The Note Buying Business With Scott Carson From CashFlow Pro With Casey Brown

Foreign.

We all know that real estate has created more millionaires than any other industry on the planet. We also know that it has created.

A lot of heartache due to mismanagement.

Over borrowing and just simple life events that happen to all of us. Welcome to the Cash Flow Pro podcast. My name is Casey Brown and I am your fearless leader. And although we might be bourbon sipping and at times foul mouth southerners, we will always do our best to be honest, straightforward and due diligent with all of the information we pass along to you. Welcome to the show. Hey there and welcome to the Cash Flow Pro podcast and channel. I want to welcome you today and I have got a treat because this is one of the subject matters that I myself recently just took a deep dive into and learned that it even existed as far as like the profits and everything that was involved in it. So I am here today with Scott Carson of We Close Notes and Scott's going to go into it and he's going to tell us all about his note buying business, I hope and he's going to tell you how you can possibly invest or be profitable or learn or whatever he wants to help us learn about the note buying business. So Scott, how are you today?

Casey? I am doing wonderful my friend. Honored to be here. Just honored to give the Cash Flow Pro audience and family some good content they can use out there in their make their investing even that much more profitable.

We are certainly glad to have you. And like I said in the intro, the note buying business, of course it's always one of those things that most people like myself, we've always heard of it, we know it's there, we, we know it's the person we don't want to hear from at some point, if that's ever the case, you know. But nevertheless, obviously it's been a profitable and a good business model for you because I think you told me before the show that you've been doing it, was it 15 or 20 years? I can't remember a week.

I think 17 years. Yeah, it's been doing it since over 17 years and some sort of note aspect of buying or originating. And most people think of when they think about the note business, they're thinking about owner financing. You know, I'm going to take a property, I'm going to offer up terms and that's a facet of the note business. But that is just a small, small facet. I actually don't really focus on that part. I focus on a niche where we buy the debt actually from banks and Lending institutions. And we're usually buying the debt at a substantial discount, way below value, usually buying non performing loans on residential commercial properties. And we make the biggest bang for a buck by then, like you said, reaching back out to the bars and say hey man, you know, pay, you know, stay, work with us and kind of go from there.

So I guess obviously the first question I feel like would be burning in everybody's mind, I know it's burning in mine is, is it's cold in here is how has, how has Covid obviously impacted. I don't want it to sound like I'm just saying how does it impact your business? Because we know that the moratoriums and the non, you know, pay you get to stay lifestyle has kind of been of the norm lately. And so what has that, what specific new strategies maybe are you kind of looking at or any kind of basics you can tell us about that.

So the last two years with COVID did put a little bit of a hamper on things. We fortunately for us, 85% of our portfolio, of our performing portfolio, where we'd already worked with the borrowers before that to get them back on track, actually continue to keep paying. You know, they kept paying and of course we did have a chunk that like hey, I need a modification or I need a forbearance agreement or I'm just not going to pay and good luck trying to get rid of me and that's going to happen. So we had that happen but we still worked through a lot of it. You know, the inventory did tighten up. I'm not gonna lie, during that two year you had a lot of banks like oh, we don't wanna be the bad person. We're not willing to sell that stuff now. Wait till the end of the year or wait till the first of the year. Yep, now we still kept buying, we're still buying non performing. We were buying contract for deeds, we were buying performing stuff. You just had to hunt a little harder to find it. And I think that's one thing that kind of separates what we do at we close notes is a lot of investors, especially when they start thinking about note missing, they think of a couple, there's a couple of different platforms out there that they can go and take a look at, make some offers on. But that's just there, that's just a small drop in the bucket. Websites like paper stack or 10x, you know, for commercial loans or you know, you look at like SM Servicing, we'll have some notes available for sale or loan mls, but that's such a small, small drop of. But we looked at billions and billions dollars of debt over the last two years and still bought quite a bit of stuff because there's still non performing stuff that's not government backed. And one of the big things about the note business is you've got to know what's, you know, obviously you're buying a note a bar is not paying. You got to know what's going on and what state it's in and what's going on with that state. Foreclosure, like here in Texas we do everything fast, you know, fast highways, fast foreclosures, fast executions, you know what I mean? So it's the fastest in the nation. Now compared that to like New York, I don't buy in New York because it takes up to three years to foreclose. All right? So you gotta know what's going on in that specific state. Now the good thing is you're buying in a state that has a longer foreclosure time frame, you get a bigger discount. That's right. So that's, we just adjusted some things. Okay, okay, let's go to a little bit. You know, let's look at Florida, as I like to call it, God's waiting room, you know, or Ohio or, you know, some people don't like Michigan.

That took me a second. We apologize to all of our Florida listeners.

Hey, they know it, you know, when you're outnumbered by oxygen tanks and Cadillacs, it's a, you know, it is what it is. But anyway, it did hurt us a little bit. But back on, you know, we've gotten most of our borrowers back on track in the last few months since the first of the year. It did lead to more inventory rolling in. It kind of trickles in depending on what's going on in specific states. Like I said, with the faster foreclosure state, we're seeing inventory speed up in some of the states. If it's a longer process, going to be a while until we see stuff in like, like New York, New Jersey, South Carolina, stuff like that rolls through. So, you know, it's the beautiful thing is there are still banks out there originating, I think I did some research and right before, we haven't had the numbers come out yet for Q1, but the end of Q4 there was roughly about 82 million loans out there. Okay, 81, 82 million. And at the end of the Q4 we were still sitting at roughly about a, about a 3.4%, 4.5% default rate. That still means there's somewhere roughly around 3.8 million homes where the borrowers are 90 days behind or greater.

Wow.

Now think about that. I'm going to throw you back here. 2010, at the peak of the last recession, we had 15 million homeowners that were, you know, in default now.

So 25 of that, it's about.

Yeah, it's about 20, 25% of that, just under. That still means there's a lot of opportunity out there with what we do. So that's the thing to keep in mind. You just have to be more creative. We leverage a lot of our marketing isn't direct mail. It's a lot of LinkedIn reaching out to asset managers at banks. Direct mail. Once we've got a bank contact, we'll just drop an email out once a month to them and they'll send us a list of anywhere be from like one Note or maybe 900 notes.

Sure. Size of the bank, I'm sure. Now, one thing that I've gotten an education in real estate over, of course, as everybody else has over my career. And I came in, in 07. Now with that being said, and I came in, I came in the real estate sales, real estate, like a real estate agent, real estate broker capacity. And we are really close to Fort Campbell military base. And one of the very first pieces of education that I got was a VA homeowner or. And this may even carry if he does. I don't know if it's. It was specified to a VA mortgage or if it was. If the soldier is deployed out of the country, he cannot be foreclosed on. And I don't know if that specifically goes towards if they're just a VA home loan or if that's any home loan. If he's a soldier, he's deployed, he can't be foreclosed on. But either way, man, that was. It was such a sad, sad state of affairs to see so many people and families and everybody struggling and wives are running off and husbands who were staying behind or running. You know, everybody's just scattered. It was such a mess. And I can only imagine then you having to kind of deal with a lot of the. I don't want to call them family issues, but the domestic issues, let's say, of that type of scenario.

So to answer the first part of that question, it's an active duty military. You cannot foreclose an active duty military. If they're deployed. If they're deployed. Exactly. No matter what. Doesn't matter.

Okay.

No judge is going to end up approving and foreclosing out our military when they're deployed, that's just, that's bad. No bank's going to do it. And if a bank does, they do not want the bad press that would come from that. Obviously. That's right. Okay. So yeah, there's always a thing we look for. Is the borrower active duty, Are they deployed? If we're, if we think it might be a military. And we can see that stuff by looking at the actual collateral file, the loan and the documents when they took out the loan. It's a VA loan. It's kind of obvious about half the time. Okay.

And all that stuff.

Exactly, exactly. So, yeah, I mean you look back at what happened beforehand. You know, I don't talk to the borrowers per se myself most of the time. Now when you're a note investor, it's different than being like a landlord. Okay. You don't get a phone call at 2 o' clock in the morning when the AC stops working. When you're at the bank, the landlord does, you know, you don't get a phone call when little Timmy flushes the rubber ducky down it. And now they've got indoor water feature. You know, the landlord does, the bank does it. But we use servicing companies and we use attorneys kind of as that buffer. So if something's going on with the borrower, if you've ever been late on a mortgage, ever been in default, stuff like that, you know that the after. Once you're seven days late on your mortgage payment, the phone basically rings daily and the mailman is tracking you down to deliver certified mail, trying to keep you back on track. And that's the whole goal with the bank. And that's. We use servicing companies when you're buying debt. Some states have debt buying licenses. You gotta have or specific things in place. Your servicing company's gotta be licensed in debt collection. Cause there's fair debt collection practices. Like they don't call you threatening you. They don't send over the Mayan Bicycle Club banging on your door to collect on you.

That's right.

Can't do that.

Okay, Right, Yep.

But there's still things that they can do. Eight to five, they've got a, you know, tell, you know, anything you say, you know, we're debt collector. And then you use collected debt. Kind of like read you your memorandum rights almost.

Miranda writes of deck collection.

But you, that's the thing. It's. And I'm always been a big, big advocate of working with homeowners that's always our number one goal, honestly. Yeah. One of the biggest mistakes I made though, when I first got in the note business before the Great Recession, I always tried to foreclose on everything, like, oh, they're dead beats, you know, they don't deserve to stay. And I would have made a lot more money if I'd have worked to modify and keep people in their houses because it's actually a better ROI for us to keep somebody in the house, get them back on track at a payment that makes sense for them and both for us. We're not putting out legal fees, we're not having to repair the house and try to list it. If we get a borrower back on track and they start paying on time for 12 months, well, that increases the value of that paper. So if we bought it at $0.50 on the dollar in 12 months, we could probably sell it at 80, $0.90 on the dollar without having to fix or flip it, deal with contractors. The increased cost of wood and materials these days, sure, we can sell it back to the, back to Wall street, back to other investors at a nice profit. Plus we got cash flow along the way. Yeah, so that's the thing, we always try to, hey, what's going on? You know, some, some investors are, want to be really specific and nitpicky. Let's have you fill out a financial term sheet. I tell my servicing companies and my staff like, listen, if you get them on the phone, let's make something happen then.

Yeah, better opportunity.

Yep. Exactly what do you owe? Are you working? Just, let's work with it. Can you start paying again?

Yeah.

Can you pay a little bit extra? You know, can you? If you are, they call, hey, we want to modify when we're even paid in a year, you got to bring something to the table.

Yep, yeah.

Exactly, exactly.

You know, towards the collectors, I'm sure.

Exactly. And so that's the whole point of like, okay, what's the situation? What's your country western song that you're going to tell us? You know what I mean? And I mean we know a lot of times if we're buying non performing debt, we know what's going on with that borrower. You know, through looking at the servicing notes, we can see if the borrower has been friendly or not friendly. We do a little social media sleuthing, can tell if they're active, you know, you know, if we had one bar say, hey, I'm not going to pay my mortgage this month because I'm going to go to Orlando and Go to Disney World.

Yep.

Like you know, or another one that literally had his leg broken. He was self employed out of Chicago. Like okay, he's out of work for six months. Let's just give him a six month forbearance agreement and get them back on track.

Yeah, and that's, you know, and I think the world in general, especially the business world, I know, especially the corporate.

World.

You know, it's like anything else. You're basically providing a service, you're providing a service to, in two different directions. To the bank by buying the paper and to the, to the borrower by saying hey Mr. Borrower, you know, you, we see that you've whatever, whatever, whatever. And then, and then we're going to give you a forbearance like you said, of six months or whatever the case is. Now I guess from a business standpoint we've kind of covered the whole, the way these things kind of relate to the personal situations and how, excuse me, the abilities for you to try to work these things out and obviously become, keep, continue to be profitable. But from, from a business standpoint where obviously you said the, you said pre show before we hit record that, that, that you know, the trick is finding the, finding the paper and especially finding the good paper. I, you know, Texas things happen fast and you want to buy in New York or California, you, you, you know, you, you might as well just hang up your money and wait because you're going to be a while. With that being said, what does the business standpoint when you're looking at saying okay, hey my investors need a return. It's time to start moving some of this paper out of here and getting our money. Either getting our money back or getting our return. I mean, how does all of that look? I mean does it happen in an individual note basis or does it happen like do you just pack up a box and say here, here it is, how does that look?

It's a little bit of both, honestly. So it all depends on how we're buying the assets. If we're buying an individual note, we often will determine that that note, if we get it back on track, it's going to have somewhere between a 24 and 36 month lifespan with us. Especially when we're buying in about 30 different states because each state has a different foreclosure time frame. So here's the thing, we buy a non performing note. We're usually targeting owner occupied stuff because that gives us the most amount of flexibility getting back on track. If we can't get the Borrower to the table in the first 90 days. Then we look to either foreclose and start the legal side to foreclose, or we'll liquidate that asset and sell it off to somebody else who wants to take on the deal and foreclose, deal with it. If it's a troll borrower, we buy it at 50, we'll sell it as a one off at 60, and we made a 10% return in 90 days, which is a pretty good annualized yield for those.

Okay, yeah, yeah, yeah.

If we get them back on track, they kind of move into a second portfolio that we have of our performing paper, which we're going to hold Those notes for 12 to 24 months of performance. And then at the end of usually that timeframe, we'll either a pull them together and sell them off to a bank or REIT or individual investors, maybe do a onesie twosie, or maybe do it in bulk. Or we'll, depending on what our money costs are specifically with that portfolio, we may keep it for cash flow. We may go back to the investor. The investors on say, listen, hey, this has been for three, you know, two years. Three years. Do you want to renew for another two years or three years with us on that? Yeah. And just keep the cash flow going, you know, or depending, you know, it may be a point where we've got cheaper capital. You know, when a few years ago we were financing stuff at a pretty decent return because we're getting bigger discounts, but as the prices get a little bit more competitive, our money costs have need to be cheaper.

Yeah.

So if we had high expenses, like, you know, 10% interest rate money from an investor in an IRA, but we found investors to come in at 6%, we go ahead and refinance out that investor for the cheaper funds, and that way we're seeing a bigger yield on the back end. That makes sense, Casey.

Oh, makes perfect. I mean, it's all about the, it's the, it's the delta between. You're basically living off the delta between all of those different scenarios and, and, and figuring out how to go. But so, so walk me through, walk us through the process. So, so, so you call local, you call the bank downtown, and bank downtown says, hey, man, I've got this guy. It's a $200,000 house. He owes us one, he owes us a hundred or he owes us one. Feet, I don't even know what the.

Let me go through an actual case study that I'm doing right now because how's that sound?

So yes, perfect.

We got a, you know, I've been doing this for years. So we've got a pretty good relationship with a bunch of different REITs, you know, real estate investment trusts and institutional companies. And I get this one hedge fund calls me once a month with a tape. And a tape is just an Excel spreadsheet.

Okay.

And they, you know, it had 78 assets on it last month. And there was one asset we saw was in Houston, Texas.

Okay, okay.

Now I don't buy a lot in Texas because it's usually too overpriced, but this one caught my eye. It's the borrower borrows deceased. He owes 210. That's his total payoff. Back payments and stuff like that. The house is worth somewhere between 200 and 230. A payment hasn't been made in two years. And so I looked at what's going on with this one. What do you want for it? And they came in and said well we want somewhere between 95 and 109. And I'm like okay, so you're opening the bid at 95. What's your strike now price? What can I buy it for me now and not worry about it? And they go 109. I said I'll take it. Okay.

Yep.

I'm like stupid not to. It looks pretty good. Three bedroom, two bath, 1600 square foot house. Great neighborhood in Houston. So I, I said let's go ahead and order it. I mean let's go ahead, we'll take it. And I have basically three weeks to close on it. So yeah, then I order a bpo. Now if it was occupied I would only be able to get an exterior bpo. Okay. But the bar is the same price opinion exactly. Comps have a realtor. I had a realtor go by and pull comps and he walked through it, took photos and came back. And then I also paid 125 bucks for a BPO too. So I had two kind of price points. Well, they both came back at that 200 to 230 mark somewhere because it needs some work. It looked like somebody had just been evicted. You know, trash and stuff around there, not any structural damage. Basically a clean out crew and I could list the thing. So we buy that note. I'm closing this Friday on it. I reached out to my investors and said hey, I've got this deal. I'm looking for 125 to fund on this $200,000 asset and it's going to go one of two ways. The borrowers the estate, I should say now I would have the point, the price point that makes if I. If they wanted to keep the property and come in and start making payments on time again, I'm at 50 cents in the dollar, the notes at 6%. So if they started paying on time, I'd be making at least a 12% cash on cash return.

Right. Right away.

Right away. And then if I sold it at 80 cents on the dollar, I bought it at 109. I sold it at 160.

Yep.

In a year, that's another $51,000 in profit. That's not a bad day at the office, you know, so. But they're not. So we're all going to offer up cash for keys. We'll give them two grand to sign the property over there in New York State. They don't want to own it here. Remember, I bought it. I bought the debt at 109. They still owe the 200 plus.

200 plus.

They don't have any equity. But by buying the debt, I kind of control the equity, control value. So the borrowers will give them a little bit of money to sign the property over to us, and then they'll walk away. So the minute they sign it over to do a deed in lieu or friendly foreclosure, I can clean it up. The property is technically mine. It's now a foreclosure. Technically, our real estate owned an REO because I'm technically the lender. Yeah, we'll just clean it up and then list it on the MLS for traditional sale. Now, if the borrowers won't play ball or the estate won't play ball with us, then we'll just go ahead and, you know, file the foreclosure documents and we'll foreclose out the estate in 90 days or less here in Harris County. And then we'll sell it. Let's just sell it at the auction for somewhere around 80 to 90 cents of. What's the. So somewhere around 180 to 190 at the auction, because that would leave about $40,000 in equity for somebody to take down themselves. And you leave that much equity, somebody's going to buy at the auction and then. Then I get paid in 30 days later without ever having to fix it up or clean it out or anything. And it's going to cost me about 2,000 bucks at that point in legal and servicing costs to foreclose if they want.

That was my next question. How much does the foreclosure cost you from a. From A standpoint of, obviously you've got to get an attorney that's there, I assume locally or some. Or one that services that local area.

Yeah, it'll vary by state. Like, Texas is fast. About a thousand bucks to 1500 in Florida. It'll cost me about five in New York, ten Chicago, who knows? I don't like Crook county up there. It just. If you don't live in Chicago or Cook county, they don't. The judge does not side with you. So that's one area I avoid, actually. I love deep dish pizza and Chicago sports team. Do not like the foreclosure laws.

I got you. You Bulls fan, huh?

That's right. Doubles. Jordan for the win.

There you go. So, you know, all of that is. It's one of those businesses that I've never talked to a note guy. I've never talked to a poor note guy. Let's just say that of all the times I've done business and all the stuff I've done, I mean, the note business is huge. Now, I want to flip to the other side of this. You had made mention of the quote, unquote, investors. You went to your investors. Now I want you to tell us a little bit, if you don't mind, about what those investors look like. Like, what does making that call look like? I mean, are you just sending an email? Do you have a bank of people that routinely invest with you? Is it hedge fund money? Is it. What's the. What's the. What's the. What does that look like?

Great. Very good questions. And we've done it. One of the things that I think separates ourselves, that we close notes from most of the other people in the node industry is we do tremendous job marketing. I mean, we're doing webinars about basic information. I mean, I've had a webinar every Monday night for almost every Monday night for 11 years on a free webinar just on information, you know. And one of the things that we do is that's a great way to get people in to learn about the note business. And they become either buyers, students of ours, or investors like, ah, this looks too hard. I don't want to do it. I'd rather write a check. But at least I know what you're doing now. You know what I mean?

That there's this. This facet of the business exists.

Yeah, it's like this interests me, but I don't have the time do it. But, you know, it's always easier to raise capital from an educated audience than.

A non Educated audience, you know what I mean?

So that's one facet of reaching out. And I can do an email blast, hey, I've got a deal. Who wants to make an above average return? You know, let's talk. And the same thing is we also do a lot with mining county records. We go to the appraisal districts and we'll do a search for people who have used their self directed IRA to buy a property. So like I could go to, I'm in Austin, Texas, Travis county, go to Travis county and do a search for equity Trust fbo, you know, and that's if it shows up on the county pressers, county sessions website, that's somebody who's used their IRA to buy property. Same thing. I can look for Quest Trust Company in five minutes. I can find about 500 people who have either used their IRA to buy a piece of property or if I go to the county clerk, I can do a deed search to see who have lent money out of their IRA account. And those IRA investors are, it's like shooting fish in the barrel because they're educated, they understand real estate, their IRA money, they can't be set up for.

The self directed stuff.

Exactly. And honestly, note investing is really, when you talk to the folks at Quest or etru over about 50% of their portfolio is either in notes of some sort where the borrowers, I mean the lenders originated or they bought a note or purchased a note. So it's a great, great conversation. You know, then it's all about providing the due diligence, the value of the property, making sure we have insurance on the property to protect ourselves and our borrowers.

I was just sitting here thinking the I word. I was like, I wonder who insures.

Them so well, here's the thing, a lot of times the borrowers will have insurance on, that's great. But if they don't, then you gotta put force place insurance on it to protect your investment, you know. And then we're checking the collateral files, which is, that's what we're really buying is the loan file, the ability to be able to foreclose. And then you know, looking at, you know, making sure there's no other outstanding liens on title that would stop us from foreclosing, making sure we're in the first lien position, making sure that all the, that mortgage has been sold four times before we bought it, that there's the correct documentation at the county on the loan file showing that transfer. It's called an assignment of mortgage. Because if I buy A note, the deed doesn't change. The deed's still the borrower on the note.

That's right.

It's just an assignment of mortgage is what shows up.

If you've ever bought a house with.

A traditional bank, 30 days later you got a letter saying, hey, your notes been sold. It's that kind of same thing. We're sending out letters, hey, your notes been sold. Thank you for not paying Casey bank. But now you have to pay Scott Bank.

There you go now. So of course there's. My real estate background's got a thousand different questions pop bounce around in my head and I'm trying to, I'm trying to organize those in order of what I think the listeners going to want to know about. Just because obviously somebody calls you and says hey Scott, we want to, we want to become investors or we want to get in on this or we want to whatever.

Hi, this is Casey Brown, host of the Cash Flow Pro podcast and YouTube channel. Have you been thinking about investing in real estate but just don't know where to begin? I'd like to help by inviting you to check out our website at www.3000capital.com. There you will find an array of material, material that will help you learn all about real estate syndication. And while you're there, be sure to check out our free video series download titled five Must Know Keys to Success in Passive Real Estate Investing. I'd also like to personally thank you for making Cash Flow Pro part of your day. Now back to the show.

I know in the state of Kentucky you have judgment liens and when you get judgment liens involved, they, they tend to kind of muddy the waters a little bit. Now, not so much that you don't lose your position, but if then the borrower files bankruptcy and then the trustee sells that property, I mean it just seems to me like there's just some, and these may be just nuanced thoughts that don't happen very often. But I guess I'm just saying if a borrower files bankruptcy and there's a ton of equity in the property, but you know, the equity would be between. Okay, let me explain this.

I think I know where you're going. We're in the first lien position and that's one of the safest things being on the taxes. Okay, so when we're in the first lien position, if there is equity, we're always buying at a discount.

That makes sense to what we can collect.

I'm not going to pay 95 cents on the dollar. If there's a lot of equity in deals. Oftentimes we don't even chase those because the banks are going to want closing closer to 90 cents on the dollar of what's owed when there's a lot of equity, because if they foreclose, it's gonna be paid in full.

Okay.

Now if there's a judgment that gets placed on the property that's junior to our senior position, we still get paid any equity. You know, if the borrower goes out and sells a house and we're owed 150 and they sell it for 200, but there's a $20,000 judgment, that judgment gets paid third. Taxes. If there are any taxes that gets paid first, we get paid second, and then the judgment gets third.

I see now where my question went awry because your, your equity is in the. What you paid for the debt versus what, what's owed. I'm thinking, I was thinking borrower equity versus versus where those judgments could come into play. So that makes perfect sense.

But it's a good, it's a great question because a lot of people that get into the note business, they don't think that way. Yeah, they think like the investor, oh.

Look at all this equity.

I'm going to take this property back. And all this equity. Well, that equity doesn't belong to us. It belongs to the borrower.

That's right. The only equity, so we see you, is the difference in what you paid for the note versus what's owed.

Exactly. Versus the payoff. But a lot of people, they get like, oh, it's worth 200 or 250. ARV will pay 175 or 184. Well, the borrower only owes 150. Why am I going to pay 30 grand more than what's owed? Yeah, you, you're not going to collect on it. And so we see that that's one of the biggest mistakes that people that get into the note space without understanding the nuance. You have to think like a banker versus like a fix and flipper or a traditional realtor.

That's right. Now, I want to. The, the note exposure that I had was like I told you before the show was, was. Or the learning curve that I had was a guy that was buying second mortgages. Now, the, the second mortgage only moves to the first position if the first is paid off. Is that correct?

No, not quite. That's the. Here's a good thing. If there's a first and a second, if they first, if the bank on the first, the lender on the first accepts a deed in lieu and doesn't check title to see the second. Then the minute that that deed in lieu is signed, the second now becomes the first. So one of the things that we do as a note investor especially, we're buying first liens. We're always checking title, okay? And I don't care if there's a second, because most of times, if they owe more than the property's worth, we're just going to foreclose out that second if there's no equity. But that's why you had check title. Because if there is a second, you cannot accept a deed in lieu, then at that point. I mean, you can, but you risk now the second going into the first lien position and controlling everything. So in that case, what we do is call the consent to judgment, or, you know, here for cash, for keys. We do cash for consent.

There you go.

And then we get a consent to judgment sign. It just shows that the bar is consenting to the what's owed in the first so that we can expedite the foreclosure to wipe out the second. Now, I'll offer 1500 bucks, the seconds to go away. And I'm like, listen, I'll give you 1500 if there's no equity just to go away, because that's what it's going to cost me to foreclose.

That's right.

So if you want to play ball, get 1500 bucks today. Or you can wait six months and you get nothing at that point. What do you want to do?

Yeah, and that makes sense. And it's all. It's all relative to saying, hey, here, here's the. The best case scenario. And the best case scenario, as every day goes down, the best case scenario gets worse and worse and worse. And, and so anyway.

But.

All right, well, listen, man, I want you to tell the listeners how they can reach out to you. I know you said you had a class. I know there's. There's just a number of different resources that you have where you can be able to. Where somebody out there that's listening that might say, hey, I either want to invest, I want to get a part of this. I want to learn how to do it. One of those three scenarios, I want you to tell them how they can get in touch with you and what you have to offer.

Yeah, the easiest thing was our website. We close notes dot com. We don't talk about notes, we close them. All right? We're actually been, you know, over a billion dollars in debt closed over the last 17 years.

You can go.

There's my main website. I've got the podcast the Note Closure show or Note Night in America or Note Camp. So I've got a couple different podcasts out there with over a thousand different episodes. We do have a special thing and I love what you're doing. And so we offer up every third Saturday of the month a one day, kind of a cliff notes version of the note business. Dip your toe in the water. It's a one day class to kind of give you a sound, fundamental aspect to see if notes are something that you'd really like to. We call it note weekend. Third Saturday of the month you can go to noteweekend.com and get signed up with it. It's about eight hours of me teaching you live, plus about another eight to ten hours of training videos. Usually it's 99 bucks, but if you use the code Cash Flow Pro. Cash Flow Pro, no space, all caps cashflowpro.com I'll give you the class for free. And you don't have to wait to take the class. Once you get signed up and use the code Cashflow Pro, you get it for free. We'll actually send you a link with replays to the previous class. You can start learning today. And that's one of the great things I always tell people, like, listen, if you want to learn a note business or you want to think it's exciting, go through the one day class. Learn it. Any investment is worth you spending at least one day to figure out if it's right.

Even an investment of your time post learning. I mean you have to. I mean you have to. And as. As niched down as this discussion has been and, and as many little hop, little high points as we've hit, I gotta imagine that you talking about it for a day is gonna leave somebody pretty much just exactly where they want to be. Either they want to know more about it or they're like, hey man, this is just too much, too complicated, so on, so forth. So it's we close notes and that's notes is plural. Right? So we close notes.com and then resource again. Or the. The class. What was that?

Yeah, the class is if you go to noteweekend.com and it'll ask for your name and number to opt in and then they'll see a checkout page. Just use the code Cash Flow Pro, no spaces, all caps. It'll knock that down to you for free. And then you'll get a link with a replay. And then I gotta throw in one other thing. You're listening to this right now, dude, Casey is kicking ass and taking names here on the podcast. You guys love him. So kick whatever you're listening to. I want you to pull out your phone, hit the subscribe button, and then I want you to make sure you leave a five star review. Because we, as podcasters, we love to hear from our audience. What if you like it, great. If you don't like this episode, tell them, yeah, we want to hear from you.

But leave that five star review.

Hit the subscribe button so you are always up to date on what Casey's got cooking with the Cash Flow Pro podcast.

Scott, man, I can't tell you how much we appreciate your time. And I know with, with everything you got going on, it's just, it's, it's, it's, it's hard to carve out. I know it seems like everybody's like, well, just took 30 minutes. Well, that's 30 minutes of not doing something else that could potentially be profitable. But man, we so much appreciate your time and listeners, please reach out to Scott if there's anything he can do to help you get with him. Let him teach you how to do it. Let him show you. And go to noteweekend.com and he said he set us up a special promo code. Cashflow Pro. All caps, no spaces. And you will get that for free. Scott. Thanks, brother.

Hey, Casey.

Thank you, bud. Have a good one.

Cash Flow Pro is hosted by Casey Brown, founder and CEO of 3000 Capital, a commercial real estate investment firm committed to providing its investors with ongoing cash flow and helping them build long term wealth. If you enjoyed today's podcast, make sure to hit that subscribe button so you'll be notified about all our future episodes. You can find more information about us and our investment philosophy by clicking the link in the show notes below.

Thanks for listening.