phone and making some phone calls to call some banks or asset managers. It's just going to happen from time. You got to do that right now. That's great. Now if you've, that's, if you've got not a lot of experience, now you've got some experience. I'm going to ask you about your experience. Like I had a great guy today Call me up. He's in Arkansas, Little Rock area. Very sharp guy. He's got a portfolio, about 45 houses. They're in Little Rock rentals. He knows one of my coaching students referred from our coaching students. So I was like, that's great. What are you trying to do? Are you trying to look just for more notes in Little Rock or are you looking for deal flow outside? He's like, yeah. He goes, I would love it. It was in my 30 mile radius. I'm like, well, if you're just looking for notes in your backyard, okay, this would probably not be something that you want to just hang your hat on solely because if you're just looking for one area, it's gonna be probably tighter. Arkansas is one of the states we don't see a lot of assets. We've seen these stuff occasionally, but it's not like Ohio, Michigan, Indiana. And I said, well, what's your comfort zone? He goes, well, I'd be willing to go out of state, you know, once I figure it all out on where it is, like, okay, that's fine. Then it totally makes sense for you, especially if you're looking for reperforming or stuff that's performing. He's like, yeah, I'm comfortable with that. I said, are you thinking about what are you wanting to do with your portfolio? He's like, well, I may look at trying to create some notes with some of my good tenants, my good borrower, my good tents have been the houses for multiple years. I'd be willing to finance them and turn that into passive income versus the cash flow. I said, well, you know, there's some ways to structure it. You definitely want to take a look at it and see what they can qualify for and approach them and then make sure you're not losing out anything, that you're still coming away. You know, it's great to be passive because like, yeah, it's a, it's kind of a pain in the ass to deal with all these tenants toilets and trash. That's like, yeah, you never can have somebody call you call the bank to fix the AC or to unclog a toilet. They've got to take care of themselves because that's what I would like. I said, then you're going to have to stress, you know, tenants that are going to be tough tenants wherever, no matter what they're in, you may not want to finance them because like, exactly. But he's willing to go out of the state. Now I had another guy from South Carolina, great guy as well Very knowledgeable in his area. He's just looking for notes in his area of South Carolina. He would look in the state, but he wants to stay in South Carolina and for him. And if this sounds like you, if you're listening to this podcast that you just want to focus on the state that you live in, then note investing probably is not for you. Unless. Aha. There's always an unless. But unless you're in a state where there's a ton of inventory on notes that we see now. What are those states? We see a ton of inventory. It's really Ohio, Michigan, Indiana, Illinois, Florida, Missouri. I mean, if you live in New York, New Jersey, obviously there. But I'm not counting that in in the scenario. Pennsylvania, Maryland, those are going to be the states that we probably see the most amount of inventory that we look at. Now. I just got to tape in a stuff in Texas. You know, I. If you're in Texas, it's great. But don't rely solely on your Lone Star state. It's a big state, big state. We can fit multiple states in here, most for you guys. But I don't rely just on here because the pricing often doesn't make sense because it's a faster foreclosure state with a lot of things. So that's the thing to keep in mind if you're willing. You're an active real estate investor, got some experience. You still need to understand the difference between buying the note versus buying the asset. There's a big difference there. Don't get fall in love with the equity of the property. I realize that you're only buying the debt. That's what you're entitled to. And you don't get access to the property unless you get a deed in lieu of cash for keys or it doesn't sell at the auction in some cases, or you owe. You know your opening bid is the full debt amount, which may be more than the property's worth, and you want to take the property back. That's completely up to you. So you've got to keep that mindset in mind. So if you got some experience, great. If you're open to doing things in multiple states and relying on servicers and realtors and attorneys amplia, it can be more passive for you. You still got to be active. Active in finding deals, raising capital, especially using other people's money. And then also the workout process. You need to communicate with the attorneys and servicers of what you want to have happen with the barn. Now if the bars get back on track and pay Me on a monthly basis. Great. You still got to be on top of them and check your reports to see who's paying on a monthly basis, who isn't paying and then be willing to fire up that foreclosure process or you know, have a shot across the bow, say hey, you know, pay, you know, stay, we start the foreclosure process. So that's what I mean by that. Look, it's, it's a great, great niche. It's a great way to make money without really owning real estate. You're still going to take some real estate back. If you're wanting to do rehabs, this is not a deal for you because you're not going to necessarily end up with a property. If you're looking for deal flow for, to add to your portfolio for tenants, not as long as you're, I mean if you're looking in one area, not really going to be the ideal thing unless you're comfortable investing the whole state or you're in a state that has inventory. Just as it's important to keep in mind, it's a different aspect of investing. If you're geo. Geographically stuck and don't want to get beyond that, then don't do this. Okay? If you are open to multiple states and leveraging vendors and services because it is the 21st century, there's a little thing called Google and Realtors and servicers all across the country that can help you out. You don't be such a control freak. And I know us real estate investors, we are control freaks. Let's just admit it, okay? Control freaks. Anonymous should be meaning on a weekly basis or a daily basis for some of us out there, but that's okay. All right. Part of what we teach is showing you how to leverage individuals, how to leverage vendors like Baldwin Advisory Group to help you with drive bys and values and O&E's and title reports, stuff like. It's just a different philosophy because there's many of our students who have bought plenty of notes, got reperforming as cash flow and they're sitting chill. They're. There's also others that have bought a lot and with the idea that they're going to take stuff back and foreclose and sell it off or foreclose and maybe add it to a rental portfolio across multiple states or they're buying in the major markets in multiple states with idea that they're going to add. Let me give you an example. If, if you lived in. Oh, let's just make it simplicity. If you Lived in Michigan and Ohio, either one of those states border war there. Okay. If you lived in Ohio and you're comfortable investing in the major markets in Detroit, you could probably find some property managers not too far away to make some things happen there. Same thing if you lived in Michigan. You're comfortable investing in the bigger markets in Ohio. There's plenty of property managers in those areas to make it worth your while. If you're buying at the right price, you go through the foreclosure process, take the property back. Obviously your biggest bang for the buck is to keep people in their houses. So it's important to keep that in mind. This is not for everybody. If you're over analytic analytical, you suffer from analyst paralysis. You know, this is not would not be something for you because you're going to constantly be going overanalyzing, over analyzing, over analyzing. And that's the, that's the beauty in this business is you, you can overanalyze the deals death if you want to but every possible exit strategy going wrong or stuff like that. But you have to realize at some point. But if you buy occupied assets about 60, 70% of the time, 2/3 of the time you're probably gonna be a borrower back on track provide you buy it right. The other third of the time you're gonna probably foreclose. Dean cash for keys. If it's vacant, you're probably gonna foreclose at least 50, 60% of the time. The other 40% if you can get a hold of the bar, do a Dean loan provided that there's not second liens on the property. That's what I would tell you. If you're thinking about diving a note, please schedule a phone call with me. Talk with Scott Carson dot com. I'm glad to talk with you and listen to you. I'm going to ask some questions. Just be honest with me. I've had people in the past. One guy called me up last year, well I'm going to buy the cheapest possible price. Like where are you looking to buy? What are you looking? And he was so not forthcoming of information. It sounded like the guy had run scenarios through chat GPT and was reading that and not giving me anything specific. So like what states are you looking to buy? And he wouldn't tell me what state he was in. I said do you have any of your own funds? I have my own funds. Like well how much do you have? Are we talking 50k or half a million? There's a big difference whether you're need your own capital or none of your capital. You know, if you've got a rental portfolio and you're comfortable, you don't want to do so much property management. It might make sense to own or finance those, but with the idea that you're going to hold on to those notes at least two years. If you're tired of dealing with tenants, don't originate a note just to turn around and try to sell that note. You're going to take a discount. You'd be better off just to sell the asset and go that route. It does not make sense to sell an owner financing if you're planning on selling the note. It just doesn't make sense. It does. It's smart to structure it if you're going to plan on doing it in 2012, 24, 36 months. Hey, that's not a bad strategy. But you got to expect to hold on a note for a period of time, right? Just because you buy the note to number one, just because you buy the note doesn't mean you'll always end up with the real estate. So it's comfortable with those things and you answer those questions and you're willing to think like a bank versus a property owner. And let's talk, let's book a phone call. Let's see if you're fit for note investing because I will tell you straight up, you're a good fit or not. The guy that I talked to that's in Arkansas, he's a fit. The guy in South Carolina, I told you're probably not a fit if you're just focused on that one state. And he's like, well, I'll take anything in that state. I'm like, I appreciate that. I like to feed my students first. Am I coaching Student first with deals. People have tender classes and go from there. So love for you guys. If you're interested in learning more about notes, obviously check out our one day class@noteweekend.com but we do have our three day class that we teach three to four times a year and you get signed up for that at Note buying for dummies.com that's Note buying for dummies.com if you use a discount code, you're listening to the podcast. Use the discount code podcast, all caps. It'll knock a discount price off for you. So check it out. No buying for dummies.com special code podcast to get a special price for our podcast listeners. But as always, guys, thank you for listening and gals out there, thank you for helping to continue to make us the number one podcast, number one YouTube channel and the number one investor recommended source for note investing, especially in non performing. So go out, take some action buddy and we will see you at the top. Bye. Sam Sat.