Session 13 - Note Investing Blueprint: Marketing, Due Diligence, and Deal Flow Secrets

All right, so there's a couple things I want to go through with you before we dive in. Some other things here. I know we've got, we got a couple hours left for the day. First thing, if you look over into your comment section, you will see that I posted a link to your to a due diligence checklist for you. And we're always constantly updating this. And the reason I don't put this in the manual, there is a shorter version of this in the manual, but I give it to you guys there. Join us live on here so that you have the most updated version of it along with if you're watching the replays, your paid client watch the replays. If you go into the description of this video, wherever you're watching it from, there should be a link for you to download this as well for. So you've got it. Okay, so before we dive into that, let me go back here. I was talking about a guy on LinkedIn that I really like to follow. His name is Anthony Jones. Now I can remember his name. Buddy of mine had him on the podcast once or twice. Met him at a conference a few years back and he is hilarious. He is probably the best. He actually helps people with LinkedIn and their LinkedIn marketing and you can tell it's phenomenal. If you go to his LinkedIn profile, Anthony Jones. John Anthony Jones, right. And check out his profile. He's got some great stuff. He puts his services, testimonials for his services he's got featured that he wants people to click on his classes and stuff like that. His posts, his videos are pretty fun. He does some, a lot of fun stuff with Tick Tock and sharing that on there and it makes it very comical and entertaining. Not long stuff. Now I'm. I used not to be a fan of Tick Tock. Okay. Used not to be found Tick Tock. Four years ago I was at the fincon conference down in Orlando. They like to go fincon Expo, phenomenal event to go to. You learn so much about marketing stuff like that. It's one of my favorite events and I got, I challenged myself to do a short video each day on Tick Tock. Do I used to do any short videos? It's all long form content, right? I said, okay, I'll start doing short form videos. And so I did a short little video about like the nuggets or a term of the day. And those all worked well because I could use them on YouTube and stuff like that. But when I started posting a distressed deal that I Would pull off the foreclosure list or I would pull off tape that I got in and starting sharing those deals by just using the green screen version of Tick Tock, putting the asset behind me, the few bullet points, and keeping the video so under three minutes. Then I saw my Tick Tock channel take off. I went from like zero followers, like 5,000 followers, 7,000, like just under 8,000, stuff like that. But I started doing one video a day about an asset or a property or something like that. And I would do it Monday through Sunday. So I did seven days a week about something interesting going on. Well, guess what? I started having these big funds, big hedge funds calling me a looking to buy distressed apartment deals. I also had sellers reach out to me that had notes for sale. Didn't know there was a lot of note investors on there. But the thing that worked well, I didn't just share that video to TikTok. People would go to TikTok to watch that stuff. They found me. But people that worked at firms, they worked at these funds, their staff members saw it and would go talk to their manager, hey, check out this guy who's posting stuff on a regular basis. And they would then book a phone call with me. I've raised money off of TikTok from people looking at the assets like we like. I think some of you even connected with me from TikTok on either short videos that we post now. We post like 10 short videos a day through using a service called Opus Clip. They're just short videos of my longer videos chopped up. And occasionally I'll do a video like, you know, we've been going to a lot of like the, you know, I go to the local high school games around here, so we'll go some of the basketball games, we'll go to some of the baseball games. But what's really exciting here in Texas is a football games, right? Like we had 46, 000 views on a video from two weeks ago where I filmed the winning field goal for Vandergrift beating, you know, Austin Westlake, which is awesome. Westlake, you know, five, six time state champion and Vandergrift won state last year. But that's 46,000 views. Add another couple hundred followers. I posted that on Twitter. That got about 75,000 views and stuff like that. You never know some that. So it's okay to share some of your personal stuff from side to side to get more followers. I got a couple thousand views from a clinching interception last night at a game. We went to. But the idea is to get good ideas from people that are posting on a regular basis. Because the great thing is when you do post on like a Saturday or Sunday morning, most people aren't posting, but we're still sitting outside drinking our coffee at breakfast or wherever we're doing Saturday morning and still scrolling on the phone looking at fun stuff. So take advantage of that lack of posting by really 95% of others to post something educational, entertainment, or just fun and personable. You know, if you have a passion, post about a passion of yours or something fun. If it's you're passionate about cats, post about cats, about dogs. You never know. When we've had our different mastermind groups over the years, we found that a lot of our investors that came in and stuff like that, they all, they are musically, musically inclined. They played in a band, homeschooled. And there were also. It was a third thing that they were interested besides notes and real estate investors. A third thing. Oh, my God. It was something, of course, travel. That was one of the thing, you know, a few years back. So we end up doing some of our masterminds a different outside of like Hawaii and Florida, South Florida and, you know, we've done some different ones in San Antonio and Dallas and Cape Coral and Miami beach and stuff like that. You know, San Diego, Temecula, you know, down in line country, stuff like that, we like doing around inches. And if you have some different interests that are a little expensive, I mean, going to high school football games, not expensive. But when you go to some of these schools like our Vandergrifts or Westlights, the Lake Travis game they went to, there's people there that have money. All right. And last night alone, it was kind of funny. I only bring this up. So there's a, you know, company called VAR that basically tracks all of the local folks here in Austin about all the sports stuff. Well, my Twitter account or I post a little video stuff like that, they, you know, I get 10 short videos going through. So I posted something episode just being me sitting in the stands and the guy. Oh, it's the guy that has all the videos. I started laughing. But I've started having people that reach out to me, hey, I saw what you're doing. Can you tell me more? People at the local high school, we go to a baseball game. Hey, tell me more about what you're doing. It's. It's an indirect way of sharing and spreading your network than you would if you were just sitting home. And that's what Most of us have done is set at home and hide behind our keyboard. Yeah, you can get some stuff out there, but this is one of the most powerful marketing tools. You can do emails. Right. But then you need to start posting a little bit of stuff what you're working on. When you're walking through a property, that always does well. When I do a property inspection, walk around, that always does really, really well. It doesn't have to be a long video, really. Three minutes or less. Yeah. That can change your whole profile on what you're getting. But anyway, check out Anthony Jones. Great stuff there for you as always. All right, so let's go in here. So let me pull up the due diligence checklist here. Okay. So let me make this a little bit bigger so that people on screen, if you are in the zoom here, you would have been sent the link. Look in the chat roll there. And this is a, it's a general checklist. You can tweak it, you can add it. You know, we, for the most part, I want to make sure it's this. Yeah, it's the right one. Okay. I've added more stuff to over time. All right. And the idea here is just follow along, ask questions as you have them. Now, when you get a tape, that's a spreadsheet or an individual note deal. Here's the thing, always number one, when you get a tape in, ask about pricing expectations and when bids are due. Okay. Pricing speaking. What do you want for this? If somebody comes back and they want par, it's not worth wasting your time going into the rest. Okay. If bids are due tomorrow, don't call me up and say, hey, I need help bid night. It's not going to happen. Okay. I've got other things I got to focus on most times. Sometimes I can jump on and walk you through it a little bit. But find out when bid to do. If we've got a week. Great. That gives us more time. We also get a little more time doing in the due diligence and stuff. If it's due tomorrow, then you guys, you can't go through all these things. So this is kind of a before, during and after your due diligence process. Okay. So when you do get a spreadsheet in, they say, okay, it's highest and best. Okay. That's better than no pricing expectations. Okay. Bids are due in five days. Okay. So first thing when you get your spreadsheet is you want to filter. You want to put filters on. I'm not going to walk you through Excel 101. Okay, but filter for the states and get rid of the states that you don't want. Get rid of New York, New Jersey. I get rid of Chicago because it's horrible. I, it's not a state, but I still get rid of it. It's a state of mind there. I get rid of Wisconsin. Wisconsin's got really high property taxes. They don't really make sense. I mean you can still make some money there, but if you end up taking an asset back, the taxes will kill you. That's why they don't have a really, really strong rental market. A lot of cases there's still some renters there, but it's just a little harder aspect of things. Okay, so I get rid of the states, I don't want to get rid of the cities. I don't want. Okay. I want to make sure when I look at the last payment due date, you know, they make it give you number of days behind the next due, you know, months behind, you know, they give you a payment stream where it shows xxx, you know, 1, 2, 3, 123 or 11111. That means they're all on time. You don't. If it's not more than 90 days, it's really not worth wasting time. And I actually prefer six months of grid. Now they're 90 days behind and it's. They're going to sell it at a price that makes sense for you to buy it at a good yield. Great, take a look at it. But if it's like a 4% or 5% interest rate and they're less than 90 days behind it, you can't make any money on that for the most part. Okay. I'm going to filter by property type and get rid of mobile homes. Match your manufactured homes, raw land for the most part, unless it's in Texas, you know, you take a look at it. But I, you know, like I said, I prefer distressed stuff that I can buy at a discount. I don't want to pay full value for something unless the yield's gonna be great. I'm gonna look at either their Zillow value or a BPO value. Some things I'm want to see values that above 25 grand and unpaid balances that are greater than 25 grand as well too. Okay. That's my minimum thing. My values I would probably want to be a little bit higher, probably 50k to begin with. But anyway, I'm gonna get rid of assets with a P and I payments under 250 per month unless you're gonna use your own funds and you're fine with that cash flow. That's fine. I'm also gonna look at assets and the maturity dates. If they're less than 10 years of payments remaining, I'm gonna get rid of them. Now I'm gonna put a little hashtag unless you're buying with your own money. Like that portfolio that went through yesterday on those small balance ones that Colin was looking at. Most of them were under 10 years. So he's gonna use his own money for that and it's gonna be a good yield for him and it's worth its time for so good. You may want to remove vacant assets that have been non performing for three or more years. They may need extensive repair. Remember we went down that list yesterday, those 46 and we got rid of really anything beyond 2020 because it's probably going to be vacant or in such need extensive repair. We're going to get rid of desirable locations. We're going to basically get rid of city remoral locations. We can map the whole thing, see how rural a city or location is. We're going to look for negative features like boarded up windows, high crime areas that backs into a railroad track or a graveyard in some cases. You know we're going to remove from the small cities we want really honestly when you're starting off you want populations that are 50,000 or greater. As you get more experience then you can get down to 10,010. You know if it's near a city like if it's right outside of all of us major metro, that's a different story. This is out in the middle of the woods in Michigan, in Minnesota like Lake George, Minnesota which has 500 people. Probably not an ideal property for you to buy unless you plan on moving to Lake George. Okay. You may want to remove from troubled areas or states that have extensive license issues or domestic issues. Unfriendly lender, landlord areas like I get rid of the Portland, I mean I get rid of the Oregon, I get rid of Washington state. I get rid of the higher really high assets too. Just not worth my time for what I can buy. One note like LA County, I can buy a block in Kansas City. Right. Then you're going to jump on Netra online like we showed you to look at taxes owed, borrower name, mail address, make sure that matches up. If anything doesn't match a check for tax sale or D transfer. If more then then more than the current year taxes. Okay. Spell check. That will reduce your bid by this month. So there's like five grand in back taxes out. You can reduce your bid. Say hey, I bid 100 but I'm a bid 95 because there's five grand in back taxes out. That may be viable unless there's a huge amount. You're already getting a huge discount. You're getting at 50 cents of the dollar. Don't go asking for reduced by taxes unless it's got a size amount of tax bill due. Okay. Estimate your fair market values. That's pretty easy to do. Zillow, Trulia, stuff like that. Okay. If you've got a Realtor friend, you can use narrpr.com to pull an AVM for it. And they're not a BPO. It's more of an online valuation. But it's a kind of a cool tool to have. Once again, if you're looking to modify, if it's an owner occupied asset and you're looking to potentially turn into cash flow, then you really probably want to stay below 250. You might bump it up a little bit. But for most of the time when we are doing modifications of trial payment plans, they really need to be below that $300,000 mark for sure. Otherwise it really doesn't make sense cash flow wise for us now. Sometimes it does. It just depends on how cheap you can get your money and the price you can get it for. Okay. Okay. If there's no recent sales or activity or the days on the market exceed 180 days, which in some cases we're seeing more of that you need to either delete it or you need to reduce the value to a 90 day quick sale price or a 30 day quick sale price. Okay. And like I said, assets above 258 will be primary, deed and L or foreclosures. And that's just what we're going to see. Okay. Look at the fair market rental rate. If you're thinking about taking it back as rental, you use Zillow, Craigslist or Rotometer as a service that we like. Retirement allowed to search some stuff and then they have more of a paid annual membership, which is not bad if you're doing a lot with rentals. If the legal balance or the payoff column is not included, you will need to determine this. Remember we did this yesterday by taking the number months behind and multiplying it times the P and I payment just to get about ID is a full payoff. And you can also add 5% to whatever that amount is as far as late fees. But I would rather just go ahead and figure the number of months behind time payments and adding that to the unpaid balance on it. Okay. You can resort to take for deals that have equity or negative equity. Equity deals would be assets where the legal balance is below the estimated value. And negative equity deals would mean where the legal balance is above the value. Once again, if you've gotten pricing expectations and this is a good thing to run that in there and figure out if they say, okay, 65 cents or 50 cents or whatever, run that percentage in there and see what kind of offering it makes for you and calculate pricing. Okay. And then like I said, like we did yesterday, calculate the the cash flow. Take P9 times 12, divide that by your purchase price to figure a rough roi. If you're going to, you know, they just reinstate if and I prefer to figure the 16 months where they bring four months to the table and calculate that if the last payment is older than three years, you're probably not going to loan modification and trial payment plans. Probably not likely. Okay. Calculate your offer price for equity deals at 80% of the legal balance. That leaves you about a 20% profit margin between the legal balance and the value. And sometimes the sellers are going to want you to go up to 90 or 95. It might make sense, it might not make sense. It depends on what state. In Texas, I might go to 90. If it's a fast foreclosure process, you start getting that lower balance stuff though, the lower value stuff, then you have to start fading your bid. If they won't tell you what they want for it, then you. So if it's assets that are below 30,000, the most I would offer be 25% of the fair market value. So if it's $30,000 house, most I'm offers like 7, 500 bucks just doesn't make sense. Right? If it's in the 30 to 40 range, 35%. If it's in the 40 to 40, 40 to 50 range, 45, it's the 50K range, it's 55, it's above 50K. Then you probably need to be 60, 65% of the fair market value. If it's in a really fast foreclosure state like Texas or Georgia, you probably need to bump it up maybe even to 70%. Okay, figure that calculation. Look up the unpaid taxes on Nitra online we talked about. Get an APN number if needed. If you can't find it on Netra online, you can go to411.com, type in the address, it'll give you the APN number this is on the spreadsheet that there's a BK filing and the date or the case. You can go to pacer.gov and pull that up. If it's in an area like a like Florida's got so many senior housing areas or stuff like that 55 plus or there's an HOA. Look for previous property listings in that neighborhood and see if there's an HOA and then reach out to the hoa, Subtract your property taxes from your bid amount and then complete your exit strategy Analyst as yield so like I said, usually our minimum hurdle rate is going to be a 15% ROI depending on your money cost for performing or reperforming, 20% or greater if you're going to end up taking the property back to foreclosure. Okay, and then submit your offers Pretty simple as submitting in the spreadsheet as an attachment not inserted into the actual email with any notes regarding why your bid is below pricing guidelines such as taxes, conditions, value things you found out if the offer is accepted, start your paid due diligence process. Once you get the due diligence docs if offer counter, review your numbers and accept decline or counter if offered not accepted, mark your calendar to follow up with the seller on offering in 30 days as many deals fall through. That's important. Follow up, follow up follow up. So if your bids aren't Accepted Market Calendar 30 days Default hey, did you end up selling this one or not? Okay, once it's accepted and you start getting the due diligence files that order your title update or owning report, you can go through Baldwin Advisory Group or you can go to our website and order directly from there. Look for any outstanding liens or judgments that would affect your ability to foreclose or to accept a deed in lieu. Verify your market value with a local realtor, CMA or a BPO or a property inspection report. Sometimes sellers will provide those. Other times you're going to order a bpo, do that through our website as well. The value comes in below. Your estimated value will need to reduce or fade your bid by a percentage of the amount below. So if a seller tells you their house is worth 300 and it comes back it's only worth 200. Well you're going to reduce your bid by 33% because it's reduced by 33% percent. If they don't accept that, then cancel your bid and walk away. Now if you find out it's actually worth 300 and they misvalued it by 200 by an old value. Don't say anything close as fast you can. All right. But always, always, always put eyes in your assets. Send somebody buyer, realtor. That's part of ordering a bpo. Is that due diligence. Eyes on an asset. If it says it's occupied, call the county check and see if it is occupied. See if the power's on, see if the water's on. You can go to and see if it's there. An active military, you won't be able to foreclose if they're active military on enlistment. I always like to run skip trace bar for contact information. You can pay for a professional skip tracer. We've got some that will do it really really cheap. Or just do some social sleuthing like we've done on social media to find if they're on LinkedIn or Facebook and go from there. Okay. If the bars has filed bankruptcy already BK chapter 30, make sure you get the payment plan sent to you from the seller. All right. The outline specifically with the bar is gonna be paying on a monthly basis. And if it's the plans accepted or stuff like there's been times like one of our coaching students, Sterling bought a note that was in BK chapter 13 and there was five grand sitting at the trustee for him to collect that been been being sent that this the existing servicer for the seller wasn't collecting on. So he got an extra five grand bonus because somebody was too lazy to reach out to the BK trustee. Okay, insurance. One of the part of your due diligence is making sure that the bars have insurance on the property. If they don't have insurance asking does the seller have force place insurance on the. On the on the property. If they don't have that then you need to put insurance on it when you go to fund the deal. Okay. Get the bid on the insurance before closing. Insurance can often kill a deal, especially depending on where it's at on the Gulf coast or Florida. Just find out what it's going to cost you. All right. Now when you get a collateral file in it's going to be a soft copy of it's going to be scanned PDF. Always get those before funding, never fund and then wait for the collateral file show up. That's a big no no. Okay. Make sure you have copies of the original note. The mortgage deed of trust can usually find on the county record if it's been recorded. All assignments on mortgage. All assignments of mortgage, one for each time it's sold. All lodges one for each AOM Servicing notes, payment history, current payoff statements from current servicing company. The bonus stuff is getting financials of the original loan application, which is called a 1003 application. If it's an owner finance, you want to make sure it's Dodd Frank compliant. There's an RM A low package in there. Let's see if there's any. An attorney that's foreclosed on. It's already started. Foreclosure. Make sure you speak to the attorneys or get notes from where they're at in the foreclosure process. If there's been a loan mod, look through the collateral files. Make sure the loan mod makes sense for you. Because sometimes we've bought. We're going to buy notes and the loan mod reduced the price than what they were told. Like there was one that our coaching student Catherine and Lauren were going to buy a note. It was normal payment for the first 12 months, but then payment 13 through 36 was $0.01 a month. That makes zero sense. Okay, so it was good enough to kill the deal. Okay, just make sure that passes up. If there are assignment of mortgages missing, don't fund. Okay. Because they haven't proven ownership that they have the right to sell that note yet if they've got an assignment in their name. Okay, that makes sense. But let's make sure they're all there. Doesn't have to be recorded. If we got a scanned copy of it and it hasn't been recorded, that's fine. I prefer that they've already been recorded so we can justify that they've been sold and it's been recorded. Sometimes you'll see stuff. There may be one or two assignments in the collateral file that need to be recorded before you record yours. And if that's the case, don't hold up. Closing. Just go and get those. All three record at the same time, but in the correct order. Okay. Look for hardship letters in the collateral file. Sometimes the sellers will tell you exactly what or the borrowers will tell you exactly what they can and cannot do. You know, we've bought portfolios where the borrower was willing to modify already and put a payment plan in place and then it didn't fall. Fell through because the note got sold or a variety of reasons. If the borrower's deceased, see if there's any heirs nearby. See if they would, you know, if it's already in probate or if they left the will to do a dean Lieu, just because somebody dies does not mean the borrowers don't. I mean the state doesn't have to pay the mortgage. The mortgage is still due. Okay, servicing company lingo. Before funding, you'll want to acquire your servicing company to retain service of the existing company. Review the state of your license to service the loans and rebate payment terms rates for service. Make sure the number of loans or minimum bill amount doesn't kill for what you're doing. Ask for referrals on servicing companies too. Performing loans can run you 15 to 30 non performing runs can can run you $90 per month plus other legal workout costs. Servicing transfer will take 15 to 30 days after closing before newer servicing company can contact the borrower. A little trick that I like to do our team does when we buy notes is if it's going to be if they're occupied assets that we're not foreclosing on, you know, we like to do a little. We will send out our own hello letter and say hey, here's payment options. All right? And we send that a week s we fund on a Friday, the next Friday we send out our own hello letter giving them instructions who to call, who to pay if they're not performing. We already give them like two or three options of sort of payment plans. The idea here is if I gotta wait a month before somebody takes action and that's another month of corresponding, I like to speed that up. If I can get em to come to the table within 30 days of the payment plan, I just boosted my ROI, my IR my ROI by another 8 to 12% by getting that extra monthly payment. Okay. If there's an existing attorney handling foreclosure, ask retained counselor, speak with the attorney. Make sure complaints are transferred to your LLC that you're put on as the plaintiff, not the old company. Just rehash with the attorney if the borrower's been responsive. The borrowers retain counsel. They, you know, try to come up with any type of deed loom, odd cash or key syndrome. Make sure your attorney is aware of any loss mitigation strategies that you or your servicer has worked out with the bar. You can always delay a foreclosure auction. Okay. Work with your service company to assign your asset manager. Company assign you an asset manager. Talk with your asset manager about at least once per month on on your Strategy for your NPNs and options available for workouts, door knockers, reduce s modifications, etc. Foreclosure is not already started. Make sure you start after 30 days. You can always stop it. Okay, got a question from somebody here. You could actually have them sign a deed in l the Day after you fund. Most people are not going to sign a deed in lieu if you're not the owner of the note though. So you're going to need to get a copy of the assignment. Most of the time, the sellers are going to send you a copy of the new assignment of mortgage. That A is your proof of ownership. You can't go talk. Here's the thing, Jay. You can't go talk to the distress bar before you own the note either. That's a violation. You can't reach out to John and Susie down the street who are behind their mortgage and negotiate a loan mod before you've bought the note. That's illegal. And you get a whole lot of trouble for that. Okay, well, maybe you can't get trouble. CFPB is no longer around. You just, you know, supposed to talk to bars until you fund the deal. Now you, like I said, looking at collateral file, you can see a lot about what's going on with the bar, whether they're responsive or trying to do some things. Part of the hello letter that we send out seven days to say if you don't want to stay, let us know we'll be willing to do a deed loan and let you walk away. Okay. I talked about that portfolio. 70 notes that we funded in four different tranches a couple hours ago. Well, we sent our hello letter and out of 70 of the letters, 49 borrowers responded, 40 wanted to stay in their house and do modifications and nine wanted to deed the property over to us, which was awesome. We immediately got that. Got those counterfeit, canceled. All right. It's a really great deal that sped up ROI really quickly. Okay. All right, so let's see here. You'll get your hard collateral file, the actual physical files. 30 to 45 days after closing. Make sure that the assignment of mortgage, a contract for Ds are in the file or if they're being recorded, they're going to be sent to you. Many counties offer electronic recording. If not Baldwin Advisory Group as a vendor or we've got a vendor to help you with recording. If multiple AOMs need to be recorded, make sure they are recorded in order. Review the collateral file for pictures, notes, Dean Lou insurance checks. There is often variable, very valuable information that's not scanned in electronic file folder that can help you like utility bills, keys to the house, stuff like that. Okay, you're going to need to get that original file. So if you're gonna start to foreclosure, you're going to need to send that original file to the Attorney don't send it snail mail, send it certified, get it insured when you send it over, okay? Because they're usually the originals to do the assignment, original launches and stuff like that. Okay? But before you send it, make sure you go in and scan the file again completely. So you have a new file that's up to date for that note in your possession, in your statement, save it in Dropbox, something like that. The original file, if you're not foreclosed and stuff like that, you're going to hold it for a while, put it in a safe place like a safe or a waterproof box or storage unit. We've got a storage facility that we have one whole. One whole wall is just loan files, okay? Just old loan doc, stuff like that we've held in there for three years after foreclose and stuff like that. Okay? The property once you once closing on the note, you all want to secure your property. The ass is vacant. You have the right to go out and change the locks if it's vacant. If it's occupied, then you can't go out changing the locks. Okay? I would send out a realtor or door knocker to knock on the door if there's no type of communication, if it is occupied and skip trace that borrower, look at the mail name, you know, name on the mail, stuff like that. And you know, talk to the next door neighbors, leave some contact information. Okay. If you're not getting a response back, we have left an abandoned sticker on the door as well with a realtor contact, okay. That gets a phone call, usually relatively quickly. Also if they're going to, if you're going to have to put force place insurance, make sure you notify the insurance company immediately on the day that you're funding. If the borrower can proof up that they have insurance, they just haven't done it, you'll get a refund for whatever double coverage is out there. Okay? If it's sold at auction then you'll need to adjust it from a different type of policy. I mean if it is sold at auction you can remove it so you're not paying insurance on it. But if it doesn't sell, you take it back. Then you'll need to change it to an REO from a note aspect of things. But that's the thing. Once you go into it inspect. If it's got mold all over the place, part of it put in force place insurance. Is that a. They'll cover that mold remediation. Usually it's somewhere around 5 to 10% of what a replacement cost is is what your deductible is. So, like, I'll give an example. When Cal was closing on this deal in Round Rock, it needed a new roof, and that was 17 grand. Well, he had a. He put enough insurance on it to cover his note purchase price and cover his investor, which is 175 grand. So 10 of what his premium, he had to pay 17 grand. So it just made more sense for him to pay. Well, he didn't actually pay it. What he did is we found a realtor, a roofer. Sorry, roofer, who went ahead and did the roof without any payment. But we put it as a closing item on the closing docks because it was already under contract. And so the realtor didn't mind just slapping it on the prop. The. The HUD wanted getting paid at the foreclosure. I mean, not the foreclosure at the closing company, which at the closing desk, I can't speak today. Closing table, so. But that's kind of the due diligence. You'll add a few things for yourself as you do things differently. You know, if you're getting stuff accepted in here, you might even put on here, you send an email blast out to your database for the deal, maybe you pull IRA investors in your market, create a postcard of the deal, that kind of great stuff for you, you know what I mean? And go from there. All right. Like I said, go ahead and save it. You know, print the screen, save it as a file on your document. If you're part of our coach and we update you as we update this with new updates to it, stuff like that, and we'll go from there. All right, Questions about the due diligence spreadsheet before we move on. Now you're using your own money, and your hurdle is that 12%. Then look is on 12%. It's completely fine. I would say you probably need to be at 15, 16 yield. If you're using other people's money, give them 7% or 8%. You're keeping the other seven. Okay, all right, Great stuff. Let's look at something else.