Modern Day Land Barons: Rick & Crystal Rumer's Note Investing Journey

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Close nodes, Scott Carson. Good morning, good afternoon, and good evening, everybody. Hey, welcome to this episode of the Not Close show. As always, Scott Carson jacked up to be with you here today. It is a beautiful Monday here in the Lone Star state and we've got a couple special guests here today who are kicking ass and taking names. You know, you in Texas, we have a saying, you know, all hat, no cattle. For somebody that's out there talking the game but not doing it well. These guys are all cattle, all hat. These guys are kicking ass and literally walking the walk when it comes to investing in real estate, being notes, land development, and they're just doing an amazing job. Who am I talking about? I'm talking about the rock star couple out of the Dallas area. Rick and Crystal Room are joining us here today in the NutCloud show. Rick Crystal, how's it going today?

Wow, thank you so much.

Like the best intro I've ever heard. Yeah, I'll take it.

Yeah, we'll take.

Well, I am available for birthdays, bar mitzvahs, graduations. The ex. The ex sports announcer in me loves the podcast side of things. If you didn't figure that out, well.

We appreciate you having us on. Hopefully we can share something with your audience that's intriguing to them.

Yeah, definitely. And we were talking a little bit beforehand about it. But you guys have been investing now for a little while. You started doing this while you were still working and made the transition into full time investing. You guys want to share a little bit of kind of your origin story before we became note superheroes?

Yeah, of course. So I guess it even goes back further than what you and I discussed. And that is simply I had a rental property when I was in college. You know, my parents said, hey, buy this home. It'll be a good idea for you. I lived in the master bedroom. I rented out the other rooms. It paid for my living while I was in college and it made me a little scratch on the side. That was my first experience in rental properties. But around 2007, I got involved with some training and went through that down in Houston, Texas, and figured out how to actually do rental properties at scale. And that's where I really got started and two 2007, 2008, 2009, we accumulated a few rental properties, managed those. It was a, it was a learning curve, a nightmare, a headache. 2010. But, but it was a, it was a, it was, it was a rush though, right? You know, I felt like I was on the brink of something. And now I used to work for JP Morgan Chase. I was down there in Houston and it was 2010 after a big bailout. Well, after the housing crash, I was done for the bank. I just couldn't. I didn't want to make them any more money while I was seeing all this other money being made in real estate. And we left. I left the bank then and started, started flipping homes, started getting those bank foreclosures that I had seen rolling off the books and got in on the action myself. And that's when we went full time real estate. 2010 started with the fix and flips got. I mean we did our little share of wholesaling. We looked into multifamily. We almost pulled the trigger on a couple of hotels. We eventually opened some oil filled housing down in South Texas. And that was great until it wasn't.

We're at. In South Texas. You don't mind me asking, what's that? We're at in South Texas?

Carnes county, south of San Antonio.

Kennedy. That whole Karn City aspect of things.

Kennedy right there, man.

Yeah.

And then we had some further north as well, and then west Texas. But yeah, it was booming and hot for a time.

It was. We were, we were full at Thanksgiving one year and we were talking about expanding and how quickly you could get more buildings down here. And by Christmas we were. There's crickets. It was. We had like five rooms rented out by Christmas. It was, it was a sad time.

We had a. He also started a business over in the Seychelles. Anyway, side note, bottled water company. So that was a cool startup and adventure that we had going as well.

So Crystal, what were you doing? They'll share your. Your origin a little bit while he's working at the bank. And Reynolds, what are you doing? Let's talk about. Because I love it when we get couples together and I also love it when we have female investors on it because I don't think there's enough women investors sharing their story and their niche out there. Rick, you're a great guy, but you and I are great. But we need more women sharing their stories. You know what I mean?

He's got. I couldn't have done it without her for sure.

That's funny. You asked because we started doing rentals together. But I was also. I was in sales. I was also with the banking. He was financial advisor for a long time. And we ended up. We were told that we couldn't have children. Long story short, I ended up getting pregnant, and I ended up losing my job because I was so sick during my pregnancy. And so really, we kind of, like, were forced to, like, where they're going to. You sink or swim during that time, and when your back's up against the wall and you're having your first baby, you're like, what are we going to do? And so we just jumped in full together, both feet in the boat going, all right, why? Let's do this thing?

And she used to show our homes to. To Spanish speakers that she couldn't communicate with, but she was like, here's the home. She used to drive while I put out bandit signs. She used to write offers, you know, on. On all of these foreclosures coming off the books, obviously, you know, there was. She was doing things, I was doing things. We was whatever. Whatever we needed done. Right. And of course, we had partners in all of this as well. So when you're young and everybody has their own little role, and we just kind of found a slot for. For everybody.

Yeah. And it was a good learning curve, too. Now we're very much in our rhythm of what he's strong at, what I'm not strong at, you know, vice versa, and our strengths and our weaknesses, and we stay in that lane, and I don't try to get in his lane, and vice versa. So that was early on where we learned, too. And having our first baby, too, where it was going, all right, backs up against the wall. How are we going to do this? And you just hustled and survived, but it worked. And then we found what our strengths were and what we just really loved doing as well through the process.

So let's dive into that. Yeah, I think every real estate investor, you dabble in a few niches. You dive in to get bitten every once in a while. I mean, I've almost bought a couple RV parks, and down in Karn City, you know what I mean? My middle nickname was Karns growing up, so not Karns City. I'm not from there, but I'm a little further south from there, down in Ingleside. But talk about what you guys. I mean, you've done a variety of things, but you've really got kind of your couple bread and butter things that you love so much. Let's talk about that.

Well, when you're doing a little bit of anything, you know, in the real estate space, starting out, we had a flip that we couldn't sell for what we had in it. And we owner financed it, we sold it for a little bit more on some terms. We found an investor that would put his funds in and buy us out of our hard money loan. And we started doing that a couple of times, borrowing IRA funds, buying a home and owner financing it for more, making that spread off of the two notes in between there. And we're like, hey, this is kind of like rentals. But it's a whole lot nicer because nobody calls bank of America in the middle of August when their AC goes out. And it doesn't matter if the pipes freeze in January because, you know, they're still going to pay their mortgage at the end of the month.

We had that happen, by the way.

We may have had both of those happen. And so owner financing, that's what, that's what notes are all about, at least for us. We still originate them to this day. We, our niche has been we've always done a little bit of single family. There's a ton of competition for single family homes. There's 10,000 people near me that want, you know, every single property around here at a bottom dollar price. And it gets really competitive. And so where we are now is we are buying larger tracts of land outside of town, let's call it 100, 200, maybe 400 acres. Will buy an old part of a ranch or part of a hay field even, if you will, and it might be 30 minutes outside of that, that growth bubble outside of town, but it's still in Texas in what we call the Golden Triangle or the Texaplex. You know, we're talking i35, i45 corridor in between San Antonio, Austin. That's where all the growth in Texas is happening, 98% of it or so. And so we'll buy a little piece of land out there. I say a little, once again, 100 acres plus. And we'll subdivide it into five and 10 acre ranchettes, just oversized lots for people to build on. Pretty simple. We put a fence around it, culvert, driveway, as little as possible. We make sure that there's power to the, you know, to it. Make sure they have road access. We might have to build a road if the, if the property is a certain shape, but we turn around and owner finance every one of those. Every once in a while somebody will get bank Financing and pay cash. We're okay with that. Right. We will carry the rest of them generally 15 years, 10% interest rate. Sometimes we go up from there, sometimes we go down from there. But 90% of what we originate is, is our, our land notes at 10% for 15 years. And now we've built up a portfolio of them. And it's easy to find land in Texas. It's easy to find buyers in Texas. You know, we're just, our biggest job is getting rid of these, these notes. So that's how we have to recapitalize. What I didn't tell you is we borrow the funds to buy these larger tracts of land on the front end. Right. So we have some debt service that we have to take care of. So after we originate a few of these notes, we do need to recapitalize so we can keep this machine going.

Yeah, great stuff. I want to go back and ask a couple questions about this. I know my listeners are going to ask about this. So you're going out there rehabbing properties, are using your own funds or using hard money loans to, to purchase those distressed properties before you fix them up and owner finance them.

Well, back in the day it was all about hard money. I think after you do this for a few years, you make some contacts there. Private money is generally more affordable than hard money. So we've got some relationships once again started this in 2010. We have some people that we have invested in 2010 with on single family homes that now provide large amounts of money on some of these larger projects. And it's just relationships that we've kept alive the whole time.

So glad you said that. Totally makes a lot of sense because a lot of folks like, oh, they're using hard money, which is a short term product and they're doing a 15 like that's gonna, that's a kind of a bit of a squeeze trying to do put those two together. But having private money much more flexible for you because those usually those investors like making a decent yield and the, you know, the arbitrage between it puts money in your pocket for a while. That's great.

That's right.

And it's also about relationships too. You know that. And yes, we have some newer investors that invest with us that have never bought a note before or want to be on the acquisition side. But majority of our investors, they've been with us for a longer amount of time. And so it just, it's not just about a transaction, it's a working relationship. And that's. I Think really where we've grown is on the relationship side and what we value too.

Well, just like you said, hard money when you get in a pinch, when it comes up to the end of the term, hey, I need to extend. Okay, well, there's a point. Remember what our contract says. We got to do this. But when you're with a private lender and you're up against it, hey, I need six more months, 12 more months. I'll keep paying your interest. Are you happy with that? They're like, yeah, you haven't missed a payment yet. So let's keep this thing going. Yeah.

Especially here to work with people. Yeah, well, especially if it's a self directed ira. They don't need to pull that money out to live off of you. Keep, keep padding the passive returns. I'll take it all day long for sure. Now I have to, I have to give you a little bit of ribbon here because you're talking. Oh, yeah. Small 100 you've acquired, I think in the, the description when Crystal put 8,500 acres. That's no small feat. Come on, guys, brag on yourselves a little bit there. That's pretty cool.

And it's accumulative as, as we've got a whole team. It's not just Rick and I either, but there's a whole team working in place, of course, on the acquisition side and then on the originating the note, finding the borrower. Obviously there's a full process to it, but it's been exciting. We just expanded, actually, this, I say this week, it was technically on Friday, last week to Colorado, a new state that we've never bought land in, buying land there and originating a note.

So do you guys, with what you've done, you probably have kind of like a formula and I don't want, I don't want to take anybody's secret sauce, so don't. If I'm asking a secret sauce here, say, Scott, no secret sauce, okay? No extra sauce of this. But with you buying 100, 200 acres and then looking to turn around and subdivide it up or split up into Ranchitas at 5 and 10 acres, do you have like a ratio of what you figured? Okay, we're buying this in 100 acres. We're buying it for this, and we sell it as a smaller, you know, the Sam the wall, the Sam's to Walmart special. We, we can sell it for 2x of what we paid for as a bulk or 3x or 11 and a half. What's, what's kind of your guys formula that you look at.

Yeah, let's. Part of that secret sauce, but part of it's not. So let's just, let's just talk in generalities. Every property is going to be different, right? Of course you get a better deal on one than you are on another one. But in reality let, let's just say we're going to double it. You know, let's, let's use that, that model that gives us a little bit of spare room. Everybody will lend 70%, you know, 12% or something somewhere around there. And so if we can get it $0.50 on the dollar, that gives us a little bit of room to do what we need to do, finish out entitlements, put fences in and things of that nature. And it may be less than that on a lot of them but, but some of them are tight and they bump up against those numbers. So because we do have those private funds that we borrow, and I mentioned this earlier, when we do sell there are a certain number of notes that we've got to get moved relatively quickly. But we, when, when we do sell these notes and recapitalize them, you know, we do have a carrying cost, we do have a bottom that we can't go below. And, and I have, we have offers all the time from larger note buyers and hey, I'll give you, I'll buy your whole portfolio $0.55 on the dollar. Well that didn't, that didn't help me out that you, I've got costs that you don't understand that I have. And so you know, I need more than that. I need significantly more than that. But so, so if I can, if I can clear 70%, you know, 75% with all my costs in. But, but yes, I was, I was referring to on the note but once again on the, on the purchase the land at least double. You know, we want to be at least double.

No, it totally makes sense. That's what I figured was run some numbers on stuff. And so that's what others have told especially here in Texas, that golden triangle. Things are going up. You know, it's, it's honestly probably some of the most expensive land here in Texas. But people are gobbling up because God's not making any more of it. Right, right, right.

Well and what we love about land notes, better we personally do better than on the sticks and bricks is because we're creating a whole, our own comps for that whole area. So when we've bought the large parcel of land, we subdivided it then we've sold track 1, 2, 3, 4, 5 and so on. 20 lots, 10 lots, whatever it may be, then if worst case scenario, and we had to take that property back, we've created all these comps already as opposed to. It's harder, like he was saying, the competition on single family and getting to cherry pick here and there in those neighborhoods. And so we just originated some notes in the Midwest and they're single family. But I didn't, we didn't get to cherry pick, actually. I paid more for that property, still created a great note, have a great form of cash flow coming in. But I just wasn't able to get that deep of a discount on that property that I wanted to on a single family. But on the land notes, we know we've already created that comp. So again, worst case scenario, we go in and we can reload that note very quickly. Default rate is very low for us. But again, we always want to think of, you know, if we had to take that property back.

When you said something you're doing your land notes, was it 10 years or 15 years is how you're amortizing them?

15, 10%, generally.

Yeah. So that gives you some time. Land goes up in a couple years. And then also, are you seeing that a lot of your buyers are putting improvements on the property in a relatively, you know, 12, 24 month period of time? Are they kind of letting it ride? Is it very.

I mean, that's, I think that's the best part of land is inherently when it's raw, you have no, you can't do anything without improving the value of it. Anything you do to it is going to be an improvement on it when it is raw. So when they do come in and they put the septic system and they do drill a well on it, that just makes the value of my collateral go up. That puts me in a much better position saying that they don't always do that in the first 12 months. Probably by 36 months, you know, 24 months. Yeah, they're doing that. Some of them are foreign foundations, building the sticks and bricks. Others sit on it for a little while and we'll turn around and sell the property later on. Maybe they had grand dreams of moving out to it, but things didn't work out for them and they're going to turn around and sell it.

But then we'll put a mobile home as well. It depends. But what we love is seeing multiple, multiple generations on one property too. Very few. I mean, when that happens, you don't have someone Defaulting either, because it's not just one family, it's multiple families that it affects.

Yeah, that's a great thing. I mean, we definitely see a lot of that with. We've been bought some notes on land where there's been father and son or brothers or mom and kids all pitching in to pay it off and knock it all out. What's your kind of normal down payment you're getting on these things? You're getting 10% or you're being more flexible for folks or how does it all vary?

So speaking once again in generalities anywhere in Texas, if you can find a bank to finance you, you're gonna have to put 50% down.

For land.

For land. For raw land. We don't require that. We don't have a hard fast rule. These guys are generally putting down between 5 and 20%. We, we have a few notes every year where somebody will put down a hundred thousand dollars. We love that that note disappears real fast because everyone likes that one. Is that the norm? It's not probably. Average is somewhere around 10% if you wanted me to come up with a number.

But it varies. It depends on person to person. Because when we do a full RMLO on all of the land properties. And so for your listeners, a residential mortgage loan originator, I'm sure they already know that, but we do that. You don't have to on the land, but we do on all of the land properties. And so looks at the debt to income, we look at the history, we look at what's in the bank account, the credit score. I mean, we've had some credit scores of 800. We've got a lot right now in the 700 high sixes. So it really is going to vary depending on that individual buyer.

Well, but it makes that note that's much more valuable too, because it did go through an rmlo and versus just on a piece of paper and financing to anybody, you've actually added value by that little extra bit to it. You know, what's, what's that run you to do an RMLO on your land deals? What are you seeing on an average across the board?

Less than a thousand bucks.

Yeah, I was gonna say somewhere around a thousand dollars extra. But a second set of eyes saying, I'm not gouging them, they have the ability to repay. This is a good working relationship for both of you. I think it goes both ways. I think it's a good idea for the, for the, the buyer, the, the borrower as well.

Totally agree.

I mean, you already know this and teach this and preach this with your, with your group. But having a lender's policy is key. We also do the rmlo. We also go through a third party servicer and with our buyer on that property, we close at a title company. So we have a full package and we want to make sure that the underwriting is going to be clean and worthy enough to then go ahead and sell it to an institution as well.

Yeah, you're doing. Go ahead.

I was going to say you're talking about our, our past and when we first did things and some of the first ones, I mean I felt like back then it was the wild west of notes. Like you could kind of do it on a. Something you printed off of the Internet and you could have somebody sign up, but you're not going to sell that note to anybody else. You're not going to transfer that note. No. No savvy investor is going to look at that and say, hey, that's a good idea for me to buy that. So when it's part of your business model to turn around and sell these notes, you go through the process to make sure every one of them is marketable.

Yeah. I can't tell you how many times I get somebody calling me, can you buy my note? No mlo. No third party servicing company. You know, the documents don't make sense. The documents don't look good. You know, it's just. Yeah. Those little touches may cost a little bit more, but it makes it, you get, you recoup it back in the back end when you're looking to sell it for sure. Absolutely. Who do you like for your servicing company that you're using for.

We're using Techstar. We've done as a, as a company, 300, 400 notes with them before. Good working relationship with them.

Yeah. Are you usually using them for your Colorado and Arkansas stuff as well too?

Not on the Colorado one. Arkansas. Yes, we are though.

Cool. Cool. That's all. Because here in Texas you could get away with self servicing if you wanted to. There's not any law that says you have to. It's just that the law of I say reciprocity of it. You need to do it so that it. Right.

Well, I know for us that's just one last thing that we want to have to deal with and have to manage and it's a mess. I mean we very rare do we have a note buyer that says I want to keep it in service it myself. Usually we just transfer it over. The borrower is already paying for it 20 bucks. So keep it with the servicer.

That's also. That's a good thing. That's added in on top of their PITI plus servicing is they're.

That's right. That's right. They're paying for our investors that buy that note.

Oh that's awesome. That's a, that's a simple way of calculation then going from there lenders policy.

For our investors as well so that I don't have to take care of that. So I mean closing. The only closing cost that they have to approve is going to be when it's transferred into. Out of our name into their name. There's a one time $100 service fee just to change the name.

I mean that's, that's at the third party servicer. That's, that's, that's their fee, not ours. We don't get that fee that, that's what they charge to switch the name over from, from me to you.

Yeah. I mean it takes me to log in there for all their information and do it. And if they're going to keep it there it's always easier to keep it especially if you got a performing note. Might as well keep it in the same spot versus giving the bar. Not that they would. You've got pretty strong bars. But any mistake in servicing being delayed or transferred or using his excuse. I had a bar call me out of blue this morning too. Hey, I'm like you should be calling me. You should be talking to the servicing company. But that's okay.

Yeah.

Right. I was gonna say I actually woke up to a borrower today. It's one that we bought in the Midwest that we originated the nose like I'm trying to send the money but it's not going through. And I was like okay, I. I don't know. Just. Yeah.

Call the servicer.

Yeah.

What is. What's been your. You know you're using. It sounds like you're using OPM to purchase these hundred acre tracks. Are you still using. Are you using some bank finance? You know any banks that are be willing to carry some of this stuff for you or. No.

Pretty much exclusively. The, the private lending. We've talked to a number of large sources of funds. Obviously if we weren't looking for more funding we would be a business that wasn't growing. Right. So we, we've gone down the road of what does it take? How does this look? But we haven't found anybody that didn't have a million claws in it. You know that it was just too Much paperwork, I guess you could say. So no, all of this is going to be, is going to be private lending or, or some combination of hard money. But we try to stay away from that.

Sure. What, what's your best one or two things for raising private capital from investors? What's, what would you recommend to folks out there who haven't raised capital to start doing now to take their business to the next level?

Be honest, take care of your, your lender, communicate to them.

Yes. And ultimately build relationships. Tomorrow we're going to lunch with an investor, him and his wife, that have invested with us. They're looking to do more investments. Just getting to know them on a personal level as opposed to just transactional. There's another investor that we're close with that we go and check out all different barbecue places in the metroplex. Now we're like looking to expand because we love to eat our barbecue.

Who does it? We're Texas, you know, we're heading down.

To Luling in Lockhart soon enough to check out. Not really. We haven't scheduled it yet, but we need to with her.

Yeah, you need to let me know because you can hit the Blacks original, which is always really good. Terry Black's original. We were there just a few weeks ago, actually. Barbecue capital, Texas, definitely. You can't throw a stone on any street there without hitting a barbecue joint.

That's right.

But I mean, just to answer your question, it's building relationships more on a personal level as opposed to, again, transactional. And I think that's been the biggest key for us. And like Rick said, over communicating and taking care of your, your lender also.

Now are you finding these guys just out networking or you, you know, heart, you know, sending out mailers to IRA investors or what's your best way to kind of start that relationship?

IRA investor is a great place to start out with because most of those investors are going to have 50,000 or 75,000. That's kind of like where you start with people, right? That's a great spot to start with. But yeah, originally it was all the real estate events. I mean, you can, you can, if you're here in Texas, at least in one of the big cities, you can hit one every night of the week if you want to. You'll find out sooner or later which ones you should go back to and which ones you shouldn't come back to. But yeah, I was gonna say I.

Personally, he collects the real estate, but I personally like non real estate networking. And just because when you're working With a professional or someone good at their trade or someone maybe in the medical industry or, or medical business, what, whatever industry they're in, then they don't usually have time to be active in the real estate arena, but they still want to partake in some way. And so just networking in areas in different clubs or things like that that you can get to know people and what their profession is and see if they're interested in double digit returns that backed by Texas real estate.

Now I was answering that question based on, you know, on lending and where to find lending and stuff like that. We're, we're just now turning the corner on, on selling notes, going into those smaller institutional areas, family offices, you know, that pseudo institutional money family offices. We're looking for different funds, different trust endowments and foundations. So we're trying to get into that in the small banks and, and get some more volume. We will sell all day long these notes to professionals just like you said, somebody in the medical profession, engineer, etc. Etc. But that's a onesie2z transaction. If, if with our portfolio, if we could sell a million or 2 million at a time to, to somebody, that would be great. As of right now, we're, we're generating 2 to 3, maybe sometimes a little bit more than that, 2 to 3 million per quarter in new notes. And so we, we have a portfolio large enough where you know, if somebody wanted to buy 5 million it would be like, here you go, let's, let's do this and we can, we can recapitalize. And so that's what we're really trying to get into. But the lending, the private funds on the other side are on the acquisition side. We've seen too many, that's what I was meaning, too many claws in the deal.

Yeah, no, I, I got you. Thanks for the clarification. For sure. Go ahead, Crystal.

And you know this Scott. So there may be someone that wants to lend on your deal, but they're not, you're not equally yoked or on the same, I don't want to say level, but they just might be a difficult lender. And so we've had someone that has wanted to about $2 million lend, but very early on there were some red flags that were like, yeah, this relationship just probably isn't going to work. I love that you want to lend on something, but at the same time it was going to be a bigger headache in the end. And so making sure that it's a good working relationship for both parties too, instead of just taking Somebody's money.

Yeah, I would agree to that. It's always good to start with a smaller amount. Make sure you guys get along well before we do a bigger piece of the pie. I mean, because, you know, worst deals we've ever made was assembled. We should not have invested with, you know, and you sometimes you get to have like, I gotta close on this deal. They got some money. Okay, we can make it happen. You're like, oh, no, I should not have gone. I should have stuck to that sixth cents. You know what I mean?

Yeah, yeah, I think we've all done that before too.

Yeah. So true, so true. Now, you guys looking at different states, are you like targeting like foreclosure list or brokers in different areas for land or like some of the land listing websites to find some of your deals?

We're using brokers in Texas and in, in Arkansas. What we just picked up in, in Colorado was, was going through some of the lists and, and sending some mailers and I, I'm. Those are smaller tracks of land, but for, for our larger 100 acres, stuff like that. Yeah, we're just going through brokers and they know what we're looking for.

Yeah. For Arkansas and other places. Now people are starting to come to us and go, hey, I've got this pocket deal or I've got this off market deal or whatever. So now people know that we buy land and we're sourcing it. We do it for the land notes as well as we also buy land for a residential developer where we do the full entitlement and then we'll sell to a residential developer as well. So now the word's getting out more and people are coming to us going, hey, I got this piece, I got this piece of land. You know, would you be interested it? And so we're always open to looking at more land. Like you said, God's not making more. So.

Right. How did you learn that development process with entitlements and things like that? You take a class or have a coach on it or background or. How did you figure that out?

Work friend. What a good friend. Yeah, let. We just looked at each other. Good friend. A good friend who grew up, you know, excavating, doing all of that work. Everything from being in the trenches to overseeing the entire job site, working with the municipalities. And he's been really our, our guiding, guiding light, if you will, through that navigation.

We had him come out. So we also lived in Alaska for a time and we had built a place of refuge for women and children that have Been sex trafficked. We're literally on a mountain. It was 10 acres and we needed someone to go up and do some excavation on this mountainous straight rock. And we had all of these people come in that lived in Alaska, these excavating companies. They're like, yeah, we can't do that. No, we can't do that. And so then we called up our good friend. We're like, so if anyone can do this, we know it's you. And sure enough, he, he made it happen. And we have people all the time like, how did you do that? But he's just been experienced. He started as a kid, when he was younger and been in the business and just started partnering and working on deals together.

Very nice. How difficult it is to, to entitle the land and get that plan in place for development that you can sell to a, a builder, things like that. Is there a, is it a costly thing, a time frame? Take a while? What's it kind of. What's it take?

Yes, yes. Yeah, it can be both. And you know the old saying, if it were easy, everyone would do it. So when you're looking at a, at a project like that, obviously you need to know, well, once again, we have contacts with friends that can help guide us through this. But yeah, you're arranging a lot of stuff with a lot of different entities and everybody has their own requirements. So you have to not only secure some land, but you have to make sure it's going to pass everyone's test. I, I don't know how many times we've met with somebody that had a deal blown up because the, the fire marshal came out and said, nope, not going to do this, not going to prove it. Well, find that out while it's under contract. You know, write your contract so that you have some time to address these things, because this can easily take six months, if not 12 months or 18 months.

Yeah, I was going to say, if someone's saying, oh, it can be done in six months, give yourself another six months, give yourself a full year. And with the municipalities, when you're dealing with them, I mean, meetings can get pushed back. It's just the way it is. Things always kind of seem to get pushed back. But our goal is usually to have a, an offer in hand already with a residential developer. So as we're going through that process, we've already got a contract with the developer. And so that, that makes it a little bit easier when things are getting kind of pushed a little bit more and bit a little, little bit more and And a little bit more costly. But I would just tell people, give it more time and make sure you have more money because it's always going to come back.

It's always going to take longer and cost more than you think.

Yeah, definitely that, that is always the case, especially when you're putting something like that together. Now, on your, on your notes that you're originating, how long are you holding on to them before you sell them? Are, are you looking, trying to do like a simultaneous clothes holding them for 90 days and selling them or it just varies?

It's a great question from the pool of investors that are out there inherently our smaller ones move faster because there's more people that can, they can bite that off at once. So less than $100,000. We will originate it one month. We'll have it the next month ready to go. They it may last one month, two months, three months before it gets it, before it gets transacted, transferred to somebody else. 200,000 and above. We tend to hold on to 300, 400,000. They're going to hold on to longer. We have some notes right now. Perfect pay history. I think we closed on one last month. Perfect pay history, 24 months. And, but, but it was 24 months because it was 300. A 300, 000 note. And there's just fewer investors out there that just have that much at any given transaction. But our smaller ones tend to go faster because of that. Is that a question?

Totally does. 100. Yeah. What's your best way that you found to move your owner finances? Are you using like a platform or retargeting your existing buyers list or webinars? What's, what's, what have you found that you like the best?

We're still looking for it.

I would say number one's been referrals though. It always comes back from someone that's purchased a note from us and they go share with a family, a friend, a co worker. And referrals has been our, our best. We haven't pushed like he said, as long we're newer in selling these. But, but it would come down to, I would say reflect referrals and then just connecting with people through the podcast and things like that that just are interested in notes. A lot of them I would say are newer note buyers. Most people haven't bought a land note either. It's just, or it's a just the area. People they bought residential haven't moved over into the land side because like, well, that might seem a little bit more risky. We look at it as the opposite. Not risky, but you know, some people have to warm up. And we also do a partial note as well. And we work with non accredited investors. So even someone with a minimum of 20,000 can still invest, get their feet wet and see. Okay, do I like this? We actually had a lady. This is hilarious. Rick had been telling her, it's going to be easy, we'll walk you through. Very simple process. And the next month she got her, got the check that came in or, or the, the funds, her cash flow. And she like called Rick up and she said, you're right, it really worked. It really worked. And she had never bought a note before, but she was shocked at how simple it was to then start receiving the cash flow.

Yeah, I think we'd closed like on the 20th, 23rd, somewhere towards the end of the month and already on the first of the month she got her first, her first payment coming in and she was thrilled. Over the moon.

I love that. That's, I mean that's the power of notes. I think it's the sexy side of real estate.

You know, that's interesting that you say that because I say the opposite. I say, I say notes aren't sexy yet. The banks have a big building, you know, on every main street downtown in every country, I mean in every city across America because they're not sexy, but they're the most powerful position in real estate. They just hold that first lane position and receive that monthly stream of income. Sit back and do nothing, let everybody else take all the risk. They just sit there and make that money.

Well, that's why I think it's sexy. Because I think honestly it's one of the least risky, one of the least riskiest ways and it's a base hit.

We tell people every time for us it's, I think a lot of people kind of look at the shiny objects over here and over here and chasing after maybe this certain return or yield when they could have just been getting still double digit returns and each month getting that passive cash flow. I guess a lot of people don't understand how simple it can be and how quick you can start receiving that too.

Yeah, that's, that's the beautiful, beautiful aspect of it. It meets, it beats a hell out of deal with toilets and tenants and trash outs and rehab and. Right guys?

That's right, that's right.

Now if we've got some more listeners out there that have people looking for stuff, do you guys like pay a referral fee or like a bird dog fee? If Somebody brings you buyers or things like that for your notes?

Yeah, we generally do. Once again, it's generally when we do that, it's a, it's somebody who's already, it's a referral that somebody's already bought a note. And so we'll call up. Hey, hey, thanks for sending your, your mother over. You know, here's a, here's a kickback. Here's something there all the time. We're doing that.

Very nice. Well, that's good to hear. That's great stuff there. Well, what's the best way for our listeners to check out what you got going on, your list of notes available or how to connect with you two guys?

Yeah, I would say you can go to the website or check us out on LinkedIn, Rick Rumor, Crystal Rumor or Texas secured notes.com and then our emails are the same. Crystal@texas secured notes.com and rick@texas secured notes.com.

We don't have all the notes on the website. They're changing every day. But what we love to do, once again is build that relationship. Let's get on a zoom call. Let's talk about it. What, what's your risk pre reference, you know, what's your timeline? What are we looking at here? What can, how can we work together? And then we can say, here's what we have available. Here's, here's five notes. Here's eight notes that fit your criteria. Which one looks good to you? And at that, at that case, in that point, we will pull two or three note packages just like we talked about earlier. The rmlo, all the lender's documents, the closing documents. We'll pull everything together and send it your way. Allow you to do a little due diligence and, and we can figure out which note you want to move forward with.

Easy peasy note investing is make it easy.

That's what we're trying to do.

That's right, guys. That's right. Well, we'll make sure to put the link and all that stuff in the, the show notes. I want to say thank you so much for coming on here and, and doing a great job. Just absolutely knocked it apart. I guarantee a lot of folks are going to love this episode. And hey, land in Texas is the best that's out there, baby. The Lone Star State is big and bright and all right. Deep in the heart of Texas. When you make it down the locker, let me know. I'll meet out there and we'll meet for barbecue sometime. All right, y'.

All. Perfect.

Yeah.

All right. Guys. Well that's going to wrap it up for this episode of the Note Closure show. Like you said, Rick and Crystal have been through a variety of different things like main note investors, but found their niches that they like that work well with each other and they've if you don't hear anything, they've systematized their business. So it makes it easy doing the things that are worth their time, staying in their own lanes as well too to create a successful business model. So go out there guys, take some action and we'll see at the top. Thank hey note investors. So you want to dive into the world of note investing but no know how to get started or you don't want to pay 30, 40, $50,000 for a one on one coaching program that just completely does not deliver the deals or the funding or the access that you need to take your note business to the next level. That's why we have our one on one coaching program. I'm Scott Carson. I've been buying notes for 20 years. I've helped thousands of investors buy their first note direct from banks using either their own funds or other people's money to buy non performing, reperforming or performing notes yielding them an above average return. Now what's involved with my one on one coaching program? It's unlike anybody else's because guess what, you're working with yours truly. Not some paid student, not looking at some recycled list of stuff. Now what we do is differently than anybody out there and that's why we have such a huge success rate with our one on one coaching program. What's involved? Well, once you take in our three day class or not Buying for Dummies workshop, sign up for our coaching, you get 10 weeks of one on one coaching calls. These are on zoom in the morning, the afternoon, evening. What works best around your work schedule? We accommodate this to help you start looking at stuff. And during those 10 weeks we focus on finding deals, making offers, getting your website, your social media stuff set up so that you are a lean note buying machine after spending 10 weeks of Zoom calls with yours truly. That's right, live not somebody else will spend two days one on one. And usually people come to Austin, Texas to hang out with us on a Thursday, Friday or Saturday, Sunday. And those two days are focused on whatever you are still lacking and need the most amount of work. Sometimes it's making offers like Larry came In, we made 50 offers that he got 20 approved in a weekend. Other people came in to raise capital so we helped them find Ira investors to fund their deal so they're able to raise hundreds of thousands, if not millions of dollars for their note deals and other investing stuff. We're also going to give you a list of asset manager contacts for you guys to dive into. That's right. This will be either LinkedIn profiles, emails, phone numbers, names, all for you to start reaching out to people. No, you don't need to buy notes directly from me. We're going to show you how to go to banks and contact them directly. We're also going to make introductions to our top 12 hedge fund managers that send us deals on a weekly or monthly basis. That's right, you go straight to the front of the line and guess What? There's no 10, 20 or 30,000 upcharge for the deal you buy direct from the hedge funds. Because we make the introduction. That's why. Because. Why do we do this? Because we know not, we believe, we know there are more than enough deals to go around. And yes, we make most of our money from buying note deals for ourself. Some people will say, oh, you're creating competition. No, because there's plenty to go around. All right, we're also going to give you a one year membership to our WCN membership for one year. That's $97 a month usually. That's going to allow for you to continue support weekly coaching calls along with access to our base camp group for other things, other tapes, other resources for our coaching students. We're going to help you with raising private capital, putting your pitch deck together, putting sample deals together, or your case studies that we've done, other students have done, or that you're doing so that you help raise capital or help you find IRA investors in your local market or the markets you're looking to buy in. You're going to also basically for you, plus your partner, spouse, person you're going through this with, you're going to have VIP access to me. That's right. Whether you need to jump on, a quick phone call, a text message, a quick zoom call to go through tapes or notes that you're making offers on for us to review your bids or help answer a question when it comes to loss, mitigation, foreclosure, bankruptcy, what it might be about a deal you're working through, get VIP access to me most of the time. Come on now, everybody. We're also going to do a six month follow up day after you spent two days with me, six months later, if you want to, we can do a half day, a full day, zoom Follow up just to see where you're at, what are you dealing with, where are you looking to go? Because within six months you should have already closed on several deals the way that we teach them. Because we will help you find your first deal and then some. We've had students have closed on their first deal in 30 days. We've got others who've closed on six deals in their first 35 days. Other people closed on 100 deals in their first year. We are here to help you because guess what, ladies and gentlemen, there is plenty of inventory out there. We're not going to focus on owner finance notes. We're going to focus on how to get people calling you with their deals or how to get banks sending you lists on a regular basis that you can cherry pick and show you how to raise all the capital that you need. Our one on one coaching program is the most complete program out there. That's why you have such a high success rate and it's cheaper than most of the others out there. And we also give you the biggest bang for the buck by helping you make the introductions, looking at the tapes, helping you bid if you're coachable. Now, not everybody's coachable. Not everybody can afford this. But what we can do is we can set up payment plans and different options for you. I encourage you to either book a phone call with me@talkwithscottcarson.com and we can talk about it. See if you're a fit. Not everybody's a fit and that's a okay. But go to talkwithscottcarson.com, book a call on my schedule and we'll gladly talk about our one on one note coaching program to see if you're a fit. One of the very requirements is we do require people to go through our three day class, but that whatever you've paid for that three day class is applied to the tuition for your one on one coaching. And we also have a third party provider who's willing to finance this and carry financing for two to three years to help you paid off. But we're going to work with you until you get your first deal closed. We want to help you make your money back in the first six months, if not sooner. So check us out. Pick up the phone, give me a phone call. TalkwithScottClarsen.com that's talkwithscottcarson.com book a call and let's see if you're fit to take your business next level. Sometimes all we need is just a hand up to take you to the next step, to show you the way. This is not a blow smoke up your tail, give you the crappy tapes left over or up. Charge you 10, 15, $20,000 per asset. No. We want you to buy direct. And we've always found if you can show a man how to fish, you'll feed them for a lifetime. So let's get started. You being a note investor for the rest of your investing lifetime.

Sam.