Lessons Learned from 500 Notes

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.

Hey real estate investors. If you have ever wanted to dive into the sexy side of real estate and become a note investor and 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 and 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.

Foreign Good morning, good afternoon, good evening everybody. Welcome to this episode of the Note Closure Show. As always, Scott Carson. Excited to be here today and I know it's been a couple days since we released an episode and I want to say I really felt like a disclaimers song. If you don't know who the disclaimers are, maybe this will ring a bell for you. You know, you know, or the Proclaimers not disclaimers the proclaimers, you know, and I will walk 500 miles and I would walk 500 more. Well I felt kind of like I will break down 500 notes and I will break down 500 more just to be the note investor that you turn to who's broke a thousand this, this past week. If you weren't a part of it, I highly encourage you to check it out. But Thursday, Friday, Saturday this past week I spent three days going through over 500 assets. 292 on one list, 172 non performing on second list and then 66 performing. So yeah it was, it was a, a lot of assets. 500 some 30 something. What do you learn from breaking down 500 assets? Now for me this is a drop in the bucket. I mean we break down hundreds and hundreds and hundreds and hundreds and hundreds of assets every month. And we've heard you, we've seen the views if you aren't subscribed to our YouTube channel. So you can watch those, you can do so by going to Weclose Notes TV to check out the, the replay of those breakdowns. Because it was basically nine hours from 12 to 3, Thursday, Friday, Saturday to go through these lists. But one of the great things that you learn by breaking down assets, when you take the time to evaluate them, to look at the values, to run some numbers, you start to identify what you like, you start to identify your buying model, your game plan, what do you like, what you don't like. Some of these tapes had some really, really non performing assets. We're talking like one has been non performing since 1999. How the hell it hadn't been foreclosed out yet. Don't know the bar. It played games and does some other things but others had been lost to tax sale. But there was a big chunk that were, you know, in that three year time range. And that's I guess is what I'd say is if you see a note, you get a list of non performing notes in. I start really understand the fact like if a borrower has gone default in the last three years begin of 2020 or sooner, they've had more than their share of opportunities to get back on track, to modify, to do a forbearance agreement, to reinstate, to do all sorts of amazing things with the two year crap show that we saw with COVID If you're a non promoting investor, anything beyond that, if they, you know, they were defaulted before that they had an opportunity to come to the table during that time frame and get Back on track. So that's one of the, you know, kind of the things that we look at, look at before 2020, you're probably going to foreclose. All right, maybe you did alone. That's not saying you can't get the bar back on track, but you're unlikely to do that most of the time. There are going to be some rare situations where people haven't paid in a while. It's just because they're dealing with a crappy servicer or the note investor. The note owner hasn't done anything. We've seen that complaint times where people just sit around with their thumbs up their butt not doing anything because they've limited funds or their attention is elsewhere. There's a variety of different reasons for that, but it's really easy to separate your list between the opportunities ones, the ones that, hey, this is a potential mod or potential reassignment and those are distressed that are not that go beyond that. You know, start getting into, you know, 20, 19 and older. You start understanding values. You know, values have all increased the last couple of years dramatically, even with a bit of a downturn. So if it's a value from the source, get a value on there from 2020, 2021. Okay. It's probably for pretty close to what it is 2022. You still gotta look for it. But one of the most important things you have to get in your mind. And I've seen people literally flip out from this and I heard people reaching out to me like, oh my God, I, I, I, I, I, I mean, I'm stressing out. I'm just stressed out about this is to cut to slice and dice. We did an episode of being a samurai note investor, getting cutting things. You're gonna make a lot of offers and when you get a lot of accepted offers back, you're going to slice and dice from that. There's going to be issues with title and the issues with value, issues with condition. I had a couple performing notes recently accepted on bids that I've been working for. And I finally get condition reports in a property in the properties, it looks like it's a empty property. I don't want to end up with that property. So, you know, you look at that, if a property's been sitting vacant for more than three years and you start looking back further and further back and still vacant. I'm gonna tell you right now, it ain't gonna get any better. It's gonna get nothing but worse. You're not gonna have some magical fairy or magically Godmother, just show up and waver magic wand and your, you know, your shack turns into a mansion, you know. Right. That doesn't work that way. Only in fairy tales does that work. Okay, you gotta realize everybody too, that you want to start looking at deals. If you want performing notes, you gotta buy some notes that are gonna perform for a while. Buying low balance notes is not a good play because most of those times those payments are going to be all interest, very little principal, mostly principal, very little interest because most of the interest has been paid down. So you have a very short time frame. I don't like to look at assets that don't have at least 10, preferably 15 years of payment history left to do. Because that way the difference between what I'm buying the asset for and what I'm funding it at, there's usually a good three to four to five years difference between the pay down to, to what I invest with so that my investors are still taken care of. I don't worry about refinancing, have to pay up my investor and being a negative position. All right. You also got to realize foreclosure are different for every state. There's states you don't want to invest in. There's states that are just a pain in the ass. You know, you look at what's going on like in Portland, Oregon or other areas on the west coast, people are just getting the heck out of Dodge left and right. They don't want to own anything there. There's a reason for that. Because it's very difficult to foreclose, it's very difficult to evict. Until the government at those levels understands that they're going to see a continued, you know, transition of investors leaving the states, not putting money into their own backyard, but putting it into other markets. All right, so, and also another thing too, ladies and gentlemen. If you start seeing addresses that are rural FM farm to market roads, roll route ones, don't see much roll route one now, but stuff that's way out in the boonies, it's, it's probably not worth your time unless it's on acreage. And you're fine handling the foreclosure and acreage because it's going to get difficult. So these are the lessons I've learned over the years that hopefully you, as you start breaking down and evaluating more assets and look at things, you'll start understanding these truths. There are states that we don't just, we don't look at because the property taxes, you guys, like Wisconsin is one of those states, you know, Milwaukee is a big city and we looked at some decent acreage spots there. But the property taxes will kill you. And you gotta realize, ladies and gentlemen, you're in the note business. It's not a Baskin Robbins type of investing. Okay? Yes. There's 32 different flavors. You want to be basically a vanilla and chocolate guy. Okay. Maybe a Neapolitan, maybe a little strawberry mixed in there. Okay. And what I mean by that, stick to your basic deals, your cookie cutter, your meat and potato deals. My meat and potato deals is single family occupied assets from usually $50,000 at 250 that I can, if I can get reinstated or modified, I'm seeing at least a 12 to 15% cash and cash return. If I've got a foreclose, I want to see at least a 15 to 20% cash and cash return based on. If I've got a foreclose based on that, I can foreclose in 12 months or less. Okay. But it's going to be in a state like South Carolina, Florida have longer foreclosure time frames. That's okay. I just need to see a little higher return. And I'll put more pressure to use what I would use as a foreclosure cost, you know, three to five grand. I only use that more for a deed in lieu. But you know, your sellers will tell you just about everything you own. If they can't provide servicing notes, they can't provide proof of insurance. If they're sitting there, well, it's performing, but we got to pay the first place insurance. That's not performing. We got to pay the taxes, but the borrower reimburses us. Hopefully that's not performing. If a borrower is paying once every three months, that's not performing. Okay. Yeah, they get caught up. That's scratching dent. If there's issues with the property, the values aren't there. This is what you have to realize and just be. And here's another thing too. Just because you sign a loan sale agreement doesn't mean that's the hard, fast and last contract that you sign. You will reduce bids, you will move assets. I've got a couple students right now that are arguing with the seller because he's refusing to allow them to fade bids even though they didn't perform due diligence or sign the contract that he wants to buy them all, not kick four or five them out because the values aren't there or that he won't fade his bid. You have to realize something, ladies and gentlemen, it's you that you're buying for. Not broker, not some buyer. You, ladies and gentlemen, you have to realize it's ultimately you make the decision. And it's okay to kill deals off. It's okay to kill half the, the accepted offers if the due diligence is there. I know some people are scared because I don't have capital. But guess what? If you start marketing at the same time, and I mean marketing on a daily basis, not a one social media post, one email blast, that's it. I mean daily basis, on a regular basis, your marketing. And you get in the habit of doing that, taking down 20 assets won't be so intimidating. Taking down 50 assets won't be so intimidating. Heck, even making offers off of a 500 assets won't be intimidating because you realize that that buy box is a lot smaller than 500. Maybe you'll end up with 50, maybe you'll end up with 25. I don't know because I don't know the exact numbers of where everything's at. But when I start looking at these bigger tapes and I start seeing stuff that's been out there for a while, I can tell you right now, ladies and gentlemen, that stuff beyond night, you know, 2019, 2018, it ain't getting prettier when you start getting five and six years out. Not only are you dealing with statute of limitation issues in a lot of states, you're dealing with assets that probably aren't in the best shape. If they're vacant, they are going to need some work. You know, the exception may be being if they're in a really nice part of town or in a condo, something like that, but they're still going to need some work. They're still definitely gonna need some work. So, you know, if you, you know, in three hours of time. Can I eliminate half of the list? Yeah, I can eliminate half a list in 30, 45 minutes to identify the cream of the crop or the deals that I want to spend my time on. But that just comes with experience. That comes with spending time. But take advantage of these opportunities. I mean, there's no cost for you to watch the replays. There's no cost for you to take time to pick up the phone and schedule a call with me and say, hey, Scott, can you walk me through a deal or two? I'm putting this out here for you. I know not everybody does this, but I really do give you access to me so that you aren't making mistakes, you're not over bidding or bid on assets, you shouldn't be doing that and I really do mean that. Let's take the time, let's make sure you're buying a good deal, not a dud and that you're gonna actually make some money instead of losing some money. And I highly, highly encourage you out there. We've got some really great content over the next few weeks that we'll be discussing and bringing some folks on here. But ladies and gentlemen, one of the best things you can do is don't be intimidated by a list. Carve it out, start looking at some of the things on there, what estates, what cities you don't recognize values, low upbs. You know, there's a lot of things you can do with this in a slice dice basis to identify assets that you want to have. You know, like low, low monthly P and I payments. Get rid of those. Anything under 250amonth, just go ahead and delete it off. Unless you're going to use your own ira. You know, stuff that, like I said, it's been vacant for a while or it's not vacant, not secured is usually a big red flag that if it's vacant, not secured, it's only been if it's been non performing for six months or longer, a year. Yeah, you probably had a squatter or you probably got some stuff stripped out of it and that's not really what you want. You're in the note business, not the property business. Keep that in mind, ladies and gentlemen out there and realize if it's a good deal, if you will market, there's plenty of capital out there. I know that intimidates some people, it intimidates you. It's because you've probably never done it before and you just need somebody to hold your hand or guide you through the process. So encourage you guys if you ever want access to those tapes, it's easy. Just get signed up. For our WCN membership. It's real simple. If you go to noteumbrella.com you can get signed up for 90 cent a month and you'll have access to tapes, you'll have access to replays, training, recording, all that good stuff there. It's the biggest bang for buck in the industry. If I can't make you or save you $97 a month, I'm doing so wrong. But get out there. Best, best thing I can tell you is just start breaking down assets. This is one of the things that was so critical for me early on was taking the time to break down an asset, identifying potential deals and then Sharing those potential deals with our social media on Facebook, with short videos or YouTube even today, that led to people reaching out to us saying, hey, you know, look, you look like you know what the hell you're doing. I understand your logic. Thank you for sharing the due diligence. I don't want to do this, but I'd rather write you a check. And that helped us not only to find deals because we posted stuff to YouTube and social media where other funds saw this stuff and start sending us deals, but led to investors wanting to put money with us because they could actually see us working through the numbers. So encourage you to do that. We'll continue to do more of these live streams. I promise to do them at least once a month. I may not be able to do them the same weekend every month, but we'll try to definitely do them at least one Saturday a month along with everything else. So encourage you guys. Thank you as always for listening. Stay tuned. Make sure if you like the love the podcast, make sure you subscribe and I'd love to. I want a challenge out here for you guys. You know, I really want to get our five, our five star reviews up. So if you leave a five star review and take a screenshot of it and email to me at Scott we close notes.com I've got a very special surprise for you. So yeah, leave an itunes episode screenshot once it goes live. Usually takes about eight hours for it to be live once you submit it. But take a screenshot email to me@scottclothes notes.com and I've got a very special surprise for you if you do that. So go out, take some action, buddy, and we'll see at the top. Bye. Sa.