The Gospel Of High Returns With Scott Carson From The Active Duty Passive Income Podcast With Kevin Brenner

Or he didn't want to. We're going to go to a board. When he stopped, when he saw it was me, he said, well, what do you know? I said, well, I know you've got $48 million in distressed debt on your books right now, and over 75% of it is 120 days past due and you're struggling. That debt's worth 60 cents of the dollar, if not less of what you financed. And he's like, oh. I said, yo, I also know you've got this. I know you've got about 20 million in apartment loans that are defaulting. And he's like, oh, come in with me. So we go into the boardroom and there, long boardroom table about 20 foot long, stacked from there to the ceiling are all these large loan files. And the bank's like, okay, here's our portfolio. My secretary will assist you. Take as long as you need in here and buy something from us, please.

Hey, hey, freedom fighters. Welcome to the Active Duty Passive Income podcast. The only place where military members, veterans, and their families learn how to build wealth through real estate investing. I'm your host, Mike Foster, and I'm here to show you how to stop wasting your benefits. Now get off your ass, step up to the firing line, and make ready for today's lesson Shooter standby.

When I first started in real estate investing, I was completely terrified of making that one huge mistake. In fact, I walked on eggshells, overanalyzed everything, and pretty much paralyzed myself for months simply out of fear. Are these numbers okay? Will it cash flow? What if a tenant destroys my property? What if someone sues me and takes all my stuff? I knew real estate was my path to financial independence, but I was saddled with a pretty, pretty bad case of the what ifs. Turns out what I really needed was a mentor to guide me. Someone to bounce ideas off of, double check my numbers, help me build my local team, and provide me sound and sage advice when I felt stuck introducing ADPI's Operation Adam, the action Takers only mastermind. For less than $15 a month, you'll get access to a private network of fellow action takers kicking ass in real estate. Plus exclusive, exclusive 247 coaching from both me and Mike Foster. You'll also receive programmed accountability through ADPI's 30 Day Hero Facebook Live challenge, hours of bonus content, including coffee with Kevin, training seminars, weekly live Q&As broadcast direct to you, free webinar replay, and unlimited access to our new house hacking calculator. You better act Fast, y'.

All.

Because if you purchase ADPI's flagship 37 lesson Military Real Estate Investing Academy today, you'll get one month of operation Atom Free. Still feeling stuck? Kick your fears to the curb and join the movement of action takers. Now check out the link in this episode's show notes or text DEAL to 33777 to get started. All right, y', all, that's enough chatter for now. Let's get fired up for today's episode.

Hey, what's going on, guys? Welcome to the Active Duty Passive Income podcast. We have an awesome, awesome guest today. We're gonna talk about note investing. We're gonna talk about how to protect risk and get into some of the really, truly passive ways to invest in quote unquote real estate, but through the vessel of notes. I'm so excited. We've got Scott Carson here today. What's going on, Scott?

What's going on? Mike and Kevin, honored to be here today. Honored to serve your audience out there. And let's give a shout out for the ladies. They're just saying, hey, guys. Let's say hey, guys and gals.

There you go. There you go.

Are you crazy? Cat and kittens.

Oh, Carole Baskin.

Love it. Love it. But hey, before we get started though, we want to talk real quick about some awesome stuff that's going on within the ADPI community. Kevin is working on some amazing stuff right now. Kev, what's going on, bro? Tell us what you're working on.

Hey, Mike. Yeah, so, guys, we have some pretty amazing stuff. You've probably seen me if you're in operation, Adam, ActionTega's only mastermind. You know that we are diligently working on our house hacking calculator. Had another meeting with the developer today. It's, it's, it's awesome. I mean, it does everything you could want and more. It looks great and we are progressing to the next phase and we should have this thing out and going. And then we're also working on our 13 week action journal. So if you're one of those people who might be like, I want to do all this stuff, but I have so many distractions and you have trouble focusing, this 13 week action journal is going to be your ticket. It lines up everything that you need to do. There's prompts in there. Tim Kelly and I wrote it together. And that's going through the editing phase and that's going to be out and available. And just a heads up between you and me, Mike, and I guess everyone who's listening here. So if you become a member of the Action Takers Only mastermind, before this action journal hits the shelf, you get a free copy. Otherwise you got to pay for it. So definitely, if you're thinking about joining like Adam now you should join because you're going to get a free copy of this action journal. Just, you know, heads up.

All right. All right. Well, hey, guys, there it is, right? You heard it there. There's a lot of good stuff happening. You want to make sure that you get in soon. But let's go ahead and let's not waste any further time and get into this awesome interview. We've got Scott Carson here talking about note investing. He is with not Camp 2020. They do webinars, online webinars, virtual courses for you guys to go in and learn how to take advantage of this truly passive way of investing. Scott, how are you doing, man?

I'm doing great, Mike. Thanks for having me. Kevin, great job as always there. Honored to be here today and just excited to give and be an asset to your community out here for you guys today. Really appreciate it.

Yeah, this is awesome, Scott. So for a little background for our audience, I met Scott at PodFest in Orlando right before COVID kind of took over in March of this year. And he was in a mastermind group of mine. And we met and we got to talking and I thought I was the only real estate guy in that group. And then lo and behold, across the table, Scott Carson doing note investing. And it's just such an interesting topic and I'm not going to steal any of your thunder, Scott, but just the fact that you can use kind of what Mike was saying, the vessel of investing in notes, which is also real estate, because when you invest in notes, you inevitably are investing in real estate and you sometimes end up with real estate. But the concept of it I think a lot of our listeners will find very intriguing. And it's just another, guys and girls and everyone out there, it's just another way to make passive income through real estate. So it's awesome.

Diversify. So, Scott, tell us a little bit about your background and what got you started in real estate in general.

Yeah. For everybody that's listening to this or watching this, everybody's in the note game already. Whether you believe it or not, if you've got a mortgage, a car payment, student loans, credit card debt, and iou, you're already in the note game. You're just on the wrong side of the payment stream. We're all in the note game. It's Just you're on the wrong side of the payments. You want money coming in to you, not money going out to you. But I got started in the note business, really, golly. Going back to 2004, I left my corporate job and joined a buddy of mine, started a mortgage company here in Austin, Texas, that was working with real estate investors across the country. So I was originating mortgages for investors back in the day. And between 2004, 2008 was a great time to be a mortgage banker, mortgage broker. And during those four years, though, I got a chance to really kind of be an apprentice. Not only my friend in the mortgage company, but also his founding brokers, who were very active real estate investors who were traveling the country speaking at these large expos Real estate seminars in front of 500 to 1500 people, talking about owner financing, wraparound mortgages subject to deals, and all that stuff that goes along with that stuff. And so I was very fortunate for four years to really get an apprentice, be able to take home a new class almost every week, and learn the ways to do real estate investing properly, as I like to say, versus the old buy. I'm gonna buy off the MLS at full value, put 20% down, and then try to make money that way. There's nothing wrong with that. But I learned about options and taking over property subject to and all sorts of wholesaling, which is a great way to get started in real estate investing without any money or credit. And so very fortunate. I learned a lot of creative ways of doing things. Notes. And then everything hit The Fan in 2008, 9 and 10. Oh, man, we're gonna see that happen again here. We're already in the process of seeing the early stages of that, but I was fortunate enough, saw the writing wall, listened to my mentors, and then left the mortgage company and then just started dialing for dollars, calling banks, calling the lending institutions that we were originating for, and starting to get lists sent to me of notes that I could pick up and purchase for huge discounts, like, literally pennies on the dollar. Back at the point in Miami, condos downtown, facing the loan for five grand, I could buy the dead at. Oh, my gosh, it was ridiculous, you know, and for, you know, I basically was just hustling, you know, post a Facebook, a deal here, post on LinkedIn, getting, flipping notes, flipping, you know, flipping contracts and wholesaling notes, and then started buying stuff. And then 2010, I was sitting here in Austin, Texas, and I'm a big baseball fan, and I am missing baseball right now.

Oh, Boy, yeah, I think everyone is.

And I think. And I was sitting there planning, okay, what would it be like? I was married, but I've been divorced. And I was sitting there, man, I've got the time to take some trip, to travel now. What would be like to go around the country and visit all 30 Major League Baseball parks? I wrote down what I wanted to. Big, big, big fan of journals and writing goals down. And I said, okay, let me take it a step further. Let me pull up espn.com and see what the schedule would look like if I started in Dallas for the Rangers and went to the Astros and kind of worked my way around. So I created this 30 week journey. But I'd been marketing video blogs about the deals that was closing and lucky enough, like four or five investment clubs reached out to me and said, hey, we see your stuff online. Can we put your stuff in our newsletter? And would you like to come speak to our group? And I was like, when do you want me to come speak? And they're like, this date and this date? And I pulled up and I'm like, oh, you want me to speak in Philadelphia on this? I'm like, I was scheduled to be in Philadelphia on that day for this New York. I was supposed to be in New York to catch the Mets and the Yankees. And the group was like, oh, yeah, come on this specific day, which has been an off day. So it was total divine intervention.

Perfect.

I went out, started traveling, buying notes, talking with bankers, and what I thought turned it would be 30 weeks turned in over three and a half years of traveling nonstop across the country and really helping spread the word of note investing. The Gospel of Higher Returns, as we like to say.

The Gospel of Higher Returns. That is a podcast title if I've.

Ever heard of one. That's what I learned. I just learned how that we wanted to buy debt and people didn't really understand it. I mean, they've seen the Big Short has come out since then. People understand or too big to fail. We get a little bit understanding that. Or Field of Dreams is actually a movie about baseball and somebody losing the farm note. And so I just started teaching. I'm in a no nonsense kind of. I don't have to talk over anybody's head. I'm a very keep it simple kind of guy. And I've been fast forward now, over a decade later. I've helped thousands of real estate investors kind of, you know, evolve from the fix and flip that, you know, hey, I gotta touch it now the paper side where they can do note investing, real estate investing from anywhere in the world, here in the United States. I mean, I've got students in Australia, Israel, Italy, England, Spain, and all across the country that do this from the comfort of their own home or office or wherever they're located. And, you know, they're buying notes and working to try to make America great again, one defaulted mortgage at a time.

Yeah, so he's got so many one liners, man. So many one liners.

I love it.

No, but guys, I mean, let me just jump in here because there's so much that needs to be broken down. And what Scott just said one, you know, when you were starting this and you said, well, you know, I got a mentor that is such a critical piece that most beginning beginner real estate investors don't do. They just think that they can do everything by themselves. And you don't realize that when you find a mentor and you go to someone, you add value. I'm sure you're adding value to this person in some way, shape or form or another. And when you're adding value to this person and then, you know, instead of them paying you, they're paying you with education and knowledge and you're learning from them. It's like you are in an accelerator of whatever it is you're trying to do. You're just like pedal to the metal and you're going to achieve what you need to achieve. Whereas if you don't have a mentor helping you out, you're kind of just dragging your knuckles on the floor and all this friction and you're just going slow. You're hitting your head up against the wall. I can't think of any more metaphors. Mike's probably got one, but I mean, you're just like in quicksand. I got one more. That's the last one.

And here we go.

Here we go. No, but like, having that, having that mentor relationship is huge. And then I love how you traveled around three and a half years, traveling and teaching and adding value. That's unbelievable. How did that, like, how did a 30 week treat or a 30 week trip evolve into three and a half years?

That's a good question. Kevin and I, I went to Dallas, spoke in Dallas one night. Next night I spoke in Houston. I drove to Baton Rouge and spoke at investment club. And then I got a phone call my way down to Tampa from a student of mine and like, hey, I'm in Tampa. I've got a meeting with a banker in a week. Would you, would you want to come and Walk through, go with me to that meeting. I'm like, yeah, heck, let's do it. So I went in and met with his office and it's a funny situation here. So my hair, I kept a bit short. Right now it's a little shorter than normal because I have a COVID pandemic haircut going, you know what I mean?

I need one of those.

I had a throat going. But anyway, I go in and this guy Jim, Jim's probably mid-50s and I'm 32, 33 at the time. And we go, we're wearing suits and Jim has called the president. The president's. He was tall, 6 foot 4, probably in his 70s, gray haired, showed up in his immaculate suit as we walk into the bank and he goes up to Jim and Jim says, and he goes, hi, Mr. Carson. Thinking I'm the president, you know, it's me. And Jim's like, no, no, no, I'm Jim, this is the guy I was telling you about. And this old guy looks down at me like, what the hell do you know? And I'm like, hi, you know, I don't remember what his name was. I said, let's talk. So we walk in, or he didn't want to. We were going to go to a board. When he stopped when he saw it was me, he said, well, what do you know? I said, well, I know you've got $48 million in distressed debt on your books right now and over 75% of it is 120 days past due and you're struggling. That debt's worth 60 cents of the dollar, if not less of what you financed. And he's like, oh. I said, also, I know you've got about 20 million in apartment loans that are defaulting. And he's like, oh, come in with me. So we go into the boardroom and there, long boardroom table about 20 foot long, stacked from there to the ceiling are all these large loan files. And the bank's like, okay, here's our portfolio. My secretary will assist you. Take as long as you need in here. Buy something from us, please. And it was like that for three months. I stayed in South Florida. I went from one bank to another bank to another bank and just would go, not really kind of door knocking in an older kind of way. You can't do that. Now, most banks don't hold their own collateral files these days. And most of the apartments that handle the banks aren't going to be located in the same bank. They've changed now, but it was literally just Walking door to door and walking in and seeing, you know, they're like, hey, buy anything from us, please. Buy stuff at 50 cents of as is value back then or at 30 cents of as is value or condos in Miami for five grand, you know, and taking two years to foreclose. But by the time two years went by, it went from 30 grand back up to 100 grand and was making some money, you know, that's what it turned into. Just ended up evolving into something, you know, Kevin, I stayed. I said, I have an opportunity of a lifetime here. I don't have a lot of strings or things behind attached to you right now. Let me make the most of this opportunity while I can. And we've bought in the last 10 years over half a billion dollars or more in debt, thousands of assets ranging from, like I said, a mobile home, which we got the borrower to start repaying with the first phone call, all the way up to a big 300 unit apartment complex that we got regentrified in nine months and then sold it off at the to somebody else. To buying 175 homes in one purchase with none of my own money and then working those deals out. So, you know, it's been a wild ride and it's gonna get a whole lot wilder here in the next six to 12 months as well.

Absolutely. You got questions? No, you go, yeah.

Yeah.

No. So I love how you just kind of gave us a really cool, simplistic overview of it. I know there's so much more, so I'd love to kind of dissect this a little bit. Maybe starting with, you know, before you even get to the bank, where do you get the money to invest and to buy the debt from this bank?

So here's the thing, you need to throw that out of your mind. Good deals find money. No investor is going to sit there and say, come tell me your theory. They want to see something. Now. The beautiful thing about note investing is I'm not putting down earnest money. Okay. I don't have to do that. So you can throw that out the window. You know what I mean? Let's get rid of it.

Wait, is that a soundboard? Yes.

I love it.

This is the first podcast guest we have. It comes with a soundboard.

I come prepared. Here's the beautiful thing about note investing. Banks will have lists. And let's start at the basic work. It all starts with finding the deal first versus going and raising the capital. Because banks will give you 30, 45, 60 days for due diligence. All Right. And the fact that you're buying a note well below market value, buying the debt versus a single family home or an REO or a property, we're not usually paying above 60 cents of as is value, usually paying well below that. Especially as market values drop, we're paying less and less and less. So the whole goal is to find a deal. And most banks will have a list, or they call it a tape. And you're not calling a realtor. You're not going into the local bank and saying, I want to buy your notes. One of the easiest ways to find deals is to jump on LinkedIn. And actually, this is how Kevin and I originally met. Originally, I sent him a LinkedIn invite. Well before Podfest, he just forgot about it, which is.

Okay, LinkedIn. Okay, Scott.

LinkedIn.

I'm getting better.

You're getting better. He's getting better. We'll give him a nice round of applause for getting better. All right. Is internal departments at banks that sell debt. They go by a couple different names, like special asset managers, secondary marketing managers, whole loan traders. You can literally Type this into LinkedIn. It'll pull up thousands of thousands of people and then spanner just reaching out to them. A lot of times say, hey, I'm a real estate investor or I'm a debt buyer. You know, I'm an investor in distressed property. What do you have on your books that you're looking to get rid of? And you'll get listed like I got listed this morning. One, it was six properties. I made an offer on one of them. I got another one that was a list of 25 properties. I made an offer on five of them. You know, the banks these days don't usually require you to take down a whole portfolio unless you're trying to buy from like a Chase or bank of America or Citibank. And if you're trying to buy mortgages from them, stop now, please, because they want you to write a $50 million check. There are 4,000 plus different banks and lending institutions across the country that, trust me, will want you to buy something and you can buy a couple assets, a couple notes, first liens I recommend, because then you're controlling the whole property. And then when you buy that note, after doing due diligence on the ballroom, doing the diligence of the property, make sure the value's there, checking taxes. There's a whole lot of things that you've got to do to check due diligence like anything else. Then you've got all sorts of different strategies to Work with a homeowner and our biggest goal is to actually try to keep the homeowners in their property. This is active duty passive income, right? Right. I want performing notes for my portfolio. Now. I buy non performing notes that are occupied and then once I buy it at a discount, I have so much flexibility with that homeowner to keep them in the property, to modify it, to offer up a short sale if they can't make the payments, or to reduce the payoff, or to let their sister or mother or father come in and take over the payments, or offer them cash for keys and let them move. Now I have an asset that I can sell or rent or own or finance or if they won't play ball with me, then I can foreclose on them legally and then sell the property at the auction or take it back and keep it. So that's what I love about the note business is there's so many different strategies to kind of. I hate to say this, but it's the itch, you know what I mean? If you like buying property that you want to grow your rental portfolio, notes are a great way to do it. If you want to not grow your portfolio but have quick deals, you can wholesale notes or get things under contract and flip the paper like you can with traditional piece of property or just buy the notes or buy performing notes. There's a lot of investors like me out there that have bought non performing. We've put some work into it by reaching out to the homeowner with our team, our servicing company and other vendors that go along with it and getting them back on track. Making America great again. One mortgage at a time. And now after we've had it for six to 12 months, if we bought the note at 40% of value, we could turn around and sell it at 80, 85 cents of value and still give an investor a double digit return on investment either on their savings or cash or their retirement accounts.

And who are you when you sell this note in the flip the note strategy? So you buy non performing asset or non performing note and you talk to the homeowner and you work out some sort of loan modification. It's now performing 12 months later, just like you said, you're selling at 80 cents on the dollar. When you bought it at 40 cents, are you selling it to another small community bank? Are you selling it to who are you selling it to?

Yes and yes you can. There's funds out there that are looking for reperforming notes. You're going to pay 8 to 15%. You could sell it to an IRA investor who's got maybe 20 grand sitting in their account or 50 grand in their account. They don't want to go do the work, but they would rather buy a note that, say, worth 100, that they could pick it up for 80 grand, is return them a 10% return on their investment. But they don't have to do any work. There's a vendor in place that's handling the collections. All that they do is basically look the first or the fourth of the month for that wire transfer to come into their account.

Yeah. And the vendors you speak of, I mean, for our listeners who don't quite understand, I mean, I'd like you to break those down, but I'm familiar with just what the servicer of the loan. And I guess there's, like you said, someone who does collections or a company that does collections. What other vendors are there?

Those are two. The same. Your servicing company. Servicing companies that collect. And each state's a little bit different as far as licensing. So a lot of states require you to have a licensed service or doing the document collections, you know, the payment collections, because you're dealing with the Consumer Finance Protection Bureau laws these days. Right. So there are some states that don't require you to be licensed or required to have a servicer. I think that's a big faux pas. You should always have a third party collecting.

Yeah, I can't imagine you want to be doing this yourself. It's got to be super time consuming.

It's time consuming. And if you're doing $10 duties, you're going to have a $10 account, bank account. All right, so outsource it to these professional companies that are serviced. I mean, they're licensed and they're doing the borrower outreach. They're doing the collections, they're sending the statements. If something goes south where their borrower doesn't pay, they're picking up the phone and saying, hey, hey, hey, you know, pay you, no stay, you know, you gotta talk to me here. And if, then if it goes where they don't pay, then they're contacting you and say, hey, what do you want to do? And you're like, well, okay, let's give an opportunity or let's modify the loan or, hey, let's have the attorneys. Because you need an attorney that's licensed out of state to start the foreclosure process or the legal proceedings. And that could vary from 700, 800 bucks like it is here in Texas, to all the way to like 10 grand to foreclose if you're in New York or New Jersey where two to three years. So that's why it's important to understand what's going on in each state, the timing. But what's a great thing is if you're buying a performing note, the servicing company is going to charge less for that monthly fee. It may be 20 to $25 a month just to handle the paperwork, where if it's non performing, it may be 70, 90, $95 a month for them to do much more of the aggressive workout with making phone calls and trying to track down the borrower to say hey, you need to pay something or work with them. So that's the beauty is you've got that. Of course realtors are important in our neck of the woods to pull values. We need that. You always need to have eyes and ears on the property. Never just trust Zillow.

Right.

100%.

And we talk about that all the time. Right. Either a real estate agent or an appraiser.

Yeah, well I, you know, appraisers are great, but I don't want to pay 450. There are BPO companies out there or companies that will go out and for 100, 250 can pull a broker price opinion for you and you know, internal or exterior BPO or they can pay a realtor 50 bucks to pull a CMA for you.

CMA, exactly. Yeah.

And then one of the things that we said, well, we're buying the note, can you, can you drive by, take some photos for us? Most of the time you're not going to get inside the property because these are still occupied. Okay. You know, hey, let me in, let me take a look at your property before you, before I foreclose on it. It doesn't happen that way. Yeah, but you can tell a lot about the interior property from the exterior. And then the beautiful thing that most people don't realize is since we're buying the note, we're buying really the collateral file with all the statements, all the loan docs in there from original the call record. So if the borrowers called the previous servicer and custom out, we know that. Or if they've called and said, hey, I want to stay in my house, I just need to try to do a loan mod or I've been laid off for six months or you know, I've been divorced, you know, my dog died, grandma got run over by a reindeer, whatever country western song can tell you that, you know what I mean? So we base things off of numbers, you know, and then you've got a little bit longer time, you know, frame. And since we have so many different variety of exit strategies and we're closer to the source, we are seeing a lot more deal flow and we're all seeing a lot better discounts because we, you know, we don't have to do a skinny deal, you know, I live in Austin, Texas. I love it. Here's a great place. Overpriced. I haven't bought anything in Austin in over a decade. I bought in a lot of other places across the country where I got a bigger bang for my buck. So, you know, that's, you know, your insurance company, everybody knows, familiar with that, your realtors, attorneys, servicing company. You're gonna use title companies or a title company to pull title work to see what's outstanding on the property or any other type of liens. You're gonna check taxes. It's just a different mindset looking at a property through the eyes of a banker than a fix and flipper or a landlord. A lot of traditional real estate investors like to go after property where they see equity. Like, oh, there's all this equity above what the borrower owes. I'm gonna get that by buying the property in the note space. I actually prefer going after properties that are over encumbered, where the borrower owes more, where there's no equity to the borrower. Because this way they don't fight us as much, you know. So if, let's say the property's worth 150, but they only owe 100, well, they're gonna fight you to hold onto that equity. Right? Plus the bank's not gonna sell that note at too big a discount. Cause there's all this equity. But if they owe, say 200 on $150,000 property, the borrower's not gonna fight you because there's no equity there for them. And the bank will take a much bigger discount to get that nightmare off their books. And so if you're buying it, you know, 50 cents of the dollar of value, it's worth 150. Great. You just picked it up at 75 grand. It gives you a lot of flexibility that homeowner to bring them back to the table. Say, listen, I know you haven't paid in six months or two years. What happened? I know you're way upside down. Can you start paying on time again? Okay, you can. For every payment you make, I'll forgive a payment or pay 100 bucks extra for gift. 200 bucks or your interest rate. Was at 10% or 9%. Let's not get make 12 months of payments. I'll knock it down to 5% or pay for 12 months and we'll recast the loan to the full market value. So I might forgive 50 grand in 12 months to you. So the flexibility and the creative creativity you can get when working with homeowners to create Win Wins is what I love about this business as well.

What's up ADPI Nation? Kevin here. If you're listening to this episode with our special guest Scott Carson and are chomping at the bit to get into note investing, then you're in luck. Mike and I have teamed up with Scott to help our listeners capitalize on an amazing educational opportunity to learn the ins and outs of note Investing.

Note Camp 2020 this online event from.

5 to 7 June is the longest running virtual note investing seminar out there and will not disappoint. Join a 30 educators, investors, asset managers.

And vendors for three days of learning.

About the different facets of note investing from the comfort of your own home or office. Just go to www.notecamp2020.com and register with code ADPI to claim your 50% off discount today. Now let's get back to the show with Mike and Scott.

That is awesome.

I've been that's so cool.

It gives you the creative ability to help people out right in a bad situation. And you know what, it's so crazy how we're having this conversation right now and even though our listeners may be listening to this at a later date and when things are in, the market are looking a little different right now. Today we are experiencing a large rising crisis in the forbearance side of the market. So I'm curious to hear your perspective on what's going on. I think I read an article last night and right now we're at about 7% of all mortgages are currently in forbearance right now. So how do you see this as an opportunity for your side of the business and note investing?

Really good question Mike, and I'm glad you asked that question. I've already expected this. I've been saying this for the last two years on the commercial side that the market couldn't keep going up and we were three to four years past normal timeframes for recession to kick in before this all happened. America was already in dire straits. One out of 10 homeowners were already a month behind their mortgage before any of this happened. People just live paycheck to paycheck they just don't have the income. And then you look at the amount of unemployment filings. The big companies are going out of business. They're in the service industry, the retail industry, where people aren't making above 20 bucks an hour for the most part. And 20 bucks an hour is almost a poverty line for a lot of places for you to be able to live decently, you know, be able to survive in markets. I mean, it's a lot higher in Hawaii than it is, say in Chicago. You know, it's a lot higher in DC than it may be in San Antonio, Texas. So you got to know the markets. But with all these forbearance, we're gonna see a huge impact when it comes to new foreclosures. The banks are gonna give people some time. They've already said in 60, 90 days, that's great. What they're doing is waiting for Uncle Sam to come with his handout and say, hey, help me out. Here's the thing that scares the crap out of me. Commercial assets, commercial that. We lost $50 billion in market cap in the commercial space. Three weeks, the market dropped to zero. Nobody wanted to buy anything. With oil being down in the negative and all these jobs being laid off and stuff like that, and business going out of business, it's a scary. Every time it gets me every time that leads to. We're gonna see. I would, I hate to say this. Drumroll please. I expect us to see somewhere between a 10 to 20% foreclosure rate over the next 24 months. 10 to 20% foreclosure rate because people can't work, the government can't bail everybody else out. They're expecting 20% unemployment across the country. Worse since the Great Depression. I would love to say that I'm more positive about that, but this 60 day issue has turned into a 12 month problem, right?

Oh yeah.

And so that's why I'm so glad you're. There's ways to be making money. And that's why I like the note space. Because hey, I'm gonna see deals six to 12 months before the traditional REO agent is gonna see it. And I like. What I also like too is the fact that I can do this marketing via LinkedIn and emails. I'm not sending out postcards or yell letters or do anything like that. One bank may feed me a hundred assets every quarter for the rest of my life. You know, I don't have to drop a lot of money in marketing on the front end. That's usually where a Lot of real estate investors struggle initially is the marketing and trying to bootstrap themselves into getting things going. Like you guys talked about before, you need a mentor. And so this is. That's one of the things I love. You don't have to do a lot of crazy marketing. You can find deals well below what everybody else is paying. If you want to do performing or non performing, great. About 70% of the self directed IRA funds that are out there across the different IRA companies are in paper of either origination and private lending or their bought debt. And that's what most people don't realize is IRA. There's so many people with their IRA right now with savings accounts at 0%. They were already pretty much at zero anyway. Let's just face that, right? But with all these savings accounts, all these people being laid off of work, there's a lot of 401ks that need to be moved into something that they can start making some money with. There's never going to be a better time than to get involved in any sort of real estate and pulling the trigger. Oh, there it is.

There it is.

This is awesome.

Scott. What I really want to do is break down. For someone who knows absolutely nothing about notes, break down a deal. We call it Barney style. We call it army style. Sometimes we call it Navy style. Not really. I just made that up for Mike. But no, break it down with an example so we can really kind of have our listeners wrap their heads around this.

Here's a deal that I'm working on right now. Okay. It's a property in Spring, Texas. First lien means that's the first mortgage. The borrower only has one mortgage on the house. They don't have a second mortgage. I don't buy seconds. You can buy those if you want. But it's a much riskier investment. First lien, borrower owes about 185. They've been out of work for about 12 months.

Okay.

They owe 185 houses worth 150. Normal mortgage payments around, I think it's P9 payments, like around $800 a month. 850 somewhere right around there. I don't have it up in front of me. But here's the thing. So I've made an offer to that bank at roughly 60% of as is value. I don't look at after repair value because I don't want to take the property back. I look at as is value value. So 150, 60 cents on the dollar of that is 90 grand. Okay, now let's take $800 a month. What's $800 a month divided times 12? 9,600, right?

Yeah, just about right under 10.

So if you take 9,600, divide that into 90 grand, that's a 10.7% ROI right there on that. If I get them re performing on that. Okay, now what? The borrower, obviously they're upside down borrower. Let's say they get back to work. Now they're worried because they owe, you know, 10 grand on the back end. You know, they haven't paid for 12 months. They're both in the banks. Most banks, like, hey, can you pay the full? Can you pay the full? That's what we have to worry about with forbearance agreements is a lot of times the banks let you skate for 90 days, but then they want you to bring the full amount due in 90 days. So we're gonna buy this note, say, at 90 grand if we get the bar, start paying on time. Great. Our goal though is like, listen, can you bring a couple months to the table? Can you bring some skin in the game to the table? Because if you put some down payment down, you're gonna be more likely to perform versus if we just adjust your loan and go to a trial payment plan, you're probably gonna go late next month. All right, so we always want to get the bar to bring some skin again. Look, I know they haven't been paying their mortgage, but if they got a big screen TV and a bunch of other toys. Come on now, let's have a come to Jesus meeting. All right? People can pull three to four months of payments together from their friends or relatives. They can cash out their 401k if they need to, whatever. But let's add that number. Let's say I get to bring four more months to the table. Well, instead of them making 12 months of payments, over here, they made 16. So take your 800 times 16 months. In the first 12 months, that's 12,800. Divide that by 90 grand. That's a 14.2% cash on cash return. Now, if we bought it, here's another thing we get paying for 12 months. Yeah, there's some servicing costs along the way, a little bit like that. So it's not exactly 14.2, but let's say in 12 months, they paid on time. I can now probably sell that note at 85 cents on the dollar. Okay, so if you take 150 times 0.85, that's 127,500. Now, what did we buy the note for Mike.

For What? Just the 96.

96,000.

We bought for 90. We bought it for 90.

90. Yeah.

So we had 16 months of payments plus an additional 37,500. So let's add that up really fast here. 37,500. Oh, sorry. 800 times 16 months. 12. 8. Plus 37,550 grand. That comes to 50 grand in profits in the first 12 months. And we paid 90 grand, so we'll divide that by 90,000. Oh, man. Percent return. Now, let's say you borrowed equity and you did a flip. You got to do an equity split with somebody. Okay, great. Fine. We'll do that. And you'll give you half the profits off of your 90 grand. They still. They made a 27% ROI on their capital.

That's an easy sell.

It's an easy sell. Or, hey, what's your IRA making is zero. How about I give you 6 to 8%, okay? They're happier than I'm picking slop. And then you just went to the bank as well, so that's why. That's why I get excited about notes. Exactly. Mike just had a little like. Do you need to check your shorts, my friend?

I think he might. I think he might.

I think I might fly out. I think I might fly out to Austin, bro.

Look, I wish every deal performed that way, and that's not the case at all. I wish it was like, you know, that all the time. The thing is, the bigger. The more default mortgages, the bigger the discount we get. And with all these defaults starting in, the pricing is gonna start shrinking back down, and you just gotta be flexible with people. Maybe they can't pay 850amonth, and we gotta go to 750 or do that for a little period of time. So that's the thing. I mean, if they owe 200 and their house only worth, you know, 150, that 50 grand in overage, what they owe more than. It's a carrot to. Daniel said, listen, pay for 12 months, and I'll forgive that 50 grand. Or if you can't pay, let's sell it as a short sale, you know, or, hey, you can't pay. Okay, I'll give you five. I'll give you five grand to move. We take the property back. Now we're at 95. I could probably sell it tomorrow to a fix and flipper, you know, or wholesale it.

And wholesale it. Do whatever you want with it. So here's. Here's something, Scott. So something that kind of struck Me. So you're buying the thing for 90 grand, using that example.

Right.

And you're buying from the bank. But it's not like you have a mortgage on the property yourself. So you're not paying every month because you just have it. So you're holding the paper. They are paying you because all of us real estate investors, traditional real estate investors, are focused on being, like you said, on the other end of the note spectrum. But here we, you know, you have the title to the property. You have, you know, all of that. Oh, no, you don't have the title.

I don't have the title still in the borrower's name when I buy the note.

Yeah, that's true. Okay.

Yep. So it still shows for the county records, John Smith, Kevin Bruner, whatever. Okay. As the borrower, I buy the note. I become the bank. There is an assignment of mortgage that is filed that secures our investment because the mortgage is the collateral.

Right.

The property is a collateral on the debt instrument, the iou. So I have the right if the borrower doesn't pay.

You can foreclose.

You know, I can go now. Here's a big question. People like, well, why don't these banks just foreclose right now? Why would they sell it to you at a discount? The big thing is banks aren't in the money of make, in the business of making loans and making money. They don't want to take property back. They don't want to go through the foreclosure process. So if they can sell me the note now at a discount at 25, 30, 40% discount or more, they can get that money in, and then they can rinse and repeat it 10 times to make up what their losses are. So that's, you know, banks aren't in the business of foreclosing. They don't want to take your property back, no matter what you're thinking, that's where I make our money, is in the fact that we can take on a bank's nightmares and kill Freddy Krueger for them and make it a win, win, win, win for the banks, win for the bars, and definitely a win for our bottom line there as well.

And what, what are the top three states that you like to operate in? Because I know that you have different states have different rules and laws. And what's your top three?

Well, those, those vary all the time. It used to be Florida. I used to love God's waiting room. I mean, great. I'm not gonna. I can. You know, who doesn't love California. But California's way overpriced. I mean it's the land of fruits and nuts and with all the drought, it's just a bunch of nuts out there right now. It's overpriced in California. I mean you've been in Hawaii. It's ridiculously overpriced. Oh God. So I buy in Texas. Same thing. Even though Texas is the fastest foreclosure state. I mean we have fast highways, fast foreclosures and fast executions here. You know, lenders are dying to get in here. But anyway, I like kind of the six to month night, six to nine month foreclosure time frames. I like a lot in Ohio because it's pretty relatively cheap compared to other places for what I can buy. For one property in California I can buy like a block in Cincinnati or a block in Columbus. Okay. Michigan people are like oh my God, white Michigan is so damn cold. Like well it's cheap. I mean I bought a note up there for ten grand where the borrower, the person living it was paying 560amonth.

My God.

Yeah, that's like a 50% cash on cash right there.

That's what I'm trying to get. People have to get outside of like I gotta go out and touch it and rub it and feel it. How did I know where the higher returns are?

Hold on, hold on. How the heck did you buy. Okay, so if someone has a mortgage and they're paying 560amonth, there is no way that that mortgage is worth with ten grand. How the heck did you probably bought that on 10 cents on the dollar?

No, I paid 10 grand for the note. They owed 45 on the mortgage.

Okay, they owed 45.

So I give it up.

They were non performing. And what happened? I bought that as part of a Bulk portfolio like 70 other properties, 70 other notes at the same time. So I got a bigger bulk discount too. But it was still. What you have to realize is it when you there's a magical number and when you start looking at properties that are below 100 grand, especially get 50 grand or below. Most banks don't want to finance those type of properties because it costs them a lot to foreclose. And if it's only a $50,000 profit, that's not exciting. So you will see a lot of contract for deeds that will pick up. But I like that 75 to $100,000 value because those are great first time homes for most people. Those where the biggest pool of buyers or renters. Worst case if I Got to take a property back, put a renter in it. I have been a big fan of college towns, but college towns are now ghost towns for the most part. Mm. They'll recover.

They will.

You know they will. But that's the thing, is, you'll be surprised. I had a discussion with a guy. The attorney's like, the Guy's mortgage is $300 a month. Why he didn't pay, I have no clue. I'm like, me neither. But thank you. He now owes 70 grand in back payments. He hasn't paid forever. Now, when you add in stuff like that. Okay, let's. Let's. What do you want to do?

But. But even as, like a mom and pop, though, you know, if this was something you wanted to do as a little side hustle, right. I mean, it gives you the opportunity to do it, do it well, and then, you know, help people out too, Right? So it doesn't matter what your speed is. Great.

That's so. Mike, I'm so glad you said that. Because, people, that's what I love about the note industry is you can do. If you want to do one note a year, great. You can do one note a year. If you want to replace your income, and this is one of the big things that we teach our classes, I'm like, listen, if you want to make. If you want to leave your job or replace a $60,000 a year income, you can do 20 deals and get that done. You know, 20 deals in the first 12 months or 20 deals in the first two years, that's fine. Put a plan in place and start planning and going from there. Now, there's a lot of learning curves. There's due diligence in each states and stuff like that. I'm not going to sit here. This is not a get rich quick scheme at all. It is a wealth over time aspect of things. Fix and flipping much faster. 90 days. You know, buy a property, fix it up, and flip it. 90 days. We want to notes, the average timeframe for a Note can be 12 to 24 months. Now, that's still relatively short term in the face of thing, because most. When you start talking to other people like, hey, do you want to fund my mortgage? Like, oh, my God, my money's gonna be tied up for 30 years? I'm like, no, no, no. You know, we're talking two to five years the most if we needed to. But we're still gonna give you, you know, four or five, 10 times what a certificate of disappointment is going to give you as return or if your 401k is now a 101k now let's get it revamped. Yeah. Certificate of disappointment. I love that.

I think that went over someone's head here, but it's cool.

Certificate of disappointment, Mike.

Oh, you know what? I wasn't talking about you. I was talking about.

But you know what?

Hey, that's all. But I mean, I love it though because I love what you said there because I honestly do think there are people that are listening right now and their heads are real big. Right? This is like, oh man, so much money made here. But let's start to bring it back down to reality because there are always challenges when you step into something, especially if you haven't done it before. Right. You said there are crazy learning curves for this. But maybe walk us through like, you know, one or two, like maybe two or three challenges that you face along the way.

Here's the biggest challenge from what we see. 90% of people won't do anything no matter what they're learning. That's the first thing. I'll just put that out there.

Okay, we know that, we know that.

90% of people won't do anything. Okay. Now here's the biggest thing that we see across the board, not just in notes. We see it in fix and flippers. Wholesaler is marketing, everybody. We're in the marketing business these days, not the real estate business these days. Yes, I'm in marketing, I'm in media. Everybody's looking for things and that's the same way across the board. If you want to get the word out what you're doing, you've got to learn to market more. So that's always the biggest challenge. People like to go to like websites that will list some notes for sale, but it's always over picked. It's like the low hanging fruit. So it's, you know, big demand, low, low supply. So those are always expensive. Most people don't want to do the two things that are going to make them wealthy. And that comes from a sending emails out to asset managers or dialing for dollars. And that's what I started doing initially is making 50 to 100 phone calls a day to talk to these internal departments. You know, I was trying to get into capital one, you know, what's in your wallet. And I knew that they had a note they sold recently here on a strip mall. And this goes back 10 years. Well, I made 70 phone calls over three weeks and I got transferred, I can't tell you how many times to Pakistan. Hello, My name is Steve. No, it's not. Can you transfer me? But when I finally got to Amy in New YORK on the 70th phone call, I talked to her, what I was looking for. She's like, I've got some stuff. She sent me a non disclosure agreement. I signed it and sent it back because they're providing all this information on borrowers, you can't go out there and blast that. But that turned into a $1 million relationship because I bought over a million dollars in debt from Capital One and they sent me a PDF, a 33 page PDF with all their loans across the country. And it was all in six point font. I almost had to get a magnifying glass to read it. So I saw one. They had one deal in San Diego, an eight unit apartment complex for 699. I offered 375 for it, they said yes. I said I should offer 350 for it. I marketed it to my list with an email blast out to my database twice. I had an investor reach out, he paid me 415 for it. So I made 35 grand on that deal in less than 30 days.

There you go.

That led me to wholesale and I found an LA apartment complex that I was able to wholesale for 100 grand. I mean people in LA will slice their grandmother's throat for a 4 cap these days. So that was the thing is I just looked at where deals were and I went out and marketed on Meetup. Well, Meetup wasn't around really then, but on LinkedIn and Facebook and email blasts like even on Craigslist. I was marketing on Craigslist back in the day. So marketing is one of the most important keys to doing that. Second thing is raising capital. You mentioned this earlier on Mike and I know, hopefully I didn't come across shutting you down. No, people are intimidated about raising capital because they don't have the deal flow. It's a much more empowering position to be in when you have a deal that's worth 700 that you have and you know in every cell of your bone it's worth three. If you're picking up at 350 and it's worth 700, you know, hey, I got a deal here. I'm looking for either a funder or somebody to buy it from me. Here's the details. And doing that little bit extra work to get the word out on the same thing, emails and marketing to people out there, a lot of people are intimidated. You know, they've worked in a regular 9 to 5 or some sort of career that hasn't required in the market. They don't want to get up and have that money conversation. And I'm going to tell you right now, America needs you to have those money conversations. People are hurting. IRAs, retirement accounts laid off. We need more than ever people to come together and say, I've got some opportunity. It's a win win if stuff hits the fan, Mr. Investor, you're secured because A, we're only buying first liens. B, we're buying well below market value, well below 70% of as is value. Three, we're using professional title companies and attorneys to handle the paperwork and the foreclosure. It's not me you don't want me going. Hi, Billy Bob. Can you make your payment today? Nobody else is doing it. Four, we're going to put insurance on the property in case an act of God or something like that happens. You're going to be taken care of in five. Hey, we're using, you know, we're not wiring a check to me. You're wired directly, my attorney or the bank. And we're making it happen that way.

Everything professional, everything legal, everything protected.

And that's the thing. Don't worry. There's still things that will go south on a deal. A borrower might file bankruptcy and most people get scared of that. For me, okay, I now have an attorney to talk to in a bankruptcy court. I now know it's going to be either a re performing out in chapter 13 or they're going to have to liquidate the property in a Chapter 7 or a deal we thought we might be foreclosing on. Suddenly the borrower shows up with money and starting to pay on time. So now it's performing that we gotta hold on for 12 to 24 months. And you know, there's values going up and down, things drag on. It just is what it is. I wouldn't be surprised. We see a lot of foreclosures delayed like we've already seen. I mean, back in the day, attorney generals in different states overnight cancel foreclosures for 12 months for a lot of times. So in the debt game you're gonna have some of those issues. Just always use professionals. And that's why you really need to learn how to do this from somebody who's closed thousands of transactions or is. We've got so many videos out there for people to learn online for free. It's just, it's a great place, it's a great way to learn. And like I said, we're all in the debt game. You might as well start having the payments start coming to you versus you paying out these days.

I love how similar the elements are to real estate investing like you. I mean, it is real estate investing, but how similar it is when we're talking about, you know, you're talking about marketing and you, you know, dialing for dollars, guys, that's driving for dollars. It's the same thing that we talked about so, so long. But you don't have to leave your house.

Here's the thing though too, that's driving for dollars. You're gonna find you're looking for like one property from one borrower. You're gonna get a list the bank to send me a hundred deals with a phone call every quarter. Okay. You know, that's, that's the biggest thing. Look, I like driving for $. I've done that in my past. Oh, where's the weeds? Let's look for the weeds. Okay. You know, or the notices of the mail stacking up, stuff like that. That's great, you all do that. But I would rather just jump online on the fdic.gov list and see who's in trouble and then start dialing for dollars that way. And banks are going to need to move their assets. I will tell you that right now. They're already starting to reach out. They're already starting to move stuff off their books. It's a great time to be a debt investor.

Yes, it definitely is. And perfect segue. So let's talk about some of those webinars, right, that you're putting on. Right. Note Camp 2020. What is it, Scott?

So for the last five years, we've been doing online virtual events for almost six years now. We've been doing it since it was the fashionable thing to do. All right. Before Corona kept you at home. We've been doing it for a long time. So every year we bring about 30 different experts, investors, educators, vendors in the notes space for a three day online summit. We call it Note Camp. And this will be the eighth time we've done it. We see anywhere from like 300 to 1500 people join in depending on what's going on with the market. And I expect to see a lot of people. But one, we have no Camp 2020 is an event we've got slated for June 5th, 6th and 7th. It's a Friday, Saturday, Sunday. Early bird. Pricing right now is like 100 bucks, 125 depending on when this comes out. You know, it's recorded. I mean, it's live like this so you got real interaction back and forth with the speakers. We may do two zoom rooms so if you listen to one speaker or heard that person before, you can jump over and watch somebody else. But it's really, it's the largest and longest running note convention of its type in the industry and we're really proud of that. We call it Note Camp. Camp stands for content, actions, marketing and profits. There you go. Nice to help you out there. Some people selling some products. Yeah, they'll be selling some classes or workshops, but we know that they're valuable for what you're trying to do. For the most part, 70% of the speakers are just there to provide content and give you tips out there. And we keep it affordable. You know, some normal ticket to a three day event like this be like 600 bucks. I think our highest price will end up having it as we get closer to 1 99. It's below that because early bird pricing right now. But if people are interested, we've got a special discount code. If they go to notecamp2020.com and use the code ADPI, they'll get 50% off of their ticket to that.

Guys, 50% off.

Take my money, Scott.

You guys are comped in. You guys are comped in.

I'm gonna be there, man. Because this stuff is just we, you know, Mike and I like once. Scott, once you leave this room, Mike and I are just going to nerd out on this stuff for a while.

Dad, you were on my note weekend. I do like a one day training, basically a month for like 20 bucks. It's just something simple to help people dip their toes in. And I have never been accused of not giving too much content, you know?

No, it is like I got through what two of, I think there's six or seven lessons on there and they're like 30ish minutes each and with outlines and with everything. So guys, if you're interested in this stuff, if any of what we're saying is resonating with you right now, Scott Carson is the man. He is the guy who will get you knowledge wise where you need to go. And then you just follow the steps that us at active duty passive income have been telling you forever. Learn, network, take action. Boom, that's it. So it's that easy.

Yeah, I mean, that's the thing. And that's why we hit it off. So at Podfest, because fellow podcasters, I've got a podcast called the Note Closer show that we are at 600 episodes and it's a Variety of me teaching nugget by nugget. And we're bringing on vendors or other people in the industry to share that as well. So if they're interested, they can check out Note Closer show podcast.

Absolutely.

They can also check out the previous couple Note camps. We've turned those into podcasts as well. So the Note Camp podcast, as well as from the last two or three years that we've done it, it's there for you to listen to as well.

From our previous speakers.

I just want to help and I have to command you guys. I wasn't in military. I would have gone if I hadn't gotten a full football scholarship. But my heart goes out to you guys and everybody out there. It's because of what you guys are doing, have done, and is a reason that we have all the liberties to do what we are today. And if I can help any of your listeners, they want to pick my brain, I am always glad to do that. My heart goes out to our past and present veterans and our first responders out there. We are here to help in any way we can for you.

I love that. We love that man.

The man Scott. And we can. We can definitely tell your heart's in the right place. And I would appreciate it. And it's an honor to serve. We are running out of time. Probably over time, but we're way over time.

Good reason.

Yeah. Sound effects are definitely worth it, but this was definitely an amazing podcast and so much value. You brought so much value to this community, man. We really appreciate it. We're gonna take you to our bonus round. We got four questions for you.

Number one. Hang on, hang on. Drop the bombs.

All right, let's go, baby.

Fly over.

It would be nothing without an awesome flower.

I love it.

All right, so question number one. What's your favorite book or business tool?

Favorite book, hands down, is Outwitting the Devil by Napoleon Hill. Is the author of Think and Grow Rich, one of the top five books there. He wrote Outwitting the Devil back in 1938, but never published it. Now the book is him having a conversation with the devil, asking what makes the devil so successful and what makes the devil so successful. He puts a lot of distractions in front of us, and then we drift. If we have a target, we're all motivated, but we get something and we get drift and we go away. We're not as effective. So his wife wouldn't let him publish it back in 38 because you can imagine how that would go over. You're talking to The Devil. Right. The Millennial foundation found it, turned the the manuscript over to Sharon Lecter, who's the co author of Rich Dad, Poor dad, you probably understand that book. Sharon's a friend of mine as well. And so she wrote the book, took the manuscript, left it pretty much the same. Just added paragraphs here and there on what she thought Napoleon would say with it being current versus the late 30s. And so it is a book that we've probably given away hundreds of copies to. Is one of the best books anybody we've ever given to said the same thing. It's one of the top four or five that they read on a regular basis. So those that are most driven and most and remove obstacles and distractions are the ones that change the world and have more impact in what they're doing. So outweighing the Devil, hands down, number one book that we love to talk about and I love to read.

Excellent. We're going to put a link to that in the show notes Scott. So all the listeners out there go and get a copy because it sounds pretty awesome. Question, question number two, Scott, who is your biggest hero and why?

My father. My dad and short second when I was growing up was Nolan Ryan because He could throw 100 miles an hour. All right. But anyway, my dad is still to this day, I think for a lot of our fathers or our biggest hero. My dad was a self made man. He quit school when he was a junior in high school because his uncle went off to the Korean or his brother went off the Korean War, had served a couple duties. When his brother came back. He went back to high school and finished on his own against his family's wishes, was a farmer in Minnesota, married my mom, moved to Corpus Christi down south Texas and was an entrepreneur for a year. So I grew up with being around that entrepreneurship bug. Building a work ethic comes directly from both my parents. My mom obviously is a hero of mine as well too. But it's hands down my dad just was a big heart. You know, my mom used to give him a hard time when we owned the local hardware store about hey, you're not charging enough. He's like, I'm charging enough. You know, sometimes people need to dig themselves out of a hole. We're here to help. Anyone can. So that's where a lot of that comes from is I hear my father in my voice or in my head, not my voice. But you know, I was very, very fortunate to have very supportive parents that always put supported me. Maybe they didn't push me. Anyway, they wanted me to make my own decisions, and I did that. But I would not be where I'm at today without the guidance my parents and my dad for especially.

That's awesome, man.

That is amazing. And incredible. Incredible father to raise an incredible guy. So that's. That's awesome. Question number three. What do you like to do for fun?

What I like to do for fun? Well, I'm. Man, I love to travel, but that's not been happening much recently.

Yeah, not so much.

Yeah, not so much. But I like. I'm a big sport events fan. I mean, We've been to 23 out of the 30 Major League Baseball parks, concerts. I like going on different places for travel, whether it's cruising, taking a cruise, which is gonna be really cheap now. So I'm really excited about that.

Yeah, that's right.

They'll be inching it with full.

Yeah, like full body suits.

Yeah. My wife and I are planning our honeymoon now. Air conditioning in the Bahamas. But anyway, I love to travel. I like to go to new places. I'm not a big fan of going to the same place over and over again, but I do love traveling to new countries. I love just new experiences, concerts, you know, movies, you know, I like to have fun as best I can. That's awesome.

Love that. All right, fourth and final question. If you had three nuggets that you could give out to someone who's just getting started in real estate investing or maybe even note investing, we'll kind of modify it here. What would you. What would you tell them?

Wow, that's a good question. Four bits of advice. Here's the thing. Embrace the suck.

Oh, I love that. That's like my motto, man.

You gotta do that. You're gonna suck at anything to begin with. So whether it's sending in marketing or door knocking, don't let that intimidation realize that everybody, even the best real estate investors at one point were brand new and sucked ass at what they did. Okay. But they still put their pants on one leg at a time. Hopefully still wipe their ass with multiplayer paper. All right? So you've got that in common with them. Okay? That's the big thing. But people don't real people get so intimidated. Oh, this guy's done 100 deals. They all.

Not when he started.

And everybody that's been worth their weight in gold has gone through bad times. They've recovered. So embrace the suck is the big. You're gonna get better the first time you do something. Maybe it's only 60, 70% of where you think it should be, but it's completed. That leads me to the second thing. Don't wait on perfection. Delivered will beat perfection any day now. What I mean by that? Don't wait for the perfect email, don't wait for the perfect website, don't wait for the perfect clouds to line up so that Thor shows up from this guy. Okay, the iPhone is in, it's what, 14th or 15th version? If Steve Jobs and Apple wait for the perfect phone, we would never have had it. Okay, so get it delivered. You'll get better at it. You're gonna screw shit up. So get it delivered and embrace the suck of the first two. Third thing is learn marketing. We're in the 21st century these days and Scotty is here to up and I'm here to give you all she's got, Captain. Alright, so learn the marketing. Learn LinkedIn, learn, send an email, blast out. Those are tools, they're gonna help you long term. No matter what phase of real estate investing you're doing, whether it's notes or fix and flipping or Airbnb or short term, I don't care. Learn marketing so you can use it across all facets of that aspect. And then the fourth and final thing, go get you a self directed ira. It's one of the most powerful wealth building tools out there. I don't care if you're gonna get it from equity trust or quest or whoever, just get it from a self directed IRA trustee and start using it. You know, you can start a deal, you could do an option. One of the deals I did, I put a hundred dollar option fee down on a note and I flipped the note for 40 grand and all. 40 grand. That profit went back in the IRA that I paid in $100 with.

That's awesome.

Learn self directed IRAs. It can be valuable. And those are really the four things. Embrace the suck. Delivered equals perfection. Learn how to market and open yourself a self directed IRA today.

Yeah, so Scott didn't do three nuggets, guys, he did four. All right? No, no, but we love it.

You guys have extra nuggets to go out there and take action and success on. So don't you dare slip up and let this podcast go. But at least trying it, man, you.

Know, come on, you can start a self direct. 100 bucks, put it in there. You know, just start trying to put a little bit away and using that to buy a tax lien or buy a note or lend money on a mezzanine finance. If somebody's a little short on rehab costs or something. Like that. That's a great way to get started. You know, wholesaling and putting an option fee down on a piece of property and then selling it for something more doesn't require a lot of money. You can do an option fee for 10 bucks if you needed to. So just start learning that and you'll. It's. That's really the secret to wealth is start thinking like a banker versus thinking broke. Yep.

It's all about mindset. It's mindset.

Scott, this was great, man.

This was awesome.

Yeah. Thank you.

Thank you so much. This is amazing. And we definitely got to set something up, man. But guys, make sure that you take advantage of not camp 2020. We're blessed to have a code. Thank you so much for that discount code, man. I know that's going to help a lot of people get to that door. But guys, do not slip up on this opportunity. You have the opportunity there. Take it. Let's go, man. Let's get educated and let's figure this out.

Yep. Yeah, absolutely. So it's adpi and how can people sign up for the course? How can they get in touch with really easy.

Go to notecamp2020.com that's the website just for that event. There'll be a opt in and then you just hit the checkout. Ask the last 4 code. Just type in ADPI, all caps. If you have any issues, you always go to our main website, weclosenotes.com. that's weclosenotes.com and you can touch me there. Scottclosenotes.com is my email address. If you'd like to. I do have a free book if they'd like to. If they want to get a copy of my free 73 page book on how to dive into note investing, they can do that by just going to noteblueprint.com freebook and they can download the PDF.

Perfect. That's perfect.

All those links in the show notes, guys. So if you missed any of those, just go right in there. You can go one click, you're there. All right. Easy day.

All right. Thanks, Scott. Thanks for coming on. Thank you for your time and thank you for dropping all of this knowledge.

Honored guys. And if you guys are listening to this, do Mike and Kevin a big favor. Go on over. Listen to this on itunes. Click on our hit to subscribe and leave them a five star review. These guys are doing a rock star job and we often forget as podcasters to ask for reviews or ratings. Please do that. They're doing a great job and that's one thing that we love. Putting our hearts and souls in the podcast is reading reviews and hearing back from our listeners. So if you love this episode or loved any other episode, if you hate this episode, review another one. But anyway, no, no, no.

Just leave me a tractor with the oats.

That is awesome.

Thanks, man.

We really appreciate that we even say this, too. We're trying to say this right. We're not perfect with it, but take a screenshot of this episode and share it with someone, right? Share this with someone who you think could help. Maybe someone you don't not even sure could help. You never know what situation someone might be in. This podcast might change their life.

Absolutely. All right. Thanks, Scott.

Outstanding. That was an awesome episode. Thanks so much to our special guests and thanks to you for listening. If you haven't hit the subscribe button yet, make sure you go and do that. Or schedule a call with us by texting ADPI to 444999 or checking out our website at www.activedutypassiveincome.com to find out how you can get started on your financial freedom journey today. I'll see you guys next week.