Mobile Mailbox Money: Cracking the Code of Note Investing with Scott Carson

We'll do a little countdown, little breath.

Breath work, a little drink of water. She Susie sells she seashells by the seashore.

I need to roll that in the repertoire. All right, five, four, three, two. We're here today on another episode of the mobile Mailbox Money podcast here with other prolific investors operating here in the nation. In and today I've got a special guest, Mr. Scott Carson. Scott, real estate note extraordinaire. We closed Notes was just on his podcast, you know, huge web presence. Scott, appreciate having you on the channel today. Maybe if you could just introduce yourself for the viewers that don't know you.

You know, I am excited to be here, always glad to be on and share some of my positive energy and knowledge for being a real estate investor. For now like 20, 20, 23, 24 years now I look at, you know, I'm about to get rid of the gray by go shaving off the grave here later today. But hey, yeah, glad to be here. I've been an active real estate investor since 2001 and basically for the last 17, 18 years focused primarily on buying non performing notes. That's why they call me the note guy. That's why we've got note night in America. We close notes and the note closer show. I all I focus on is buying primarily distressed debt. That's where people haven't paid their mortgage in six months to six years and then trying to work to rehab the borrower, not by, not by sending them to the Betty Ford clinic for alcoholism, but to get them back in rehab their payment plan and try to keep them in their house. But yeah, honored to be here. Glad to share any nuggets with your audience. You know, I'm glad to have you on my show. You did a great job. This show is out. Rock and roll. Now anywhere that you listen to podcasts, I'll send you the link for it if I have. My team has done it and doing well. I mean, mobile home investing, we see a lot of mobile home notes and what we do as well, either from banks or hedge funds that have financed stuff. And it's just an opportunity. Why I reached out to you because, hey, we've seen more of this inventory and we're both big advocates of affordable housing too out there. So ask away and ye shall receive.

Love to hear it. You know, it's kind of interesting to see the other players in notes as most people don't even know what a note is or you can buy a mortgage. Most people are thinking, you know, just on the sake in the Steps of the borrower. You know, maybe you could just touch lightly on how you fell into notes. Why notes, how notes, you know, and why it's a good time for notes.

Yeah, I'll, I'll share my origination story, you know, from Marvel. But buddy of mine started a mortgage company back in 2001 and we were working with a couple investors that were traveling the country teaching on the Ron La Grande circuit. We, Ronald Grand's been around 40 plus years and we were there basically, you know, slinging mortgages to real estate investors. And Bob and Jamie taught me the power of like owner financing and note investing how to. And we were also structuring deals with owner financing. This back in the day when you, if you originated note, you could almost immediately sell it at the closing table. All right, no seasoning, you could sell it, get 80, 90 cents the dollar. Obviously that's changed now depending on seasoning and credit score and a whole variety of things. Most people want to see 6 to 12 months. But this is back obviously and I, I learned, I basically for four years had this amazing apprenticeship I'd say where we were doing mortgages on one side of the office and doing owner finance deals and real estate investing. And it really opened my eyes to all the different ways that you can do creatively in, in real estate investing. And Bob and Jimmy had owned, been a mortgage banker before and had, were teaching about buying notes not just from owner, you know, owner finance buyers or people originating notes, kind of like what you're doing with mobile mailbox money. But they also taught that hey, banks will often sell notes on the non performing stuff from time to time on residential commercial. And that really interests me. You know, I was like many folks dabbling in real estate, sending out postcards and yellow letters to foreclosure list and stuff like that. And I was having some success with that. But it was always a lot of work and a lot of money to get those out. Especially here in Texas. I mean we got fast foreclosure time frames, 21 days, you know, and so I mean fast foreclosures, fast highways, you can drive 85, 90 miles an hour on toll roads. And then you also got, you know, we're fast execution, shooting, killing people here, you know, that doesn't mean if you don't pay, you know, we're going to shoot you. But anyway, I digress. So I, I learned from Bob and Jamie about this creative stuff. But then I also, when everything hit the fan in 2008, I was like, oh, I'm I'm gonna leave the origination side because it got really hard to do mortgages. And I'm gonna start calling the same banks that I used to originate from. And that's what you did. I started calling banks and talking to the special departments inside of the banks that handle their debt sales, their special assets department or their secondary marketing managers or whole loan trading. And I started getting banks and lenders to send me their list of of notes. Excel spreadsheets might be anywhere from one mortgage to like several thousand notes where somebody hasn't paid their mortgage, like I said six months to six years. And I could buy that debt at a big discount. And by buying that note at a discount, it doesn't eliminate what the borrows they still owe what they ow. But now when I buy that note, I become the lender, I become the bank. And there are some, you know, licensing requirements you need to have or you need to have it with a servicing company that covers your licensing so you don't have to. I don't go out and get licensed in the 36 I buy and we just hang it with a servicing company. But the great thing now that I'm into that mortgage which is secured by what, real estate? Right. It usually has a value higher or well above what I'm paying for the note. And how we make our money is by reaching out to the homeowner and saying, hey, what happened? What's your country western song? Did you, you know, somebody died? Did you get run over by a reindeer? Well, that kind of stuff. Do you want to stay or do you want to go? If you want to stay, great. You gotta pay, you know, pay, you know, stay. All right, so let's work something out, you know, selling the property or us giving you money to walk away to do cash for keys. But if you're not going to work with me or my attorneys, then we're going to foreclose and take it the auction. Either sell it at the auction or take the property back into what we want with it. And fast forward now, you know, we've closed on thousands of deals. Single family, multi family mobile homes, condos, you know, million dollar homes down to like, you know, 25000 homes all across the country. And it's been a interesting ride over the last 20 years, I guess you could say. But I love the business because first and foremost I love it when, because banks are sending me lists on a regular basis that I can cherry pick from so I'm not having to deal with like the expensive costs of of direct mail we get, we buy some reperforming stuff. So it can be very passive for some folks who just want to get over performing, don't want to do a lot of work, very similar to what you're doing, which is great, love it. Or those that want a higher return or a little bit more workout, that don't want to deal with toilets, tins and trash outs, they may go the non performing side and get some higher yields on that stuff. So it's kind of a mixed bag. And like I said, I'm. I'm not the old G in the business, but I've been around a long time and educator the year before. And we've got the number one podcast for note investing and the number one YouTube channel as well. So a little about my hero's journey, I guess you could say.

Dropped a bomb there right there.

Say that again.

Number one podcast. Number one YouTube channel.

Yeah, we've got. Yeah, I mean our pot, I mean our podcast, you know, we're coming up on a thousand episodes. That's the note closure show, you know, note night in America. We got about 200 episodes on that one. We were doing that as a live Monday night webinar for like 13 years straight. And we've on recordings now. Wow. But I mean, we just believe in the marketing side. That's why I reached out to you, man. You do such a great job with your online marketing and unfortunately, most people in the industry don't understand that that's how you have to market these days. You know what I mean? You got to get creative. You got to go where eyeballs and earballs are at, right? You got to go to podcast, you got to get on YouTube, you got to share what you're doing so that the general public knows what you're doing. It's not the same old, same old. And know I had a conversation with somebody who been in the business for 30 years and he's like, well, Scott, you know, your generation wants to give, give, give. Odes don't come from that generation. I was like, well, man, either you can get on board with understanding that if you don't give information to people, they're going to go out and find it on their own. I'd rather them come to my YouTube channel or come to the podcast to find information they need and then go from there and building a relationship and building a community around what we do because it still is a niche. I mean, what you do is a niche. Buying notes is a niche. Not originating us, but buying Notes is definitely a niche within a niche.

You know, multifaceted quip. You know, in Notes you're becoming the bank. And there's a lot of challenge I think with marketing a product like that at any given time. And there's question and I think that that may hold a lot of people that are trying to raise money or do deals. How do you navigate that process? You know, I have my own strategy but I'm just curious about when you maybe get questions of, you know, can we market this kind of stuff? What, what's your take on that?

So it goes back. I'm, I'm so glad you asked that. It goes back to when we first started off like 15 years ago. I had an office, little one room office, you know, I got the spreadsheet of multifamily loans from Capital One. Okay, what's in your wallet? So they sent me this huge list, 33 pages and 4 point font. I mean it was every million dollar loan and below on their whole balance sheet. And I could cherry pick from it. I mean I still have the PDF today. I still go back to it because it always reminds me and people get excited about the tangible of being able to go out and touch a property. Right. They want to feel it, they want to see it. The idea of flip this house, you know, and those fictional shows on tv I joke about, about going out and falling in love with paint and carpet. I hate painting carpet. Okay. Do I rehab properties? Yeah, from time to time we'll do that. But I don't want to rehab it. I work too hard, get too old. I want to enjoy sitting in the AC in this 100 degree heat, you know what I mean? So what we started doing was like I had to start sharing how note deals were different than buying a rental property or buying an aria or buying a foreclosure and showing hey, this apartment complexes goes back up here. This 16 apartment complex has a BPO value of 750. The borrower owes 700. I can buy this note at 375 and either a get them back paying and it's going to be a 1520 yield or foreclose and it'll be a 40 cash and cash return if I foreclose and sell at the auction or take it back. So I had to literally go through painstakingly efforts to start breaking these deals down. So I had a big dry erase board and I got one of those little del flip cameras. Here it is still that I was filming all this stuff on like going out and walking Some of these properties and, and literally having to break it down into like a fifth grader could understand, right? And that's why you know people, you know people that post notes to Craigslist, we get all these tire kickers thinking that they're buying the actual property, right? Oh, I'm going to buy that property. No, no, you're buying the note. So I, I like to say that note investors are evolved. You know what I mean? We've gone from the caveman days to the banker days now, you know what I mean? And you learn it's different. It always pays to be the bank because the bank always gets paid as long as you're in the first lien position most of the time. And just that's what I had to start doing. And I started doing tons of case studies and tons of videos and I started doing these blogs and articles back in the day and people started picking up on and this, we're going back to 2010, okay? This is 15 years ago. And people started reaching out to me like real estate clubs and like, hey Scott, we see your videos on YouTube and Facebook, we see your blogs that you're writing. Would you come out and speak about this niche to our audience? Because I realized nothing really like this existed in the non performing notes space. I mean you had the RTC days in the 80s of the things in the loan crisis and, and banks selling a lot of debt then, but we hadn't seen anything like this. So it was kind of, you know, brand new. Nobody thought you could buy enough. Oh, you got to have $20 million to buy notes direct from banks. And that's not the case. And so we started doing these blogs and videos and I came with the idea to travel across the country to see 30, all 30 of the major league baseball teams and planned out this like 36 week schedule. Well, lo and behold, Divine Intervention, I started having these investment clubs reach out to me and say, hey, would you come speak in Philadelphia? I'm like, okay, that's when we'll be there. When you want me to come speaking. They're like, this date in June, I'm like, oh my God, I'm supposed to be there for the Phillies series, right? Or hey, can you come to Atlanta? I'm like, yeah, when you want me in Atlanta? And then when they want me, it's like when I be there to watch a Braves game. So I was like, literally, divine Intervention. I'm like, okay, God, you got something going. So I was literally what, took what I thought would take 30 weeks took three and a half years of non stop travel, speaking to people, getting out and sharing the differences, going through case studies step by step, sharing with people and, and I want, I hate the word proving concept because concepts have already been around, but showing, educating people with a little entertainment. In my quirky side of how being the bank always pays. It's this, I call it the sexy side of real estate. I know that you think that too, being your business, we're the sexy side of real estate because we become the bank, you know, and that's, you know, the bank holds all the keys and it pays to be the bank. And so that's just transgressed, you know, down to what we're at today with the, you know, sharing what we do. I don't travel that much anymore unless I want to. Although I'm, I am traveling a bit this month. I've been, I'm speaking at a conference in Tampa. Later in a month I'm going to Dallas, work with a couple, an oil and gas fund who wants to put 10 million into notes. We're working with them for a couple days and then, then I gotta fly out to Portland, Oregon to speak in another conference and group as well. On note, investing and marketing, stuff like that. But that's, it's the 21st century, unfortunately. A lot of people are still marketing like it's the 19th century, the dark ages. You know what I mean? Yeah.

You know, online presence is, is the potential is, you know, 10x and it's a lot of the times people feel subconscious not to post this or post that or you know, put it on there internally. You don't know who's surfing these opportunities at their leisure, whether it be an oil and gas fund, you know, or whatever it may be. But you know, as much at weight as a digital presence. I think parlaying that obviously with physical conferences is fantastic because people do business a lot of the times in person, they want to get to know you. You know, people do business with people they know like and trust out in the business. What are some great conferences? You know, top five conferences in the nation that you would tell someone either a noting conference or a real estate conference. What have, what, where have you seen great success?

Best success actually is a thing that's not in the note space. It's called Fincon. It's a conference Fincon Expo. It's where about 2500-3000 money nerds get together for three to four days. It rotates across the country. This year it's up in Portland, Oregon, you know, September 10th through the 12th. I been to that conference four years in a row and it's one of the greatest minds. Not only do I find real estate investors, there's that are looking to market themselves, but I always walk away with a bag full of a tool belt full of tricks and tools to apply not only to marketing but to the podcast and other things like that. But that's been a great way to build a lot of affiliate relationships with people. We've also met other real estate investors and speaking on their podcast or being able to deliver content about note investing because their students are looking for stuff. So that's been a great way to do it. That's a good one. I wouldn't pay for a ticket, but I would go to IMN any of the IMN events. It's too expensive a ticket to sit in a room and listen to panels. I hate panels. I think panels can be a waste of time. I would say go there when it's in, in whether it's in California or Florida, and go hang at the bar right next to the conference center. That's where you should go and hang out, save the 2,000 bucks, dress appropriately, start open a bar tab and just start talking with people coming through there. Maybe walk the, you know, vendors area. That's a pretty good one in my neck of the words. Attending a mortgage banking association or a servicing conference is a good thing to go to as well. Kind of just hang out there. Then there's some smaller groups that have been around for a while. Like you used to have paper source, which is stopped for a little bit. I think it's come back to something else. The noteworthy convention used to be 800, 900 people years ago, 30 years. Jack Sternberg used to run it. We used to help them market it. I think a couple guys bought it and they get a couple hundred people at it now it's not bad. Out in Phoenix. Then you have the Distressed Mortgage Expo. Was there when Mark Gold used to own it back in the day. Now Nathan Turner owns it. He's doing a pretty decent job with it. You know, the best thing that I love doing, I think the most important spot to do is you look in your local market and go to your local real estate club. First and foremost, that's gonna be the biggest thing. And most of us are in cities where there's multiple clubs, some that meet in the morning or the afternoon, the evening, once a month, twice a month, go do that network with local people. You know, go to your local IRA events. You know, Quest used to have a big event. Equity Trust used to have a big conference every year. Those are ideal for going and raising capital and meeting with other investors as well. Just look at what's around you and what's in your budget, you know, and rotate. You're going to rotate through some things, but spend not just the time on going and learning. Don't be a wallflower. Like you said, break bread with people. Have an adult beverage or a cup of coffee with folks. Never eat alone. If you've never read that book, go read that book right now.

Love it. You know, I think there's a lot of people on the sideline looking for, you know, alternatives, looking for answers out in the market, you know, multifamily seeing some challenge. Pressurized residential real estate pricing. You know, interest rates are of conversation for the individual, you know, that has failed to entertain and walk into a note conference or invest in notes and they have capital on the sideline, but they hear this is a risky strategy from their financial advisor or someone else. You know, what's your take on how that fits currently given the financial market and what someone's sitting on the sideline maybe with a million bucks or 250,000 or $10 million in their fund. What's your conversation like that with that?

So I think this is a. Is it parental guidance? Here's the thing. Don't seek opinions. Opinions, like everybody has one. Okay? Doesn't mean they have their. Correct. I wouldn't go to my aunt and ask questions about money from my aunt. Right. I wouldn't go ask my financial advisor about note investing or real estate investing if they're not investing in real estate, okay? So you gotta realize most people, when you ask them, they're going to give you their opinion because they don't have the experience. The most important thing is you can go seek counsel from somebody who's doing it and talk with people who have bought notes. Closed notes have a track record of doing more than just one or two. We've been doing it for a while because you'll realize very quickly that a being in the bank is actually one of the most secure positions. The. And the thing I love about note investing is oftentimes the less risk, the higher the returns. In a lot of cases, you know, it's, it's. In a lot of other cases, it's, you know, high risk, low returns or high risk, high returns. A lot of cases here, if you're in a first link position and you buy it at a discount and it's occupied. You got so many extra strategies, way to make money on it. The other thing goes around. If you're buying a performing note that's paying with a through a third party servicing company, you're pretty much just mailbox money or wire money on a monthly basis coming into your account. Could they default? Yeah, they could default, but that's part of the reason of doing your due diligence. Figure things out. So learn what you're trying to learn, pick up the phone and call experts. I think the great thing about the notes space is most people are very giving of their time and willing to educate you if it's a good deal or not a good deal. I mean there's a few states I would not buy in. I wouldn't buy in New York or New Jersey, those non lender friendly states along foreclosure states I wouldn't buy unless you're buying at a heck of a discount and you're prepared to tussle with a borrower for a while if you're fine with that. But that's the thing start off with, you know, many people start off 25, 50 grand buying their first note. You know, they're leveraging, they're using their IRA funds or self directed IRA funds to do it and they're getting cash for getting greater returns than they would get in the stock market. The great thing about buying notes too is it's steady. You're not going to have some rumor of a company going under and your stock price drops or people hating Elon and your Tesla price stops or dips or goes up or stuff like that. It's fixed like that for you know, a period of time, whatever it might be. That's a beautiful thing to be able to plan around accordingly. In a lot of cases if the borrower stops paying, we'll make more money because we bought it at a discount and that asset or balance is higher than what we paid for it. So I think get, get counsel. Don't seek opinions, talk to people have actually done it. Don't be afraid to pick up the phone and always ask it, have you done this? If you have not done this, then you cannot give me an educated opinion. You can give me an asshole's opinion, but you're not an educated opinion. We don't. And you don't want ignorance, you want education.

Yeah. It's so important right now. I saw on Google, I think alternative investments was one of the biggest things being Googled. And when an individual is looking at alternatives, you know, there's not all that much education like a white label alternative investment education. You know, at the end of the day they go to their fa, they go to their, their grandfather who invested money. You know, it's so important to understand there's other items out there and it's a lack of education from people that are sitting on the sideline to feel comfortable in investing in alternative and knowing that the stability built in with that. It's a lack of education knowing how to bake in due diligence and bake in risk mitigation. You know, that boils down to getting either a formal education, you know, in notes, whether you take a note education platform or you watch Scott's podcasts, you know, and just start taking in the unfiltered gems that are put on there at any given time. What are your top five due diligence items in note investing? Let's maybe go with just performing because there's so many different strategies in notes.

Well, let's go, let's go through the, the top five commandments. Let's talk about this. This is important. Okay. One, never buy a note on something you don't want to end up owning. That's the number one thing out there. Okay. Number one is that number two, I'm a big, you got to be in the most secure position you want to be. So buying a first lien, I think it's a much better than a second lien. Second liens have more risk especially they're behind a non performing first. So second buying a first lien position I think is great. Next thing always a make sure there's insurance on that property, whether it's force placed through you and your servicing company or the borrower has it. Preferably the borrower has it because they're supposed to. But making sure his insurance is there in case of an act of God or you know, hurricane or tornado, stuff like that. Fourth thing, always check the collateral file but don't rely on yourself to look at because a collateral file is really what you're buying. You're really buying this thing right here. Yeah, you're buying the prop, you're buying the collateral here. This is like a forty thousand dollar file right here. Right. So having professional. That's the great thing I love about the note business is it's more vendor professionally business run whereas like fix and flipping like you're going out and trying to find contractors yourself and trying to do it yourself. No, no, use a servicing company. Use attorneys. They're there to cya cover your assets. And if they tell you it's a bad deal, listen to them. They've done thousands of those. Okay, so once again, let's review. So basically only buy an asset you want to end up owning. Buy first liens, make sure there's insurance on the property. Use professional collateral file. Oh, and then always check taxes because taxes are the one thing that can wipe you out if taxes aren't paid. And either pay them or don't pay. But those are the biggest things. There's other things like value the property condition, those that we dive into, ROI payment amounts like I want my monthly payments to be at least if I'm using my own money, 250 or greater if using somebody else's money, 500. There's a lot of intricacies of where you're buying. Some states to buy you want to buy and you don't want to that we don't want to get in the way. But those are the biggest thing. I'll never buy something you don't want to end up owning the asset on making sure there's insurance on it. My buying first liens, you know, double checking taxes. And there was something. Oh, and then using professionals. That's one of the most important things. You know, we use title companies, we use attorneys. We have servicing companies are reviewing our docs, making payment history and making sure all those ducks are checked off, those T's are crossed, those eyes are dotted before we ever get to funding. You know what I mean? So that's one of the most important thing.

I've talked to a few investors and they went and talked to their general practice attorney about real estate notes or if it's legal or not. How do you find the right counsel and what's your take on. On someone that may have already spoke to an attorney but doesn't know notes?

Great question. I love that you bring it up there. Once again, it comes back to talking to the attorney and what is their practice? What is their practice in. Is it divorce estate planning? Well, they're not a note, they're not a real estate turn. So you need to find a real estate attorney in your area and talk. Go to your local real estate club and talk there. Do they have a local real estate attorney? Oftentimes there's one that sponsors the risk association. If not, who do they use? They're usually pretty good attorneys. These reus. If you, you know, can't find one that way, go to legal league100legaleague100.com it you type in the state that you're living in. It'll give you a list of different attorneys in their specialty. And you want to look at folks that are special enough like foreclosure or loss mitigation or modifications. You know, speak to attorneys that are handling that or your real estate attorneys that are handling deals and closing deals. Worst case, reach out to your title company as a peak to their, their attorney.

Scott, do you have education that you put on? Do you provide education platform?

We do, we're. Our classes are actually the number one recommended when it comes for note investing out there. That's not from me, that's from my buddy Bill Moncaro from Paper Source, you know, and we focus primarily just on the non performing note side. I mean performing is pretty easy. You get a payment, you get a servicing company, it's monkey collect on a performing note, which is great. But what happens when this hits the fan and you've got to, you know, start enforcing your ability to foreclose if the bar is not paying? I don't run a charity. You shouldn't run a charity. I donate to charities. But I, I'm here, I'm a capitalist at a pig. Oink, oink. You know what I mean? So yeah, we have a class. We've got a couple different series of things that are really good for folks. We, a couple years ago right at the beginning of COVID we started doing a free one day class, like four hours. It's a simple kind of overview, Cliff notes version. I highly recommend it. Anybody want to get into the note business space? This is really the best thing to go watch for you. We talk about how we find these, we talked about how we fund them and then how we make money and flipping the exit strategies and the vendors and team that you need. The pretty simple overview doesn't cost you anything. Noteweekin.com you can sign up for it, go watch it, get a replacement to you. You know, we usually do it live every other month. And then of course we have a three day workshop boot camp that we do half the time online via Zoom or we do it in person here in Austin. And then we do have some one on one coaching for those that want to go from 0 to 60 in 60 days versus 6 months or 6 years and stuff like that. We're very, very proud of the success. I mean we're, we're just. I, I'm a, I'm a, you know, ask me anything. I'll tell you the good, the bad, the ugly, you know what I mean about things and note investing you're not going to learn anything about note investment in three hours or three days. But it's, we like to make sure we give you as much meat on the bone. Show you how we find these asset managers from banks because that's where we get most of our deals from, is direct from banks. Show you how we raise capital. How do you find investors? What do you say, what don't you say? And then how you, how you turn lemons into lemonade, you know what I mean?

I think it's really important to understand how to re perform a non performing loan or mitigate your risk in that aspect. Specifically because you go buy enough notes at the end of the day it's, you know, Murphy's law or whatever you want to call it, you're bound to get one that goes non performing. And notes are so nimble. You know, someone could just enter in a performing Nature and buy 10 notes and not know that or be educated on that aspect to re perform an asset. Then they go end up trying to sell it to someone like you or whoever it may be to reperform the home and stuff like that. So that's really important to understand not only that, but also the abilities of when you're entering into a performing loan and the nimbleness within that to feel confident to borrow against that asset and parlay. Maybe my aunt's big wealthy estate. You know, how do you go about approaching other individuals or yourself is obviously raising money for notes. That's a cool thing to notice and as well as have the education and confidence to be able to navigate a process like that. What's your take on raising money for notes?

Yeah, great question. I'm glad you asked that. So we target, I'll first tell you how we target who we target. We target mostly self directed IRA investors. Okay. And that's pretty easy to find. You can actually go to most county records like accounting appraisal districts and, and when it asks for owner's name, just type in like Equity Trust or Quest Trust or Pensco Trust and that'll give you a list of everybody who's used their IRA to buy a property. Yeah, those are, those are ideal individuals. You know, you reach out to them, they give you their mail address. Hey, I see that you're an IRA investor, which means they're usually educated, you know, because they have a self directed ira, they've got money and they're looking for more deals to pull the trigger on. And it's got to be passive. It's got, they can't Be something going out and fixing the problem itself. There's got to be a passive return coming in. So we target IRA just because of the education piece so I don't have to reteach the wheel to everybody. Now one of the things that we do we're big on is talking about case studies. Because in note, when you buy a non performing note, it's kind of, it can kind of be like a choose your own adventure book. I don't know if you had were around when those were out when I was a young kid but I used to love this choosing own adventures. You read a couple pages, get a decision, you go to page 12. If you choose A, go to page 15 and choose C. Right, Whatever. It's kind of thing. When you buy non performing note, it's going to first look at two things. Is it occupied or vacant? Now if it's vacant, it's about a 99.9 chance. You're not going to get that borrow back on track. They're not going to move back in the property. Most of the time it's happened every once in a blue moon. But most of the time that's going to be either a foreclosure or deed loom. In a lot of cases, okay, and I did lose where the borrower signs the property to you, you take control of the property, they walk away, you forgive them the debt. Okay. If it's occupied, you have a lot more opportunities either a, to get them reperforming, you modify the loan and do a trial payment plan. You do a short sale, an assumption or then you go the foreclosure or cash or keys as well like that. So knowing that aspect, knowing that, okay, if I'm buying an occupied asset, if I get the borrower back on track, here's what the yield is. Could be right 12% for first year. I mean, you know, yeah, if I'm going to have them, usually what I'm going to have them do is bring extra to the table. Some skin the game the first year. So maybe the first year it's 16 and then after that's 12 based on their payments and what we paid for the asset. Right, and ongoing returns. But if they don't pay, then we foreclose. You know, it could be about a 25 return on it with like bigger, higher profit margin. So explaining to your investors, like listen, I've got this note, it's worth a hundred thousand dollars. The borrower owes 95 on it. I'm looking to borrow this 50k from you because I'm buying the note at 45,5 grand extra for the foreclosure costs. I'm going to pay a 12% on this for the year. You know, a flat return. You can't do splits because that would be a violation of SEC laws. We're not selling securities. You're just doing a flat 12% interest rate. You're not pooling money. Either you're one investor per one deal or one LLC per one deal. And you just structure the agreement. Most people when they think about mortgage notes, they think 30 years. I'm gonna be tied into a deal for 15, 20, 30 years. And I always say, no, you're gonna be in it for probably three to four, two to three, depend on the state. Okay? If it's non performing, it's going to probably take us 90 days to 6 months to get back on track and then I'll start paying on time. If it's not performing, they don't want to play, then we got to go through that foreclosure rather that state. So that's why we say more than a year. But people, we say still say when you think about things, when people are brainwashed by the banks and the financial institutions to think, you know, that 1 to 4% is safe in a CD or certificate of disappointment is like to be. But they got to tie the money up for five to 10 years. Two to three years is a short time frames annuity, seven years, you know what I mean? So that's the thing, you just have to kind of speak a little bit of language of people like, hey, you know, you're, what are you getting in your certificate? Disappointment. Oh, you're getting, you know, 1%. What if I could give you 5%, you know, for 24 to 36 months, secured by real estate, we're buying this at $0.50 on the dollar. You know, that's the thing, people like to hear numbers and as long as, you know, you under promise and over delivers the way I always said, okay. One of the biggest mistakes I made in my business a few years back is I had all my agreements at one years. Well, I should have made them like two years or three years because things dragged out sometimes Covid kicked in, you know what I mean? So that's the thing. Learn from others, but talk with people and say, listen, here's the deal, here's what could happen with A, here's what could happen with B or here's what's going to happen with C. One of these three things are going to happen. But Regardless, you're going to make 10 or 12 or 8% along the way for 24 to 36 months and then we're going to refinance you out or sell the asset off. One of those things. And that's just the thing is getting comfortable. That's why a lot of times in our classes or workshops we are going through a ton of case studies for people to be able to speak that language. You know, it's different, it's a different idea when raising capital, but the idea is that you're in such a secured position, you're buying it cheaper than most REO guys are buying real estate out there. You know, there's not really a lose lose unless A, you have an act of God, you need to put insurance on the property, or B, you find it and do your due diligence ahead of time. And I've seen people have made those stupid mistakes because they haven't followed a plan and a path and haven't taught.

Right, you know, and some people don't want to or have the time to get that education. And you know, there's different ways to participate. You can find a qualified operator such as Scott Carson here or Silvercrest Opportunity Fund or you know, things of that nature where you're with a vested partner making a double digit yield or more liquidity conversation opposed to a 20 year term. You know, if you're sitting here watching today, you know there's an avenue for you possibly as low as a one year term, you know, depending on what kind of commitment you're looking for, what kind of return, you know, and all of that's mitigated within note investments. You know, there's, there's seasoned individuals out in the industry and just because you don't have the time to go get the education needed in order to operate confidently, you know, there, there may be another opportunity for you out there.

Totally agree to that. Most important thing though is learn. Take the time to learn the basics, you know, the mechanics of what happens. That's the most important thing. One of the best advisors I've had for my mentors before is invest in stuff that, you know, you don't have to be a PhD in it, okay? But take the time to learn the ins and outs of the strategy, the pros, the cons and then that'll help you determine if your risk, if you're risk adverse or you're okay with a little bit of risk. I mean, it is what it is. Jesus saves. Everybody else has to invest.

I have not heard that before.

That was good.

Hey Scott, if someone wanted to contact you today for the various opportunities that you have get on your calendar, how would they do that?

Yeah, it's easy. You can go to my website. We close notes dot com. You'll find our podcasts and our different training classes that are available there. We host them about once a quarter, like I said, our three day class. And you can always go to talkwithscottcarson.com if you're watching this. It's my little name down here, talkwithscottcarson.com they'll get you on my calendar. Glad to answer any questions that you have. You know, I'm a big believer that if you're calling and reaching out, you got questions and you need somebody to talk to. And I'm always glad that we, I'm the guy you're talking to when it comes to that. So I can, I'll ask you some questions about where you're at, what you've done in the past and what you're kind of looking for. And it may be a fit, it may not be a fit. I may be just like, hey, you need to call, you know, over the Silver Crest, more passive, you know, aspect of things. Get invested in a fund. There's nothing wrong with the fund at all. You know, they've done a lot of their due diligence. They're going out and find the deals and stuff like that. If you're looking to be a little more hands on, then give me a phone call. But the great thing, ladies and gentlemen, don't sit on the sidelines. You've got to take action these days. I, I, this past weekend I was at the state championships here for baseball. A buddy of mine I hadn't seen in 20 years, worked with in college for three years, his best man, my wedding years ago and we got a chance to hang out and visit him. So we were talking about it. I said, because he's been at a company for about 15 years, he's getting his mid-50s, he's looking at, I asked, well, you know, retire. He goes, hell no, I'm not going to retire. I can't afford to. Have you seen health care? If I retire at 65, I'm gonna be alive for 85. That's 20 years of healthcare. That's expensive. So the best thing I can tell you, that's what I love about note investing. If you're looking to buy, if to invest in something that's going to pay you cash flow on a monthly quarterly basis, go get some notes. Go put some notes together. Go some find some note deals. Talk to us two guys here. We're here to help you and that's a great way to turn your hobby into a passive return and help supplement your income or even if you want to look to replace your income. But by investing notes full time, there's opportunities in either part time, full time investing on the side and and you're in good hands with us two guys here.

Loved it. Well hey like comment, follow and subscribe for more. Join our mastermind if you're interested, check out Scott Carson's podcast and the various opportunities that he has today is brought to you by Silvercrest Opportunity fund. It's a 506c note investment fund offering a one year term and at 10% net paid monthly or 12% for three years in an income oriented investment strategy investing like Warren Buffett. Scott, round of applause. Appreciate having you on the channel today. We'll get together soon hopefully so.

Yes sir. Thank you so much. If you're listening guys like do like you just said, go leave a comment go subscribe. We as podcasters love to see that. It makes us know that you're listening and you like what we're doing. So go out, take some action and we'll see you at the top. Everybody. Damn.