Working For Yourself: Larry Hoffman’s Journey Into Note Investing

Foreign.

This is the no Closer show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars worth of property for panties on the dollar. Get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same. Now, here's your host CEO of We Close Nodes, Scott Carson.

Hi everyone, my name is Larry Hoffman and on this episode of the Note Closure Show, I'll share my journey as a new note investor and how in just a short time I've closed on my first deal and raised a couple hundred thousand dollars in private funds. I hope you enjoy the show.

Good morning, good afternoon and good evening everybody. Welcome to this episode of the Note Closure Show. As always, Scott Carson. Excited to be here with you today. And on today's episode, I'm really excited to have a guy who is a true Note closer. It's one of our newest coaching students who's doing an amazing job who literally hit the ground running and soaking up things like a sponge. And we're excited that before, I guess you've been learning for about two months now is closed on their first deal. A great roi not only for him, but his investor, but also is raising capital like crazy and making offers and contacting banks. So without further ado, I want to introduce a very excitable guy keep an eye out for in the industry. Cause he's making ways doing a big things. A big Cincinnati Bengals fan from the city of Cincinnati, our good buddy here, Larry Hoffman Jr. What's going on, Larry? How you doing today?

I'm pretty good, Scott. Thanks man. Thanks for the intro. That's awesome.

I am available to book parties to announce you as you walk into new rooms if you want to. You know, here comes Larry if you need to.

That would be awesome, right?

I've always thought it would be kind of cool to have like music like the Equalizer music playing before you walk into space. Kind of like the movies you see like the Iron man before he gets on stage. Well, it'd be kind of cool. The dancing girl's always great. But anyway, that would be awesome. So Larry, let's talk a little about what attracts you notes or talk about kind of your background because you've got an interesting story. Like many people the very big investor back decade ago and of course you got, you know, kicked in the shins pretty good like everybody else did too. Let's talk about your kind of your investment experience up to where you got to invest in notes.

Well, yeah, I started back Real estate Investing back in 2006, I guess I pretty much started out with a lot of the other people just buying the properties, fixing them, rehabbing them, and then selling them. I would sell them just conventionally and or bank financing, but then also along the lines of I was selling them under a rent to own or a lease option. And so. And then when the economy kind of took a tank and then the housing market and the economy and people were getting laid off, that's when it really impacted me. It hit me hard. Unfortunately, not only did it hit me financially with real estate, it also took a toll on my marriage. And because of that, it was one of the factors that led to my divorce. So I took a little bit off time off on the real estate and then I slowly got back into doing it. When I say slowly, I started out with, I like the cooperative lease options and then wholesaling properties, things like that. And then just recently, I came across you. I came across your podcast, actually, and I knew about notes. I've sold notes I've created, took back a second, sold it on the market, and I knew when I sold that second, I was going to take a bath. I've already made my money up front. And then I sold the second, but I didn't really understand really quite what I was doing when I was selling that second and never really thought about entering the space of strictly becoming the bank and buying these notes. And like I said, God, what was it? I think it was about three months ago, four months ago, I came across your podcast. Listened to everything and anything I could listen to. Then I became one of your members with the monthly, like the membership, the WCN crew.

Yep, yep.

I was soaking up all those videos. I mean, it was 24 hours, 48 hours just watching your videos after one after the other, and it was like a light bulb just went off of my head. I'm like, oh, my God, I've been totally doing this. There's nothing wrong with, like, investing the way that I started. And there's still a lot of people that are doing that Burr model and things like that. There's nothing wrong with that. But for me, this light bulb went off on my head. It's like, oh my God, I've been totally doing this the wrong way, at least for me. And then that's when I signed up for your mentoring. And it's been nonstop. It's been great. I mean, I've been loving every moment of it.

That's awesome. We'll get to that in a little bit. So as you said, you got a lot of background doing a lot of different things. Market change, like many people, financial difficulties, not only just the real estate, but also family. Hey, that happens. Hey, been down that road and a lot of people have. But one of the biggest things I want to commend you though, is you didn't let that stop you. You took a little bit time off or figured some things. You actually went into the workforce. I think you taught yourself on programming and stuff like that. That's kind of what you're doing now, right, these days.

Yeah. I graduated from the University of Cincinnati with an electrical engineering degree with a minor, computer software. So I've been developing software, oh, I don't know, for 26 years now. So, yeah, I am in the software industry and I'm looking to break out of that and really go back into working for myself. Because when I was doing the real estate stuff full time, I was in fact working for myself. And I think it was for almost eight years. I think I was full time at it. Yeah. So I was making pretty good money at it then. Just took my eye off the ball a little bit with that economy and everything. And that just kind of impacted me.

There's a lot of snowflakes that turn into snowballs that turn it into avalanche for a lot of folks out there. I know a lot of folks that lost everything because they financed and they just, they couldn't get out of it fast enough because the market was things. But you've also, I mean, you're great at your job, you work from home, you're doing stuff like that. But you also just recently found out after kind of sign up for stuff that you might be a marked man here in a month or two. Correct?

Correct. They are talking about layoffs once again. I'm not sure. Just gotta take it as it happens. But it's one of those things where you can just kind of sit sidelines and just let it happen or you can just take action and then at that about that, a little bit before that came down the pipe, that's when I reached out to you and signed up for your mentoring. And my goal is to actually do this full time again. Start doing the real estate investing full time.

Yeah, that's the thing is we don't expect to replace you make good money, what you're doing. Right. You don't expect to replace that overnight. And by no means would we ever say that. It's just a matter of like, okay, you were asking me, we were exchanging text messages, like, can I really do this. Can we set up a place to plate? And then we basically. That was one of our first phone calls, I think after the class was let's talk about your goals, talk about what you're making and let's figure out, okay, you're going to have some big checks in the non performing note space with foreclosures or deep, and then the other side is to build that cash flow. So we really kind of built it into two buckets, you know, and came up with specific number of deals you need to do. I think it was what, 20, 20 to 30 deals on the performing side and then like seven or eight bigger checks on the dwarf foreclosure. Am I right on the number?

Yep, correct.

And that's the great thing. Now you've got a plan, now we just need to go implement it and go from there.

Right, right, exactly.

Now you're really good at. You're a very coachable person, I will tell you that. It's a joy because you are constantly doing something. I know in your spare time you're doing a lot of things, setting things up. When you were learning the note side of things, what was what, one or two maybe thoughts that you had that you might, that you, anything you thought you might struggle with, or you're like, oh, that might be hard. And that's turned out to be completely the opposite.

The big thing for me was, I guess it's finding the deals within your course or within these weekends that you have these virtual workshops. You go into great details on how to actually find these tapes, these assets. And I thought that that was going to be the hardest, reaching out to these people, especially banks and hedge funds and who are they going to just deal with? Just little old me. Here I am kind of new to the notes space. I've been around real estate and I've done a lot of real estate deals over the years. But once again, like I was saying before, I'm new into this note space here I am new, nobody's going to talk to me. And that hasn't been the case and it's been great. The other thing is private money. I've had private money in the past and it was one of those things where when you get out of it and you start looking for it again, I'm always amazed at how it's just having that conversation with somebody and telling them what you can do, not guaranteeing anything, but like, here's the deal, this is what the type of return that you can get. And it's just Basically following what you're talking about and it all shakes out.

That's to. The biggest thing is finding deals and then also raising capital and all kinds of stuff. They both are the two biggest things that people worry about. How can I find deals in the note space when I can't find them in the REO space or the. What makes notes so different about that? Then also, oh my gosh, I can't get my bank financing when I'm used to or hard money. Lenders aren't going to do this. How am I going to raise capital? And you've done a tremendous job in raising capital. For you, it's really, you said come down to having conversations with people and kind of sharing. These are the types of deals that we do.

Yep.

And hey, if you want to jump in, great, let's work on these together. Or you fund it and pay a flat return on investment and go from there, right?

Yep, yep, exactly.

Now, you mentioned there was one thing. Cause you've raised how much in approximate funds have you raised or have had people kind of say they're pledging to you over the next 12 to 24.

Months, initially it's going to be $50,000 right off the bat. And then with the potential of going up to 350,000 with this one lender.

With one lender.

With one lender that I just contact you just.

He's one of the first guys that you funded a deal with.

Yep, yep, exactly. And then I have another meeting with the second lender. What I did was I sent out 77 letters. And. And this was right before Christmas and you and I had this conversation. Like you said, don't expect to get any calls. And I kind of figured that because the holidays and people are busy.

Let me clarify this for everybody's list and the letters he sent. We pulled up a list there in the county that you're in of people that had bought a property with their self directed IRA.

Correct.

Those were the first. There was. Oh, more than 100. But you sent out 77 letters with the IRA letters that we've provided in the sample case studies. And you sent that out first, right?

Correct, correct. And then out of those 77, I had two people respond. And then the one I actually had lunch with week and a half, two weeks ago. And so we met for lunch and of course I bought lunch. And so he said, yeah, that's fine. And then I'll tell you the big thing. And this is something that I didn't do in the past with the private money I didn't have this pitch deck, this video. And I'm telling you, huge difference. Huge difference. Because he went to that and looked at that video, there was really nothing. No question. But the other thing though, too is he's a seasoned investor. He's done this so he understands what's going on. But basically when we met was two questions. The only two questions he had was, how much return am I going to get and how do I get started? And because he goes, your video answered all of my questions for me.

Now, this video was like four hours long, right?

No, no, no, no. It was only 10 minutes, 10 minute long.

But here's the fast of those guys. And you can always check out, We've got. If you're listening to the podcast or watching this on YouTube, you can always just go to our channel and type in like, pitch deck. Building the perfect pitch deck. Because that's kind of what we did. We literally gave you the guts of what we've done. And then you tweaked it with your branding, your story, Talked about the types of deals that you're looking to do, talked about your vendor team who's done thousands of thousands of deals, funding and all the. That you're not the guy going out and knocking on doors and collecting. Exactly. And I think you said that's one thing that he really liked is, hey, you've got your team all set up with professionals. You're not just investing in Larry. He's investing in Larry plus the team, right?

Yep, exactly. Exactly.

That's awesome. You said he went from basically, okay, just 50. He's already started. Like, when are we going to do the next deal? When are we going to do the next deal? We're not going to disclose the interest rate, but we'll just say it was very. It was an above average return on investment for him because the money was sitting there making nothing. Right, Larry?

Right, Exactly.

Versus you're not paying hard money fees or traditional investor shark loan. You want to keep that interest rate low like it is for a while, correct?

Yeah, yep, exactly 100%.

Now, you also done a really good job. You've been going to different lists, some of the different list websites and identifying deals that have been, I guess we could say, have been stale on the websites, but have turned out to kind of be some opportunity for you there too, correct?

Yep, correct.

You got one that you went. It was what, 20 minutes away from you that you went with.

Yeah, yeah. Well, it's actually just 10 minutes away. And so we're kind of still, when I say were Scott's actually helping me still working through the steel. But if that one works out, then that would be the other one that this lender would fund for me.

Well, it was nice that that note had been sold three or four times it looked like. So we found three or four sources for Larry to reach out to with every assignment. And then you're in contact with another new note holder of this who's a fund out of California. And. And the person will reach out to us. Yes. Contact this person in house who handles our note. All of our note deals.

Yeah.

Which one deal looks like is going to lead to hopefully more. We just haven't gotten a list from yet. But I know that company, I know they've got a portfolio that they're constantly selling. So.

Well, the funny thing is I was out of that list that I got right. The one that I was specifically looking at that's 10 minutes away. I went down like a few more properties as I was walk going down. I'm looking up information. They just happen to own that another asset. So that's two from the same company. And. And so yeah, like you said. So not only do is it going to be two, but there's going to be a large amount that they're going to have. Plus they do commercial deals as well.

Yeah, they got some pretty good sized, nice commercial deals out of California. Now let's talk about this deal that's been funded on because it's a pretty sweet deal. A lot of people are like, oh no, it's overpriced. You can't find deals that make sense. And we know that the BPO on this came back better than expected. Like at what, 80,000, right?

Correct.

The payoff on this was what, like 41 and some change.

Payoff was 35,000.

35,000, yeah.

Some change, Yep.

And you got the Investor is funding 20 grand on this, the purchase plus some workout costs, stuff like that.

Yep.

Now, based on the cash flow on it as borrows, what paying like 430amonth or something like that.

It was a 344.78, $344.78.

So it's still going to be besides having to fund a little bit extra, you've also besides paying the investor their fee per month, you've still got about $200 in cash flow coming into your end.

Exactly. Right.

Right after servicing costs, taxes are paid on this. And it was funny. Let's talk about besides sitting on the list, we found the students actually the investor that owns us knows a previous one on one coaching student. So we've been working back for us. And so it made it really easy. We actually he wanted one price for the note. We were able to actually get him a reduced price on the note too. Correct?

Yep, correct. And that was all because of you and him being a former coaching student of yours. And it's so neat being able to work with you and then along with other students of yours because we all have this, I guess, camaraderie that it's just awesome. I love it. I absolutely love it.

That's what we love about the note nation out there is the note space. Usually it's pretty, pretty friendly for those that are doing deals, they realize they market and go from there and do some things. So you have raised, we'll just say conservatively a couple hundred grand from a couple investors. Are you continuing to send out more letters here this in January? Now?

I did, what I did was to that same 77 people, I just created a postcard. Basically I just took the letter, shrunk that down to a postcard and then I put my case studies on the front of that postcard and I put ROIs on it and I sent that out. And then I'm still in the process of creating a newsletter. And so what I'm going to do is I'm going to have printing company send out this newsletter every month and I'm trying to reach out to people either myself that's going to write the newsletter or see if I can work with somebody else to help me write it. So that way I know basically I need to take myself out of the equation. So that way I know it will 100% get done. What I want to do is I just want to touch them every month and the idea is have some articles on there, write some type of blog post and then on the back of the page have a case study that I'm working on. And then this month's article newsletter is going to be the case, the one that we're closing on.

Oh, that's nice. That's a great idea there for you. I've got a couple of resources for newsletter I could put you in touch with.

Oh thanks.

For some of my friends in the podcast space now on how hard was it? Because the way that we do our one on one coaching is a little bit of investment there for you.

Right?

We agree to that. Would you say you've gotten your money's back on it so far?

Honestly, the answer to that question is yes, A Million times over. Honestly, I felt like I got my money's worth really. Like the first meeting, the second meeting. It's just I've been involved in other coaching programs doing this real estate stuff. I mean I'm sure you've taken them, other people listening to this podcast has taken them in. There are people out there that'll just take your money. And I just knew right from the start, looking at your content, listening to all the free stuff that you give, that I knew it was going to be a home run right out of the gate. But 1,000%, yes to your question.

How difficult was you decided to select a bond third party financing option? How difficult was the process?

It was pretty simple. It was really easy to do. Yeah, and that's the thing. I chose to go that route as opposed just to paying because I could go ahead and pay for it, but I would just rather financed it and use that money, my personal money to buy. If something comes along down the pike, I can go ahead and buy that note and get more of a cash flow on it.

Well, that's the thing. It's too. You've spread your cost of education out over two years or three years and then there's no prepayment penalty once you close.

Exactly.

And pull the capital. They said made it pretty easy. I mean you were approved with 24 hours and then it just.

Oh my God, it was literally actually four hours. I think it was literally within like 20, 30 minutes is what they called back and they said, yeah, you're pre approved. Okay. And then everything was done within I think it was a couple hours and we were ready to rock and roll.

Yep, exactly. Everything showed up, I think three days later or mailing and then firing and stuff like that there for you. So yeah, it's pretty easy to do. You're doing some amazing stuff. You've also spending time with your kids. One of the things I too, I want to bring up too is that other people at your work are probably starting to see a bit of a difference. You had one individual that reached out to you that was initially interested in funding but then kind of got scared and kind of flaked off a little bit.

Correct, Correct.

Thinking back now, what we've been through. Anything that you would do differently about that conversation with him?

Yeah, it's one of those things where don't chase them. That's the big thing. I kind of, I tend to get overexcited on things because I'm just for lack of better balls to the wall type when I put My foot. Make my decision on something. I will move heaven and earth to do it. And that's the thing that I need to do. I need to take a step back. Not everybody is like that.

Right.

So this individual I work with, he reached out. It was just funny because I'm a software developer. We have these daily standups and then I still own a lot of properties, rental properties. And so we were talking about that and goes, oh, I didn't know you did that. So we had multiple conversations afterwards. And then he talked about investing. And like I said, I think I chased him too much and that kind of made him a little weary. What I did was I just totally backed off and was on the, our standup last week. He was kind of like mentioning something to me about it and I'm like, yeah, that's fine. So basically what I'm doing is I'm just kind of putting. Keeping him at arm's length a little bit and I'm going to let him come to me.

That's great. And always I bring that up because it's a learning thing for everybody out there. We get so excited. A lot of times we can scare away some of our close friends and not everybody has the same energy that we do. Yes, you're excitable. Yes, you're balls of the wall. But that's. You're focused. You see an opportunity there and you're not making it happen. That's why I said that you're so coachable because I would give you something to do over the last 10 weeks and the holidays. Hey, Larry, this week, focus on this, these two things and you go get it done.

Yeah.

And then like, hey, what else can I do? Like, oh, okay, we'll start on this then for next week. And you know, you've got some great stuff in, like, we've got your kind of your marketing plan down, as you mentioned, a little bit about things you'll be doing on a daily basis and working around stuff. And you're already, before we had this episode, you're already talking about two or three resources of other deal flow in different parts of the country or off different lists, like, oh, I found another one that this company owns or this other guy owns I can reach out to as well. So you're out there, you're finding and funding deals there for you.

Yep.

And we got. Okay, we kind of built that 6 to 12 month kind of Runway for you so that you hopefully put this stuff to work and start knocking off that big income goal for you. Correct. Right.

Exactly. Exactly.

How old are your kids, Larry?

Oh, I have four. My oldest is 26. 18, 16 and 14. Or, I'm sorry, 17. 15.

17. Going on 30.

Yep, pretty much.

Pretty much. Have you talked with them about any of your investments or have they showed any interest in your real estate stuff over the last years or recently?

They all know that I do real estate and stuff like that, and it's not so much. It's one of those things where they just don't have the interest in it. I think once they start seeing a little bit more, especially I did pretty well before with buying or rehabbing the home and stuff like that. Made a pretty good living off of it. I think when they start seeing, like, notes and the cash flow and talking to them about. I think my older two would be more interested in it.

Awesome. Good stuff there for you. Big goal for you for 20, 22.

Is to replace my job. That's one of those smart goals that you and I talk about where you need to. You just can't say replace my job. And that's where we have specific. Scott worked with me to have very specific goals that. That I need to have, that I need to obtain, that. You know, I need to talk to so many people each day, make so many offers, so that way I can realistically hit that.

Yeah, I mean, that's the thing. You've got a plan. We're just working that plan for it. Everything's completely different. How many hours a week do you think you're putting into your new real estate business right now, on the developing side? Not your rentals that you have, because I'm pretty sure those are pretty automated for you for the most part. On your note business, how many hours a week are you kind of putting in?

Oh, I don't know about. I would say between 10 to 15 hours a week. Yeah, I know I should be doing more, but I know consistently I'm at least 15 hours a week. I do something every day.

The reason I'm bringing it up because you are, you're working from home, you've got your job, you're doing that full thing. You're working around that with calls and stuff like that, which is great about working from home, but you've also, hey, you're still dad. You got your kids on the week every other week or something like that. And then other interests. You run, you're a big runner and stuff like that. You. Your fitness and mindset with that is important for you as well there for you.

Yep.

Any advice for those out there that are listening that might be on the fence to dive into the note business or to get started. Anything you want to share with them.

I would just tell them that if they are really thinking about it, just to do it. And then 100%, I would encourage anybody and everybody to sign up for your mentoring program and. Or if they can't do the mentoring program right away, then become a member of the WCN crew. I think $97 a month, which is cheap compared to everything that you get with it. Because I'm telling you, I still have a lot to learn within this note space. I just know where I was before starting with you, then looking at the WCN crew, becoming a member, joining the mentoring ship, and now what I have, it's leaps and bounds. I mean, you can just continue to spin your wheels. If you're serious about it, then you gotta take that investment and put that investment in you. But not only you, also in you, Scott, because it is an investment. But I knew with just seeing the stuff that I saw within that WCN crew that it was going to be well worth it. It was one of the best decisions I made.

Awesome. I appreciate that. Yeah, that's the. Our WCN crew is our monthly 97 all you can eat buffet. Basically learning online. And we do weekly calls every Monday with the group. And you shared some resources. They've shared your resources. A little topic there. So it's kind of a great weekly accountability to keep it rocking and rolling throughout the week as life gets and the craziness and chaos of the world gets in the way a lot of times.

Yep.

Cool. You mind if people reach out? We post your website so people can reach out to you, see what you're doing and talk with you. Pick, right?

Yeah, for sure.

Awesome. Yeah. I will tell you this. Steph and I, we love talking about our students. We love bragging on our students, especially love working with folks that are motivated and hungry. Les Brown says you gotta be hungry. Another Ohio native there. Yeah, Les Brown out there. But you guys, you're hungry, you're motivated, you're coachable. There's nothing that we haven't given you that we don't do ourselves or haven't done a lot in the past to help us get where we're at. And you're off rock and rolling. And we're very proud of you.

Oh, appreciate that.

Look forward to your 2022 and all the continued success out there, Larry.

I appreciate that. Thanks, Scott.

All right, guys, that's going to wrap it up for this episode of the Note Closer Show. Hopefully, this is valuable. Hopefully. If you're listening to Larry out there, hey, there's a lot of opportunity available out there. As he mentioned, he was worried about deals and capital, like many investors are. Can I actually find deals? Can I actually find funding out there? And it's actually easier than you would think. It's always 10 times worse up here in these 4 inches between or 6 inches in my case, between ears. Look, there's still plenty of deals, plenty of money out there. You've just got to put the work in. You've got to take the action. And if you do, we look forward to seeing you at the top, everybody. So go out, have a great day, enjoy your weekend or week, and we'll talk to you later. Bye.