Scott Carson – Double Check The Worst Case

Welcome to the Men on Purpose Podcast featuring dynamic conversations with emerging and established visionary Men on Purpose. Thanks for joining us today as we celebrate the Men on Purpose who are committed, creative, courageous change makers all around the world. Now here's the host of Men on Purpose Emerald Green Forest.

And welcome to another episode of the Men on Purpose Podcast where we celebrate men on Purpose and provide our listeners with wisdom and immediately actionable steps to be more purposeful, powerful and positive in their impact and their leadership. I'm Emeril Greenforest and today I have the pleasure of bringing to you Scott Carson, also known as the Note Guy. Scott has been an active real estate investor since 2002 and solely focused on the distressed mortgage and note industry since 2008 where he buys and sells non performing mortgages directly from banks and hedge funds on properties all across the country. Scott is the CEO of WeClosenotes.com, an Austin, Texas based real estate firm. He's purchased over half a billion dollars in distressed debt for his own portfolio and purchases assets in over 30 states across the United States while also helping thousands of other real estate investors make money along the way. So I'm really excited to have you with us today, Scott. I actually had the pleasure of meeting Scott in person at the New Media Summit and Scott is one of those guys who's just, you know, it's interesting because you're in this very interesting business, but you're also incredibly generous and incredibly big hearted. So I'm very, very, very honored to have you with us today and thank you so much for being here. Scott.

Hey, I am jacked up, excited to be here as well. Thank you so much for giving me the pleasure to be on here as a guest. I tell you what, there's a New Media Summit was a great event and you are one of the people I so enjoyed visiting with there. Get a chance to know a little better over a couple days. So thank you so much for having me.

Yeah, well, you were quite a presence there, Scott. I mean, you're just quite a presence in general. And so I want to talk to you because the business you're in is really interesting. I want to talk to you about how you got called into that and I'd love a little bit of a backstory on your own kind of journey to that calling and also like why distressed mortgages, you know, so I'd love to hear a little bit about both your personal journey and then this particular niche, this particular industry that you have been called into serving.

Yeah, that's A really good question, because most people don't know about what this little niche avenue is unless they've watched the Big Short or Field of Dreams or too big to fail to hear about it. How the heck do you get into something so niche in the real estate community? And I take it back to, I think God and faith prepares us for different things along the way. We don't know what that journey is going to be till a few years down the road. And I was like many people that graduated college, business degree, got in the workforce, was married and was going to be working, trudging along that 9 to 5 kind of space, and thought about being a real estate investor. And I'd grown up in a hardware store that my dad owned for 20 plus years. And so I could fix a lot of things. But we bought a couple houses at the boom in 2003, 2004, and then the market went south here in Austin almost immediately afterwards. And so I found myself being a deadbeat borrower, being somebody who was in default. Fortunately for me, we were able to get out of that bad situation, keep our house, and kind of move on to a different line of work in banking. And then fortunately for me, in 20 later on 2004, 2005, I had a local investor here approach me about coming and working with him on the mortgage side, doing mortgages originating. Guy turned out to be a really great buddy of mine over the years, still is. And he was working with a couple other investors that were traveling the country teaching about creative financing, owner financing, and a little about distressed mortgages. And so I was just fortunate to be in the right spot where I basically had like a three year apprenticeship with these people of not only creating mortgages, but learn all this creative financing. And then when everything hit the fan in 2008, 2009, I saw an opportunity when everybody else was running screaming, oh my God, this guy's falling, this guy's falling. To kind of flip over from originating mortgages to start buying them. And really, I like to make the joke of working to help make America great again, one mortgage at a time, of buying this debt and then reaching out to homeowners and say, listen, I get it. I've been in your shoes before. I empathize with you. Let's try to create a win in here. What happened? And let's try to get you back on your feet and get you out of this nightmare you're in and back into a dream of homeownership.

Oh my God, that's so beautiful. Because you could Be the kind of guy who just buys up the notes and kicks the people out.

Right, right.

So I knew there was a big purpose to having you on the show. I'm really glad that you're here because it's literally like you're the mortgage angel for a lot of people, I'm sure.

You know, we have done. We have helped a lot of people out. I mean, we have bought a lot of debt in a lot of different places. And we love helping people. I mean, we try to help modify keeping the house. We can. I mean, I don't run a charity. We donate to those. We try to help them as best we can. I mean, some people just can't be helped. They've got their head in the sand, so they tell us to go pound sand, and that's okay. You know, I run a business here. We help, but, you know, we help those that want to be helped as best as we can, and we move on there. And, you know, the way I look at it, karma does come around. If you can help somebody with a hand up, it comes back to you tenfold. I was very fortunate when we got started in this business of me buying this stuff in 2008, 2009, I had a business partner that kind of went south about 2010, 2011, and I literally just sold everything here in Austin. It was kind of a funny story on faith that I gotta get out of town. Sold everything here in Austin except for my dog and the truck. I'd not gotten divorced at this time. I've been divorced for about two years, but started driving across the country and just meeting with investors and talking with realtors and meeting with bankers and honestly meeting with some of my borrowers. And it's just been amazing. Now you look back at eight years since I launched that I was literally on the road for three years straight, just basically talking and working, just kind of guiding myself along the way. And I never said no to an opportunity, and things just kind of blossomed from there. And so that's why I always have. I'm always trying to help people as best I can, whether it is in real estate or podcasting, because I think you don't know what you don't know until you've walked those steps that somebody else has. And I think the most successful people are those that are the most giving with their time and energy. And we try to do that. Hey, if I can help somebody, an entrepreneur or, you know, podcaster or mortgage broker, whatever, real estate investor, we're going to do it.

Well, you Know, it's really cool because I just recently watched the movie Margin Call.

Oh, yes.

So I understand better now. Exactly. Specifically and precisely what happened. And, you know, I think the interesting thing, Scott, is that most of the people who ended up having to default, they were doing the thing that they thought they were supposed to be doing, and they were, you know, they applied and they got approved, and then the next thing you know, everything went sideways. So I find it really fascinating and how courageous of you to, during the time when everything is imploding, like, you went into the implosion and, you know, became, for a lot of people, I'm sure, a heroic figure in their life. And so. Yeah. So thank you for doing that. And that takes a lot of courage. It also takes a lot of courage to buy into. You were buying in when everybody was bailing out. That takes a lot of courage. It takes a lot of vision. I'd love to have you tell our listeners what you do to exercise your courage muscle. Like, where are you getting all this courage from? And how do you keep yourself pumped up to stay wholeheartedly invested in your own mission and your calling?

Those are good questions. I'll tell you this. I've always had a sense of fearlessness, even from as a young boy. I was never scared to do anything. Yeah. If I got bruised or black eye or something like that, or got my finger caught in something, okay, let's move on and figure a different way to do it. But I'm a big believer that if you're really going to find what you want to do, success, you've got to get outside of your comfort zone. You've got to expand your comfort zone on a constant basis. And that's the only way that I think that we grow as individuals is doing that. So that's one of the big things. I enjoy new experiences. I enjoy learning more from my failures than for my successes. Just I've had some really great mentors along the way, like my buddy Greg Reed. He's the author of Think and Grow Rich Three Feet From Gold. He talks about how in five years from now, we'll be the average. The only thing that'll change about us in five years is the books that we read and the people that we meet along the way, how we're the average of the five people that we hang out with the most. So I was doing a podcast this morning talking about how if you're not happy with where your tribe is at, you gotta get. Get outside the tribe to go find another one. And that's one thing that I think I'm constantly doing is looking okay, how can I surround myself with good people? Another big thing is I'm anti negative energy. It just if you've got Debbie downers around you, you know what I mean, you got to get them out of your rotation, you got to get them out of your atmosphere. That's the biggest thing in my office because we have deals that come in and go well, then deals that just go south for a reason or investors walk away. And so I've instilled a 30 second bitch session. Basically that's all I got. Chance to worry about that and let's keep moving forward. So that's part of it. I do have down days like anybody else does, like, oh, I'm tired. But what I love about what we do is you never know who you're going to help today, who you're going to talk to on the phone podcast is going to come up. Huge thing. You don't know what kind of letter email you're getting from listeners. I know you deal with this all the time too. It's just, you know, I just love to stay plugged in and constantly, constantly growing. How can I make myself just a little bit better today than I was? And that 1%, if you do that on a daily basis, you look back in 30 days or 60 days out there of working to better oneself, man, you'll come a long way really quickly.

Yeah, well, I think that a lot of people get overwhelmed by the idea of where they might want to go next and they just put the brakes on before they even take that first step. And so one of the interesting things that you've done, in addition to buying half a billion dollars worth of notes, which is frickin epic beyond belief that you've done that, is you've also created something where you're helping other people learn how to be in the business. So I am sure that in the process of creating that, you probably maybe ran into some creative challenges and you probably also run into some people who, you know, they think you're talking a good game, but they don't really, they can't buy into the vision themselves. So can you talk about both the creative process of creating your own educational arm of your business and then also about how you help talk people off the ledge to open their wings so that they too can fly?

Oh, those are great questions. So I like to take a look at things and I'm not afraid to embarrass myself. Let's just put it that Way I'm not afraid to make fun of myself. Like, you heard, I got noisemakers around my office that just keep me entertained half the time, and toys, because I think we all have. I like to entertain that inner child. Okay? So one of the things I like to do is I always look at what draws my eye, what keeps me entertained, things like that. So I like to do a lot of crazy marketing things. I went out and bought three Tyrannosaurus Rex outfits, and I had my staff running around the office and Tyrannosaurus Rex outfits one weekend. Or I lost a bet and had to wear angel wings at an event all weekend. So I twisted it to people making fun of me. I said, well, I'm just the angel investor for the weekend. You know, I love movies. I go see, I see a lot of movies. That's kind of how I energize. So I come up with great ideas and try to, you know, figure what's going on, whether it's like the Big Short or Marvel. We did a series, Iron man vs Captain America, where me and versus one of my rivals, I guess you could say the industry, not really rivals, but peers. We had a lot of fun with that. I think as a leader, you've got to be willing to do the things that others would not be willing to do. And for 90% of it, it's worse up here in our head than it is actual in real life. And so, like I said before, I'm not really scared of anything. I'll go out and be the life of the party just to help people feel a bit more comfortable. And that has really kind of bled over into our education side of what we do, because people see. I'll give you an example. We just had a few of my coaching students in this weekend, and at the end of the first is like, oh, my gosh, you gave us so much stuff and so many lists or other leads. I'm like, well, that's great here. I believe that if those that really want to succeed, if you give the person the tool or the axe or the pen and they want it achieved, they'll go out and do it. Those that won't aren't going to do it. But I'm not going to let somebody come back and say, hey, that I was the cause for them not hitting their success. I want to give them everything that they need to get to things. And it kind of comes back from when I was mentoring originally with somebody. Originally, back in my early days, you know, I made a promise. Listen, if I Get ahead, get out of this bad situation. I'm gonna promise to help anybody that I can along the way.

Beautiful. Well, we're gonna have to take a quick break here, Scott, and I want to thank all of our listeners who are downloading, rating and reviewing. We've already had thousands of downloads from all over the world. We are now up to 68 countries. And I want to shout out, that's awesome.

That's awesome.

Play with the toys. Let's play with the toys. I'm going to shout out today to Austin, Texas because, hey, that's where we close Notes live. So let's shout out today to Austin, Texas. And it's funny, across the US the only states that I do not have downloads coming from is Vermont and Arkansas. So maybe you can drive up to Arkansas for me, Scott, and download one of the episodes so we can get that one on the map.

I'm glad you reached out. I'll share across my database and we'll call them out.

There you go. I'll go run over to Vermont and download and you can run up to Arkansas and download for me. All right, we're going to be right back with Scott Carson.

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And we are back with our special guest Scott Carson from We Close Notes. In fact, if you want to know more about Scott we, about the events that he puts on or about his educational arm of his business where he teaches other people to do the same things he's doing, please go to weclosenotes.com it's a very robust site, has all the good stuff going on there and you will be able to find all kinds of information about how you can get started yourself if you are feeling some courage building up in you. All right, so Scott, let us talk talk about Accountability. I call this my check in question. How do you hold yourself accountable and assess your progress and adjust yourself along the way to align with what you really want to create?

Oh my gosh, that's such an important thing, especially the time of year that it is. Everybody, I'm a big believer. And you've got to have goals and you've got to do besides just coming up with a goal, like a resolution, you've got to share that goal. You've got to write it down where people can see it. You can share it with the people that you're surrounded. So one of the things that I do to hold myself accountable, oftentimes I'll take my goals, we'll get it laminated from FedEx and I'll post it on my mirror in the bathroom, on the tv. I'll tape it to the bottom of the tv, put it in my office, in my truck so I can see it. So I hold myself accountable. But I also, I empower my students to call me out if I'm not doing the things that I need to do. I'll be the first one to say, you know what, you're right. Let me go ahead and get back on it. Now. We all are going to struggle. We're all going to fall down our goals and things like that. But you have to give yourself permission to fail, permission to kind of, especially if you're struggling or things like that, put that goal down maybe for a little bit, take a break and then pick it back up and run with it. So I'm big about visualization and sharing what I want to accomplish with the people that around me the most. That way they can go out and if they see something or the ability to help me, they can help me get it done and be more successful a lot faster off. But it's proven that if you don't write your goals down, you're 50% less likely to have the good things happen to you.

Beautiful. Well, Scott, I got a question that's kind of bubbling inside me that I just have to ask you. It's kind of off what I normally would ask somebody because of the very unique nature of what it is that you do. How do you, because you are such a generous, big hearted guy who wants to help people and who genuinely has created a system that allows people who are in bad situations to get some help. How do you navigate your own emotional desire to serve and help people when they are in so badly that it's just an impossibility? Like the numbers don't Add up, the business doesn't work. You know, like there's no, like the no hope kind of situation. How do you navigate that and how do you reconcile that within yourself as well?

That's a really good question. We get that because we do have to make some tough decisions sometimes about whether a, to let somebody stay in that house or start the foreclosure process. I will tell you this, I'm very, very blessed that in this business we rely on our vendors to do it, our attorneys, we rely on a lot of our servicing companies. They're the ones that are in the trenches talking with borrowers on a day in, day out basis. And I get emails from people with numbers and stories and things like that. And so one of the things that we love to do if we can, and it's a win win for us, is if a borrower is not able to make payments, can't stay in the house, we'll offer up cash for keys and we'll offer up, hey, five grand to help you move out or two grand or do you have something in come take over the payments aspect of things. We kind of have a checklist that we go down to to see if we can help. I mean we've done anywhere from giving them 500 bucks to 10,000 to move out of the property. So I hope none of my borrowers are listening right now. But anyway, after a while you can smell somebody, call them bs. And while I don't get on the phone and talk with my borrowers much anymore, I'm not opposed to do that sometimes I, you know, got on the phone and talked with borrowers. What's going on? What's really the situation here? Let's talk and let's come to a conclusion or solution today that works for both of us.

Sure.

And let's move on and let's get you back on track. You know, we give people opportunities. If they don't follow through those opportunities, there's not much that I can do to help them out. Otherwise we're really blessed that we got a great team that helps me out with that and that helps me identify opportunities and to really help those that want to be helped.

Beautiful. And my sense is that literally you've created a massive cash flowing machine. Your business is just constantly cash flowing to you. I would imagine.

We do pretty good. We do pretty good. I'm not gonna give any numbers, but we do pretty good. We can't complain. We buy, we're buying usually a couple hundred assets a year, some we keep for ourselves. We do really well with our investors. Some we sell off to other students. So yeah, it allows us to have a really great life. We do a lot of fun things, travel quite a bit, you know, I can't complain. We do well. I look back 10 years ago and if I thought about this is where I was going to be at today, I would have said you were lying out of your butt.

So how do you choose? Like how do you choose what notes you're going to buy? How do you choose like who you're going to bring in for investors? How do you choose? Like not specifically like individually but like what's your choice making process? Like how do you discern what's a good thing for you to do to move your business forward? Who are the right fit people to be playing the game with? Tell us a little bit about your choice making process.

So those are really good questions because I will tell you this, I am not, don't get me wrong, I love making money but I have turned investors away who just did not have the right fit. And I'm a big believer especially we have a really great tribe with what we do with our students and things like that. And so if somebody's not gonna be a good fit, it's not gonna have a. We coined a term called co opetition. Alright? We want people, obviously everybody's working for their own families, their own dreams or legacies. That's great. There's plenty of business to go around I'm a big believer of. So we like to cooperate together, share sources, share vendors, share stories and then we're all competitive in nature as well. So that's one of the biggest things. The second thing I would say, trust my gut. If somebody, if I just have a bad feeling about somebody, I'm like, look, no offense, I just don't think you're fit for us. You know, I don't want your money. I mean we've had, I've had coaching students fly in, it's you know, gonna pay us 15 to 20 grand. And I'm like, listen, I don't want your money. Let me know what it's cost to fly in and stay here. We'll reimburse you and wish you on your merry way. And some people don't like that and that's okay. I don't need that money. You know, anytime we've ever gone against my gut, it ended up costing me two to three times of what I should have done. I think we're built with this inner compass and a lot of People don't trust it. You have to trust that so that when it comes to dealing with investors and students, as far as borrowers, it's a numbers game. First and foremost, what can you afford versus what we're paying? Where is it located at? What's the situation? The beautiful thing is when we're buying this distressed debt, we often get access to the notes on the file from the previous owner, so we can see what kind of stories have been told or if it's the truth or any other truth. And then my team does a really good job. You're gonna love this. A Facebook stalking our borrowers. You know, we've had some interesting stories. Like one borrower was gonna say, oh, well, it's either I'm gonna pay my mortgage or I'm gonna go to Disneyland today. I'm like, well, that was from a day ago. Now we know why you didn't make a payment this month. You know, another one was going through a bit of a transition. He needed to pay for some implants. He was going through some transitions. Okay, great, fine. Another person sick, you know, or had a death in the family, things like that. So, you know, we have. We do have a heart, but it is, you know, it's kind of a black and white game here as far as numbers and going from there. But, yeah, if the story matches up, if somebody's got their third grandmother that's passed away, we'll cut you some slack. One of the things we love to do is if you've made your payments throughout the year on time, come Christmas, we'll forgive you a payment so you can have a better Christmas.

Beautiful. Beautiful. So what I heard mostly there is that you trust your own knowing, and that's, you know, the most important thing I want to make sure that we communicate to our listeners is that trusting your own knowing and your own. I call it the compass as well. In fact, I've got a book in process called align your compass.

Nice.

Yeah. So awesome. Well, we are very close to the end already, Scott. It's amazing how fast this goes. So I have to decide, do I want to ask you the challenge question or the celebration question? I feel like I want to ask you the challenge question because I feel like you've already shown us how you celebrate. You have toys around the office. You dress up like Tyrannosaurus rex. So I want to know what your biggest challenge is personally right now or a massive challenge other than being what you call the deadbeat borrower? Other than that. Another massive challenge that you have overcome either what's presently in front of you as your big challenge or something else that you've overcome.

So a couple years ago, I was traveling across the country on a regular basis, speaking, hosting seven, eight events a year, and I was literally killing myself. Traveling 40, 50 weeks a year is not a healthy thing. No matter. Don't be wrong. We were having some fun, but it wears on you. And so we had the challenge of what do we do to kind of not travel as much anymore without giving up the business. So we decided to. We moved our business from being on like a hotel event and workshop thing to going 100% online via like zoom, like what we're using to record this. And my team, my sales staff, even some of my peers, like, oh, that's never going to work, you know, And I'm like, well, we're gonna give it a try at least. And it worked brilliantly. I mean, it was awesome. Okay. So well, that literally in a month, we canceled our rest of our schedule for the year and rebooked everything online. So the last three years we've done a really good job with really being the leaders in our industry of doing online workshops and events, especially for the note and real estate industry. So that was a big challenge that we overcame. Loved it. I still travel quite a bit, but it's a lot more for fun now than it is for just work with what we do. Since we buy distressed assets. With the market recovering like it is, people are doing well, Job growth is back. You know, values are going up. It's gotten a little tighter in our industry. And our biggest challenge is sharing with students and people out there. Hey, there's other ways to find these types of deals. You just can't go to the low hanging fruit. And so it's constantly sharing with people. Hey, here's new sources, here's new ways to do the business and pivoting or, you know, evolving a little bit, their business versus what it was a year ago, two years ago. So that's the. We're kind of the shining light out here. The lighthouse, I guess you could say, like, hey, no, here's what you do now, you know, and I'm not afraid to mix it up with people. Oh, this doesn't work. Okay, let me prove you wrong here really fast. But I think that's always a challenge as markets evolve and things like that is always trying to stay two steps ahead of where the market's going.

Yeah. And what goes down has to go up. And what goes up has to go down. And that's just the way of things. Yeah. So. All right, well, we are at the end. Thank you so much again, Scott, for being here. Listeners, we love feedback. Please let us know what you thought of today's show or send in questions or guest suggestions to listeners@menonpurposepodcast.com we might even give you a shout out on the show. Please find out more about scott@weclosenotes.com and also listen to his podcast, the Note Closers show, because I'm sure you'll learn a whole lot more by listening to that as well. I want to thank you all for tuning in. Keep your ears open and remember, you are magnificent men.

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