Note Buying With Scott Carson From Dive Into Real Estate Investing For Newbies With Cecil Rose

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Real estate for financial freedom. Now your host, Cecil Rose. Hey, welcome to the Dive Into Real Estate Investing for Newbies podcast. I have a special guest, Scott Carson. Scott is a great friend. He's been in real estate for a very long time, but he's a young guy but a lot of experience. So if you don't mind, I can read a quick introduction About Scott Scott Carson has been in mortgage finance and banking industry since 2001. He's an active real estate investor since 2002. He has been actively buying banknotes on residential and commercial properties since 2005. He's a former senior investment coach for the nationally renowned Real Estate Coach along with being a national nationwide speaker and educator himself on Notes Creative Real Estate raising private capital over the past I guess this is longer several years, Scott has built inverse investments into one of the nation's premier note buying companies. They are now direct to over probably more than 400 plus banks nationwide that he had purchased commercial and residential notes all across the country. So I mean Scott has a whole list of his resume is very long, so I'm very appreciative from him being on the show. Y' all know I do short sales and I think with notes. I I've attempted notes several times, but I've been successful a few. But man, Scott, just welcome and tell me a little bit about yourself, how you got started and what you're doing now.

Yeah man, I'm honored to be here. Cecil. We all got started somewhere. I did a lot of short sales when the last recession hit in a variety of different places. We were doing short sales in 30 states for different investors back then. But I was fortunate enough to get in the note business because back in 2004 I left the banking and joined a buddy of mine who started a mortgage company with a guy who was traveling the country speaking on creative financing, owner financing, wraparound, selling the owner finance note at the closing table subject to deals and distressed notes. And so for four years from 2004 to 2008, I was able to kind of sit in the back, not only do you know, doing a lot of mortgages for other investors, but also learn and hone my craft as like an apprenticeship and really learned a lot of the ins and outs of note investing and Distressed debt and things like that. So that when everything hit the fan in 2008, 2009, when the music stopped in the mortgage industry, I just basically started dialing for dollars and making things happen by buying notes direct from the banks. And when I talk about buying notes, I'm talking about buying first lien mortgages on residential commercial properties. Everybody who's listening to this is probably in the note game of some sort. If you got a mortgage, a car loan, credit card, student loan debt, medical debt, credit card, whatever, you in the note game, you're just on the wrong side of the payment stream.

All right, all right, right, right.

You want it coming in versus going out. But what I, you know, so I just started dialing for dollars back a decade ago. Now we're direct about 5,000 different institutions bought over a half a billion dollars debt. What I'm most proud of though is that we've really helped thousands of other real estate investors transition into being debt investors. Where they come from the landlord side, the fix and flop side, or their wholesaling, you know, they come into something they realize they can do, they don't need their own money to do this and can do this from basically anywhere.

So that's what we're proud of and that's great. So do you buy mostly non performing notes or as performing notes? And it's, it's really every single variety or strategy with that or is non performing is your basic focus so you.

Can buy performing notes and get a decent return, you know, 8 to 12% a lot of times me, I like to buy non performing, occupied non performing. And some people say why the heck would you buy a non performing note? Right? Well you buy a non performing note with the idea that you could get it worked out to keep the borrower in the house and turn into a reperforming loan. Performing loans will sell around 80, 85 cents of what's owed for the most part, or the value of the property, whichever is less. But with non performing, I'm usually picking up assets at 25, 30, 40, $0.50 of as is value. And so when I buy that debt and become the bank, I don't own the property yet, I own the mortgage, I become the bank again. That gives me a lot of flexibility to work with a homeowner to keep them in the property. So let's run some basic numbers to give your listeners an idea. Let's owes 100 grand on a house, they lose their job and furloughed, been laid off, they owe 110 after a few months, house is still worth 100, but they're upside down like a lot of the Americans are gonna start facing here as the markets drop. Normal mortgage payment, let's just say is say $700 a month for $100,000 mortgage, something like that. Well, we'll buy that debt. Say we buy the debt at 50 cents of what's owed or 50% of value. So we'll pay 50 grand for that $110,000 note. I don't want to foreclose on the borrower. I don't want to have to put legal costs out and have to remarket it. I like doing things very easily where I don't pick out paint and carpet and evictions and toilets and trash. I don't want that stuff. So I'll reach out to the bar, said, listen, okay, you haven't paid your mortgage in 10 months. What happened? You get laid off? The previous bank not wanting to work with you, they want you to bring six months to the table. You don't have that. What's the situation? And most people really want to stay in their house if they can, right? And so we'll say, okay, can you start making your existing payment? Can you start paying $700 a month? Forget about the 10 grand you're behind on, can you start paying $700 a month? And yeah, people are like, yeah, I can do that. So what could you bring $100 extra or $200 extra a month now to get you caught up on this other stuff? And like, yeah, so let's. All right, great. Even if they just pay $700 a month, 700 times 12 is 8,400. 8,400 divided by a $50,000 investment is what? Pretty good.

That is, yeah, that's. Yeah, that's a great investment.

You know, that's about a 50. You can't beat that cash and cash return right there. Now that's on the front end side. After they pay on time for 12 months, it's now kind of considered a reperforming note. The house is still worth 100. I could sell that note at 80, 85 cents on the dollar on the secondary market to other investors. And now, okay, now I got 8,400 in cash flow. Plus I spotted at 50, I sell it down. Let's just say at 80, I just made another 30 grand. In that 12 month period, I made $3,800, $38,000 on a $50,000 investment.

Right?

That's a pretty good ROI. If you systems in place, it's a no brainer.

Yeah.

And then if you've got cheap money to investment money, either lines of credit or you've reached out to IRA investors or given to you money at a cheaper term, it turns out to be a pretty good win win across the board. So that's kind of basically what my whole goal is, is buy non performing at a substantial discount. We're not usually buying above $0.70 of the dollar unless the banks have already done most of the foreclosure work. And I don't prefer to foreclose, but we still end up foreclosing, have to go to legal about half the time because borrowers will not just work with us or they've already moved out. And that's the goal is to get it cash flowing and keep it as we say, make America great again when performing borrower at a time.

Right. You know what, I like what you said because when you do approach these homeowners, of course what they said, it's what, 30 something million people that file forbearances. So I mean we know something is coming. It may not come as quick, but we know something is coming. But you look at it, most of these people really want to keep their home. So you got like you say, wholesalers, investors approaching these people with the approach of well, sell me your home. But guys like you, you create something and say, hey, I can let you keep your home. So why would they not go for that?

Are you the problem with that? I'm going to interrupt you, but the problem with that is the banks will sell this stuff and I'll see stuff six to 12 months before a wholesaler, before it hits the foreclosure market. So why borrowers will sometimes not communicate with us is like the, oh, they're not serious, they're not going to foreclose on us. And sometimes you've got to have that shot across the bow and starting the foreclosure process to bring the people back to the table, say, listen, I can help you, but once we get to this point, I am going to foreclose. You know, I'm only willing to, I'm willing to help you, but if you're not going to help yourself, I'm not going to sit here. I don't run a charity, I donate to charities. Okay. And that's the thing is, you know, people are used to getting those 50 to 100 letters, those postcards, the door knockers, hey, you're going to lose your house, right? By the time it gets to that where you're the week of the auction. You know, banks don't want to delay stuff. They've obviously given the borrowers multiple opportunities to try, and we try to do that too. You know, there's some times we've bought deals that we thought would modify or reinstate pretty quickly, and we ended up having to foreclose. And then just the other day, I'm getting ready to foreclose on a property in Pittsburgh, outside of Pittsburgh right now. Borrower comes to the table, hey, I got, I got my stimulus checks. I can put $2,500 down and pay $200 extra a month on top of that. Like, okay, we'll let you stay, you know.

Right, right. So with, with everything that's going on now, your prediction with, with everything, it seems like you've been doing this for years. So you built a relationship either with these hedge funds, these banks. So you say that you're able to get, you're able to know what's coming up soon or before it even hit the market. Is that because of the relationships you have built, doing this over your experience or what?

It's just the nature of the beast, Cecil. I mean, because banks will sell lists. I mean, if they're taking a foreclosure, they're not going to send me the list. So you have to look at the foreclosure timeframes, and that's going to vary from state to state. I don't see much here in Texas because we're very fast in foreclosure timeframes, 21 days. But I do see a lot of stuff. Ohio, Michigan, when you start seeing Indiana, Illinois, Florida, Louisiana, where you've got longer foreclosure time frames, the bank will send us a list and want to get off their books and let somebody else deal with the issue of taking 6 to 12 months to foreclose. So that's why we see it ahead of time a lot before banks, before an REO agent, before it hits the MLS and things like that. So we're just closer to the source, further of the food chain. Now, I've done this for 10 years, but that doesn't mean those that are listening couldn't go out and start dialing for dollars and calling the right departments, the bank and get a list sent to them today. It happens all the time. It's great that I've got 10 years experience, but we teach people all the time, hey, dollar for dollars, there's thousands of lending institutions out there that I can't possibly deal with them. All right? There's a plenty of opportunity.

I know as a, because I'm a real estate agent too but of course I'm more of an investor than the agent. So of course when the chart sells everybody was becoming BPO agents and everything like that. I would rather not. I tried that. That's a lot of work and I know that's what a lot of people are getting emails. I'm still getting emails and I guess lenders are trying to line everything up now to get. Because people going eventually going to loan modification status after the forbearance, you know. So what you think about that? Do you, are you an agent or do you have agents you work with? Are you just, you just strictly go to the source and say hey, this is what we offer, this is what we want.

You know, so it varies. So I'm not an agent. I've worked with plenty of agents though. Agents are our friends because we're about to get a list in from bank. We need agents to pull comps for us to give us a good idea of values. We're not gonna see interior inspections, but at least we need an idea what the market looks like so we can make our bid. And then we hire the agents to be the REO agents to help us foreclose or help it move it if we end up taking the property back. So here's, here's where everything is at. We look back at history in 2008 when everything hit the fan 2008, it was roughly about 12 months until we hit 2009 before really everything kind of shook free with Malone mods and attorney generals at state stopping foreclosures or suspending things for a while. So we're really not going to probably see a lot of inventory at the market until the end of this year, if not the first part of next year. You already look at what Fannie Mae and Freddie Mac. They're already offering six month forbearance agreements right now. And there's a talk on DS News default servic dsnews.com where they're talking about doing a secondary forbearance agreement or having permanent forbearance agreements. That's great, but that's, that's great for the borrower. Now does that mean it's great for us as note investors? Because we're gonna, you know, I'm gonna, I won't be buying stuff that's on a 12 month forbearance until they start to serve, until they start the process of. Hey, they've exhausted their options to stay in the house for the most part. That doesn't mean, you know, if I'm gonna buy a note, I want to be able to get that borrower to start paying immediately. Do something I don't want to, hey, get it out of jail card for 12 months, then my money's tied up, I can't do anything. Unless of course I bought that mortgage at pennies on the dollar and I don't mind waiting out that. So looking at history, it's kind of the same thing. We're gonna wait and see. That doesn't mean there aren't options in the market. A lot of hard money lenders right now are calling me, hey, will you buy our paper? Will you buy our debt? And I'm like not right now. I mean if I can't foreclose, I mean I'll buy it at 30 cents on the dollar or 50 cents on the dollar now and go from there. But if I can't foreclose, it doesn't do me any good to just. I'd rather wait around for better deals in the longer when things finally hit the fan, you know what I mean?

Cecil Right, Right. So I'm talking to homeowners that I've been working with Pre foreclosure before COVID 19 and a lot of these homeowners wanted to either do a short sale, sell their home, but the lender had just by all means just put them in a forbearance and it's almost like they're tacting what the forbearance on the back end now? So are you working with a lot of still notes like that right now as far as that pre Covid and trying to close on them but are you having any challenges with the lenders now trying to let those go away?

We were working with a student of ours on 450 notes from a bank out private lender out of California. And these were all performing notes Originally we were going to buy it at 53 cents on the dollar. Ridiculous return on this tape. But with everything hidden in place, forbearance agreements, the borrowers aren't paying. It drops the value down quite a bit. So I mean I got our portfolio, we have our borrowers that reached out to us and said hey, we'd like a forbearance agreement, you know, 60, 90 days. I'm like that's fine. What am I going to do, say no? I can't say no. But I'm glad to help them. Those that reach out to us and work with us. I'm Glad to work with those that don't. Hey, you know, you gotta communicate more than anything else here. So you're gonna see that. I think banks are the reason banks will go to that forbearance agreement aspect of it. Because if they can get bailed out by the government, that would be the better thing for them versus them taking a 20, 30 or 40 cents loss on a short sale. You're gonna see short sale days basically stop for a while and then a restart again. Who knows, six months or 12 months, you know, that's the biggest thing I think you can still get. If you've got a buyer for a property who's interested in short sale, I still think you can get something pushed through. But if you're dealing with your borrowers out there, they're just starting the short sale process, they might as well just stay in the house for another six months on a forbearance agreement for free.

So what you advise right now as far as in the real estate for investors that are out there, do you, do you advise that they continue to just work the note? Do they do wholesaling? Do they continue just working? I mean, what are you doing now to keep your, to keep your marketing going? Of course, we, that's the lifeblood of our business.

Amen to that, man. We are, no matter what aspect of real estate you're in, we're all in the media business. Whether you believe it or not. You got to stay in front of your audience, your investors. So here's the things that I would be doing more than anything else. Getting the word out on what you're doing, you know, doing a video a week and emailing that out to your database. That's the biggest mistake that I see any type of real estate investors making is they don't market enough. You know, they're building a database, they're going to meet up groups, they're part of real estate clubs that maybe they're not meeting now, but I have in the past, they don't market, you know, you gotta market. Marketing is the lifeblood of any business. So getting an email blast out at least once a week or once every other week, hey, here's what we're focused on. My biggest thing right now is we're reaching out to as many investors as possible from the local county records or pulling self directed IRA investor lists and then marketing to them, say, hey, are you looking to put some money to work? Here's what we do, you know, let's stay in touch. Here's some of the Past deals that we've done. Here's our type of case studies that we do. Those are all things that any investor out there should be doing right now is marketing. Because what you gotta realize in six or 12 months the country is gonna be on sale. We're gonna have Kmart blue light specials all over the place. Woo.

Right, right.

You wanna build those relationships, you wanna put that marketing in place so that you've got people that you could tap into. So when a deal or a portfolio comes across your plate or just a phenomenal asset, hey, you can tap into that investor network because you're ahead of the crowd. 90% of people aren't doing anything. They're just sitting at home binge watching Netflix and oh, woe is me, right? Those investors that spend the time on marketing, whether it's a podcast or an email or YouTube or Facebook Lives or just talking about your case studies, you're going to be top of mind and stand out from the rest of the herd. And those are the people that really make the most amount of hay and have the most advantage. A downturn is that those are continuing to market. Most people give up and go woe is me. When now is the best time ever to be marketing because you're stuck at home. What else are people gonna do? Get the word out and put these assets in place. If you've never put an email together, go to mailchimp and get your mailchimp account for free and take the hour to set up a template and send it out on a regular basis. Or spend some time on your social media. Do a Facebook live where you're just sharing nuggets, things that you learn on a regular basis. Because 90% of people out there want to do something, they're just too scared to pull the trigger. But they will love to work with normal people and see you're a normal guy. You don't be published. You know, you have to all perfect. It doesn't be production value, just some of my best videos were the ones that I was holding a shaky phone with sweat dripping down my face. You know, dog barking in the back and just talking about real estate and that's, that's the most valuable I can give the new people up there is you learn how to market. It doesn't matter if you're wholesaling apartments or doing subject to deals or short sales or rehabs or brr, whatever. Marketing is a tool that is the great equalizer. If you can know how to market, you could be a one person, but do so Much more than anybody else out there who's just trying to do the old fashioned way of marketing, and that's not doing anything. So as I like to say, Scotty is here to beam you up into the 21st century and I'm giving her all she's got for you. Cecil. Come on, man.

I like that, man. I like it, I like it, I like it.

The country's coming up hard at the seams, Captain. Don't think she can handle it.

I like that, I like that. Hey, so when you first started in no buying, how important was it for you to get a coach? Did you just start doing a lot of stuff, failing fast, or did you get a coach? I know you say you kind of had a mentor or did you shadow someone or.

Yeah, I didn't shadow for four years. I had an apprenticeship with somebody that I learned to know business from and they were just a great resource that I could reach back out to. And I had another investor who went through the Resolution Trust Corporation days in the 80s, the savings and Lynn scandals, who bought a lot of paper then. So, yeah, having a mentor is very key, especially if you're going into something new. There's a lot of different real estate niches, you know, avenues to go around. Some of them work in markets, others don't work in markets. What you need to do is look at what markets you want to invest with. Find the people that are still doing deals, just not talking about it. Somebody, because there's a lot of, hey, I did one deal and now I'm gonna be. Now I'm an expert. I'm never gonna do another deal again.

I'm start a course. I did one deal. Yeah.

I started laughing because I've seen so many note courses come out. And I'm like, you got like two deals under your belt, you know, right. Or people that'll write a book on note investing and they haven't bought a note in three years. So you gotta be careful of that. I mean, don't be wrong. The information is great, but you definitely want to learn from somebody who's doing stuff on a regular basis, knows what's going on, has their pulse in the market, is going to share with you exactly what's going on and go from there. Now, don't get me wrong, there's going to be ups and downs in every market. I mean, I've had deals that have been home runs and I have other deals I've struck out on, but it doesn't stop me from doing more deals because that's the biggest thing. If you've done a bad deal and you've gotten a little gun shy in the past, go do another deal and make up for it. Not it. Anybody that's been around for 10 years that's gone through ups and downs and still around, those are the people you want to be with. Those that have just been around for like a year or two, that only have invested in an appreciating market. That's great, they're taking action. But you know, a lot of rats will lead the sinking ship. And you want to be around those guys that have been around, those guys and gals that have been around for a while with experience or who aren't afraid to say, I don't know, let me find out for you.

Yeah, I would rather that. So you of course, and I know this is not a pitch for your coaching, but I know you've coached thousands of students. You just mentioned one that you said had a, what a package of 450 deals. Can you just tell me a little bit about your coaching program? Like how you help your students find these deals, how you walk them through them, I mean give them that confidence, that mindset. I know that's one of the biggest things.

Yeah, that's a big thing, is I show them how to actually do it. Like I have a three day online workshop. I mean I've been doing online workshops for years. 5 years ago I started doing them online because it was an easier way, it was more affordable for the audience out there. So they'd have to travel, stay in a hotel, airline tickets, they can do it from their home or office or laptop or smartphone. And so I'm not one of these guys. Like there's a lot of people, there's quite a few people like oh, the banks won't talk to you because you're a newbie. And that's the biggest crock of crap out there. As long as you know what to say and how to say it and have some of the online assets or have a team surrounding you. Banks will move assets to you on a one off basis all day long. Now you're not going to buy from bank of America, Chase or Citibank. You're going to have your best luck with regional banks. You know, we'll have some bigger banks have some stuff. You just gotta know how to approach and what to say. And so I'm big into scripts, I'm big into providing. You know me doing, showing people. Like I two weeks ago I did a four hour call blitz of Me calling banks and over four hours I was able to reach out to.

So you did that online, you recorded.

It or he did online for four hours.

Wow.

You know, and I've done that multiple times. I usually do that once or twice a year. What I'll probably do is do that on a monthly basis going forward just to show people, hey, here's how you do it. Here's who you call here. They can hear the conversations with the bankers, hear what I'm saying, hear me getting hung up on, you know, that's the thing is I show people exactly how to do it step by step. And you know, I'm a big believer that, I mean, you're not going to learn note business in three days in a three day workshop. But I'll show you how to find them. I'll show you how to raise capital or find investors. I'll show you how to market those deals and then I'll show you the different exit strategies to make money in note investing. And that's what we've do in our virtual note buying workshop. We used to call it Note buying for dummies.com, but it's a great starting point. And then we have so many videos. I mean you talked about the podcast. We spent a lot of time talking with investors, vendors. I do a lot of case studies on the note closure show podcast. We do Monday night webinars just about every Monday night that are open to the public as a great way to, hey, bring on an expert or bring on some specific subjects matters and do that on a regular basis. So literally I was looking at YouTube and I think I've got over a thousand videos on YouTube for people watching from.

That's awesome. That's real awesome. So are there any deals that have been. I'm sure there's plenty. But can you give me one example of a deal that may have been one of your most difficult or challenging ones that you learned a good lesson from?

Yes. So three years ago I bought a portfolio of 10 duplexes and triplex loans in Chicago, or as I call it, Chirac. Okay. These were from a hard money lender. We were buying them at 50 cents of value. I'm sorry, 50% of what was owed. Now the hard money lender only lent at 75% of value. Most of these have been rehabbed. Duplexes, triplexes, nice brownstones, million dollar trade, excited about it. And then we went to that to foreclose. Chicago is one of the most corrupt cities in the country. It's one of the Hardest foreclose on. It's also, I mean, we ran all sorts of issues with these assets. If, you know, I got. We were able to do evictions pretty easily for the most part, except for a couple that took forever. The properties got broke into multiple times and the copper were stripped and things like that. And the legal fees just ate the deal apart. So I lost a quarter million dollar of my own funds on that deal. And I made my investors whole on the deal, but I lost at least a quarter million dollars on the deal. So I will never buy in Chicago anymore. Buying a note. So don't buy in Chicago now. It doesn't mean they're counting.

Even if, even if the deals are good, even if it looked good, you still.

It looked. I mean, everybody agreed with me. Everybody, like, this looks amazing. And then we just hit one wall and the judges hit one wall and the judge literally gave people like three or four times to get evicted. And I'm like, what the hell? And it turned down. The attorney's like, well, the judge is up for reelection, so they're gonna side with the person that lives here versus somebody that lives across the country. So I don't. I'm not a big fan. Don't get me wrong. I love Chicago sports teams. I don't like buying notes in Chicago. I'll buy outside of Cook County. Other places in Illinois are fine. But that was probably over the last. I look back the last couple years, that's been the most painful deal that really just was like, ugh, just became an anchor around my feet. And we really struggled. I mean, we sold some of the assets, made some stuff, but taxes were high there. And it was just a. You got to look at it. I didn't let those 10 assets stop me from going out and buying an additional 200 plus in the last two years. So that's one thing is I realized, okay, look, the only way I'm going to make up this money I'm losing is by going out and doing more deals. And that's what I did.

So, you know what I like about you is the bulk. The bulk buying bulk notes. You know, I appreciate the education that you put out there, so of course I'll be following because I've attempted a lot of bulk stuff and like, you just not really having the coaching, failing and making the mistakes. And I mean, like they say you fail fast, but I think that's where the most of your money is made, with big deals, big bulk deals. And I'm not saying you don't you know, to get away from everything. But go ahead. It looked like you was about to say something.

No, I want to make sure. Bulk week. We define what a bulk deal is. A bulk deal to me is 10 notes or 10 properties or more. Our biggest trade has been 105 assets at one failed swoop in funding. I'm working on a $500 trade right now. I don't know what's gonna happen if I get divvied up into three trades. Here's the thing. Don't let investors. We all get bombarded with phone calls from people that say, I got $20 million to fund stuff on a monthly basis, or I got $10 million every month, or I'm a rep for somebody who's got big money. Do not go chasing those big whales. They don't exist if you don't know that person. Look, if somebody's got 10 million to fund a deal or fund deals on a regular basis, they're not going to talk to you and me. They should be going directly to the banks. And I know realtors. Oh, I got this person, you know, it's got 20 million. Have you seen the funds? No, but I know them. No, too many daisy chains involved in a daisy chain. Is there maybe three or four people between you and the actual bank? Look, if you're worried about not having the funds yourself, go out and market and raise the capital. That's the big thing. I see a fear in a lot of investors is like, oh, I don't have $10 million. Yeah, I know, but you can go raise a million bucks relatively easy. You can buy. So you only getting three to five points on a deal. Like you're taking an order. Go out and fund on one or go buy these two deals that you'll make 20, 30% instead of 3%. And so have a little confidence and don't chase the big whales. I get phone calls every week and I'm just like, no, if you had 20 million, you wouldn't be calling me. Be calling somebody else.

Right, right, right. So as we wrap this up, what advice would you give to a new person getting into real estate? As this show is dive into real estate. What advice would you give to a newbie? Somebody trying to get into this? Would no buying be one?

I know you.

This is one strategy I think you have to have. You really need all of them. But what advice would you give to, I guess, a new investor trying to get into this? Where would they start? I guess so the best thing to.

Start is you always Got to get educated. And for your listeners out there, if they go to noteblueprint.com freebook, they can download my 73 page book for free.

I'm gonna put that in the show notes.

I know you will, but it's there for you.

It's a book.

73 page, easy read. Education is the most important thing. I'll tell you that right now. You gotta learn what you do. Here's another thing. And it's probably gonna irritate some people. Don't be a J all trades. That's the one thing that I see investors struggle with, especially newbies. They go from one situation to another one to another one to another one. They go to all these workshops and they're jack of all trades, but a master of none. So when you find something from talking to your mentors, talking to your team, talking to people you respect, find a channel that works for you and stick to it. You'll be a whole lot happier. You'll make a lot more money by being focused. Like I said, I don't care if it's wholesaling or Airbnbs or notes. Find something that you're happy with, that you understand and you're comfortable with and go with it. And here's another thing. Don't be afraid to invest outside of your backyard. There are realtors and professionals in every state, every county out there. You don't have to go out and touch it and put paint and carpet on it if you want. Use resources, use marketing, but learn the education. Try to stay in one lane if at all possible. You'll be a lot happier in the long run.

To me, it seemed like no buying cheaper than every other strategy. Am I wrong saying that? Because, I mean, I know you still.

Have to market by cheaper. Do you talk about that? You're not having to drop like thousands of dollars in marketing every month, right?

That's. That's.

Yeah, yeah. I mean, I. If you've got email and you know, mailchimp. I mean, I spend. Me. Wrong. I spend about a thousand dollars through email and other things on a monthly basis. But it's a much higher return investment versus me dropping. I'll give you something. If you went dropped a thousand postcards out there right now, that would cost you about a thousand bucks. When you figure in time, postage, mailing and how many phone calls would you get? 1%, maybe 10 phone calls.

Right, right.

The week of the auction to get one deal, maybe. Right, right. Me, I'll drop a thousand emails in one fell swoop. The first Week of the month, I'll get 10 to 20% of the emails to the asset managers to open it up and then I call those asset managers. So if I get a tape, it's just not for one deal. It's maybe 5, 50, 500 deals that I get from that source on an annual basis. So I'm not having to drop bandit signs or postcards. So it's a whole lot cheaper when it comes to marketing. But you got to learn the marketing side like anything else. And then it's a whole different due diligence process in the notes. Basically. Notes are not a get rich quick. I mean, rarely are you going to buy a note and make money on it in 90 days. Usually the average timeframe is 12 to 24 months with workouts and foreclosures. There have been some deals we bought that we made money in 30 days. But the likelihood is you have to set it up. It's gonna be a 6 to 12 month process to really kind of get where you want to go. And so the returns are great because you're buying stuff a whole lot cheaper. The deal flow is greater because you're a lot closer and one source becomes a repeat source. And then the returns are a lot higher too because you're buying at a cheaper price. And you've got so many different exit strategies. Whether it's a performing or non performing note, that can be a win win.

What's the shortest time it had taken you to close on a note?

Oh, closing on a note. It's about I can close. I've closed on a note in a day where I bought a note, I saw it and I bought it and funded it the next day. The longest was six months because we kept going back and forth with the bank on a deal. I've made money. I bought a note in Florida where I thought it was gonna be a six month process and the bank sold me the wrong note. They sold me a note that was going to auction like the next week. And so it sold at auction. I paid 40 grand for it. It sold for auction the next week at 80 grand. So I made a quick 40 grand in two weeks, basically when I got the check on that deal. And so that's great, but that rarely happens. Here's the thing, you buy a note, it's gonna be at least probably 30 to 45 days before you're able to reach out and talk with a homeowner, get them right on the right track, and if they start making payments, that's a great thing. But that's all about cash flow, everybody. We all want cash flow. Nobody calls the bank when Junior flushes the rubber ducky down the toilet, you know, they call the landlord. Okay, Right. I don't deal with that. You know, I'm a bank. Bank gets paid. Banks gonna win one way or another. And it's good to be the. It's good to be king because the pen is definitely mightier than the hammer in the notebook.

Right, right, right. So how can the listeners get a hold of you, contact you? Your coaching program? I know you just showed your book. Where they can get a hold of that. Are there any other way they can contact you?

Yeah, you can go to our website. We close notes.com. that's the main kind of mothership for everything. You'll see the podcast there. You'll see the ways to register for our webinars. You'll see our different trainings under the training tab. We close notes.com is the best place to go to catch a hold of everything and connect with us there.

All right, well, Scott, man, thanks for being on the show. I appreciate it. Delivered a lot of good content and just look forward to it. Like I said, I'll be following you, getting more educated on notes. And again, just appreciate you taking some time out your schedule today, man.

I'm honored to be here. And for you guys that are listening to this, Cecil's doing an amazing job. Do them a favor, go on over. If you love this episode or love the previous episode, go on over. Hit that subscribe button, Apple itunes and leave a five star review for Cecil. Come on. We love his podcast when our audience communicates with us. If he's doing his time, we just spent 45 minutes. The least he could do is take a minute to leave a review for him. So come on, help. Help a man out.

Help me out. Help me out. That's right. Thanks. Thank you. Appreciate that.

Thank you for listening to the Dive into Real Estate Investing for Newbies podcast at Dive into Real Estatefor newbies dot com.