Structuring Your Note Deals With Investor Funds

Foreign this is the no Closer show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars worth of property for panties on the dollar. Get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same. Now here's your host CEO of We Close Nodes, Scott Carson. Hey everybody, Scott Carson here. Just want to say thank you again for listening to the podcast. If you've been listening for a while, you're subscribed to the podcast. First of all, thank you. Second of all, hey, you know, if you're you're not one of our coaching students or you haven't signed up for one of our three day workshops, here's an opportunity for you. You want to check out our WCN membership. This is the biggest bang for the buck of the notice street. Besides our one on one coaching, this is our monthly membership for 97amonth that gives you access to all of our online training, our virtual workshops, our note weekends, our special one day master classes that we've taught in the past, anything that we have going in the future, as long as you're a live member, if I can't make you or save you $97 a month, I'm doing something wrong. But save you paying 997 or 99 bucks or 399 here or anything like that. We make it affordable at $97 a month and like I said, it gives you access to all of our past replays, our upcoming classes, our access to our special classes. We also do weekly coaching calls with our WC members and also our WC members also get first crack at tapes and lists of notes that we get in after our one on one coaches. Take a look at them. But it's a great way for you to go. You can also schedule call with me anytime to go through deals that you're working on marketing things, questions you got going on about a deal. We're here to help you. So how do you get signed up for that? Really easy. Just go to noteumbrella.com that's noteumbrella.com get signed up there for you 97amonth guys. Like I said, biggest bang for the buck of the industry and we want seeds of the family. So let's get you signed up today. That's knownumbrella.com welcome to the no family everybody and thank you for always for listening. Good morning, good afternoon and good evening everybody. Hey, welcome to this episode of the Note Closure Show. As always, Scott Carson, excited to be with you today. Today's episode is actually going to be a replay from a session in this past virtual no buying workshop. Why am I doing a replay? Because I had everybody that I've talked to who attended the workshop absolutely just go gaga for Cocoa Puffs. Okay. On this specific hour long video. Now you've heard actually part of the video. We went back in and restructured or redid the second half of this video going down and breaking through a performing contract for deed that and then we structured it with the money. But you didn't hear the first deal. And the first deal is the first part of this episode that you definitely want to listen to. And what it is is we found a performing note that I think the the unpaid balance is 245. The seller was selling it for 180 and we structured it in how to purchase it because it was at a 12% return on a property in Amarillo, Texas and they were selling that at a discount. We actually brought in structured how you would take your money partner and put them into the deal, make money. And by our due diligence on what we found is that the bar would probably want to refinance out in three to five years. And so how would you structure this deal to cash out your investor in three to five years at the same time and put just under, oh six figures in your pocket, like $99,000 in your pocket. So I want you to listen to this. The video is also here. So if you want to watch the original video because we actually pull up the amortization table and share with you, you can actually see the numbers that they keep paying. And I think that shed a lot of light on some things because I know a lot of people like how well how to put my investor together with my money or together with a deal, my money in the deal, how do I put them together so it all works and I think a lot of people got it. So enjoy this coaching call from our most recent note Buying for Dummies workshop. As always, feel free to sign up for the next one sometime in January at no buying for dummies.com or you can go to we close notes.com and click on the education side. But listen in. Hope you enjoy. If you like this kind of stuff, please feel free to comment, share, subscribe and thank you for always for listening. So enjoy. Stay tuned. Don't do it. Just go secure the property. Okay, now what I wanted to do right now with you guys is go through kind of an easy way for you guys to start Buying up literally a way for you to put what we've talked about, how to find notes, you're raising funding and how to structure deals. So that makes sense for you and your funding partners and actually put some money in your pocket. Is that okay? Is that all right? Okay, let's go, let's dive in. I'm keep it simple for you. All right, so I'm going to go to, I went to paper stack. I'll just go on here and show you how to do it. You log into them. Like I said, I haven't bought, I haven't bought anything. Paper stack. I, they're going to charge you a fee on both sides. I, I get better deals direct from source. But there are a few on here that you could probably make work for you. Okay, because here's the thing. Can we agree that your investors are more concerned about a, is their investment secure? And if all the hits the fan, can I get my investment back? That's their two biggest issues. It's not about the return on investment. Is my investment basically secure? If something happens, can I get my investment back? And then the third thing is, what's the roi? Well, actually the fourth, the first thing is can I trust you? Is my investment secure? Not in a risky spot. If all shit hits fan, can I get my investment back in some sort of fashion? And then my yield, that's really what it comes down that order. Most people think it's the yield and that is important to attract people to it. But honestly it comes down part of why you're marketing all the time is to get people to trust you and get number four out of the way. I like, I like him. I like her. I can trust her. I could build rapport online. Okay. And go that route. Yes. A return of capital before return on capital. Exactly, exactly. Okay, so I've gone here, I've logged in here. All right. They got 137 listings that are basically available single assets and first liens. Now I'll look at both performing and non performing. But for the sake of the argument, what we're going to dive into is gonna hit download this esv. I've already downloaded it. I did it before we got started this morning. So let me pull this up here. So okay, here it is. Let me share my screen so you guys can see this now. All right. All right, so you've got the asset here, the listing type, single asset, the list date for it. Okay. Available list price, firm flexible, make an offer, lean positions, first deed of trust, contract for D, unpaid For balance, interest rate, yield means the return on investment. Basically for what you're buying, what they want. The NAs basically say are like that because they say they haven't calculated it, which is. Okay. Interest only. No. Yes. Property value, BPO value. You'd have to look at your stuff yourself. Is not on there. The date the investment to balance means the investment to the balance of the note. Balance, the investment to value the property, the loan to value of the property when the note was originated, the original balance, the total payoff, any payments remaining, if there's any legal status, occupancy, vacant or occupied, street address, state Z, zip, property type. A lot of this is land. Okay. P and I payments, escrow, impounds, total monthly payment, last payment received, next payment due and the maturity date. Why they have hardest hit funds in here? I don't know. Because we don't. The hardest hit funds don't exist anymore. So don't worry about it. Charges judicial, non judicial, going from there. Okay, so remember we highlighted the fact that they shared the seller's name and you should reach out to the seller to get deals direct and not have to pay a stupid fee. All right, so but the thing to look at is you can basically re organize this by a couple things. You can reorganize. This one says list price. Like for this one here, I'm gonna get rid of it. Because when you go look at it, this is actually a partial note. They want you to pay 11 grand for a partial of like 20. And I don't buy partials for myself most of the time I'm not going to get into it. I don't like how the, how this guy structures it. Anyway, I went and looked at it. It's not that good. All right. Oh, hang on, let me. I got a different tape here. Don't save. Sorry. Hang on here. Report. Let's see. I'm closing. I got too many tapes open. Give me one second here. Closing all these IRA lists out, which we have already. Okay, let me pull this up. Downloads. There we go. Okay, share my screen now. All right, so here we are again. Filter this stuff. This is stuff I just do with every spreadsheet I get in. I'm not going to teach you how to do Excel. You need to do that yourself. Sorry, custom sort. Want to filter it first? All right. And we're going to highlight these. Bold. Okay, so now what we have here, it's a spreadsheet, right? And it's a mixed bag like we talked about before. The great thing here is you can re sort this by a couple things. Let me go over here and custom sort it. And if you're starting off, you may want to custom sort it by the purchase price. You know, that's what I would do. You know, list price most largest. Okay, now they had one pop up here. Only 4, 500 bucks. Okay. This is like. Let me grab us that partial. We're getting rid of partial. I'm not gonna waste your time on that. All right, so here. Okay, so now you can also sort it by yield on this in a lot of cases. Let's look at this first one, because it just popped up. Would I buy a $4,500 note? I might. I buy the whole note. Is the whole note, not a partial. Might make sense for your IRA getting started deal. Okay, so let's look at this one. This is by Secure Land Company. So it's a land note. They're flexible about on the price. Interest rates at 10%. The unpaid balance is 6,800 bucks. The value is eight grand. So you're basically buying it just above 50 cents on the dollar. You know, 50 cents a dollar of value. Payoff is 68, 23. There's three and a half years left remaining. So you get paid off Amiga Road. Okay. In San Luis, Colorado. Okay, well, hey, SK Maybe this is a note up in your neck of the woods. I don't know, but it's land. Okay. I don't know if you want to own a lot, but the fact that they're vacant, let's see what their P and I payment is. Okay. They're paying $200 a month. Okay, $200 a month. Well, we figured $200 a month times 12, 20 $400 a month in cash flow, that's a pretty good return. You'd have your investment basically paid back in roughly two years. Right. If they wanted the. The 4500. But since they're flexible, I would even go a little bit sooner, say four grand. So you could get a 60% return on your money. Now, it's only, you know, it's only, what was it, 40 payments left. So it's only roughly. They've been into it for about a year. This was, well, it's only original. This was originated back in April. So they've been doing it for six months. So it's got six months of seizing. Okay, now is this a. Once again, one of the big things is do you want to end up with a property? A note on a property, that's the biggest thing. Do you want to own this. San Luis, Colorado, Amigo Road. Let's look at this. It's currently not for sale. A vacant lot. Last Soldier. Okay, there you go, Amigo Road. Now, the great thing is with their spreadsheet, get a question from somebody. Land is okay. It is okay. Exactly. Now, how big is this land? Is it just one acre? So if we go back here to the spreadsheet and click on the link, let's see what they say have to say about it. It's probably just a c. Yes, Steven asked the question. Is there a service fee on this note that would affect $200 per month profit? It would. Your servicing fee. Depending on where it's at, it may be covered by the seller, it may not be covered by the seller. I don't know that yet. But usually if it's not covered by the borrower, not covered by the seller, but by the borrower, it may be $25 a month. So, yes, it is going to have some impact on your profit. But thank you for saying that, Stephen. I appreciate that. Yeah, beat me to it, my friend. So let's see what they say about this asset. Come on. There we go. All right, here we go. Our latest gym. Go Castillo. It's 4.17 acres. Wow. So you could buy, basically, it's a thousand dollars per acre. Your gateway to financial freedom. Hot market. Now, you don't ne. You're not going to own the property. You're. You're buying the note. You know what I'm saying about that? Okay, yeah. So over 40 months from an initial 4500, but that's a profit of 2239. So generate revenue and ROI. 51. It's not so bad. That's a pretty good deal there for it. Hey, I mean, are you going to get rich on $175 net profit a month? No, you're not. Okay. But hey, that could be a pretty good yield in your ira, especially if they say flexible, maybe get it down to 4,4000. And that pays your servicing fees for a couple years. Okay. Yeah. So there you go. That might not be a bad little starting off deal for you. You know, you're going to make more than 10%. That's what the notes written at 10%. If they don't pay and stop paying, guess what? You foreclose. You know, you're probably going to break even the foreclosure, foreclose, but you end up wanting four acres at the spot. Wherever the heck this is. Okay. Put a map to it. Amigo Road. What is that near San Luis, Colorado. So it's. Oh, just north of Taos. Okay, so southern Colorado. All right. South of Pueblo. Okay, so you. So you see these parcels that have been cut up there? So it's one of these parcels here. All right. There's worse things. Okay. I don't know if I want to move out there. Let's see, can we drop. Oh, we can drop our guy right there. Okay, let's drop him and see what the lane looks like. All right. It's basically. Yeah, boy, need to bury a body. There you go. So since that's in Colorado, it's probably a thousand bucks or two now. There might be even some of these land guys have a. It's. It's a. It's Colorado. I don't know in that county how remote it is, how big it is or not. That'd be worth checking out. Talk to an attorney at the neck of the woods. But honestly, if somebody's like that in four years, they're probably not wanting to miss out on this, especially if they've been paying for six months already. You know what I mean? Is there water? I don't know. There may be water out there. I don't know. The thing is here, guys, that's a look at if there water on it. You might want to talk to the seller on there. Obviously, you have a lot of these companies going out and buying big parcel lands and subdividing, selling them off. We've got a buddy that does that here in Texas, sells them off in 5 and 10 acre parcels. If they, you know, track down 500 acres or a thousand acres and then subdivide it up. Okay, questionnaire. But like I said, it's. It's. If you wanted to start off to get the feel for buying a note, 44,000 bucks. There you go here. So, yeah, obviously if it's landlocked, it's a different story you want to do. If it's got road frontage, of course, it's hard to sell. Looks like it's hard to sell. If foreclose, it might be. Look, guys, you don't. Here's the thing. I'm just giving you a sample on a deal. You're right. If there was a single family house out there, I probably wouldn't do it, but somebody's bought this. Did they put any money down? There's some things to look at on. Just giving you an example on what, hey, if you got four grants in the sunlight to do, this would be a great little deal to get started. Hell, I might buy the damn deal if it's gonna make me 15%. For four grand. I could put it in an IRA. I could put it into a self directed IRA, a Roth IRA for my nephew or your daughter to see, get things rock and rolling. Okay. There's some things to do. If they're selling other parcels out there, that's one thing I would ask the seller. Hey, if you're doing this, how many of these have you sold off? Sold a lot. Okay, great. Even some of these companies out there, they put clauses in that if the bar doesn't pay, they'll buy it back from you for the amount. So that's something to keep in mind. A little bit different in land than the property. Okay, so let's go back to the spreadsheet. All right, so that might be a possibility. We'll just throw that up there. Okay. Whoopi freaking do that. Come on. As a maybe. Now let's do this. You know, let's throw. Let's see here, let's look. Let's resort it by yield. That's going to be the easiest thing for you guys to take a look at here. Customer sort yield, largest to smallest. All right, so if we go over here and we get rid of the nas, let's take the NAS offer for the time being. All right, so now can you guys see this as my spreadsheet? Some of these yields are pretty good yields. So like this one here is an 18.78 yield based on what they're selling it. Now this is a. They're a little flexible in price. All right, $180,000 a list price, deed of trust. The up balance is 245. So you're basically buying it at a discount. 73%, 176. So it's a 15 year mortgage. It's occupied. It's an Amarillo, Texas. Let's take a look at this. Amarillo by morning up from San Antone. Everything that I've got is just what I've gone on. All right, so this is a single family home. It's a 2,000 square foot house. All right, let's see if we can find any photos of it. I don't know which one it is, but it might be it's one of these. Maybe Kangaroosa Road on Trulia. Let's see if that maybe not. Two bedroom, one bath, 2,000 square foot house. It's on 13 acres. Okay, 13 acres in Texas, Fast foreclosure state. Okay, now let's go back to the spreadsheet. Here. All right, it's a 15 year mortgage. Now here's the thing. So the total payoff is 247. All right, let's do something here. Let me go. Let's work some magic here. All right, so. And they want. All right, so if you want to borrow $180,000, okay, what would your monthly payment be to an investor if you paid? So if somebody had 180,000, they wanted to make 8% of their money, your money, 180 times 0.08, that's 14 for a year. Divide that by 12. That means they're. You'd have to pay $1200 a month, basically 3600 every now 90 days. So 1200. This is paying right now 2964. Now that's principal and interest. There's a big difference in the three. Right. Or 2964. Now let's do this. Let's make one of the things you have to look at to make it simple for everybody. Let's do an amortization table. It's really easy. Just do a score dot org. All right, let's do this. Download template. All right, so the loan amount for them. We've got all that information, right? No, I don't. Give me a second. All right, so it's a loan period in years. 15 years. 15 years, 12 payments per year. The loan amount was what, 245, right? 247. The interest rate is. The reason I'm showing you on this is you could figure out your financial calculator, but I would lose you guys. So I like doing this. So it's a 12% interest rate. Kind of a high interest rate means they could probably refinance that in a couple years. Hopefully they probably own our finances. So 245, 12% interest rate. Start date alone was when it was six months ago. Right. So what we figured. So the original date was July 1, 2024. So they've been into this for three months. So I would actually prefer a little bit more seasoning or that they brought some money to the table. They brought a big down payment table. I want, I want to take a look at that. But for the sake of this, it's not so bad. Okay, so July 1st or no origination with August. July 1st, 2024. All right, now we have 29, 64, 42. How close is that to what they had there? Monthly P and I payment is 20. There we go. So it's right on there. Okay, so this is a great thing. I love It. All right, so what I like to do when I say 180,000, if it's at 75%, I'm borrowing that money from an investor. 180,000 and you have this loan like a 51. It means basically, how soon is that payoff? How much is their unpaid principal balance going to get written down to 180? Because I got to sell the note before then or hope they refinance it before then so. Because if they're paying principal and interest each month, I really just want to make the interest right. Remember, if I'm borrowing money just from my investor at an interest only rate, there's that gap. Obviously my 180 staying the same. But their 240 is getting written down. So we go back over here. So we look at their amortization schedule. Come on. So how soon does the balance go down to 180? So basically it hits 180, 000. I don't know if you can see this down here. Question from somebody. Yeah, I get it. Just, Dale, stay on track with me, buddy. Do not be getting in. Don't be distracting people with other deals. We're working through one deal right now, so please stay on hand. If you start making comments about other properties, people are going to miss the important stuff. Okay, I get you understand it, but let's stay on track. Okay? All right, so 100. You're missing one of the most important things here. So payment number 87. Right? That's seven years. Seven years until the principal interest gets reduced to that. Okay, so if we look at five years, let's go back up to five years. Would be 60 payments. At five years, their balance is 207. That's a $27,000 difference between the 180. That's what I would look to do. I would look to hold this three to five years. Because if it's after three years, maybe get the bar to refinance you out. Okay? Because if you do. Because that's the great thing. They're at 12% interest rate. They just got owner finance on this. It's if they have 24 months of payments. If we go to 24 months of payments, 24 months of payments, their payoff is 2, 3, 4, 2. 85. Okay, so let's. Let's go over here and look at this different thing here. All right, so basically you're buying the note for 180,000. Okay? 2 to 2964. The UPB is 242. Right? 245, 394. 2, 245, 394. Okay. And basically at 60 months, their payoff is. What would you say it was? 2, 075 11. 2075 11. And let's just say 36 months. 238. Let's say 238,000. Right it up a little bit. Okay, now let's make these all dollar signs, and let's go through here. So the great thing about this, ladies and gentlemen, all right, if you're borrowing 180,000 and their P&I payments, basically, is a 12% interest rate, right. Could you technically give somebody 12% interest on their money? You did 12% interest on it. Let's just go back here just for the heck of it. $180,000 times 0.12 per year. $180,000 times 0.12 is 2160 a year. Divide that by 12, that's $1,800 a month. That would be your investor payment. Okay? Now they're collecting principal and interest of 2964. If you're. And here's the thing. If you. Let's put this. If you own 13 acres at 12% interest, you own or finance it, what would you logically do be working towards? Come on, people, pay attention. If you had a 12% interest rate on a mortgage right now, and rates were at six or seven, what would you be working your ass off to do? Refinance, Right? Get your credit score in a better spot. Okay. 12% is going to eat you alive. Now, here's the thing. If they miss a payment, if they miss three months of payments and you foreclose, are you going to make some money on this thing? Yeah, because it's basically 245 as a path. That's a $65,000 difference in profit to turn around. So it's about a 33 cash and cash return. About that time. It's 13 acres. Even in Amarillo, people are buying 13 acres. How? If I could buy 13 acres with a house on it, I might move to Amarillo myself right now. As long as I get Internet. Can we agree to that? Yes or no? This is. This is the full contact version of you guys commenting. Okay? Yes. Okay. Thank you very much. All right. But let's talk about the cash flow. What are you going to be making? Cash flow. If you had an investor and wanted to give them 12% return, your cash flow would be this right here. It'd be 2964 minus your 1800 bucks. You'd be making 1164amonth. Let's say you do that for 36 months, you'd made 41 grand, almost $42,000 for the next three years. If you do that for 60, you make 70 grand off of this one note. Now, that's provided that in 60 months, you sell this note off to somebody else. It's a performing note with five months of payment history. Okay, if we look at this, let's look at this. What is. If it's equal to 180 divided by 207, that's basically 86 cents on the dollar. Could you sell a performing note at 12 interest at 90 cents a dollar? Hell yeah, you could. With almost. With five years of payment history? Heck yeah, you could. So then you get a payoff at 207. You get paid off at 207, you put another. You put what is in between you and the investor, and the investor only is owed 180. So in that case, you make another $27,511 in profit from doing the note sale at that point, if you sell it. Okay, do you get that point right there, ladies and gentlemen? Oh, hang on. Don't see my worksheet. Oh, I'm over here now. Okay, here we go. Let's refresh. You buying the note at 180, the UPB currently right now is 245, 394. Their PNI payment is 29.64. It's at 12%. If you borrow 180 grand from an investor at 12%, you got to pay them $1,800 roughly a month. Okay. Basically, if you did that, you borrowed 180 grand at 12%, just the discount between the two is going to yield you $1,164 a month difference. That would be your monthly cash flow. Okay, now you're buying it at a $65,000 difference. Yes. Every month they are paying, their balance is coming down. So if you held it for 36 months, 36 months of 1164, that's 36 months cash flow. This would be 16 months of cash flow to you. Okay, now this is the unpaid balance right here at those.2,38, or 207. Okay, now could you turn around and sell this note? Basically, let's just, you know, yeah, you could sell this. And that's what I'm saying. You could sell this at a nice chunk of money to pay off your investor in 36 months. Let's say what's to, what's 238 if it stays at now, if they pay. Here's the thing. If they pay you off in 30, they go refinance out into a cheaper mortgage at 36 months, their payoff is 238. You take that 238, you pay your investor back and guess what do you net? Somebody give me the math on that. If you borrow 180, they refinance you out at 238 in three years. What's the profit difference in that? $58,000 is exactly right. And the difference is equal to 238 minus what you're paying your investor back. 58. That's 58 on the note sale. But guess what you just got. In three years time, you got cash flow and the note sale purchase, you make a $99,000 total in profit on this deal. Let's say they refinance out in five years. Okay, five years. What's your difference in profit on five years on. It's not that difficult. If in five years their balance is 207 and you owe your investor 180, it's the difference. 27511. Great job, Helena. Yep. And your total profit over five years, it's 97, 351. Wait a second. There should be more. Cat, hang on, I must have done something wrong here. Oh, well, it's the principal. The principal buy down, that stuff is. Yep. You get that bigger gap. Yeah. So yeah, your profit goes down a little bit. You've got more in cash flow, but their principal acceleration has increased quite a bit. But so there you're. It's a, basically a 20, 200, 2600 difference because they're that 1164. Technically, because they're paying more principal, it's still 1164amonth in cash flow, basically on average. Okay. Because you bought it at 180. You bought it, you bought your, you made your profit in the front end by buying at a discount or the unpaid balance is 245. Nice. Now if they don't pay, they don't follow through and foreclose. You foreclose. Now you turn around, sell the asset off. Now what's the value of the property? So there's a house out there. There you go. It's a middle building. Okay. Let me get some inside pictures. You don't usually get that when it's rural. So you got family there. They've, they kind of built that house themselves. But that's okay. You know, I got it. You know, it was like a handyman special Somebody's put some work hard into it. Got a kid growing up, 13 acres there, hard working. Could you put this up for sale for 12 months? Yeah, you could, you could sell the note after 12 months. Let's go back to that. I'm just trying to see. Let's go back to trying to figure out what they sold it for. Anyway, so it was the owner finance deal. They may not have listed the sales price on this, but I would ask them, since they owner finance, you could see what the sales price was. You could see the hud. So it makes sure that they brought some skin in the game to the deal. So let's go back here to the spreadsheet. If you want to sell it after a year, you could. What would you make note wise? Let's see here. So they would owe 241. So you really just make. They write down a little bit. 241. Yeah, you make. You only make 60 grand selling the note in a year. If somebody bought it out from you at par, roughly. Okay, the thing about this is if somebody's working, they're probably working to refinance their credit or work their credit. You see how this. Does this make sense? Anybody. Does any get excited about this or not? Am I just talking on deaf ears here? What's the biggest handicap on this, though? I don't have 180 grand. Okay, but would you be willing to market. Hey, I got a deal. $180,000. I'll pay 12% for. For three years. How many of you. I mean, what's 11 $64 a month mean to you now? Or $99,000 in total in three years? I could go for this. Yeah, that's the, that's the great thing about buying us. Now this is nice because the performing note, and they're selling at a sizable discount. They're selling it right, you know, six, you know, 75 cents of the dollar. Okay. And you've obviously got a lot of emotional equity in this thing. If somebody's living in it, they rehab the property or they built the property, basically convert that middle building into a small little house, but they're living there. Okay. Now what I would do too is I'd make sure and work with that bar like. Because here's the thing, if it's at 12%, I mean, that's okay. But hey, can we get you into a cheaper loan? Since it's in a 10%, it's over 10 acres. You could do a USDA loan, maybe get them qualified for that, work with them to get a better interest rate so you get paid off sooner. So great question, Natasha. Why is the seller selling it at a deep discount? Because they probably they, they're into it for a whole lot less than 180. Because if they sold, let's say, let's say they own the property and they bought the property for a hundred, the owner finance it at 245. No, they're gonna get. And if they get 180 for it, they're happier than a pig. And let's do this. I bet you we can find out here. Give me a second. Give me. So let's see, let's go back here. Let's do a little due diligence. What county is Amarillo, Texas in? What county is Yellow Texas? If you don't know Amarillo means yellow in Spanish? Potter County. Okay, so let's go to nature Online Texas, Potter County, Brazil district. And the address of this is Kangaroosa 24. 301 Kangaroosa. There we go. Dave James and Jeanette Davis. They were out of the mail. Address is Validator Road, Texas. Okay, so look at this. He's a homestead disabled veteran. All right, thank you for your service. All right, so value history. Let's see if we can find a deed history on this thing. So deed history. Okay, so somebody bought this. Panhandle Homes bought this from Robert Goodson. There's a deed on this thing. Panhandle Homes llc. Let's look at see the instrument on here. All right, so let's see, we can see what the deed was originally. They're not going to disclose what they bought it for. So I guarantee Panhandle Homes, who bought this, bought this cheaper. A whole lot cheaper than $180,000. Yeah. Okay, so here, right here, 148. So they bought it. And let's see here. Grant. Grantor. So there was a mortgage hunt for 108 48,000. Let's go buy vendors lien. Yeah. So what they did is owner finance. They bought this, okay. Panhandle Homes bought this from Robert Greg Goodson with owner financing for 180, 48,000. They sold it to such the James for 245. And they want to get paid 180 because then 180 they pay off the $148,000 and they pocket $31,500 difference. Does that make sense how we got that and they've been receiving payments for three or six months and they would have gotten any down payment that the Davis's put down as well. And they bought this back in June. Yeah. So basically they bought it immediately turn around and owner financed it the next month to the James. Win, win, win across the board, everybody. I love how notes can create money out of thin air. It's. That's the. That's one of the beautiful things this is. Can we agree this could be a slam dunk deal? Yeah, this could be a slam duck deal for somebody. If that doesn't want to make it go out, start raising private capital. I don't know what that. What wouldn't. There you go. 108 right there. That should get you wanting to get. Rock and roll. That's a green one. Okay. Using other people's money to make money. This is what the banks do, ladies and gentlemen. Except when you give banks money into the checking savings accounts or certificate disappointments, they're paying you four and they're going out and making 12. 18 on credit card, 32 on some credit cards and they're glad to give you four. It's the same thing. The arbitrage. This is a great little deal for somebody. Not bad yield on that. Let's. Let's dive. Should we go into another one and look at another one here? Now they're flexible. Could you maybe get that at 170? Probably. All right, let's look at this other one. This next one here is a smaller one. It's another land deal. Scout land group. Okay. 87. Let's see where it's located at. It's a better deal than out in the middle of Colorado. Vacant. Oh, Pine Tucky Lane in Elephant, Alabama. Let's. Let's look at single family. Let's do. Let's do a property. Okay, let's look. This one is. Is single family home. Let's do this one here. Occupied. Yeah. 18%. You okay? Let's. Let's look at this one. Let's look at this one. Okay. What do they look. What's this look like in a contract for deed? Helena? Contract for deed's the same thing. It's a mortgage note. A contract for deed is written on lower balance properties below $100,000 usually. And it works well in Alabama because a contract for deed would be where it's a 30 year mortgage at 9.9% interest rate. The deed stays in the seller's name until the contract is paid off. But in a lot of states, instead of having to go through a foreclosure auction, you can do a eviction. Because some states treat a contract for deed as a tenant, others treat it As a mortgage. Okay. Contract. But it's the same thing. Just got to know what the eviction law is like in Alabama. Instead of foreclosing and having to wait that one year redemption period, if I'm buying a contract for deed in Alabama, I get to evict. Okay, I can evict faster. Indiana, I'm evicting in 14 days versus going through a nine month foreclosure. All right, so Michigan, let's look at this one. This is probably, this is probably a contract for deed anyway. Yeah, it's a contract for you. Okay, same thing. Casey Connors. I think I've looked at this one a couple times. Let's go see what the property looks like. Whoops, hang on. Sorry. I always have too much stuff open when teaching. Okay. Whoops. That's not what I want. Sorry. Go back here to my spreadsheet. Casey Connors. All right, so it's this property in Jackson, Michigan. This is a picture taken from October 2012. So don't let it. Somebody's doing a rehab here somewhere. Maybe it's this property right, right here. Okay, let's go back here. Let's look at something else. 41,000 off market. It's a 816 square foot house. Not really that exciting. Okay. Yeah, I mean. Oh, so it's a little bit more. So there we go. Last sold, 134, is that right? Right. Address some of these cities. Yes. 134 West Robinson. Okay, fine, it's Michigan. It's gonna have some snow. All right, so let's see if we got any. All right. Yeah, not a bad looking cookie little cutter house. Right. I just wish we had a better map. IM I'm not sharing amortization. Hang on here. I'm showing the pictures of the property right now. You guys see pictures of the property? So that's what it looks like. Okay, so all right. Cookie cutter little home. It sold for. It last sold for $6,000 in April 2010 because somebody bought it at 610. So here's the great thing about contract for deeds is that there were so many of them bought that were these low balance reos that Fannie and Freddie were selling that you had companies like Harbor, Rock Top that came in and bought these in big, big portfolios. And since they bought the reo, they bought them cheap. So this was originally sold in 2010 for six grand to somebody and somebody bought it in owner finances. Let's go back to the tape here. So now we're back at the tape. New share okay, let's go here today. So when did they finance this? When was this originated? Total payoff is 46. Original balance was 49. So they originated us back in January 2023. All right. Property value is about 73,000. I could see that being it's gone up in value a little bit. It has. Okay. On paper balance is 46. Let's see what they want for it. 32. Okay, so let's go to our numbers here. Okay. Fair market value, we'll just say 70,000. UPB is 46,877. Purchase price is 32. We'll just say 33, rounded by 40 cents. 33. Interest rate is probably 9.9 or 10%. 10%. And the monthly P&I payment was 537. Was that 537 bucks? Okay, let's do dollars here. Okay, so basically they're in at 66 cents on the dollar.67. You'd be buying this at roughly LTV and you're at 70% of UPV or you are buying this at roughly less than 50 cents on the dollar. 47% of fair market value. So you're at a pretty good secure your prop. Right. Okay, so let's blow this up a little bit, make it a little bit easier for you to read. Okay. All right, so there we go. 70,000. And let's go back. This is. They've been in here for a little while. All right, so when was this originated? They made a payment August 1st. They're due for September, so hopefully they're not behind. Okay. Matures in 2029. So it's probably a 20 year originated yet. January of 2023. Okay. Original balance was 48. 799. Okay, let's do this. Let's. So 49, 879-498-79. I think it's a 20 here. Sorry guys. Let me go back here. Here, visit mature payments remaining 156. So they've been paying almost two years. So it's 24. So it's a 15 year mortgage. Okay. 1 1, 20, 23. 536 is a monthly payment. Okay, we're pretty close there. And if they did January of last year, then what's. What should we say? Their up? 746-877. Yeah, so they're right here at not quite 24 months, but they were doing okay. We're right about that same point. Okay, so there was 18 months. Okay, so let's go through the numbers here. Okay, 46, 8, 7, 7 and we got that basic. So like basic. So we're 15 years. So really we don't want to be beyond the seven year mark. So let's figure out what the five year payoff is. So it's 60 months, is 40, 40,700. And what, how long does it take down to get to 33,090 months. Actually let's just do see what the seven year mark is. So the 84 payments is 35, 562. Okay. All right, so 537amonth. Now let's see here. What would we offer up our investors? Let's just say, let's just do a, say let's do a quick 10% money cost. So for borrowing, let's say. Yeah, let's, let's say we borrow 35. Okay. So if you figure, let's say 35,000. So if you figure 35,000 times 0.1, you're basically paying $3,500 a year. And if you divide that number by 12, you're paying two hundred and ninety two annual and that's what you're paying your investor. Okay. So but if you figure 537, what are you making in cash flow? Well, you're not making a huge amount, but you're still making something that's pretty nice. Right? So it's equal to 537 minus your 291. So you're making 245amonth. All right, that now if you do that for 245amonth and let's say you do it for, well, let's say three years. Three years, 36 months is equal to that. You made 8, 800 bucks in 36 months just on the cash flow. And let's see what it is. Where's their balance in 36 months? Well, we, we 36 months from now, which would be the five year mark, roughly. Yeah, yeah. Okay, that's it. Remember, they've already been in for about 18, 19 months. So it's at the 60 month or the five year mark is really three years from now. Okay, so that's where it'd be 47 with you, the balance. So maybe you give a refinance out and pay you off at 40. You borrowed 33. If you borrowed 35 then you're making another 5,5000 bucks. Okay. This is a little scarier deal because it's a smaller deal because it's a higher, it's at 9%, not 12%. It's also not a bigger discount. I mean it's about the same but discount but smaller dollar amount. Okay. Yeah, make about five grand. Now here's the great thing about Michigan. So it's a contract for deed. If Mr. If he doesn't pay you evict you foreclose effect provided that they didn't bring more than 25 down at the purchase price. So if they financed, if this was the, the 49000 was the original amount. As long as they didn't bring like 12 grand. The original sales price was 62 you can, you can evict. Okay. And that's a great thing. Now you end up in a property for 70 or greater because the value is going up in Michigan there in Jackson Michigan. Okay. So yeah, so it's about a thirteen thousand dollar payday. Like I said, this is not a bad deal. Okay. It's just a little skinnier deal because of smaller amount. Your cash flow 245 is not bad. It's a little less on the higher interest because they get 10%. Your money costs are 10%. Now if you're 12% I don't think you'd like that. Let's see here. Figured monthly cost times 0.12 it'd be a little bit less. Yeah. See 187 if you held it for three years from now is your cash flow at 12% money cost. Right. But let's figure your money cost at 8%. 810 grand there in, in cash flow plus about 5 grand. So you make about 16 grand on the deal in three years. It's not 375. But guess if you did a bunch of these, who out here couldn't go find somebody $35,000. Would it be worth paying somebody 50 bucks to go take a picture in Jackson Michigan of the property on the outside? Yeah, it would be. Let's do, let's go one back one here. And once again this bar has got some motivation to be there. Right. Oh right there. Look at that. That's from less from 12 years ago. Is that it or is it this? Oh it's right this one over here. Okay. Yeah, it's a different owner now but you got some pride of ownership. Hey, who would like to make. If you've got 35 grants in an IRA make that like you'd like to make 8% of your money for three years. Let's talk. Yeah, I take that out of my money market from, for that yield. Yeah. See that's the thing. If you're, if we go back here, if you don't have Any money costs. Okay, let's take that. Let's. Let's do that. You have zero money cost because you're using your own 30, 33 grand. Okay, well, if they refinance you out in 36 months, so you got 19 grand and then you basically paid 30, so then you also make an additional seven grand. So you just made $26,000 using your own money. 27,000. Now, let's figure the yield on that. Really, since it's three years, you hold it onto this. I would just divide. Take 9,000 divided by 33 is the simple math. That's a 27 cash and cash return. Dale, if you use your own money on that deal, you ain't gotta be stupid to understand that 27 is pretty freaking good. And if he didn't pay, guess what? You evict. And now you have a seventy thousand dollar profit. Now what does rent go for? Let's look at this. Let's just figure this. If you want to keep this around. Not that I want to. Well, but let's not. Let's go back. Let's do something. Let's say you just sold it. We can assume the property value, probably. But even if you just sold it, all right, and it's $70,000 times 90% at 63,000 after closing cost commissions, boom. It take you about 1500 bucks. That's 90% sales, 15% in eviction costs. Let's just say it's in good conditions. Somebody's probably loving it right now. Okay, so you're into it at the 33, the 35. Okay. You made $28,000 with no cash flow, foreclosing. Yes. You're not going to live there, Nicole. Exactly. Yeah. So how. So that's the thing. You're probably not going to get refinanced out now if the value goes up to 100. Okay. I don't know what Zillow. Because that's. They said values at 70. Some properties in Michigan have been going up pretty good value. Let's do this is. This is old. 49. That's from three years ago. Guys have gone up quite a bit. That's from way back then. Yeah, that's. That's old too. So it's. But if it's gone up. If it's gone up 30 grand in three years, maybe it goes up to 100. In another three years, you're probably not gonna get. You might get refunded, maybe go get some line of credit. Who knows what happens on that? But we know value in real. Let's see if we get any more recent costs. 72,000, about the same square footage. Let's look at rent. What's rentometer in that area? Rentometer 134. What is it? West Robinson in Jackson, Mississippi. This is a three bedroom, one bath house. Check rent rates. Oh my gosh, look at that. So our house is right here. Blue, blue, blue, green or green? Yeah. So median rent's about a thousand dollars a month. Twelve hundred bucks a month. Okay. That's probably what this guy is doing is probably. Well if it's a contract for he maybe is living in it or if you rent it, heck you could have a nice cash flow and rent it there too. This is what I like about note investing, ladies and gentlemen. You got some multiple ways to make money on it. Jackson, Michigan is not a bad area. It does ever get cold, you definitely get some snow there. Been through that a couple, couple of times. Okay. Is it the best places? No, it's not the best of places. There are some rougher parts. There's some good parts. But the great thing on here is you're not living there. Now. Would I want to own that property? Yeah, I wouldn't mind owning that property if I had to take it back. Okay. I'm not going to live in it. But it's a desirable. By looking at the other strategy here, the rental income is about 12, $1000 to 4, 1300 dollars a month right now. Okay. It's home for someone. That is exactly right. And it's home for someone. And that's a normal property in Jackson, Michigan there. Okay. You ain't got to go deal with the property management for, for 1200amonth you could easily pay somebody to take care of that property for you. And still cash flow and still being at a good yield and cash flow more than 200amonth like most people are doing. Okay, so that's a potential. Let's go back here and highlight this one. You know, I mean look, are you going to get rich off that one? No, but it's a great starting point to get the ball rolling at 35 grand. 35 grand leads to another one. You know what I mean? I mean we seal a lot of deals now this, that's occupied. That's good. This other one, it's vacant. I don't know if I'd want to own it. Vacant. It's land. Well, it's land. No wonder it's vacant. Okay, let's look at some more of these actually. Let's do this. Let's take, let's take our break right now. All right, let's take a, let's just do. We'll do a 25 minute break for you guys. 23 and a half. We'll come back at right at top of the hour, one o', clock, take a little break and come on back. Top of the hour. Okay, good stuff. So I hope that you liked that episode with the two deals. Like I said, one Amarillo is performing and that one is a contract for Deed in Michigan. It's funny enough as one of my coaching students attended actually was able to go out and make an offer on both those deals. Actually got them a little bit cheaper than I did. Well, kudos to him for making that happen and that's a beautiful thing and he's doing kind of a cool thing especially with that Amarillo one. He's got an investor who wants to make 12% on his money or no, roughly 10% on the on 200k. Well Phil's going to actually buy that note, I think at 177, put 20 grand in his pocket right in the front and pay his investor a split of the profits along the way. At the end he's in cash, his investor out. So he's going to actually make a pretty decent return on his money to about 50k. Plus the 28 is about 70k on the front end. But anyway, I hope you enjoyed as always guys. Please feel free to share this, subscribe and don't forget to sign up for our WCN membership. It's 97amonth. You can do so by going to noteumbrella.com that's notumbrella.com we'll put a link in the description so you can click on it directly. 97amonth. It's the biggest bang for the buck. You get access to our classes, access to a lot of other stuff that we thrown into a basecamp group tapes, list of notes, and also some one on one training videos that we sometimes share with our coaching students as well for you. So check it out. Noteumbrella.com thank you for listening. Always go out, take some action and we'll see at the top. Bye Sam Sa.