Session 6 - Unlock 6-Figure Income & Passive Cash Flow with Note Investing

All righty. All righty. All righty. Now we'll go back to that tape. Probably a little bit more throughout the week and we start looking at individual deals. I also, I think I've got a couple that come in today that I'll dive into and share with you guys tomorrow and Sunday. There's never a lack of note deals to look at. Some we get a little bit more in a weekly basis. Some we get more. It's. It's December or as we get to it, we're on the verge of December as record this. So we expect to see over the quite a few over the next couple weeks. One thing I highly encourage you all that I did not mention. If you're not already subscribed to our YouTube channel, you definitely want to go do that. Okay, go to. We close notes TV is our YouTube channel. All right. I just kind of want to share that with you guys here real fast. Let's see here now, we've got a lot of videos on there. We've got our podcast. But if you go to weclose notes tv, of course, our website is weclose notes.com now the great thing, there's something that goes unknown quite a bit. We have a fully cloned AI clone. And you, if you go to our website weclozenotes.com and you see the little orange dot down here in the bottom? I should make it a little bit bigger. But if you click on this orange dot, it should take you directly to my AI clone and you can ask questions of it. One thing it's going to ask you after about 30 minutes, it's going to ask you to log into Google. And if you log into Google, it'll give you more access to. If you never log into Google, it's not going to give you access to it beyond 30 minutes. Okay, we want your email. That's what you're going to get for talking to my A clone. Now, how is my AI clone trained? We've taken my website, my YouTube videos, all my podcasts, all my guest interviews and other shows and stuff like that, my book, my blog, my. It's trained on my class here as well too. Right. And if you're a one on one coaching student and you want full X, guess what you do. You're one on one coach student. You get access to AI Scott anytime you want. All right? And so you can go ask it any type of question and it will answer back either in chat form or the phone call aspect. Now, we're constantly updating it and Stuff like that, adding new material, new information. I'll be uploading this series to it as well too. Well, it's a constant, ever evolving. I really like the answer. I can see what people are asking. I can go back and tweak the answers and stuff like that. But is it such a great resource for students? As far as I know, I'm the only one that has an AI clone that's there to help answer your questions for you. You can ask it anything. Okay. But if you go to our YouTube channel, weclose notes TV and hit subscribe button, we've got over five a lot of short videos you can see. We're streaming live on here right now. But if you go to, you'll see all sorts of podcast interviews, all sorts of shows we have. Here's the thing, I bring people on my show. They're going to add value to my audience. I rarely will do a paid podcast, so we'll do that occasionally. You'll know. But I like to share resources that are going to add value to your bottom line. Like we just had Nick Sahagan from Guardian Companies talking about checkbook IRA LLCs. And there's a special discount if you're wanting to do an IRA LLC through safeguard. That's what it is. We had Michael Hawthorn from Longhorn Funding, which is a huge Texas. They're also doing 10 states now. Start off in Texas, but he gave a really great interview about the ins and outs of hard money. You're going to use them for say, fix and flips. What's going on? Alan Chesker, great Texas attorney on creative financing. Subject to deals. It's something I think everybody should watch if you're looking at sub 2 deals. And then we also got a lot of notes note night in America. We've got a lot of case studies, we do a lot of portfolio breakdowns. One thing that we're going to start doing is every Monday night going forward, starting in January is on Monday nights we're going to be doing a tape asset breakdown. All right, Monday night, seven o', clock, we're gonna start doing that again. We did. I mean we're on the only ones that break down tapes anyway that we mix that in with a podcast. But on Monday night we're going to make it a complete focus going forward in 2026 and beyond. Going through performing notes, non performing notes. We get enough tapes in that we can do this on a weekly basis, if not multiple times during week. So that's something to keep an eye out. But really Close. Make sure you subscribe to the channel. Lots of great stuff there for you. And going from there. Okay. What I want to go with you today. Now usually what I do is on day one when I start off the class, I go through, hey, here's a game plan for you. Here's how to make six figures in the next 12 months. And people love it. But what happens is a lot of people got overwhelmed. All the different resources, they forget about how to make six figures in 12 months. So I thought I would save it till the last session of day one after going through a tape or two so that you now understand it a little bit better. Especially if you see me kind of break down a couple. An individual asset and then a portfolio 4740 really to find the most desirable notes in there. That would be potential cash flowing assets. Now the greatest thing like I said before, if you pick eight, make offers, they come back. Oh, half them are vacant and you don't want to pursue them. Guess what? Nope, I'm going to cancel those because they don't meet with what was stated on the tape. They said occupied the tape or unknown. When you find out it's vacant and nobody's going to be in there and you don't want to rehab and Shreveport or go through the foreclosure process in Louisiana, then you move on and get rid of it. Do it all the time. But what I wanted to share with you now is people often ask what's your game plan? You know, how do you help people and how have you helped so many students really reach their financial goals or believe their jobs? And it comes in, you have to have, whenever you're investing, you have to have, I call it a lane, right. In investing lane and most highways the max length is one to two or three lanes right now unless you're out in crazy LA or what is going to be like North Austin here it can be six lanes wide. It's crazy. Okay. I still think it's best to focus on three lanes. Two or three lanes the most okay. Obviously performing notes, non performing notes are the two lanes. A third potential lane could be like subject to deals, creative financing, raising capital. Those are really the three lanes max that you should stay in is the way I look at things. Okay. What's also great, if you like subject to deals, those lists that come in if they got low interest rates like that three and a quarter that 5% sellers are paid well, reaching out to them to see about taking over that payment and knowing that the lenders probably or whoever's going to buy that note is going to probably end up foreclosing them to do something like that. But anyway, that's a different class for a different day. So we put together, did this a few years back and showed you kind of the basic game plan, minimum level way to make six figures over the next 12 to 24 months. Interested? I think you are. Let's go into it. All right. This is something that's repeatable. It's a part time aspect of things. It's not a 40 hour work week kind of thing. The great thing is that we rely. Besides buying the notes ourselves and raising the capital, you're going to rely heavily on servicing companies. Do the borrower outreach, the borrower workouts and foreclosure attorneys to do the foreclosures. You are not going to be going knocking on doors, negotiating loan modifications, negotiating cash for keys. That's not your bag, baby. Let the professionals do it. That's what they're getting paid for. Of course there's an a la carte fee, a fee a la carte feat that'd be interesting, an a la carte fee to the servicing companies, depending on what they negotiate. But it's. Well, let them negotiate on your behalf. I like the budget in $1500 a year in servicing and then roughly about 2,500 bucks in foreclosure costs on average. Now that's going to be less in some areas, going to be more in others. All right, that's for a True non performing $90 a month. If you can find a servicer that's only going to charge you 30 bucks a month, we've got a couple. They usually want to work with people that have portfolios, but when you're starting off buying your ones, E2Z3 notes that are non performing, expect to pay about $90 per month for the servicing costs. That's why we want to stick to that 250$300 a month P and I payment stream so that you're making some money even after paying service. Okay. Anyway, let me show you how to make six figures into next year and go from there. All right, so making six figures a year is not difficult. Honestly, if you've never made it, it may seem impossible. But making six figures with notes is not easy. And I like to break it down to the basics. Okay. Now how many in here, you know, does not raise your hand. Five grand a month. Oftentimes that's 60 grand a year. If you could bring in 60 grand a year, we often find that might be a great way. It might be a number enough to replace your income. Now for you like a few folks on here, I know that that's only like a third of what you need to make. Maybe it's half. If that's the case, then just double these numbers. Pretty simple. Okay, so let's just assume you need 5,000 per month and you're going to be looking at single assets that have a greater than value of $50,000 or greater. Okay, $50,000 is the base amount of value. If you start getting below that, it's going to be a pretty ugly asset. Now don't be wrong. We may see decent assets or 50 grand in one area that are just complete trash in others. Like doghouse in LA where LeBron lives is worth 50 grand when a nice little house in akron might be 50 grand and above. A little bit, you know, I'm saying. So just varies all where you're looking at. Now we're going to be buying these somewhere around 50% of the fair market. If they've got a current value of 50,000, we're talking about they owe more than the property's worth. Okay, that's what we're kind of seeing. They owe more than the property's worth. Their owner occupied. That gives you the greatest opportunity to get them back on track and source them a payment plan. Okay, we obviously want where rent rates are higher than the existing payment. We usually see that that's motivation for them to stay in the house because usually what will happen is people who are distressed are starting to look what it's going to cost for them to rent a house. What is it going to cost them to move if they get foreclosed on? All right, they know it's going to cost them more to rent. It cost them, you know, u haul, changing utilities, uprooting kids from school, not a good thing. Okay. What we're doing for the most part too is we if you're going to use in other people's money, you want the existing payments to be in the P and A P and I, not PITI, but the P and I payment to be $500 or greater if you're using other people's money. Now, if you're using your own money, great. Look at the 250amonth or greater. That's what we talk about that. Okay, if you're using other people's money, let's start looking for payments, you know, 400, $500 a month or greater. And the goal is like I already talked about before, if somebody's a year behind, I don't need a full year. It'd be nice if they get paid a full year, but they've already been offered that from the bank. So if I can get them to bring four to five months of payments if they're a year, maybe two years behind is about the minimum. I'll do that. But they get beyond two years, I'm going to want a sizable chunk. Otherwise, there's no reason for them to stay in the property. Okay. I'm never going to let somebody stay in a property. They can't bring anything to the table. The only exception of that would be if a they've been completely out of work, laid up, or they're an elderly person and they're on a fixed budget. I can understand that. I'll work with them. I'll probably work to put a deed in the loo and escrow so they do pass away. That we can file that and it's no foreclosure to going through probate. Okay. Or I'll go have them deed the property and let them stay in there at 0% rent until as long as they're alive. That's probably what I would do. Okay. And they're just responsible for taxes and insurance or something like that. I've done that before. Okay. Anyway, but usually we wanted to bring four months of payments to do a loan forbearance or modification at some point. And we're going to use other people's money and we're just going to run the numbers at 6% for you. You can go higher than that. But 6%? I've got money. People that have money sitting on the sidelines making 06% is a normal mortgage rate. Guess what? If you're not making any, if you're not making greater than 6% now, you're not doing anything. Okay, so let's just go through that. Now. You may have to go to 8 to 12 to begin with, but the more you get, better at raising capital, you can get it down to 6%. So your bar 25K is at 6% interest rates, $1500 per year, that's $125 per month. Okay. Now if you're targeting $5000 a month and you take 500 as your target payment minus your $125 you're paying your investor, that's 375amonth left to you. Three hundred and seventy five to get into $5,000 a month cash flow due means you need to do 14 deals. Okay? Now if your payment's a little bit higher. Okay, great, maybe it's 12. Then you got to do 28 deals. Okay? It's okay. Not a big deal. All right, just numbers. So 5,000 divided by 375 is 14 deals remaining 125 paid the investors. I said you take this $375 that's coming to you times 14 deals times 12 months. That means that's going to equate to about $63,000 a year in annual cash flow. Okay? You take four months, take four months of payments behind and bring that skin in the game as an additional $2,000. $2,000 in your cha ching. Okay, that's an additional 28 grand from those 14 loans. All right, 14 loans. Add those two together, it's going to be 85 or nine. Sorry, $91,000 in income. Well, that's not six figures. You promised six figures. I'm showing. This is on the, this is on the front end. This is the, the Cha Ching with the down payment, the four months and then the ching of the cash flow. We haven't gotten to the third Kaching yet. Okay, Kachinga. Kachinga. Say that 12 times fast. Anyway, so 91,000, not bad. Now like I said before, if you've got 14 assets that are worth $50,000, you're basically have a $700,000 portfolio. That's your fair market value based on those assets. And if you fund them at 50 cents of the dollar, you're at 350. Okay? That's what you funded. Whether it was 14 individual investors or 2 or 10. You can do individual funding agreements. While you put, you're not pooling money, you're keeping one investor per one asset. Okay, one investor per one asset. Now they could fund two deals, they could fund four deals, but you're not going to put four investors into one deal. That's pooling money. That's illegal. You want to do that? Okay, now remember, the funding partner is getting 6% made on a quarterly basis. Pretty easy to do. How do you return your investors principal? Well, it's pretty easy if you're buying these at 700,000 and you've got these non performing that's going to re performing. You could turn around and sell them at roughly 80% of the fair market back, provided they still owe more than the property's worth like we just showed you a few minutes ago. Okay, so if your market value of your portfolio is 700,000 and you sold or selling the notes at 80,000, you have that you bought at 50, you're going to sell them at $560,000 in nut sale proceeds, leaving some skin in the game obviously to the end buyer to buy them sold at a discount. Okay, I got to buy it full value. But, but guess what? You've paid back your investor, their 350. They borrowed from you or you borrowed from them. They've been getting monthly interest. So you've paid back their interest rate. They've made 6% without doing any work and you pocketed an additional $210,000 net sale proceeds. Cause you bought them at 350, you sold them at 560. Okay? Plus you got the cash flow plus the $28,000 skin the game. Plus that's your three kachingas. Kachinga cha ching, cha ching, cha ching. Right? So that's $301,000 in income off your 14 notes based at that number. Okay? Very feasible. That's basically buying roughly one note per month for a year, figuring it out. All right, that would take you 24 months to do if you bought one, but 12 in the first month. What I'm trying to get here is, ladies and gentlemen, is this is very feasible for you to do this. Okay? So once again, once the funny partner get, they got their 6% interest and their money back, usually they're going to want to get back. Now usually their money's not paying them anything. It's getting negative because it's sitting there getting paid feed to death. In an IRA that's just charging them an annual fee. They're not doing anything. We see this time and time and time again, 30 to 40% of all funds sitting in a self directed IRA account is not making anything. It's just getting feed to death. Okay? Savings of CDs are paying less than 1% most of the time. Some might have gone up a little bit, but usually to get that 4% or higher, you got to put 100 grand into it. Okay. And tied up for three, five, 10 years. So you are doing these deals primarily short term, 24 to 36 months for the most part. And you're going to stay away from longer foreclosure states really that are beyond a year. You're not going to buy anything in New Jersey, New York, Right. You're not going to stay. You're going to try to avoid the rural areas for the most part where they're outside of towns, out of the middle of the sticks. There's more skeletons or more cattle skulls than there are actual people out there. All right? And they're making 6% without doing anything at all now? Yes. Would you probably need to get somebody at 8, 10, 12? Yeah, you could probably do to start off with. But they're going to want to keep coming back for you. And every time they come back say listen, I got to do a little bit better because I've got more people that are willing to go to lower interest rate to get into these deals. Okay. And you're just doing flat loan agreements, not split of equity, nothing like that. If somebody wants to bring a chunk of money to the table, 250 grand or more, then you can do an equity deal or put them in A Special Purpose LLC Like I said, 33% or more of all self directed IRA counts are at zero. 67% of IRA accounts have 150 grand or more in it. Think about that for a sec. 67% of all self directed IRA accounts have more than 150 grand sitting in them. They're waiting for you to call. Okay, so let's go back to this recap. What are you getting? You're getting the 375amonth difference of the 500 times 12 months times 14 deals. That comes to roughly 58, 5, sorry, 61 plus the 28,000 you're paying your vestor back. The flat return of 6% you're keeping for cash flow or salary performance and then the cash out and your rinse and repeating. Okay? And I put together this simple spreadsheet that you all can do the same thing. It's 24 columns. And if you go buy one note and you hold it for 24 months, this is how it's going to yield. It may not be much. It might be your air conditioning bill, it might be your cell phone bill. But over time especially you look at 12 months, 12 months. If you're doing that at 375 and buying 12 notes, one a month for a year, you will bring it be bringing in $4,500 a month in cash flow. You do that for another 20, another 12 months. At the end of 24 months, you're now bringing in $9,000 a month in cash flow. That's $108,000 in total cash flow per year. But you've collected 132 in cash flow from month one to month 24. It's the snowball effect, okay? It's literally the snowball effect. And this is exactly what it comes. One note per month for 24 months is 112,500 profits and 9k per month in cash flow, 108k per year on autopilot. That's not selling the loans off, that's just buying a performing note and holding on to it for a period of time. Can you all do something like this? You sure can. You definitely can, ladies and gentlemen. You can definitely dive into this stuff and start taking action. Plenty of other people are doing this. Why not you? Well, why not me? Because I'm scared to take action. I'm not coachable. I have no money so I can't make any offers. I'm just a wholesaler. I just want to wholesale and flip property. But I'm not making any money flipping property because I can't find any deals. Look, with note deals we find plenty of deals. There's plenty of stuff coming in. All right? Plenty of different tapes that we can take a look at. And I've showed you through Assignments, through mortgage banking associations, through LinkedIn, through Bauer Financial, through Languide, through IMN, all the different contacts you can find that are all these institutions that I can sell you. The sexist savings and mortgage lending, the mortgage bankers, that's all that stuff. That's my whole goal day one. Because there's other people out there will tell you, oh, you can't buy notes. Banks don't want to sell you notes, you're too small to buy notes. And I say that's a bunch of hor. Okay, now let's talk about it. It would be really nice if every non performing note you bought reperformed, right? That would be great. That'd be heaven on earth. Unfortunately it's not that case. Okay, you're gonna have some that you have to foreclose on. All right, so let's just kind of go back through our numbers here. All right? But I always say, let's say your goal is you want to make 120k profit in the next 12 months in the next year. Okay. I always say it's probably going to split down the middle. If you're going to look at some performing stuff and non performing or if you buy just non performing stuff, you're going to see a probably a 50, 50 split of deals. Okay? Not every deal will perform 50%. You will probably, if they're owner occupied, you will probably get them back on track of some sort. If you're buying at a point where it makes sense to reperform like I just showed you guys, they'll probably perform. Okay. And the other half will be some sort of mixture of deed and lou cash for keys, foreclosure short sale where you'll get a bigger check. Okay. So once again, if you go back in here, 60k in cash like we showed you, that's about 5k per month off the cash flow. Buying notes, it's 14 notes, right? All right. Now if you're going to get bigger checks on the foreclosure side, I don't like to do anything less than 10 grand where it's going to come to me. 10 grand, I prefer 15, I prefer 50. Okay. And every market's a little bit different out there. I don't mind buying Ohio, Michigan, Indiana, we've got good teams. Florida, my checks are going to be a lot higher than 15 grand. But if you're in other parts where it's smaller values, that's okay. There's nothing wrong with those areas. So that's the thing. If you take that 120 grand and divide it in two, where you get half cash flow, which is covering your monthly expenses at five grand per month, stuff like that, and the other 60 grand is going to come off four to six deals or one or two deals. You can make six figures that way. Okay. It's really 14 performing notes. Six foreclosure notes is going to get you that 20 notes, which is basically eh, one and a half notes per month. Now what you have to do is be realistic, be realistic about this. Okay? This doesn't mean you go out and make 20 offers and you get 20 notes accepted. That's not how it works. Okay. Most of the time what we see on average it's about a 10% closing ratio. And what I mean by 10% means you make 100 offers, you get 10, 10 approved that you're going to close on. Okay? So if you need to close on 20 notes in the next 20 next 12 months, that means you need to make 200 offers. 200 offers comes down to about 17 offers per month or four and a quarter. Let's just round it. Five offers a week, one a day, pretty good. And you can do that. Heck, you could jump on paper, stack and crank out, find one note a month potentially or by contacting the other sellers on there and find more stuff or you get a lot more coming to you from direct sources. Like we show where you got 46 to pick from, you got 380 to pick from, you got 47 to pick from. Okay, we had, there was those four, it was 48. Reverse mortgages are all vacant. These are not going to be modifications. There are going to be foreclosures, but we Got originally two accepted and then we ended up going back and forth and got seven accepted. I'll probably settle on three or four like I said earlier today, but that's going to be some bigger checks. I like performing that suit because it covers the bills, pays everything on a regular basis. That's always a good thing, right? So there's less ups and downs. If you want to do this on a passive level basis, you could do this by just targeting the performing, nothing going from there. Any questions, comments, concerns about what we just showed you there and kind of that 12, you know, at 6K in 12 months, 24 months when drag it out like you don't have to, like I say, people always ask me, guys, we have to work full time at this. No. If you're working five to ten hours a week using Octopus to reach out, reaching out with a VA or on LinkedIn, a couple hours a week, you know, a couple hours a weekend or Monday through Friday, send an email blast out to the database that we show you how to pull. You're going to get stuff. You just got to stick with it. Just got to stick with it. All right, Questions, comments, concerns? Before we dive in, something we're in our, we're, we're probably gonna wrap this up about 4:30 today. So in about another 30 minutes, everybody, just so you know where we're at and what we're doing. Okay. All right, let's move on from there.