Session 1 - Scott Kicks Off the Virtual Note Buying Workshop

Good morning, Good afternoon everybody. Good evening. Depending on where you're joining us from, welcome to the November Virtual Note Buying Workshop. We are here to help you dive into the sexy side of real estate. As always, guys, I'm Scott Carson, known as across the country as the note guy and honored that you joined me today, tomorrow and Sunday for three full days of content. Or maybe you're watching the replays and catch the replays. So whatever, three days you're watching this. We're glad you're here and I want to start off setting some basic ground rules for you guys to understand whether you're joining us live, watching the restream, there are no dumb questions and I mean that. And you're sitting there watching the replays, you're like, well, how can I ask questions? Very easily you can book a time on my calendar by going to talk with ScottCarson.com that will get you to my calendar and you can book a 30 minute session with me anytime on the questions that you have now. You're not going to learn all about buying notes and note investing in just three days. You're going to learn more here than you would really any other place. I'll tell you that right now. We pride ourselves in providing no nonsense, no smoke blowing, no run to the back of the room, pull out your credit card kind of thing. We're going to dive into literally how we find deals, how we raise capital and fund these deals, and then also the different exit strategies on how we make money from either A, getting the borrower back on track for cash flow, B, taking the property back in A, cash for keys, some sort of friendly foreclosure workout assumption. There's a whole variety of different exit strategies involved with it. Or C, if the borrowers won't play ball with us, then we have the legal right to go and foreclose and take the property back that way or sell it at the auction. Now we'll cover all those extra strategies throughout the weekend. Today, day one is all about finding deals, all about how do we go about locating these types of opportunities that are out there. There are a ton of ways to find notes. There's a ton of ways to find the right people inside the banks, inside the lending institutions, inside the mortgage companies who handle the distressed debt sales. No, there's no like multiple listing service for notes like there is with traditional real estate. Okay. And I've always come from the school of a thought. Well, I'll tell you, not just school of thought, but the school of actually doing all Right. When people think about note investing or they think about buying notes really overwhelmingly right off the bat you think about buying an owner finance note or buying on terms you got a borrower degree to do creative financing with you and carry the paper. And that's a great way. That is one way of the note investing side of things. But what I have found in my 20, wow, it's hard to believe 24 years. Coming up on 25 years as a real estate investor and specifically dating back to 2007 at 18 years is I've found it's easier to go direct to banks and I chase owner finance paper. Yes, you can still buy owner finance notes. Some of the things that we'll talk about marketing wise tomorrow will help drive that to you. We'll talk a little about how to find them today. But the biggest thing is I never found it fruitful enough where I wasn't banging my head against the wall to get owner finance sellers to sell me their note. Because let's face it, most owner, most people that have owner finance or property or carrying paper, they've done it on one or two properties for the most part. Yes, there are professional real estate investors that do that differently. I'm not going to not bash them, there are those out there. But the mass majority of people have like one or two notes. And for you to buy a list of leads on people who have owner finance a property you then have to send out a lot of direct mail campaigns and we all know direct mail has a 1 to 4% response rate. And then talking to people that really don't want to take a discount and the reason they owner finance the property for some sort of reason is usually because a they couldn't sell it traditionally is one of the biggest things it could as a tradition because most people would rather sell it and get all their profit on the deal immediately. Yes, they get sold on the idea, oh you'll make more money over the lifetime of the note. Time value of money is a little bit different. If you're getting 90, 95% of your profit on the front end, you can do whatever you want with it versus being drug out over 5, 10, 20 years. And I've always found that when we were talking to a lot of owner finance lenders, they didn't want to take a discount. They were just kicking the tires for the most part. So we've always approached it from a different way. If I can get a hold of the right asset manager at the bank, I not only like have a motivated seller, I'LL have a motivate seller who has a lot of inventory that they can send to us on a regular basis. Usually at least once a year. Banks and letters are going to be selling. We're coming up on that. With it being the, the fourth quarter that we're now in and the first quarter of 2026. I don't think there's any better time than we see going on in the next six months compared to like the last six months. Yeah, we've seen a peak. We bought plenty of stuff but over the next six months we're seeing a lot more stuff come hit the market. Already started to see that here in December 2025. But that's the thing is, is when you are into the right departments of the banks where they're sending you the list where you don't have to send any costly email or mail campaigns out, they get a 1 to 4% response rate. We send zero direct mail out to achieve get leads in, ladies and gentlemen. And then we can cherry pick these lists. No, we don't have to buy the whole list. No, we don't have to buy hundreds and hundreds. We can buy a one off note all the way up to 2030. Currently we're working on a portfolio of seven notes that we bought from a bank who's in on 18 that we made offers on and went back and forth and finalized on 7. We'll probably end up finalizing because we're in the due diligence process of two to four notes. Somewhere around there. But still could be a great day. Legion on that was email campaigns and online marketing. But we'll get to that a little bit later on here. What I want you guys to know is that we have people from all across the country join us throughout the next three days. There are no dumb questions. You can ask your questions away. I just ask that you stay on point with your questions. So we're covering how to find notes. Don't go ask me something about funding. All right. We want to keep that to where we're at. Like I said, stay relevant to the content at hand. We will take plenty of breaks throughout the three days here for you guys so you can step away, grab a cup of coffee. You know, if you need to make a phone call or two, you'll be able to do it in the breaks for you today and on Saturday or day two, we will break for about an hour. For those that are joining us live here, obviously we break from. For about lunch. For an hour. For about lunch. Right around 12 o' clock central, my time. And on Sunday we'll take a 30 minute break midday way because we'll wrap up about 3 o' clock on Sunday. I know that the mind can only absorb what the but can withstand. So I know that sitting on your keister for three days can be a long process for some of us. But that's okay, ladies and gentlemen, you've got to step away. You've got a family issue, business issue, stuff like that. Don't worry, we're recording and we'll have the replays out to you not too long after the workshop for you. But what I would love for you guys to do, I know I need to go in here and enable the chat in the Zoom here is what are your biggest needs, your big questions that you're looking to get over the next three days? What are your biggest. I don't understand this or here's one thing I'm really looking forward to. I'd also like for you guys to share kind of what your focus has been. Where are you at, what part of the country? I know, but most folks don't know. So what part of the country you join us from and what's one or two or three if you've got it, your biggest nuggets that you're looking to achieve knowledge nuggets before the weekend is up. Like how do I find these deals, how to raise capital, how put the two together, how do we do due diligence on an asset, a non performing. Why, what's a note? All right, so if you'll do that in the chat roll for me, I appreciate it. We are also, I know we got some folks that are out and about, can't jump on Zoom, but they are probably watching us on the YouTube live stream. So if you're joining us live on the YouTube live stream, that's great. We won't be leaving these up throughout the end of the days and stuff like that. Basically we'll run it live for you to be able to join us live during the class. But as soon as the class wraps up, we'll basically be making those private. And so if you are watching there, just make sure you join us back on Zoom and stuff like that for you guys. But anyway you also see received a manual. We'll go throughout the manual a little bit. A lot of sample forms, contracts, stuff like that. Wants to be updating that relatively soon here in the new year with some new stuff for you guys and we'll send that out for you as well. But I've been buying notes, like I said, since I bought my first one back in late 2007. My journey as a real estate investor is like many folks, my first property bought was my primary residence out of college in Round Rock, Texas. Had great credit. Bought it with basically nothing. Down in 80, 20 loan with my ex wife at the time we bought it. We're excited about it to buy our first house. And so we weren't renting. And of course, along the way, our realtor came to us, said, hey, you know, you guys got great credit. You should think about buying some other real estate, becoming a real estate investor. I'm like, yeah. I mean, I grew up in a small town in Ingleside. As I say, I'm just an Ingledink from Ingleside. When I grew up down there, it was about 35, 4,000 people. It's down by Corpus Christi, Texas, right. On the Gulf coast of Texas. Grew up there. My dad owned the local hardware store, right? And I worked in that from the time I was in the fourth grade on. And so there's a lot of things I can fix. I wouldn't say I'm as bad as Tim the Tool Man Tailor, you know, but I can, I can repair some things. I was like, yeah, I should do that. I could. I definitely like this. Of course, I had read, you know, recently read the. The book Rich Dad, Poor dad, like many folks that motivated me, like, yeah, let's do that. So we ended up buying two more investment properties, 100% financing on that stuff. I was gonna be the next landlord, you know, and about 90 days after we closed on that second one, I mean, we renters into both the properties relatively easy. We're gonna make like 200 bucks in cash flow, which is, you know, what we were told we should shoot for. Well, like I said, About 90 days after we purchased, I ended up getting laid off from my job basically in the finance industry. All right. I was making set to make six figures as a young guy and was pretty excited about that. Well, what happened? I got laid off. We got walked into a conference room and they closed the whole location down just like that. That was not a good thing. And then along the way, my two tenants who both ended up working at Dell Computers in Round Rock, both got laid off. So I was a little stressed because we were suddenly now responsible, paying six mortgages, three first and three seconds, and only have a private school teacher salary coming in. So fortunate for me, we were able to get rid of the two investment properties without having to owe any Money on that stuff, found an investor, come and do that stuff. And then we were able to negotiate a loan modification on my primary residence. Really a forbearance more so than anything. We literally came about a week from losing it to foreclosure. All right? And I was doing whatever I could, you know, being like, I was waiting tables. I was delivering for FedEx owned delivery for a little bit, you know, just doing whatever I could to make money to stay afloat, you know, like, a lot of folks were. This is obviously going back, though, quite a bit. We kept our primary residence, got our assets out of a sling, and I was licking my wounds. I was like, wow, that didn't work to be a real estate investor. Okay, that doesn't work. You know what I mean? We've all experienced that, gotten kicked in the teeth in some sort of fashion. Right. Well, fast forward a couple years later. A buddy of mine that worked at the finance company, stuff like that, he was starting a mortgage company here in Austin. He is hooked up with a couple real estate investors at that time. During that period, I'd worked for. I ended up getting a job at a computer company here, Chip company. Worked for them for a while, but then got back into finance, which I really love finance, and got into the banking industry and was working for JP Morgan Chase, opening branches, being a banker, and was one of the top bankers in the state, almost right off the bat, actually. And, you know, he came to me and he had hooked up with this guy Bob Leonidi, and this lady named Jamie Kayla, who were partners, and they were traveling the country teaching real estate investing on the Ron LeGrand investment circuit. Besides teaching their own classes, too, right? And they were teaching creative financing. They were teaching how to create notes, how to do owner financing, how to sell notes. Back in that day, you could create a note and sell it immediately at the closing table, probably for 85, 90 cents on the dollar, depending on how strong the borrower was. So I went to lunch after Boyd called him, said, hey, Scott, I'm getting bombarded. We're doing traditional mortgages, and I'm getting 30, 40 applications a weekend. I could really use some help. And he trusted me. And to this day, Boyd and I are still really good friends. All right, and it was great. I went to lunch with them. I realized that's what I wanted to do still. I want to get in that real estate banking was great. I was making great money, but I know I didn't want to move up where they wanted me. I didn't like the quality of life that my manager had or my district manager, my regional manager has, like, yeah, okay, you're, you're all over the place. But you know, in banking, when you're any type of sales position, they keep moving the goalposts. Any of you ever had that happen where they move the goal post on you for sales and adjusting things and things like that? So I came home, talked to wife, I said, listen, this is what I want to do. Boyd's doing that. She knew Boyd, you know, hey, that helped us get rocking and rolling and started a, you know, insurance and some retirement accounts, self directed IRAs back in the day a little bit to get the ball rolling and I said, let's make the jump. So I left banking. I could always go back to banking was that philosophy. So let's give it a try. So two weeks after leaving Chase bank on the 4th of July, I was flying out to LA to attend a Ron LeGrand seminar and be one of the mortgage guys in the back of the room. So that's what I did for a couple years. And for, honestly for four years, I had a great apprenticeship. Not only were we doing mortgages for so many real estate investors across the country, but I had, like I said, this apprenticeship with Bob and Jamie to learn creative finance, creative real estate. I went to so many different workshops and conferences and sat in the back of a room and just would take things in like a sponge. I come home and I take another class that Bob had up on his wall of education materials from a whole variety of different people and take that home and listen to the CDs and the tape, stuff like that. And then I went out, started applying it and started getting deals subject to. I started doing a little bit of options and started buying real estate with other people's money. And I'll talk about my story when it comes to building confidence and raising capital. That's a great one. We'll talk about tomorrow about for you. That still gives me cheers today. But anyway, for four years we did that and then in 2008 when everything hit the fan in the mortgage industry, I left the origination side, still stayed as an investor and basically became a full time real estate investor, buying and selling, flipping and stuff like that. And started when the mortgage thing went down. I started dialing for dollars. Luckily for about six months before I left, I'd already started calling banks and asset managers, started getting lists of stuff sent to me and that's when I found, I mean, don't get me wrong, I'd already sent out Letters to people that had owner finance notes, because that's one of the things that they taught. Hey, here's. If you're looking for owner finance notes, here's how you go. Pull a list from the county records. The people have deeds and send it out to. And I was already getting that. Getting frustrated with people saying, no, I don't want to sell my note at a discount. What do you want for it? Oh, I don't want for that. And hung it up. Which just seemed like a waste. You know, mailing that to foreclosure lists was a better lead list for me. Or contacting or mailing yellow letters out to probate or driving for dollars. All those things we had done seemed like a better use of my time. But when I started calling banks and started contacting asset managers. Yeah. Did it happen with the first phone call? No, like the first time I started making phone calls to banks and asset managers, I made 50, 54 phone calls. Not 50, 54. I remember it was on a Thursday afternoon. Sit in my office, the phone wasn't ringing for mortgages. Didn't have any leads we were working through. So I just said, well, let me try this. Let me give me implement what Bob and Jamie were teaching and started dialing for it all. So calling a mortgage bank, started asking for the right departments. And I remember I got to 50 phone calls and I got a lot of no's. That's like, man, okay, this is a little tough. I said, I got like an hour left. Let me make four more phone calls before I head out for the day. So on the 54th phone call, I called a company called Aegis Mortgage in Houston. Back in the day, Aegis, they're obviously long gone. And I get this lady answers the phone, her name was Kim. And Kim goes, you know, this is Aegis Mortgage. Kim, how can I help you? I'm like, hi, Kim, my name is Scott Carson. I'm a note buyer and I wanted to see who would be the right person to talk to over there who handles your special assets or secondary marketing department. And Kim started chuckle. She was, that would be me. I'm like, oh, great. Do you have anything available for sale? She's like, yep, we sure do. We've got one portfolio that I'm. Once I sell it, we're closed. I'm like, oh, really? You're going to be out of a job once you sell this portfolio? She's like, yep, I am. I said, I'm sorry to hear that. What do I need to do to help you leave your job. And she started chuckling and she goes, well, let me have you sign an NDA. Let me have you know, I'll send it over to you. So sure enough, she sent me an NDA, signed it, sent it back and I get this portfolio. It's a 5 million port, $5 million portfolio of basically mortgages just in Houston, Texas. Now did I have $5 million to buy that portfolio? No, I did not. Right. I did not have that. But I knew this was an opportunity. I know there were deals here based on the price they were letting the stuff to go for, for roughly 50 cents on the dollar, I think it was. The value of the assets were about 10 million at the time. 5 million is roughly what they wanted for it. And in Texas, Texas is a pretty fast foreclosure state. Right. These are all non performing notes, but they all had value if you're buying it at 50 cents of the dollar. Even, even during that time when we saw increase in foreclosure. So took about 30 days and I got three to four other people involved and we found a buyer for the portfolio who paid us five points on a $5 million funding, which that's $250,000 basically. Right. It's not a bad, not a bad day. There's my part of that was 50,000 bucks, my commission on it 30 days later after I talked to Kim and I was like, oh, that's a pretty good day. That's what a lot of people make in a year. It's about what I was making in about a third of the year. I was like, oh, if I did this every month, that's a six hundred thousand dollar a year income just off of this and flipping paper. And so I was hooked. Like I said, left about 30 days later. And that's really what I started focusing on more so along with my other investments. But I was, like I said I was doing other things, rents, rentals, raising capital, doing some stuff like that. In about August of that year I just basically said, let me stop doing everything. I had a couple fix and flips that were underwater from when I bought them. When I bought them they were a great deal, but now they were basically worth what I was into them for. And I said, let me just focus on the note side. And then got another list in from Wells Fargo Financial, which I bought about 10 little notes off of that and wholesale, those 1 for 6 grand, 1 for 10 grand, 1 for 4 grand. And then I got a listing from Capital One which actually took me three weeks of calling and 70 phone calls later I got the right person and her name was Amelia out of New York state. And she sent me the portfolio which was 33 pages deep and all their assets across the country, million dollars or below mortgages and their small balance, commercial stuff. It was all in six point font. It was so small you needed a magnifying glass to read that PDF. And I end up flipping a note off there for 35 grand. I flipped a bunch of notes off of there for 25, 35, 50, $75,000 in wholesale fees. Even one for a hundred thousand on a 16 unit apartment complex in LA that I flipped. And so I was. That's where I've got focused. Of course we started buying stuff for our own portfolio and now fast forward. It's hard to believe. Golly says going about 18 years of have bought over a billion dollars in distressed debt and residential commercial properties. We're still constantly buying, looking for assets for ourselves. And we still see plenty of inventory out there even with a low default rates, you know, mortgage stuff like that. Even going through Covid, we still see plenty of opportunities for us to cherry pick and buy if you are willing to market. And the marketing side of this stuff is not difficult, ladies and gentlemen. The marketing side of finding non performing reperform or performing notes is easier than it is for trying to send out postcards or probates or whatever. You're focused on the next aspect of things and that's what we're targeting. We're targeting the mortgage debt. Yes, that mortgage debt is secured by the property and sometimes you can end up with a property. But the beautiful thing is buying this debt at a discount or at a great enough of a discount that gives you the desired return investment if it's A performing paper, B sub performing or C non performing, where if you buy enough of a discount, if they won't play ball with you, you're going to foreclose and make a sizable profit by either A selling that property at the foreclosure auction or B taking it back and keeping it, renting it, selling as an reo. Go from there. Okay, but today's all about the finding side. Because it all starts with finding a deal. If you can't find a deal, what good are you, right? Theory. We can talk theory all day long, but I would rather show you exactly what we do to find assets, what we do to find the asset managers out there. And like I said before, ladies and gentlemen, feel free to ask questions. There are no dumb questions throughout the next three days. Just keep them on point with where we're at. And I understand that if you got to jump in, jump out, that's completely fine. We are recording. And we'll get the replays out to you as soon as we can if we wrap up. All right, any initial questions from folks out there that are watching, like, what is your biggest need, biggest aha. Biggest thing you're looking for to accomplish here in day one, day two, or day three for you? I'll give you a second to type that in the chat roll for you. I know some folks are like, how do I raise capital? Definitely, we'll go through that, show you how we target IRA investors to do that and how it's pretty easy to raise a million dollars in the next 90 days if you just follow what I teach for you. Okay. We'll show you how to tap into hundreds, if not thousands of IRA investors in your local or the markets that you're buying in. The most important thing, like I said, is we'll show you where to find the list of deals and the different resources or websites that we use to dive into the process. Okay. But most importantly. Thanks, Dave. I appreciate. Yep. We'll talk more so tomorrow about how to raise capital for you. That's pretty easy, but thank you for commenting. Appreciate it. All right, well, let's. Let's start diving in here and showing you some of the different ways that we find list. What we're going to first start with is mostly free resources. Yeah, that's right. Free resources on how to find asset managers in and around your local markets and going from there. All right.