Real Estate Notes: The Business You Don't See | Scott Carson - From the Get Real 411 Podcast

And what we do is very simple. You know, like what I used to do as a mortgage officer, I would pull investor. Listen if, if they bought a house five years ago, I would send a letter out or direct mail piece out to him, say, hey, it's time to refi. Rates are better. You know what I mean? Let's get you get your refinance. Well, we do the same thing now, but we send a, hey, saw that you bought a property through ironing. Are you looking for more deals? Are you looking for is your money making, you know, above average return in the banks? Let's, let's talk. We've got some deals and we're looking for investors to fund these things.

Welcome to get Real 411, the podcast where real experts give real advice on all things real estate. I'm Jamie.

And I'm Brad.

Join us as we explore real estate successes and pitfalls through the eyes of our esteemed guests.

Now, let's get real. Today we are super excited to have Scott Carson on the pod with us. He runs a company called weclosenotes.com and we're going to learn all about it today. And this is specifically applicable to loan originators out there because Scott's going to talk about how you can get involved in note investing as a loan originator, how you can identify where it might be a benefit and working with borrowers, it might be having an issue, making payments, all sorts of really interesting things that frankly we haven't spoken about before. So I'm super excited to learn more about this.

Me too. I mean, right now it is a perfect time for loan originators out there to figure out ways in which they can diversify their product offerings and the things that they educate themselves on to help their borrowers and consumers.

Yeah, it is a perfect time.

So, Scott, really great to have you on today. Welcome.

I'm honored to be here. Happy, happy. Monday, I guess is when we record is Monday, isn't it? Right? Yeah, all day today. That's honored to be here. Glad to be here today, guys.

Right on. Well, let's start. Scott, I just would love to have you just tell us a little bit about your background, how you got into this, you know, kind of your, your story, if you will, you know, heading into the business life and, you know, where you operate out of and that sort of thing. Just all the basics.

Yeah, no problem. I'm out of Austin, Texas. Been home for over 20 years now. So I'm not necessarily native, but longer than a lot of folks. But got, I Guess you start my finance background was in the financial advisor for a little while, got laid off for a few years and then got back into finance roughly about to 2002, 2003, as a banker for JPMorgan Chase, as a top banker for Chase here in Austin, Texas and throughout the big Lone Star State. And always interested in real estate investing and stuff like that. And then I had a buddy of mine that used to work with me as a financial advisor, started a mortgage company and he said, hey, I'm, you know, this is back in, you know, 2000, late 2003, 2004, when things were getting kind of crazy and he's like, I'm traveling across the country. We got a couple of real estate investors we're traveling with. It's going to all these big seminars and stuff like that. I could use some help. I said, okay, all right, well, let's do it. So jump left mortgage origination from the bank side and became a mortgage broker and started doing different investor loans. I mean, literally overnight we were, I was speaking in front of like 500 to 1500 different investors and doing different, a whole variety of different, you know, just for rate mortgages, optional ARMs, fixed flip, you know, all those different types of mortgage products for a while and started dabbling as investor along the way, buying real estate and do some stuff with that. And then when everything hit the fan in 2008, like we know it did, almost overnight, the music stopped. I was fortunate enough that the investor that had sponsored our mortgage company had made a lot of money during the 80s and it taught me about investing in paper, you know, and a lot of people think about investing in paper notes. It's like you're gonna buy a property and owner, finance it and offer terms that way, which is, which is one way of doing things. But I approached it from a different animal of contacting banks, contacting lenders who had non performing notes that they originated or the bar wasn't paying for anywhere from six months to six years in some cases and buying that actual debt at a huge discount, becoming the lender. And then we make our money by reaching back out to the bar, said, hey, what happened? You know, what country western song do you want to give me? You know, did grandma get run over by a reindeer? Did Old Yeller die? You know, what happened? And let's work out some sort of payment plan modification for you. If you can't work out a payment plan, do you have something you can take over the loan? If not, do you want to walk away from the property or do you want to sell it? Or we could do a short sale. If you don't want to work with us, then we have to go the route of the legal route to foreclose and go that route. So that's really what I've done the last 15, 16 years is just buy a crapload of non performing mortgages from different banks and lending institutions across the country. Over a billion dollars in distressed debt on residential, commercial properties. And that's, that's why they call me the note guy, is we buy notes, we close notes. Does that make sense?

Really, really cool. You know, after the, the Great Recession, when Brad and I, uh, unfortunately, company we had closes doors, I found myself in an executive role on the foreclosure side of the business. So very familiar with, let's just call it what it is, very familiar with all the red tape that homeowners had to go through just to start one path. Whether it was can I do a loan modification? That conversation never happened in tandem with what happens if I can't? What? Or is there another way to work this out? And so it sounds like if I'm hearing you correctly, what you did was you simplified the process by taking on that debt at a discount and then giving the borrower kind of a one stop shop to figure out all of the different paths that they might have to resolve that debt, up to and including foreclosure, of course, but giving them an easier way to understand their options and find a way out of it.

Yeah, that's, that's so true. It's part of what we do is just the education, the bars of the different options. And you know, we were doing, I was doing short sales at the same time and doing a lot of variety things. And you're 100% right. Banks don't necessarily want to educate bars and all the different options, you know, and they do make you jump through a lot of hoops. Oh, you got to fill out this financial worksheet, you got to send in your last six months of paychecks, your W2s, all this, write a hardship letter and that's fine. I mean we see those things. But if I'm buying a note and a borrower hasn't paid in six months, I'm going to ask them a couple questions. What happened? Did you get sick, get laid off of work, death in the family? You know, Covid, I mean, people have had to get out of jail card the last three years since COVID rolled in, you know, and so when I'm buying, especially debt right now. I was like, okay, what happened? If you, if you were paying prior to Covid, can you get back on track? You've had your, you know, your joker card, your aces, wild card, good job, but you got to pay if you want to stay. Now, I don't run a charity. I donate to charities, and my. Don't. My charity is not your. Your house. Okay, yeah, 100. But let's. But I'm willing to work with you, you know, especially if I'm buying a note at 50 cents on the dollar of the value of the property or 50% at a big discount off what they owe, I've got some flexibility to become that borrower's white knight in a lot of cases. You want to stay, great. Let's work. Let's work out something that's going to make sense for you and me both. I'm not going to give you a payment that's below rent rates, especially if your mortgage is already below rent rate. If that's the case, then we need to talk about a liquidation, either selling the asset or maybe even giving you cash for keys to walk, you know, or bringing on somebody to help, you know, take over payments. But yeah, that's, you know, we educate our clients how you've got option A, option B, option C. If that doesn't work, then we need to go to option D, E, or F in a lot of cases. And we're proud of the fact that over all the mortgages that we've bought, roughly, we've been able to keep 65, 70% of the homeowners in their houses and give them, get them back on track.

So you become a big servicer, then you're servicing those payments.

Well, I don't. That's the beautiful thing. I don't want to do all that little nitty gritty work. We have a third party servicing company. We actually have three that we work with with our portfolio. Because if you're going to be investing in notes, you've got to be usually a licensed debt collector in the. In each state. Some states require that, other states don't. Some states are okay. If you just have a third party servicing company that's a licensed debt collector in that state, and that's fine. There are a few states out there that want you to be a licensed mortgage broker, and that's like Georgia, Washington state, Oregon. A few others out there have that license, but you don't have to be a mortgage broker to do this. We work with a lot of investors who they hire a servicing company in the states that they're buying in and have an attorney handle the foreclosure. And they're, they're going out and finding these deals from banks and hedge funds and using their money or other people's money to fund it. And then they're, they're turning all the heavy lifting, you know, the collection, the servicing those notes. So they're just receiving cash flow on the 5th and the 15th month. Right.

And Scott, so where is, let's take, can we take a half step back just for our audience for, for the loan officers that may be thinking about this may be a path they want to go. So it's, it sounds like you had a little bit of a leg up because somebody you were working with before the recession was kind of participating in this anyway. But if somebody wanted to get into this, how do they go about like making those calls to the banks? Like what do they say? Do they literally just pick up the phone and call? Do they walk in? You know, who do they talk to at the bank? Like, could you walk us through step by step on what they would do to do that? And are you training people too? I mean, is that part of what you do?

Yeah, part of what we train is so that we find more deals so people get tapes and that they, they can't take the whole thing down and they won't take one or two down and we'll take down the rest with them. But yeah, so here's, you're not going to walk into your JP Morgan Chase, your Bank of America and say, hey, I want to buy your notes. Okay? It doesn't work that way. But many of you, many of the loan officers listing are very familiar with like the lock desk. If you call the lock desk, the lock desk on at a mortgage company is often right next to the special assets department or the secondary marketing department. And those are the departments that you call. So if you're originating, whether you're a wholesale lender or a retail lender, if you're calling the mortgage company's main corporate office or their special assets or secondary marketing office, usually the corporate office is the best one. Not customer service or loss mitigation, but say, hey, I'm looking for the individual or the department in charge of your non performing notes either. Residential commercial banks usually will have two departments, one for each and then just start, you know, hey, what do you have on your books that you're looking to get rid of? What's non performing? What do you, what you have anything with any hair on it? You got any problem children out there that you want to get off your books? And a lot of banks have a lot of non performing stuff right now. And especially with everything that's going on in the news these days, there's a big urgency for a lot of these banks and lenders to move non performing stuff off their books to try to clean up their balance sheets. And so I'll give you an example. I may have had, you know, my mentor Bob, who'd been through this before, but when I was sitting there in my office in the mortgage company, the loan wasn't ringing for origination or refinances. I started, I just picked up the phone and started calling banks and lenders and like I said, made 50, 54 phone calls before I got my first yes. And that yes turned into a, a pool of mortgages, a $5 million portfolio, which wasn't, I mean, this is back 2008. Well, I was able to make five points on that deal. You know, I had to split it with a couple people to make it happen. But 50 grand on a, on 50 phone calls means every, every no I got along the way is worth about a thousand bucks to me. You know what I mean? Sure. And then that was that gave me all the belief I needed and started calling. I got a hold of a smaller bank that's not around anymore, Wells Fargo Financial, which was like your neighborhood subprime lender back in the day. And they sent me a portfolio and I took down a couple notes and flipped a couple notes. And then I was looking at a. I had a investor here in Austin, Texas, was trying to buy this strip mall, and we were at the local real estate investment club and he was talking about this deal that the note got sold out from underneath him so he couldn't close on it anymore. I was like, the note, I was like, oh, let me check into it. So I pulled up the title work on that asset and found out that it was a Greenpoint mortgage, which was, which was Capital One's commercial lending department. So I just started down for dollars calling Capital One, I don't know, over three weeks and sending phone calls. I can't tell you how many times I got transferred to India or Pakistan. It was, hello, my name is Steve. No, it's not. I'm not in the right department. Can you transfer the right department? And finally I get to this lady, Amy up in New York State, and she's like, yeah, I'm the right person. I'm like, oh, awesome. I was like, I know that you just sold the note on this one property on Airport Boulevard here in Austin, Texas. What else do you have? She's like, oh I got, I got a crap load. Let me send you. So she sends me this 33 page PDF, okay? And it's just loaded with all their small balance commercial loans that were below a million bucks. It was so much, it was in like six point font, okay. I had to pull up a magnifying glass to read it all and it was stuff all across the country. And I'm like, oh my God. She's like, I can't, I'm like, I can't buy this. Also she's like Scott, we don't want you to buy it all. Just buy something, just buy something. And so I bought. There was a eight unit apartment complex in San Diego that was worth 700. They owed like five sixty and some change. They sold the note to me at 375. I flipped it to a local investor for 415 like two weeks later. I had under contract, don't have to put any more earnest money down. And I just market it to my investor database and made 35 grand and flipping it. He ended up making 80 grand eight months later. But he, I, you know, 35 grand in a matter of a couple weeks was good for me, especially since it was having a hard time originating at that point. So I just started like, you know, I just started calling all my lending contacts who those were still in business and who were still lending. Hey, do you have anything, do you got any. Anything's on a warehouse line that isn't performing that you're looking to sell? You know what, you know what, what problems do you have that I can take a look at, maybe solve for you, Scott?

You know, it seems to me like, and maybe it's easier than this, but to me it seems like it would be difficult. Like these asset managers that are dealing with these non performing, like don't they have already resources, people that they like their go to people and you call in and like oh yeah, yeah, yeah. And so you have to kind of build a relationship with them. I mean isn't it similar to a loan officer who's trying to get business from a real estate agent? And they already have, I already got my guy. Right. And so you hope for a rainy day where you could be the one bringing the umbrella in. But is it different than that?

So part of that is yes, they may have their one or two people that buy in specific areas. But you have to realize a lot of lenders have stuff all across the country and so just your backyard. So that's the thing, is that they're looking for people that are buying in multiple markets. Now if I was just trying to buy in Austin, Texas, I'd have gone broke and bankrupt a long time ago. Austin's a very competitive market, has been for over a decade. But I get these lists in from across the country, you know, you know, 200, 400, 1500 non performing notes. You know, there's usually not a lot, you know, not a lot of buyers out there buying a lot of this distressed stuff compared to your fix and flippers or your other banks. A lot of your banks and lenders, they want performing paper, you know, they want stuff that maybe is only scratch and dent where there's some issues missing a tlc, good faith or till or something like that. Or the FICO score is different after closing, you know what I mean?

Well, I think for some of the bigger guys, like a $35,000 profit in two weeks on a onesie twosie thing is probably not worth their time. They're probably looking at much more grandiose, you know, groups of investments that net them much larger numbers. And so it gets into that same trap, right? The trap of you're the homeowner and you're in trouble and, and you're calling a department to try to work something out and they start to send you down one path. But really there are four solutions for you. You know, you've also figured out that you can also, you could at least back then be the guy that was willing to take the smaller stuff. Maybe the payoff wasn't massive, but it is when you start to add up the different units that you're working with and, and, and just like Brad said, you know, you become that guy. Guess what they think about you when they've got stuff that the big guys won't buy.

Exactly. Let me give you a great example. Capital One is a big institution. We can all agree to that, right? Everybody. You know, one, their asset manager made a mistake by sending out an email one day and she carbon copied all the note buyers versus blind carbon copy. And everybody. Okay, you're laughing at over there. I see you laughing and you know it.

Reps do that all the time.

Who doesn't happen? Right? Yeah, but, so there I have their full list of note buyers from all across the country. How many people do you think were on that list?

I'm guessing less than 50.

No, try, try 448 to be exact.

That many. Wow.

But actually that's for the entire 50 states. That's actually a very, very small number. Now there are bankers and institutions out there. These guys are paid to keep the portfolio going and make sure it's going good. Many of them are not marketers. Most of them are not marketers at all. Okay. Some of them may have a small list that they reach out to their, their guys and guests. But they're always looking for people to, to buy because, you know, buyers may have some stuff, they may change their buying requirements. They may get a loan back in Martin's Ferry, Ohio that they don't have a buyer for. Yeah, but I'll buy in Ohio. So it's, it's a, it's a smaller niche compared to like your fix and flippers, your landlords. But it's still, I mean, there's probably, I don't know, 25 to 50,000 note investors like me out there. But that's a very, very, very small niche compared to what everything else is out there.

And they don't have a lot of choices. So that's interesting. So now, okay, going back to. I'm the loan officer. I think I want to get into this. It sounds interesting to me. I've heard about it. I don't have the money to buy those notes. Do I talk to you, Scott? Is there like, how do you get investors to help you with that, to get that started?

So one of the great things that I learned about from being alongside real estate investors was learning how to find investors with capital. And it's a really easy thing. I mean, you can go to your local real estate investment club association or your conferences that are doing fix and flips, stuff like that. That's a good place to network. But I like shooting fish in a barrel. Who doesn't like easy targets, right? So I like to go to the county records, I like to go into the appraisal district and doing a search out there. Now there a lot of investors will have something called a self directed ira. And there's companies like Equity Trust out of Ohio. It's one of the biggest ones across the country. Quest Trust out of Houston, Texas. There's about 50 different self directed IRA custodians where people will start an IRA account that they can use to buy real estate with or they can use to lend money out of or to buy a note with. So you can literally go to the county appraisal district in most states or most counties and type in Equity Trust or Quest Trust and it will pull up a list of everybody that has used their IRA to buy a piece of property. If you go to the county clerk of every county and do the same search and look for a deed search, you'll see anybody that's lent money out of their IRA in a private loan to other investors and you immediately know you have something in common with these people. They're a investors B they've got money and C, they're looking for deals. And what we do is very simple. You know, like what I used to do as a mortgage officer, I would pull investor. Listen if, if they bought a house five years ago, I would send a letter out or direct mail piece out to them, say hey, it's time to refi. Rates are better. You know what I mean? Let's get you get your refinance. Well, we do the same thing now, but we send a. Hey, saw that you bought a property there. Ironing. Are you looking for more deals? Are you looking for, is your money making you, you know, above average return in the banks? Let's, let's talk. We've got some deals and we're looking for investors to fund these things. And it's an easier conversation because these people, these investors already understand real estate investing. They often understand the process, understand the power of lending money out and at a great return to them. It's better than us going to get like a hard money loan at 12 or 15% and it's something that can be passive income for them and it's a win for us because if we're borrowing at 6 but we're making 12% or more, we're arbitraging the difference in making money without having to use our own money.

And do you have to set up a fund to be able to do that?

No, you don't need to set up a fund to do that. I mean you can if you're to do bigger things. But usually you're going to start off onesie twosie, right? You're gonna buy one note here, get your feet wet, two notes here. What we do is if somebody's gonna bring less than 250 grand, we'll put them in one or two note deals, give them a flat return on it and they'll be code named on the assignment that gets recorded with title. If somebody's gonna bring a quarter million or more, we'll put them. We'll create a special purpose LLC where they're partners in it. We are in the process of creating a fund, a reg a and raising a lot of capital so that we can take advantage of all the different opportunities that are coming across our desk right now. So yeah, there's, you don't have to, I mean a lot of people like, oh, you gotta start, you got a 5 million or 10 million. And that's what people used to think they used to have to have five, 10 years ago. You know, I bought notes as cheap as seven bucks before. Okay. You know, I'm looking at 31 assets right now worth about, oh, about $2 million. And we're going to pick it up for just under 202, 279,000. They owe about 1.1 on it. Quite a bit of equity there. But we're picking up roughly 25 cents on the dollar because they're, they're pretty distressed. Wow.

And then do you have a team then that, that helps you in making, you know, communicating with these folks and trying to make them perform it?

Yeah, that's, that's the great thing about us having a servicing company. They're gonna do, they're getting paid for a non performing note. You're gonna pay them somewhere around 75 to 95 bucks a month. They're gonna do the borrower outreach. You know, they're gonna send out the statements to make sure it's Dodd Frank compliant with the statements. Every, every month they're gonna collect the payments. You know, most states they want you to, you know, be a licensed debt collector. So you're collecting the payments and then I get a spreadsheet every month or I can log into the portal and say who paid, who didn't pay.

But what about communication with them as far as trying to work it out, hey, I can't make the payments, but I'm going to bring my uncle in. Or you know those things that we talked about at the beginning? Is that the servicing agent that's doing that with your directive?

Yep, exactly. So when we buy, I'll give you a great example like this, this portfolio I'm buying, I already know that probably half of them are get reperforming with just a quick letter campaign. Hey, we want. You don't even paid. This is your opportunity before we start the legal process to foreclose on you. And we have them contact our servicing company. And I've already directed my servicing company. Hey, when these borrowers call you borrower A, we're willing to do A, B or C. If they can't do that, then we'll go to D, you know, borrower two. I'm willing to do this, this, and here's the numbers. I'm willing to modify or willing to adjust things for. So we kind of direct them. They handle that outbound call or inbound calls. And then they'll actually create the documents and then send it over for me to sign off on and verify. Or like the bar comes back, say I wanted to bring say three grand to the table to reinstate their loan, but they only have 2,500. Well, they'll come back to me and I'll say, okay, yep, that's fine. We agree to that. We'll let have them pay 100 bucks extra a month for the first five months or something like that. But yeah, I don't, I'm not on the phone. I mean, I've been on phone calls with plenty of borrowers before and I've been through that licensing, so I could do that. No, I don't want to do that. I don't want to hear about grandma got run over by a reindeer for the 12th time. You know, there's. Most people want to stay in their house are good people, but you have that small percentage who will lie, cheat and steal so they don't make a payment for an extended period.

So it sounds like you're, you're analyzing these notes as you're onboarding them with your servicer. You're giving them your guardrails. You've seen, I'm sure for everyone you see, you've probably seen five like it or more over the course of the time. And so, you know, okay, here's where, here's what we're willing to do. Here's how, how far we're willing to go because we know the probability of outcome on this. Go, run with it. Make sure we're compliant in whatever path the borrower chooses. I don't need to know. Here's your, here are your guardrails. Give me my report. If something isn't going the way we want to go, we can relook at them on an individual basis. Interesting.

Exactly. So like I, you know, I know ahead of time, one of the. Part of our due diligence is besides just looking at the value of the property, we also look at the collateral file, the loan file, you know, these things that create. Now as a loan officer, we're creating loan qualification packages, right, for this. This is a loan de qualification package on the note investing side because I'll see the hardship letters. I'll see things that they've sent in. You know, I see the, the call logs that they've called in the servicing company and said, hey, I've got An issue or need some help with that? You know, I, I bought a loan one time with a lady, been trying to modify it for over four years, and all of her hardship letters and tax returns, all that stuff was in there. And the loan had been sold four times. And I get it as part of a portfolio. I'm like, why has this not been modified? This lady's already outlining what she can afford and at the price point that they're willing to sell it at, they're going to lose money. This is like a, almost a 80% cash and cash return to me in my first year. And I'm like, why? I was like, I'll take it. You know, it wasn't a big deal. The lady owed 60 grand, houses maybe worth 35. You know, she'd refinance and then the market lost her husband, got sick, had a heart attack, was out of work for a couple years. The lender, it was a, was a throw off note to him. Like you said, it was small valued asset. I was like, okay, I picked it up for 12 grand. Lady was able to bring five grand in the first year extra to the table. She made her monthly payments.

Yeah.

So at the end of the first year, I reduced her interest rate from like eight and a half down to zero and reduced her balance of what she owed from 60 down to like 37, because that's what the value of the property was. So every payment she made went to Prince. Principal and interest, or just principal, basically. So she then paid the house off in six years versus it taking her 33 years. Now I made 10 grand on my $12,000 investment the first year and in cash flow for another six.

You know, you also kind of did the right thing, huh? Because at the end of the day, you just helped a person that really had a genuine issue and struggle keep their house. That's, that's a great thing.

I. Exactly. Like I said, we try to do that most of the time. And a funny thing is six months into the deal, she sends me a postcard for Christmas. And it's got the whole family, her and her, her husband, Sheila, William and their three daughters and their first grandkid who had been born. And they named the grandkid Carson after me for helping them stay in the house.

So Amazing.

You know, that's a, you know, it's a great deal. On the other side, we got another deal that is dragged on 19 months. We've had to foreclose bar, tried to file, filed bankruptcy and that got kicked out of court. We Tried to offer a ma. We tried to offer a settlement and we just evicted them 30 days ago after it being delayed 90 days because it's down in, in South Florida. But you know that's a, that's a, that's a high end property. But it's, you know, for every good Sheila and William we work with, we would deal with a holes as well too from time to time.

Do you make a decision on judicial versus non states?

That's a good question. I'm not against judicial states. I just don't, like, I don't buy in New York or New Jersey. Those are the two longest two years in New Jersey to foreclose unless the vacant asset in three years in New York. Then however long it takes you to evict the tenants after that. But I will buy in God's waiting room which is Florida, you know, that's about 12 months. South Carolina, I'll buy there. Ohio is about nine months. Kansas is about a year. So I'll buy in some judicial states. I just avoid the longer, really, really long ass ones. I mean one of the great things is when we're looking at these, these files and stuff, we can see if the bar has been proactive. If I know that the bar has been proactive in reaching out and trying to come to an agreement of some sort, I'll usually buy it excluding those couple states.

So you get to see that documentation before you buy it.

Yeah.

Interesting.

Yeah, so I get soft copies. I'm not getting the actual physical file like I shared here, but I'm getting.

Assumed you're just looking at a tape with just data, but you actually get the information to help you decide if you know and that's where, where you know. Like you said, the, you know, one by one really makes sense for somebody like that because you can make a decision based on does this look like a real deal for us? Does it look like something I can work out and maximize our return and still help. Help somebody out?

So yeah, we'll, we'll, we'll get a spreadsheet first, make some just rough rotary offers. I mean I'm not even sending out a realtor to look at the property. I'm just pulling online values, just doing some, some formulas, send in a tape, you know, send in our offers and they'll either accept, the seller will either accept them initially or counter or decline them, which is fine. If they accept them, then we or the counter, then they'll send us over all the, the collateral files, all copies of the servicing notes, whatever we request payment history and that kind of stuff. And then we're looking through that to see, okay, is the bar making payments, what's going on? We'll pull title, of course, to see if there's any other liens on the property or stuff like that too.

And do you have issues with property conditions?

Yeah, sometimes. You will? I mean, when we do, when they do accept an offer, then we'll start paying for somebody to go out and look at the property. Now we're not going to get into your access most of the time, but this is why I like to buy occupied assets most of the time. Because if somebody's living in the property most of the time, it's in pretty decent shape. You know, you'll run into a few hoarders and stuff like that.

Oh my gosh. When I was at bank of America and we took over the Taylor Bean and Whitaker portfolio of like 6,000 distressed properties, I had to hire and a team of like a hundred people. We had to send out the property preservation crews to get a look at what we were working with. Yeah, I'll never unsee some of that stuff.

Yeah, I mean, you see the best of people and seen the worst of people. I mean, to people. Yeah, yeah. You know, actually I remember when that, when they took that over boss Masses from TBW back in the day. And you know, one of the great things about bank of America back in the day is they had that whole titanium program and they first started, first started Equator back in the day for a lot of agents out there handling short sales and stuff like that. But yeah, we'll use a third party vendor, Realtor, BPO company to go out, take photos of the exterior.

Yeah.

And then we can often tell a lot about the interior by based on the notes and what's going on with the exterior.

Zoom on the window that's open.

Yeah, exactly. If the door is wide open and it's been open for two days, it's probably not a very good. Right. If it's been vacant and unsecured, we don't even touch it because we know.

It'S probably unsecured or. Those were the worst, worst. Worst of the worst. People get mad that they couldn't make their payment and they have a. For some reason they feel like they need to destroy everything in their wake as they leave.

Well, you know what's so funny about that is we also will put insurance on. We put fourth place insurance to protect our investment. So if they go do that, I just laugh. I mean, thank you. I Get an insurance check now and.

Still can get a brand new product.

Rehab and then I can still file against you for the damages. You know, I don't usually go after them for like a deficiency or anything. We'll just, we'll just 1099 of them for the damages and the lack of payments.

Sure. So, Scott, if there's, you know, somebody that doesn't have the resources, doesn't have the investors, but can Bird Dog, you know, they maybe have some connections, they don't mind making the phone calls to servicers and that sort of thing, can they work directly with you?

Yeah, we, we had definitely been doing. We worked with people all across that country that get started off and it's kind of why we started teaching, actually, because I was making phone calls and getting stuff in that I couldn't take down myself. So it was a great way for me to start teaching people how to do this, to move more product but also get more assets in. So that's why we started the podcast, the Note Closure Show. It's also why we started teaching our, our workshops. Just because we call it no Buying for Dummies. Yeah, you know, it's just a way to show people how to find what to say, what not to say. Because there's definitely things you don't want to say to an asset manager. You don't want to say, hey, I'm bird dog and flipping this. Bankers don't like to hear that. They want to hear that you're buying for your own portfolio. We show them how to market, define actually how to go to the county records and you know, what to send out to them, what to say to investors to raise capital. Then also how to evaluate what the hell you're looking at when you get a tape. I mean, I've seen some of the best agents have like breakdowns looking at a tape of assets, like, oh, where do I begin? You know, or they're not all deals. There's a lot of duds in the deal sheet and you know, filter down. We always like to tell folks, hey, start off like three to five states that you're comfortable with and work through a few deals. And we've got a really great Facebook group of our students and listeners and stuff like that out there to ask questions. And yeah, we've got some coaching and stuff like that. But it's part of the podcast is to help people kind of understand the process and then digest it little by little.

Yeah, honestly, that's what really attracted us to it because we do think that this is going to have some appeal. And you had mentioned to us that you wouldn't mind for our audience giving you a little weekend. So it's a weekend course that you put up, I think it was.

Yeah, it's called Note Weekend. It's a one day course that we usually do the third Saturday of the month and then we restream it on Sunday. It's usually 99 bucks. It's about, it's me teaching from basically 9:00am to about 2, 3:00 clock in the afternoon, going through how to find fun and flip. Just giving you the Cliff Notes version and allow you to dip your toe in the deep end, see if it's something that you like and then you get that for free.

Awesome.

Why don't we do this? If you go to noteweekend.com and register for the class and use the discount code real. Was it real411, right? Yep, real411, no space, all caps. You'll get the class for free. And if you can't make it on a Saturday, don't worry, we'll send you the replays, the most recent one, so you can watch the replays and go from there.

And then you'll make sure to put that in the notes below our post as well. Scott, along with your, your website, this is really like unique and great information I think for our audience.

I love learning new stuff. You know, you've been in the business as long as we all have and anytime you can pick up something that's different than the stuff everybody else is doing, it is really, really cool. And again, I think it's a huge value add to loan officers out there in today's market. You know, diversification is really the key. So I have a question for, for you and it's a question we ask every single one of our guests on, on this podcast. Everything you've been through, everything you've learned, what would you tell 20 year old Scott if you could talk to him today?

Ooh, what would I tell 20 year old me? Man, that's interesting. That's a good question. I would simply say stay on the path that you're on. Because I look back now on the changes, the jobs that I've had going from one thing to another, going from working at Enterprise, Rent a Car, Rent a Wreck is the first, you know, management training taught me what I didn't want. That led me to sales at Verizon, that led me then to Chase bank. That led me along the path to prepare me to where I'm at for today. And I would say stay humble, be coachable. I think we all have people presented in our lives that sometimes we think we know more. We know we really do. And it's there. People are coming to us from a coaching or a mentoring aspect and experience is, is worth a life worth so much when you can sit down with somebody one on one and, and really gain that experience. If somebody's willing to, you know, give you that information, take the time to share it and just shut up and listen. God gave you two, two ears and one mouth. You should be doing that in, in that ratio. You know what I mean?

Took the words right out of my mouth. So much of what we've learned over these years has been by the grace of other people that knew more than we did and were willing to tell us. And we were smart enough to shut up and listen and, and take some notes to make ourselves and our careers better. No, no.

Pun intended.

Pun intended. Well, Scott, I have really enjoyed chatting with you, learning a lot about what you do. Thank you so much for the offer of that, that free code for anybody, any of our listeners that would like to jump in and, and, and learn more about this. I think this has been a really enlightening and a really cool conversation and we thank you.

Yeah, thanks a lot. I really appreciate it.

So honored to be here, man. And then for those of you guys that are listening out there, do them a favor, hit that subscribe button and make sure you leave a five star review. Come on. We as podcasters love to hear from our audience and if you love what they're doing here, make sure, you know, leave them some love.

Right. You've obviously done this before. All right, well, thanks again, Scott.

Thanks.

We'll talk to you soon.

Yep. Get Real 411 is hosted by Brad Rice and Jamie Cavanaugh, produced by Stuart Jelen, and recorded live from the Amerifund Home Loan Studio in Simi Valley, California. You can learn more about the show at getreal411.com and watch full episodes on YouTube. If you're interested in being a guest on Get Real411, email bookingetreal411.com Please subscribe, rate and review us on Apple Podcasts, Spotify or wherever you get your podcast.