Becoming an Advanced Note Investor in 5 Weeks with David Gomez | Real Estate Notes Show

Episode: Becoming an Advanced Note Investor in 5 weeks with David Gomez Full Dave's Goals and Plans: - Running a solar energy provider for 8-9 years - Started as mortgage originator at Countrywide over 20 years ago, originated hundreds to thousands of loans monthly - Opened own mortgage company and rode the mid-2000s mortgage market wave - Did extensive loan modifications work with banks - Enrolled in the five-week mastermind course after discovering yield-based bidding methodology - Plans to immediately start the second part of the course Nathan's Goals and Plans: - Presented a commercial opportunity today planning to buy first and second positions - Recently talked to two people about seller financing benefits including creating notes, keeping seconds, and generating residual income - Planning January 13th episode with two subject-to buyers and originators to discuss note creation, licensing, and sellable note features - Walked into Paper Source last May and decided to create five and ten-week courses based on advanced class feedback Key Recommendations: - Learn to bid on notes based on specific yield or return rather than percentage of UPB - Understand that not all notes are equal - rates and terms significantly impact value - Combine structured course education with networking and live discussion for better learning outcomes - Practice hands-on work and make mistakes rather than focusing only on theory - Create notes properly following all laws and with features that make them sellable if you want liquidity options Topics Discussed: - Advantages of structured courses over books for learning note investing - Importance of networking with peers at similar experience levels - Bidding methodology - yield-based vs UPB percentage approach - Seller financing origination and note creation as a business model - The gap between note buyers and originators in the market - Licensing and legal requirements for creating sellable notes Guest Insights: - David's mortgage background initially made note investing seem easy but he was confused by UPB-based bidding methodology - The breakthrough came learning about yield-based bidding which aligned with mortgage industry understanding of rates - Seller financing appeals to real estate investors wanting collateralization and control over their investments - The five-week course provided detailed roadmap that removed emotion from purchasing decisions and increased confidence I started off with wanting to do a lot of things but not really knowing the road map and uh I feel like you guys provide a really solid detailed road map you know where it takes the emotion out of it where you just feel like okay based on this and this and this you know this is what the purchase price should be and then all the pre-bid and post bid steps absolutely you get the road map you get a a really strong solid road map and you get confidence because when you know what you know where you know where you're going and why you're doing it.

You just get a lot of confidence too. So I mean I I I I mean I'm ready to jump in the the the the second part immediately like I'm like when do we start you know because I it's it's given me like a whole road map of where I want to go where I want to take it. Uh yeah I'm I'm super excited and I would I mean I would recommend it wholeheartedly. It's u it just gives you the steps of what to do and why. [Music] Welcome everybody. Dave Puts here from JKP Holdings. Alongside me as always, Mr. Nathan Turner. Good morning, good afternoon, wherever you happen to be. Hopefully everyone can hear us fine today.

Hopefully everyone's having a good Friday day. Um, and look forward to enjoyable weekend. Safe and healthy weekend. Um, I know people will be celebrating everything else. Please be safe. Yeah, you know, it's this time of year things are hectic. Preparing for next year, but this week's been crazy for me. How's it been for you? Yeah, Nats. We had some house guests show up here earlier this week, and so it's just been go, go, go. And they're out at the ski hill today. I'm gonna join him later after we're done. Good. Um, so interesting to say that, about how to make it so it's sellable um and protect the borrower because the the push is we're going to protect borrowers, protect borrowers, protect borrowers um which is the Dodd Frank kind of mindset and we'll also have Max join as well to talk about structuring notes in a way that is legal and binding but also a way to sell the note for the highest dollar amount that you can you can get and what what ways or options you have.

So cool. Well, thank you again, David. I appreciate you joining us on the live feed. We're disconnecting there and I hope everyone does well for the weekend. Anytime, guys. Thank you. All right. you know, you know, we spend time with our kids and our family during this time. Um, but we see each other video enough. It's really awesome. And, uh, for those who don't know, me and Nathan exchange Christmas gifts every year to kind of just celebrate our time together and whatnot. Um, so I look forward to opening it this weekend. Um, and I'm sure we'll enjoy it. Um, I presume we got our gift from We did.

Awesome. We did it. It was very good. Thank you very much. Awesome. So, I I wanted to get into this topic which is really cool because a lot of people take a lot of beginner classes out there. Um, and we run into a lot of people out there who don't understand the space, want to dive in, nervously dive in, which is good. What are your thoughts on um how people approach a space when they first get in? You know, I' I've been approached by a number of people that ask about books, and there are a few books out there, but um because it's such a broad topic, it's tough to put everything into one book.

And you can put like a few case studies and things like that. And the books that are out there are great. Um, but it's it's limited because there's only so much you can explain and talk about in a book versus in some kind of a class uh where you've got different participation and questions and things and all those kind of things come up and it it really helps just to have uh kind of that discussion going. So I there are a couple of books out there. They're great and I know the guys that wrote them and they're fantastic. Uh but but it's only a slice of what you can learn. um because it's such a big topic.

Yeah. And also the networking is a big thing, right? Yes. Watching a video YouTube is great out there, but just bouncing thought processes live feed uh to other people and those people around you need to be the same level you are. Um yeah, I've been part of these mastermind classes where you kind of be the smartest person in the room or the people are way above your level and it just doesn't fit what you're looking for, classes and stuff like that, but when they heard us speak, they didn't learn some of the stuff that we talk about, right? So, we decided to put together uh a five and a 10 week, which is an extension of fiveweek class uh of topics that we feel is crucial in homeworks and sessions and whatnot.

So, we have David Gomez with us today. David, I appreciate you coming on. uh spend a few minutes on a Friday morning to you in California and uh sharing your your information. Yeah. No, I'm glad to be here. It's funny you mentioned Paper Source because I actually went to Paper Source. It was the first thing I kind of dipped in there. I'm in Vegas quite a bit and uh I stopped by one of those and and uh one of the days and and saw a little bit of talk and this and that and but yeah, I I it's funny because I I I had kind of looked dabbled around a little bit, looked at it. I'm obviously interested.

I have a pretty deep mortgage background. Um, and I was interested in investing my own money in something that I can have a lot of control over. I'd heard about notes. Uh, figured I've done just about everything in mortgage loans. This shouldn't be too hard to figure out. It kind of was. It really was. I mean, I I was confused from the get-go just kind of looking around because everybody kept talking about bidding on UPB, percentage of UPB, and this and that, and just having a mortgage background and understanding rates. I kept thinking like, well, this doesn't make sense. Like, just a percentage off of it's not all everything's not equal.

It's different rates. And then I happened to catch um a video with you guys and Joe Kennedy where you guys talked about bidding based on a specific yield or return. And that's when I was like, there it is. Yeah. Okay. Now this this is starting to make sense. And that's that's how I got turned on to you guys. And uh and uh yeah, then I signed up for the right? Um, and practicality, doing the work, not just worrying about theory, but actually diving in and practicing and making mistakes is, I think, a key item learning anything you do. Yeah. Absolutely. Absolutely. And and I know both you and I both took classes early on and and learned I I took classes from several different people actually and and took bits and pieces that I liked.

And not that the rest of it wasn't valuable, but uh but a big part of that was just the networking and getting to meet a different crowd of people. Uh that was a big deal. Absolutely. I agree with you. I think you know meeting different people and different people in the space that have different processes of how they do things and making your own is crucial. Um and I'm excited to hear um some of the guests. I know um what our plan today was have David and Candace come on. Candace actually had a backout last minute. Um, so it's unfortunate. Um, but it's it's interesting when we first got connected, Dave, who joined our our last class on this, he had experience he didn't realize he had.

Yeah. And then he brought that that connection which was really cool. Um, and we're going to introduce in just a moment. But before we go there, I I want to say that um those who are watching us or who are seller clients people um you guys are awesome. It is blowing up like crazy on the back end uh with seller finance deals and opportunities and whatnot. I got presented as a commercial opportunity today that I'm probably buy the first and the second created um and then we have our own connections. So if you guys are sell financing subject to please let us know some assets you're looking to sell.

Um and the people want to buy we'll be you know passing along anything that doesn't fit our our cup of tea. But it's been awesome. Yeah, I talked to just somebody yesterday, actually two people yesterday, and the one lady, she's she says, "Wait a second. Wait a second. So, I can create a note like this. I can pay off what I'm into it for, plus make some money, plus mastermind course and got going. So let's back up for a minute. Yeah. What is your background or what's your background in? How did you come across notes? Give us a little bit of the backstory. Yeah. Yeah. So, um I uh years ago I started working at well currently I I I run a solar energy provider.

Uh I've done for about eight nine years before that long before that I got into the mortgage industry as a mortgage originator with countrywide. So started off with Countrywide like 20 like 20 year a little over 20 years ago. Um was there for a while was great place to learn. Did hundreds and hundreds probably thousands of loans every month. I mean total um and then opened up my own mortgage company and uh from there I mean we rode the wave of the mid 2000s you know mortgage market. Yeah it really was it was like the wild west of like you know mortgage originating right? like it's before you know before the big crash and everything.

It was uh we did we did it all and uh you know saw the crash up [clears throat] and close you know saw the cracks starting to show and then eventually it was like you know it just it just really got crazy. Um and then from there we also got into uh loan modifications. We did a ton working with banks. We did a ton of modifications. Um so plenty of experience there. From there, I I I entered the the solar energy industry, but I always, you know, I I did mortgage loans for so long that I understand it. I love the idea of it being collateralized by real estate. So, uh about a year ago, I had a friend of mine that I used to work with at Countrywide mentioned that he had worked at a place with another guy, another mutual friend from Countrywide, um and they were working in notes.

and he originally came to me about getting a job working at Solar and he started talking about notes and I was like well hold on forget yeah we can talk about keep a second and get some residual income." I'm like, "Yeah, you can do all that." And she's like, "Oh my good." And she's like, "Oh, okay. I can do this a lot." I'm like, "That's fantastic. Keep it." We got to bridge that gap, right? the note buyer world and the originator world which those we haven't publicized it yet we will after this January 13th we'll be having two big big subject two buyers originators on to talk about how to create a note securely successfully so that it followed all laws but also what would make that note the most valuable part what features of it do you make sure you add to the note when you create it there's originations there's licenses debt lic and all that stuff, but making notes that are sellable but also secure enough is crucial.

So, and you're creating it. Usually, you're creating it. Um, most people, I think, get into seller financing so that they can create their note and keep it. What if you wanted to sell it? What if you wanted a lump sum of cash at some point? Uh wouldn't it be nice to be able to have it created properly so that you can get that uh and then if you want there it you can actually structure it as a business where you can go out and keep creating notes and selling them and creating notes and selling them and just have that ongoing. So things to think about. Yeah, absolutely. So um please feel free to let us know what you got going on the outside.

Post some comments in the feed. We're on LinkedIn and Facebook and this will obviously be on YouTube. Um feel free to take a look at it. We also have our podcast. Um, but let's dive into uh what we got going on here. It is amazing. Uh, when we first did this idea of um getting into a uh Sorry about that. So, getting into this idea of teaching, we really weren't looking planning on doing a teaching method, but we walked into um Paper Source last May. um we got approached by a few people that took some advanced the job later but let's talk about this this is interesting you know and he started talking about um you know performing notes non-performing notes and and how they did modifications and this and that and I just thought like oh wow this is really interesting because this is this is like right up my alley what I understand and and so I thought at that point I thought this this isn't going to be very hard at all.

I'm just going to like figure it out, get into it, you know. And uh my friend couldn't really tell me like cuz I was trying like, okay, so how do you figure out exactly like how to what what to bid and he didn't really even though he had worked on the backend collecting and all that stuff, doing modifications. He didn't really understand how to bid on it or how it was. And I talked to a couple of people trying to figure out figure that out and nobody could really tell me, you know, it was a lot of like, oh yeah, just you just bid on a percentage of the UPB. So I'm like, okay, I get that you but how you know how does they didn't make sense.

And a lot of a lot of people couldn't really give me a straight answer on that. I just bid on it. You know, you bid low and then you sell high. [laughter] Okay. Yeah. All right. But so it didn't really make sense until I saw that video where I was like, "That's it. Of course, you have a specific yield or return in mind and then you back your way into what the purchase price is going to be." That made perfect sense. Yeah. Yeah. So, but yeah, it it's definitely a little more confusing than what I would, you know, with my background in mortgages. I thought like, "Oh, yeah. I'm just going to dive right in and figure this out." But yeah, there's that's uh it's a little different.

There's a whole world in notes that doesn't seem to like follow the whole yield or specific return. Isn't that interesting with that kind of background and it was demand there, right? Yeah. Yeah. Yeah. Yeah. I thought it was just a m I mean a mortgage calculator, you whip it out and you you know, but yeah, it it took quite some time and I talked to a lot of people. It's amazing. Yeah. Yeah. we're hopefully going to change the world with the theories out there and whoever is teaching it hopefully will convert them as well. Yeah. So, one of some of the things that you shared in the class was really interesting to me is that like while you're country wire, which those who don't know, go watch Big Short.

It's not all about country, right? Um that you every week you walked in and your origination got easier and easier. Yeah. Yeah. Yeah. Yeah. And that was actually even like after I left Countrywide when I was running my own mortgage company because then you had you had wholesale reps or account managers show up and they're pushing their product basically like, "Hey, we're from so and so bank. These are our underwriting guidelines." And every week practically they got smaller and smaller. Like you would go from, you know, and you would be able to lend more. That was the crazy thing. like you know your LTV got higher and higher to the point where you were at 100% financing and they went from wanting to see income documentation on everything payubs and W2s to not wanting to see payubs or W2s but show us a bank statement that they have money at least and then it went to don't show us the bank statement just tell us how much they have you know so it just it got smaller and smaller and smaller and uh yeah eventually there really weren't any guidelines you know how looks.

Yeah. Why everything kind of changed, right? Right. Which sounds totally insane. At that just curious at that time, did you think this is dangerous or was it just like ah whatever? At the time, everybody was so into that values will just keep, you know, values were just just increasing and increasing and everybody had the idea, oh, you'll just refinance. You'll just refinance. You you you just bail yourself out, you know. Okay, great. You're in this pay option arm which is you where you pay 1% of the interest but your rate is 6% so your balance is actually growing every month. Pretty scary, right? But you'll rate of return.

Yes. Immediately. Yeah. Um, no. So, I I love that the whole structure of the calculator and there's a lot more that I need to learn there. I mean, you know, net present value and all that stuff, like really understanding it, wrapping my head around it. But, um, IR, right? People calculate everything on yield and whatnot. We discussed in class that not all loans go 30 years, right? You may not have a loan go for 20 years. It may only last for seven. And you have to project that that what happens if and you can sell a loan in five years. So it's Yeah. Yeah. And reinstatement, you know, that's one thing I haven't really taken into account.

What if they reinstate, you know, stuff like that. I mean, the possibility, you know. Yeah. Yeah. It could be a great thing. It could be a terrible thing. Yeah. Yeah. Right. Right. Right. Yeah. So when you're building that calculator, it you're right. you can constantly add on. There's nothing fixed about it, it it morphs as you grow. Um, but having that mindset and that addition to do it, but you can do it for multiple assets. We we're showing you how you can go by row and pop up pop and just change it and automatically calculate all your information within seconds. Yeah, I've got Right now, mine's like a hybrid of it's like got Nate's calculator, but then it's got Dave's like, you know, being able to pull from different, you know, you can have like 15 different loans and you just change the number and all of a sudden all the numbers change and which is really cool.

Yeah, that's awesome. If you didn't take this class, this this class, where do you think you'd be with your new investing? I feel like I would be in the kind of in the same spot where I just realized it's about bidding on a specific yield, but you know the the actual structure of it because that that's where I start to get confidence is the structure laying it out a certain way. you know, the buy box and then from there filtering the tape and then, you know, put adding making sure you have everything covered, you know, all the different worst case scenarios based on all that's built into this and you have the resources at your fingertips.

It's almost like you just plug and play from here and you're now in a position to start buying notes in that first five weeks. You're ready to go. And and it the fun thing for Dave and I is this is actually fun for us. We It's not like we're trying to build an empire of of students and all that kind of thing. We actually just enjoy doing this. It's just fun. And so we're we're more than happy just to share what we've learned and and our process and and what we do today versus what we did 10 years ago. And we share a lot. You know, before we went on, I was sharing with David about some of the stuff we got going on in the background and some of the cool stuff building 2023, which I think will be ridiculously awesome.

Um some of the stuff we're already getting into has changed how I'm looking at doing already. Um and that's okay. um we're not going to buy traditional situations as we used to uh because of the returns we're getting on other ends of things. Um and we'll talk about that in the class as well. And quick plug, we'll be talking about that kind of thing at DME. Please make sure you get down to Nashville, I got DMV. Yeah. [clears throat] Um and you know, networking with people, right? It's all about the networking. get down and DM me, join the classes, and start networking and have that constant conversation because these people will help you grow and challenge you and make you better.

I like to be challenged. I'm sure you guys all do, too. Um, if you have a question, David, please feel free to put in the chat. I know it's a holiday weekend. Um, so we'll see what goes on with everyone else going on here. Yeah. Um, when you go through due diligence, you know, I'm not sure, David, have you done a deal yet? I know numbers are kind of crazy right now. Where was your weakness or where were you nervous about besides pricing? Where was your fear with due [clears throat] diligence on what to look at? I think just the steps themselves, right? Like because that's not having having gone through it and you know due diligence that makes perfect sense to but your explanations and our discussions clarified a lot.

What I gained from the past few weeks was a deeper understanding of how the big calculator works and how to man manipulate the data in different ways depending on your desired results. I also love seeing the differences between how the two of you approach your buy boxes and bid strategies and the resources you're sharing with the group uh and will save with a group and will save newer investors uh a lot of time for sure. It's incredibly helpful to have state specific resources all in one place. And your 13 things to ask the seller for is definitely comprehensive. That was a good one. [laughter] Uh, one thing I realized is that based on someone's preferred learning style, there are many ways to design an analyzer to show the calculations.

This isn't something we talked about. Uh, but as I was reviewing the videos and thinking about the various layouts on Dave's spreadsheet, I recognized that the visual way data is presented can make a big difference on how easily we understand what could be a complicated topic. Nathan and many others use the 10B2 calculator uh to do the same thing in [clears throat] a seemingly simpler way, but that might not be enough for many others. I'm specifically thinking of the section of Dave's spreadsheet that has the four yellow boxes at the top to check for what you're looking to solve, whether yield, purchase price, number of months, or payment amount.

And just thought that was a great visual presentation and method to play around with all the numbers from the various methods of of manipulation. I always think there's a lot of value to be found in a group setting and loved hearing the questions and thought processes from everyone else. as we had our discussion and looking forward I definitely think that the second five weeks is going to get even better like compounded value uh I think the advanced bankruptcy week and the advanced strategies weeks which you said you'll cover topics like partials creating notes and aross will be exceptional addition and are aren't strategies I've often I've often seen offered in all in one place before uh got uh getting the capital back out of it so she can go invest in something else that she finds fun and exciting.

And even better than that, she's like, "Listen, I'm going to take that money and make 300%. So, do you guys want a little 20% deal?" Sure. Sure. She's literally gonna make hundreds of 100%. Yeah. Um, so it doesn't really matter what her yield is to her. She seems to capital. So there's a win-win on both sides that's passionable. So definitely jump into the class for that. Um, we look forward to having them on too and be part of a growing. So yeah. Um Dave, before we let you go, um and before Nathan asks this question too, uh for those people who are interested in getting in, um any final thoughts of, you know, why they should do it or why they why they shouldn't be held up on either the cost or the time? What are they investing in to make sure they get out of what they're putting in? Yeah.

No, I mean just based on my experience, I mean I started off with wanting to do a lot of things but not really knowing the road map and uh I feel like you guys provide a really solid detailed road map you know where it takes the emotion out of it where you just feel like okay based on this and this and this you know this is what the purchase price should be and then all the pre-bid and post bid steps absolutely you get the road map you get a a really strong solid road map and you get confidence because when you know what you know where you know where you're going and why you're doing it you just get a lot of confidence too.

So I mean I I I I mean I'm ready to jump in the the the second part immediately like I'm like when do we start you know because I it's it's given me like a whole road map of where I want to go where I want to take it. Uh yeah I'm I'm super excited and I would defin I mean I would recommend it wholeheartedly. It's uh it just gives you the steps of what to do and why. Thank you. That's that's really good to hear because that was our our goal. We wanted just refinance. It's like it it you know we we used to always show show everybody a 30-year fixed. Yeah. But it got to the point that you know here's a 30-year fix.

Okay. So here's the 3% interest only, you know, and the payment is a third of what it is on 30-year fix. No homeowner would ever touch that 30-year fix. It got to the point where you could try to push this, but you wouldn't you wouldn't do any loans. You had to like have the coolest, newest product. Um, and that's so everything was just I think every everything was just based on that the values were going to keep rising. Yeah. Fascinating, huh? Well, it's weird that you you came on the scene with very little education because you leaned on your history and your knowledge and your experience to kind of get you into a sector that you partially knew already.

Yeah. Yeah. So, you dove in with us head first. Um, what was your first impression of this idea of the pathway of class homework taking, you know, accountability kind of thing and having that kind of conversation? What was your first impression of walking in? I loved it because there's structure to it. You know, first we started talking about a buy box, about creating your buy box and what do you want to have in it and this and that. Super structured, right? Like that's that's and that was the first time I really heard about a buy box. Yeah. Yeah. Yeah. I think I actually heard about it first, I think, on in on I saw a video with you guys and Candace.

Yes. You guys did. And she mentioned her by you guys you guys were talking about it by box. So once you guys started talking about that, putting that together felt really like, okay, this is structured. This is actually, you know, we kind have intentions here of what I want to do. Um, so that and then from there, I mean, obviously we just we started looking at buy box, filtering tape based on your buy box, not just looking at all these, you know, loans just because they're on the tape, filtering it down so you a certain rate that you want or a yield that you want, rate of return that you want.

Um, and you know, kind of backing into it and then at that point start selecting ones that you want to bid on. And then the whole pre-bid due diligence, you know, you guys went really deep into that step by step by step. you know, I basically took notes and then I rewrote the notes every week just to like really go over it, have it nice and clean. Um, yeah, you know, the the pre- bid and then the post bit like after the the bid's been accepted. So, just having step it's you guys really went through it step by step by step by step and I think a lot of people need that especially when you're when you're starting off.

Yeah. It's just like a road map of like, okay, all right, this is it's easy. Yeah. It also takes the emotion out of it, right? Yeah. I like this. I don't like that. It really kind of clearly goes through and says, "Okay, here's your scenarios. Here's what happens." And it almost turn your brain off point go because you set up the box to accept things and then kick back out. Yeah. Yeah. It just becomes a numbers game at that point. Absolutely. People ask me all the time, "So, do you travel to go look at these houses?" And I said, "No, I don't." And and part of it is because it's convenient and I don't have to.

But part of it is once you actually get into a property, if you if if you spend too much time on a property, you get emotionally involved in that property. Right. Right. And then you're like, well, this could work. If we just did this, this could work. And if we just, you know, did I think I can make this one work. And I I learned that early early on is like don't try to make something work. Yeah. Go by the numbers. That Yeah. Yeah. If the numbers work, do it. But don't try to push the numbers to make them work. Yeah. No, no. If it works, great. If it doesn't, there's another one. Yeah. It's okay.

[laughter] Yeah. No, I love the idea of taking the emotion out of it that it's just it's just numbers. It's going to fit into and this is the purchase price based on your numbers and everything you've put into the calculator. Yeah. What was one big surprise that you me. But but what are the steps? And uh we just went through like the the steps one by one. And I mean like I' I've like typed it all out based on you know what we went over and that that gave me just having you know like I mentioned from the pre-bid like starting with your buy box and then filtering the tape and then entering in all you know all the loans there and then one by one going through them to to make sure you had all the expenses of covered for worst case scenarios and exits and stuff like that.

U that gives me a lot of confidence. I have I mean I have to step by step it takes the emotion out of it. It's a road map, you know, just go through it. Uh, and then the same thing with the post bit, you know, I'm just like now starting to tip, you know, stick my toe in the water. Really plan on getting pretty active here in January. Uh, you know, December is just such a crazy month with everything going on. We we cru we wanted to have part of this whole thing is that you're going to do things, right? You're going to walk away. You're building the calculator. We're not showing you a calculator and saying here you go.

How difficult was it to play and start messing with things and fixing things and adjusting things? How difficult was it at first to just get used to it? I mean, I think at first when you look at a calculator, right, that you know, obviously Dave, you've got like the Star Wars of all calculators, calculator to end all calculators, right? Like it's it's pretty pretty impressive when you first see it, you know. Um, so I I started, you know, with Nathan's and then started making tweaks here and there and everything. But once you understand it, once you wrap your head around it and you just do it over and over and mess with it, it's not that complicated anymore.

You know, that's the great thing. But [clears throat] those people who are using just time value calculations or percentage UPB, what do you say to them that never had a non-performing calculator? Yeah. No, that's I mean, yeah. If you if you're basing anything just on UPB, I mean, that's there's just a whole world thanks so much for providing a small collaborative place for me to learn more about notemath the in-depth workings of spreadsheet analyzers and your different perspectives on methods and a great group of people to continue growing with wishing everyone peaceful and prosperous prosperous new year.

So that's Candace. Thank you Candace. I appreciate that. I'm nice watches later. So it's great, right? And that's one of the things we wanted this class to do is have a lot of stuff in it. And it's weird hearing from other people like Candace who's taken 10 week mastermind classes say class, I never learned that before. And yeah, it was really refreshing to us to say, "Wow, we're actually on the right pathway here. This isn't what we want to do. This is what we like doing." And we like sharing it. Um, and I think that people who are nervous about spending some money on knowledge will super see what you'll be in a position to do after you're done.

It's it's Yeah. When you think about, you know, 12 years ago, 14 years ago when we first started, oh my goodness, we didn't know anything. Nothing. Nothing. And and we were literally making it up as we went, [laughter] you know, and and learning a final calculator. I've never seen that before. I'd never even heard of it before. Yeah. and learning it all as we went. Uh, and then just being able to kind of give back and and give that knowledge that we've acquired over the years has been it's just lucky though because the prices are so low today. You can't get lucky. It's not in a market that you can just make an offer and be wrong somewhere and you'll be okay because you can't buy as well as we used to buy.

That's just it. We we got lucky in the timing of it where we could make all kinds of mistakes and we'd still be okay. And today you can't make those same mistakes that we made. You you get yourself in a bunch of trouble. So you have the knowledge part and also collaboration. These aren't people who are explaining what unpaid balance means, right? We're not explaining the basics. We're diving in and going into actually look at what it is you're interested in or what you, you know. Yeah. Which was really cool. And then just just just going from there, the whole calculator, you know, building your own calculator, putting it together and and uh and I love that whole idea.

I mean, there's so much more that eventually I want to like, you know, help, you know, with you guys' help like build that up. You know, it's easy to run a calculation on one single last on a financial calculator, right? That the yield is a very easy quick formula. Yeah. But working on non-performing or even performing with the possibility of going non-performing. Yeah. That calculator is completely different from an easy simple time value financial calculator, right? Can you share a little about what you learned with building building a non-performing bid calculator that can automate your bidding process? Yeah.

Yeah. I mean, you know, the the whole the the fact that it takes into account expenses like foreclosure expenses. Um, you know, and you start you really start focusing on worst case scenarios [clears throat] and the scenarios that are most likely to happen right off the bat bas because you have everything spread out. I I love that. I mean, it's it's and it it takes into account all those, you know, potential foreclosure, you know, insurance time frames, right? Yeah. Time, right? Time frames and then, you know, and then backing right back into the specific rate that you're looking for or return that you're looking for, yield that you're looking for.

Um, yeah. So that it's just so structured, you know, it's not it's not just sitting there with a loan calculator in your hand and just like, you know, okay, uh, here's what I wanna what I'm hoping, you know, and deducting the the servicing fee out of the payment, you know, and then backing into it to see what, you know, what the actual real rate is. Yeah. Because that off the right off the bat, I mean, I'm I'm a mortgage guy and I Right. I didn't think of that. Like, of course, that whatever it is, $35, $30, whatever it is, you deduct that out of the payment, that's going to change your didn't expect from the class? Either what you learned or how you feel now that if you look back, you say, "Ah, I didn't know that was going to happen." anything that you learned or what you feel like now that was different prior to taking it? I think the the the loan calculator just being just that getting get it being so structured to me like there there's that that just makes me feel comfortable because it's like all right let me just go through the process the steps here and at the end of the day it's going to spit out what you know what I can pay for something.

Yeah. Based on the return. It was just so structured and I love that. I I I love structure period. But that just it makes it makes you confident, you know. It's not you're not winging it, you know, or like off the top of your head trying to remember things. It's all there. You know, it's very similar when you originate a note, right? There's no feeling when you originate a note. You bro, you run the numbers, you run the calculation, you plug it into into a agreement form and you go with it, right? Yeah. Yeah. Yeah. It's only the loan officer just like, you know, please approach approve this. [laughter] Yeah.

But no, there's it's it's you either that's the way it's supposed to be with originating with underwriting. You know, you either qualify or you don't. Right. Right. So, uh like I said before, Candace was unable to make it. Um Dave is going to be part of our second fiveweek course. We're going to run that in February. We are restarting the the fiveweek course uh January 3rd, next Tuesday. Um so, uh I'm going to provide you guys with a link uh into the form for those who are attending today's webinar. I'll put that in the uh Facebook chat as well as in the uh Z uh the LinkedIn um for those who are interested.

And if you're interested in getting into it, let us know. Um we're inside the email should be a code uh to get some discount off on the first five weeks or whatnot if you want to get into it. Um to me, I think it's valued awesomely. Um because I think that the the resources, the data points, the time frames for foreclosure, that's missing there because a 3% loan is not the same as a 12% rate loan. You know, you can bid 80% of, you know, UPB on on one and 80% on the other and you'll have completely different yields, completely different returns. One's not going to be you're you're going to need to discount it so heavily on a 3% note that, you know, it's not going to make sense.

it's probably not going to make sense for the seller. He's going to have to give it to you, give it away just about. And so, yeah, you it's you absolutely have to do this in order to completely understand bidding and and the whole process of it. Yeah. Shake your head. Yeah. I've got uh I've got Candace's email here. Yeah. So, Candace did write a little blurb about she was unable to make it today and whatnot. And Stacy, u we have a form. you can fill that uh form out and I'm sure I can get Nathan to send all the details over to you as well. Um I can repost the the the webinar form for you. Um just send and Nathan will get a link to it as well, Stacy.

So I'm sure Nathan will share it online here too. But yeah, DM me tickets aren't live yet. They'll be live here in the first couple weeks in January. Uh just getting the payment the payment thing set up. That's been more difficult than it should be, but we're working on that. Should be fixed here. We're not investors, not these programmers and code. Yeah, exactly. Yeah. So, here's Candace's. So, she [clears throat] says, uh, "Sorry I couldn't be live with you on the call today. I wanted to share a few thoughts about your fiveweek and 10-week class series. The topics that most interested me in the first five weeks were the note math and building your financial calculator topics.

As I mentioned in our previous conversation, I do have and use a a comprehensive bid calculator that I received as part of my other training, but I wanted to learn more about the way that they work and how to build one if I wanted to. Math has never been my strong suit and business math is newer to me, it and showing all different steps, but also showing like you you can't always bid on a performing asset as a performing asset, right? You have to watch out for the gotchas unless you're buying a partial, right? Um, but having that whole calculator out there and be able to switch from one loan to another, I think, is the only way to go.

Because if you're bidding out a performing asset expecting to do what you're going to do or going with a mindset that the borrower is going to do X is is fool's gold to me. Yeah. And for this even for the seller finance people this is a whole other category of investing that that you you know same like David you've got some experience but this is just different a different spin on the same kind of thing uh and just understanding the other side of the business. Yeah and some of the people be joining our next week classes um are going to be self finance people. So one part you may want to jump into is just to collaborate with these people.

We we need to talk to a woman the other day. She has 40 loans she wants to sell. Yeah. And let me give you a little hint. The yield she's giving is not 10. It's much higher. Right. So those kind of people in your corner collaborating with you can buy loans from her other people she's already connected with and this whole team builds bigger and bigger simply because the what who's part of that group will continue to grow. and we have some other ideas what we can do with the group once the 10 weeks over and what our thoughts are on that. Um so stay tuned for that that plan. But we're trying to grow and networking a team of different kind of investors with different backgrounds, different knowledge and different success rates.

To give a little bit more color on that, so she's selling those 40 notes because she wants to invest into this hotel. I mean that's fantastic. That's that's wonderful. I I can't even, you know, put my head around that. I've looked at hotels, but anyway, that's a different story. But but she's taking what she's to give people confidence and just be on being able to move forward and actually get going like not just thinking about it, not just, you know, right? Oh, this is really cool. No, no, it's so easy to do that. You can watch a bunch of videos and this and that and dabble around, you know, but this actually gives you step by step and gives you that confidence to to get out there.

Oh, that's great. Good. So, um, before we let you go, Nathan has one last question for those who tune in usually probably know this question, but go ahead. So, you've got an interesting background coming from the countrywide in your own mortgage company. I mean, you saw it coming before and so what given that background and what you saw in the past, where are we today? Like, are we what kind of Yeah. No, great question. And here's why I believe it's different this time around. Not saying that obviously values are already starting to come down. I mean I I I I see it here in California. Uh but back then there was no income documentation, not even assets verified like that you had them in a bank statement.

It was all just made up basically. You know, it got to the point where they didn't want payubs, W2s. You'd literally get pe the underwriter saying, "Hey, don't send it to me because if you send it to me, we have to look at it. Don't send it to me." Right? that that was what was going on back then. So it it was built on just a house of cards. Today, all the loans that have been done in the last, you know, 10 years, they're all income verification. You know, they're they're they're legit loans. So that's why I don't think we're going to see the crash that we saw back then. Okay? You know, they're real loans.

They were actually originated the right way. Whereas back then, there was no originating at one point. I mean, underwriting at one point. It was just all just, you know, signing papers. Yeah. Yeah. Yeah. So, I mean, although I think values are going to, you know, come down and stuff like that based on high interest rates, etc., I don't think we're going to have the crash anything close to what we had back then. Okay. Interesting. Do you still see a recession causing some kind of foreclosure influx? Yeah, I mean, I think so. So, I mean, obviously, you know, out here, I mean, I see the California real estate market, the the high rates have definitely pumped the brakes on it.

I see sellers dropping their, you know, I still get all those emails and I see sellers just dropping their prices every week. They seem to be coming down. Yeah. Um, and then obviously the economy, nobody knows exactly where it's heading, but everybody's talking about recession. So, I think it'll slow things down, but it just I don't think it's going to go off a cliff like it did, you know, 10 12 years ago. Yeah. Right. Right. Yeah. Interesting. We'll see what happens here. It'll be interesting to see. We'll definitely be sharing some of the things we'll be doing 2023 in the class. I think that is the angle that if you still want to be with notes, I think you need to just shift what you've been doing to a different sector.

Um, and there's a lot a lot a lot a lot available in that sector. So, I look forward a year. Three billion was it something like that? It was nuts. I think wasn't it 30 billion 30 billion now I mean yeah that that are available and there's different ways of getting access to things of that but we're we're just tipping our ticking our toe in it and it seems to be just pure gold at this point so we're excited by it so oh yeah well I I again I'm going to disconnect from the Facebook live but we're going to do an after talk here but I appreciate everyone coming on um I hope everyone's weekend is good and healthy and healthy uh I know there's some people in our space are feeling ill right now.

I hope you guys get better. Um, and things going to work out for you guys. Um, but stay safe. Uh, hope you have a great New Year's and we look for you coming on. Join us January 13th that we have um, Mar coming on Monroe and then we also have uh, Nick coming on who are two big subject to originator who've created thousands and thousands of thousands of loans. Um, and it will structure no certain way. um and talk you're looking for, right? Um, and practicality, doing the work, not just worrying about theory, but actually diving in and practicing and making mistakes is, I think, a key item learning anything you do.

Yeah. Absolutely. Absolutely. And and I know both you and I both took classes early on and and learned I I took classes from several different people actually and and took bits and pieces that I liked. And not that the rest of it wasn't valuable, but uh but a big part of that was just the networking and getting to meet a different crowd of people. Uh that was a big deal. Absolutely. I agree with you. I think you know meeting different people and different people in the space that have different processes of how they do things and making your own is crucial. Um and I'm excited to hear um some of the guests.

I know um what our plan today was have David and Candace come on. Candace actually had a backout last minute. Um, so it's unfortunate. Um, but it's it's interesting when we first got connected, Dave, who joined our our last class on this, he had experience he didn't realize he had. Yeah. And then he brought that that connection which was really cool. Um, and we're going to introduce in just a moment. But before we go there, I I want to say that um those who are watching us or who are seller clients people um you guys are awesome. It is blowing up like crazy on the back end uh with seller finance deals and opportunities and whatnot.

I got presented as a commercial opportunity today that I'm probably buy the first and the second created um and then we have our own connections. So if you guys are sell financing subject to please let us know some assets you're looking to sell. Um and the people want to buy we'll be you know passing along anything that doesn't fit our our cup of tea. But it's been awesome. Yeah, I talked to just somebody yesterday, actually two people yesterday, and the one lady, she's she says, "Wait a second. Wait a second. So, I can create a note like this. I can pay off what I'm into it for, plus make some money, plus but when they heard us speak, they didn't learn some of the stuff that we talk about, right? So, we decided to put together uh a five and a 10 week, which is an extension of fiveweek class uh of topics that we feel is crucial in homeworks and sessions and whatnot.

So, we have David Gomez with us today. David, I appreciate you coming on. uh spend a few minutes on a Friday morning to you in California and uh sharing your your information. Yeah. No, I'm glad to be here. It's funny you mentioned Paper Source because I actually went to Paper Source. It was the first thing I kind of dipped in there. I'm in Vegas quite a bit and uh I stopped by one of those and and uh one of the days and and saw a little bit of talk and this and that and but yeah, I I it's funny because I I I had kind of looked dabbled around a little bit, looked at it. I'm obviously interested.

I have a pretty deep mortgage background. Um, and I was interested in investing my own money in something that I can have a lot of control over. I'd heard about notes. Uh, figured I've done just about everything in mortgage loans. This shouldn't be too hard to figure out. It kind of was. It really was. I mean, I I was confused from the get-go just kind of looking around because everybody kept talking about bidding on UPB, percentage of UPB, and this and that, and just having a mortgage background and understanding rates. I kept thinking like, well, this doesn't make sense. Like, just a percentage off of it's not all everything's not equal.

It's different rates. And then I happened to catch um a video with you guys and Joe Kennedy where you guys talked about bidding based on a specific yield or return. And that's when I was like, there it is. Yeah. Okay. Now this this is starting to make sense. And that's that's how I got turned on to you guys. And uh and uh yeah, then I signed up for the mastermind course and got going. So let's back up for a minute. Yeah. What is your background or what's your background in? How did you come across notes? Give us a little bit of the backstory. Yeah. Yeah. So, um I uh years ago I started working at well currently I I I run a solar energy provider.

Uh I've done for about eight nine years before that long before that I got into the mortgage industry as a mortgage originator with countrywide. So started off with Countrywide like 20 like 20 year a little over 20 years ago. Um was there for a while was great place to learn. Did hundreds and hundreds probably thousands of loans every month. I mean total um and then opened up my own mortgage company and uh from there I mean we rode the wave of the mid 2000s you know mortgage market. Yeah it really was it was like the wild west of like you know mortgage originating right? like it's before you know before the big crash and everything.

It was uh we did we did it all and uh you know saw the crash up and close you know saw the cracks starting to show and then eventually it was like you know it just it just really got crazy. Um and then from there we also got into uh loan modifications. We did a ton working with banks. We did a ton of modifications. Um so plenty of experience there. From there, I I I entered the the solar energy industry, but I always, you know, I I did mortgage loans for so long that I understand it. I love the idea of it being collateralized by real estate. So, uh about a year ago, I had a friend of mine that I used to work with at Countrywide mentioned that he had worked at a place with another guy, another mutual friend from Countrywide, um and they were working in notes.

and he originally came to me about getting a job working at Solar and he started talking about notes and I was like well hold on forget yeah we can talk about the job later but let's talk about this this is interesting you know and he started talking about um you know performing notes non-performing notes and and how they did modifications and this and that and I just thought like oh wow this is really interesting because this is this is like right up my alley what I understand and and so I thought at that point I thought this this isn't going to be very hard at all. I'm just going to like figure it out, get into it, you know.

And uh my friend couldn't really tell me like cuz I was trying like, okay, so how do you figure out exactly like how to what what to bid and he didn't really even though he had worked on the backend collecting and all that stuff, doing modifications. He didn't really understand how to bid on it or how it was. And I talked to a couple of people trying to figure out figure that out and nobody could really tell me, you know, it was a lot of like, oh yeah, just you just bid on a percentage of the UPB. So I'm like, okay, I get that you but how you know how does they didn't make sense. And a lot of a lot of people couldn't really give me a straight answer on that.

I just bid on it. You know, you bid low and then you sell high. Okay. Yeah. All right. But so it didn't really make sense until I saw that video where I was like, "That's it. Of course, you have a specific yield or return in mind and then you back your way into what the purchase price is going to be." That made perfect sense. Yeah. Yeah. So, but yeah, it it's definitely a little more confusing than what I would, you know, with my background in mortgages. I thought like, "Oh, yeah. I'm just going to dive right in and figure this out." But yeah, there's that's uh it's a little different. There's a whole world in notes that doesn't seem to like follow the whole yield or specific return.

Isn't that interesting with that kind of background and it was demand there, right? Yeah. Yeah. Yeah. Yeah. I thought it was just a m I mean a mortgage calculator, you whip it out and you you know, but yeah, we we used to always show show everybody a 30-year fixed. Yeah. But it got to the point that you know here's a 30-year fix. Okay. So here's the 3% interest only, you know, and the payment is a third of what it is on 30-year fix. No homeowner would ever touch that 30-year fix. It got to the point where you could try to push this, but you wouldn't you wouldn't do any loans. You had to like have the coolest, newest product.

Um, and that's so everything was just I think every everything was just based on that the values were going to keep rising. Yeah. Fascinating, huh? Well, it's weird that you you came on the scene with very little education because you leaned on your history and your knowledge and your experience to kind of get you into a sector that you partially knew already. Yeah. Yeah. So, you dove in with us head first. Um, what was your first impression of this idea of the pathway of class homework taking, you know, accountability kind of thing and having that kind of conversation? What was your first impression of walking in? I loved it because there's structure to it.

You know, first we started talking about a buy box, about creating your buy box and what do you want to have in it and this and that. Super structured, right? Like that's that's and that was the first time I really heard about a buy box. Yeah. Yeah. Yeah. I think I actually heard about it first, I think, on in on I saw a video with you guys and Candace. Yes. You guys did. And she mentioned her by you guys you guys were talking about it by box. So once you guys started talking about that, putting that together felt really like, okay, this is structured. This is actually, you know, we kind have intentions here of what I want to do.

Um, so that and then from there, I mean, obviously we just we started looking at buy box, filtering tape based on your buy box, not just looking at all these, you know, loans just because they're on the tape, filtering it down so you actually look at what it is you're interested in or what you, you know. Yeah. Which was really cool. And then just just just going from there, the whole calculator, you know, building your own calculator, putting it together and and uh and I love that whole idea. I mean, there's so much more that eventually I want to like, you know, help, you know, with you guys' help like build that up.

You know, it's easy to run a calculation on one single last on a financial calculator, right? That the yield is a very easy quick formula. Yeah. But working on non-performing or even performing with the possibility of going non-performing. Yeah. That calculator is completely different from an easy simple time value financial calculator, right? Can you share a little about what you learned with building building a non-performing bid calculator that can automate your bidding process? Yeah. Yeah. I mean, you know, the the whole the the fact that it takes into account expenses like foreclosure expenses.

Um, you know, and you start you really start focusing on worst case scenarios and the scenarios that are most likely to happen right off the bat bas because you have everything spread out. I I love that. I mean, it's it's and it it takes into account all those, you know, potential foreclosure, you know, insurance time frames, right? Yeah. Time, right? Time frames and then, you know, and then backing right back into the specific rate that you're looking for or return that you're looking for, yield that you're looking for. Um, yeah. So that it's just so structured, you know, it's not it's not just sitting there with a loan calculator in your hand and just like, you know, okay, uh, here's what I wanna what I'm hoping, you know, and deducting the the servicing fee out of the payment, you know, and then backing into it to see what, you know, what the actual real rate is.

Yeah. Because that off the right off the bat, I mean, I'm I'm a mortgage guy and I Right. I didn't think of that. Like, of course, that whatever it is, $35, $30, whatever it is, you deduct that out of the payment, that's going to change your rate of return. Yes. Immediately. Yeah. Um, no. So, I I love that the whole structure of the calculator and there's a lot more that I need to learn there. I mean, you know, net present value and all that stuff, like really understanding it, wrapping my head around it. But, um, IR, right? People calculate everything on yield and whatnot. We discussed in class that not all loans go 30 years, right? You may not have a loan go for 20 years.

It may only last for seven. And you have to project that that what happens if and you can sell a loan in five years. So it's Yeah. Yeah. And reinstatement, you know, that's one thing I haven't really taken into account. What if they reinstate, you know, stuff like that. I mean, the possibility, you know. Yeah. Yeah. It could be a great thing. It could be a terrible thing. Yeah. Yeah. Right. Right. Right. Yeah. So when you're building that calculator, it you're right. you can constantly add on. There's nothing fixed about it, it it morphs as you grow. Um, but having that mindset and that addition to do it, but you can do it for multiple assets.

We we're showing you how you can go by row and pop up pop and just change it and automatically calculate all your information within seconds. Yeah, I've got Right now, mine's like a hybrid of it's like got Nate's calculator, but then it's got Dave's like, you know, being able to pull from different, you know, you can have like 15 different loans and you just change the number and all of a sudden all the numbers change and which is really cool. Yeah, that's awesome. If you didn't take this class, this this class, where do you think you'd be with your new investing? I feel like I would be in the kind of in the same spot where I just realized it's about bidding on a specific yield, but you know the the actual structure of it because that that's where I start to get confidence is the structure laying it out a certain way.

you know, the buy box and then from there filtering the tape and then, you know, put adding making sure you have everything covered, you know, all the different worst case scenarios based on a certain rate that you want or a yield that you want, rate of return that you want. Um, and you know, kind of backing into it and then at that point start selecting ones that you want to bid on. And then the whole pre-bid due diligence, you know, you guys went really deep into that step by step by step. you know, I basically took notes and then I rewrote the notes every week just to like really go over it, have it nice and clean.

Um, yeah, you know, the the pre- bid and then the post bit like after the the bid's been accepted. So, just having step it's you guys really went through it step by step by step by step and I think a lot of people need that especially when you're when you're starting off. Yeah. It's just like a road map of like, okay, all right, this is it's easy. Yeah. It also takes the emotion out of it, right? Yeah. I like this. I don't like that. It really kind of clearly goes through and says, "Okay, here's your scenarios. Here's what happens." And it almost turn your brain off point go because you set up the box to accept things and then kick back out.

Yeah. Yeah. It just becomes a numbers game at that point. Absolutely. People ask me all the time, "So, do you travel to go look at these houses?" And I said, "No, I don't." And and part of it is because it's convenient and I don't have to. But part of it is once you actually get into a property, if you if if you spend too much time on a property, you get emotionally involved in that property. Right. Right. And then you're like, well, this could work. If we just did this, this could work. And if we just, you know, did I think I can make this one work. And I I learned that early early on is like don't try to make something work.

Yeah. Go by the numbers. That Yeah. Yeah. If the numbers work, do it. But don't try to push the numbers to make them work. Yeah. No, no. If it works, great. If it doesn't, there's another one. Yeah. It's okay. Yeah. No, I love the idea of taking the emotion out of it that it's just it's just numbers. It's going to fit into and this is the purchase price based on your numbers and everything you've put into the calculator. Yeah. What was one big surprise that you didn't expect from the class? Either what you learned or how you feel now that if you look back, you say, "Ah, I didn't know that was going to happen." anything that you learned or what you feel like now that was different prior to taking it? I think the the the loan calculator just being just that getting get it being so structured to me like there there's that that just makes me feel comfortable because it's like all right let me just go through the process the steps here and at the end of the day it's going to spit out what you know what I can pay for something.

Yeah. Based on the return. It was just so structured and I love that. I I I love structure period. But that just it makes it makes you confident, you know. It's not you're not winging it, you know, or like off the top of your head trying to remember things. It's all there. You know, it's very similar when you originate a note, right? There's no feeling when you originate a note. You bro, you run the numbers, you run the calculation, you plug it into into a agreement form and you go with it, right? Yeah. Yeah. Yeah. It's only the loan officer just like, you know, please approach approve this. Yeah.

But no, there's it's it's you either that's the way it's supposed to be with originating with underwriting. You know, you either qualify or you don't. Right. Right. So, uh like I said before, Candace was unable to make it. Um Dave is going to be part of our second fiveweek course. We're going to run that in February. We are restarting the the fiveweek course uh January 3rd, next Tuesday. Um so, uh I'm going to provide you guys with a link uh into the form for those who are attending today's webinar. I'll put that in the uh Facebook chat as well as in the uh Z uh the LinkedIn um for those who are interested.

And if you're interested in getting into it, let us know. Um we're inside the email should be a code uh to get some discount off on the first five weeks or whatnot if you want to get into it. Um to me, I think it's valued awesomely. Um because I think that the the resources, the data points, the time frames for foreclosure, all that's built into this and you have the resources at your fingertips. It's almost like you just plug and play from here and you're now in a position to start buying notes in that first five weeks. You're ready to go. And and it the fun thing for Dave and I is this is actually fun for us.

We It's not like we're trying to build an empire of of students and all that kind of thing. We actually just enjoy doing this. It's just fun. And so we're we're more than happy just to share what we've learned and and our process and and what we do today versus what we did 10 years ago. And we share a lot. You know, before we went on, I was sharing with David about some of the stuff we got going on in the background and some of the cool stuff building 2023, which I think will be ridiculously awesome. Um some of the stuff we're already getting into has changed how I'm looking at doing already. Um and that's okay.

um we're not going to buy traditional situations as we used to uh because of the returns we're getting on other ends of things. Um and we'll talk about that in the class as well. And quick plug, we'll be talking about that kind of thing at DME. Please make sure you get down to Nashville, I got DMV. Yeah. Um and you know, networking with people, right? It's all about the networking. get down and DM me, join the classes, and start networking and have that constant conversation because these people will help you grow and challenge you and make you better. I like to be challenged. I'm sure you guys all do, too.

Um, if you have a question, David, please feel free to put in the chat. I know it's a holiday weekend. Um, so we'll see what goes on with everyone else going on here. Yeah. Um, when you go through due diligence, you know, I'm not sure, David, have you done a deal yet? I know numbers are kind of crazy right now. Where was your weakness or where were you nervous about besides pricing? Where was your fear with due diligence on what to look at? I think just the steps themselves, right? Like because that's not having having gone through it and you know due diligence that makes perfect sense to me. But but what are the steps? And uh we just went through like the the steps one by one.

And I mean like I' I've like typed it all out based on you know what we went over and that that gave me just having you know like I mentioned from the pre-bid like starting with your buy box and then filtering the tape and then entering in all you know all the loans there and then one by one going through them to to make sure you had all the expenses of covered for worst case scenarios and exits and stuff like that. U that gives me a lot of confidence. I have I mean I have to step by step it takes the emotion out of it. It's a road map, you know, just go through it. Uh, and then the same thing with the post bit, you know, I'm just like now starting to tip, you know, stick my toe in the water.

Really plan on getting pretty active here in January. Uh, you know, December is just such a crazy month with everything going on. We we cru we wanted to have part of this whole thing is that you're going to do things, right? You're going to walk away. You're building the calculator. We're not showing you a calculator and saying here you go. How difficult was it to play and start messing with things and fixing things and adjusting things? How difficult was it at first to just get used to it? I mean, I think at first when you look at a calculator, right, that you know, obviously Dave, you've got like the Star Wars of all calculators, calculator to end all calculators, right? Like it's it's pretty pretty impressive when you first see it, you know.

Um, so I I started, you know, with Nathan's and then started making tweaks here and there and everything. But once you understand it, once you wrap your head around it and you just do it over and over and mess with it, it's not that complicated anymore. You know, that's the great thing. But those people who are using just time value calculations or percentage UPB, what do you say to them that never had a non-performing calculator? Yeah. No, that's I mean, yeah. If you if you're basing anything just on UPB, I mean, that's there's just a whole world that's missing there because a 3% loan is not the same as a 12% rate loan.

You know, you can bid 80% of, you know, UPB on on one and 80% on the other and you'll have completely different yields, completely different returns. One's not going to be you're you're going to need to discount it so heavily on a 3% note that, you know, it's not going to make sense. it's probably not going to make sense for the seller. He's going to have to give it to you, give it away just about. And so, yeah, you it's you absolutely have to do this in order to completely understand bidding and and the whole process of it. Yeah. Shake your head. Yeah. I've got uh I've got Candace's email here.

Yeah. So, Candace did write a little blurb about she was unable to make it today and whatnot. And Stacy, u we have a form. you can fill that uh form out and I'm sure I can get Nathan to send all the details over to you as well. Um I can repost the the the webinar form for you. Um just send and Nathan will get a link to it as well, Stacy. So I'm sure Nathan will share it online here too. But yeah, DM me tickets aren't live yet. They'll be live here in the first couple weeks in January. Uh just getting the payment the payment thing set up. That's been more difficult than it should be, but we're working on that.

Should be fixed here. We're not investors, not these programmers and code. Yeah, exactly. Yeah. So, here's Candace's. So, she says, uh, "Sorry I couldn't be live with you on the call today. I wanted to share a few thoughts about your fiveweek and 10-week class series. The topics that most interested me in the first five weeks were the note math and building your financial calculator topics. As I mentioned in our previous conversation, I do have and use a a comprehensive bid calculator that I received as part of my other training, but I wanted to learn more about the way that they work and how to build one if I wanted to.

Math has never been my strong suit and business math is newer to me, but your explanations and our discussions clarified a lot. What I gained from the past few weeks was a deeper understanding of how the big calculator works and how to man manipulate the data in different ways depending on your desired results. I also love seeing the differences between how the two of you approach your buy boxes and bid strategies and the resources you're sharing with the group uh and will save with a group and will save newer investors uh a lot of time for sure. It's incredibly helpful to have state specific resources all in one place.

And your 13 things to ask the seller for is definitely comprehensive. That was a good one. Uh, one thing I realized is that based on someone's preferred learning style, there are many ways to design an analyzer to show the calculations. This isn't something we talked about. Uh, but as I was reviewing the videos and thinking about the various layouts on Dave's spreadsheet, I recognized that the visual way data is presented can make a big difference on how easily we understand what could be a complicated topic. Nathan and many others use the 10B2 calculator uh to do the same thing in a seemingly simpler way, but that might not be enough for many others.

I'm specifically thinking of the section of Dave's spreadsheet that has the four yellow boxes at the top to check for what you're looking to solve, whether yield, purchase price, number of months, or payment amount. And just thought that was a great visual presentation and method to play around with all the numbers from the various methods of of manipulation. I always think there's a lot of value to be found in a group setting and loved hearing the questions and thought processes from everyone else. as we had our discussion and looking forward I definitely think that the second five weeks is going to get even better like compounded value uh I think the advanced bankruptcy week and the advanced strategies weeks which you said you'll cover topics like partials creating notes and aross will be exceptional addition and are aren't strategies I've often I've often seen offered in all in one place before uh thanks so much for providing a small collaborative place for me to learn more about notemath the in-depth workings of spreadsheet analyzers and your different perspectives on methods and a great group of people to continue growing with wishing everyone peaceful and prosperous prosperous new year.

So that's Candace. Thank you Candace. I appreciate that. I'm nice watches later. So it's great, right? And that's one of the things we wanted this class to do is have a lot of stuff in it. And it's weird hearing from other people like Candace who's taken 10 week mastermind classes say class, I never learned that before. And yeah, it was really refreshing to us to say, "Wow, we're actually on the right pathway here. This isn't what we want to do. This is what we like doing." And we like sharing it. Um, and I think that people who are nervous about spending some money on knowledge will super see what you'll be in a position to do after you're done.

It's it's Yeah. When you think about, you know, 12 years ago, 14 years ago when we first started, oh my goodness, we didn't know anything. Nothing. Nothing. And and we were literally making it up as we went, you know, and and learning a final calculator. I've never seen that before. I'd never even heard of it before. Yeah. and learning it all as we went. Uh, and then just being able to kind of give back and and give that knowledge that we've acquired over the years has been it's just lucky though because the prices are so low today. You can't get lucky. It's not in a market that you can just make an offer and be wrong somewhere and you'll be okay because you can't buy as well as we used to buy.

That's just it. We we got lucky in the timing of it where we could make all kinds of mistakes and we'd still be okay. And today you can't make those same mistakes that we made. You you get yourself in a bunch of trouble. So you have the knowledge part and also collaboration. These aren't people who are explaining what unpaid balance means, right? We're not explaining the basics. We're diving in and going into it and showing all different steps, but also showing like you you can't always bid on a performing asset as a performing asset, right? You have to watch out for the gotchas unless you're buying a partial, right? Um, but having that whole calculator out there and be able to switch from one loan to another, I think, is the only way to go.

Because if you're bidding out a performing asset expecting to do what you're going to do or going with a mindset that the borrower is going to do X is is fool's gold to me. Yeah. And for this even for the seller finance people this is a whole other category of investing that that you you know same like David you've got some experience but this is just different a different spin on the same kind of thing uh and just understanding the other side of the business. Yeah and some of the people be joining our next week classes um are going to be self finance people. So one part you may want to jump into is just to collaborate with these people.

We we need to talk to a woman the other day. She has 40 loans she wants to sell. Yeah. And let me give you a little hint. The yield she's giving is not 10. It's much higher. Right. So those kind of people in your corner collaborating with you can buy loans from her other people she's already connected with and this whole team builds bigger and bigger simply because the what who's part of that group will continue to grow. and we have some other ideas what we can do with the group once the 10 weeks over and what our thoughts are on that. Um so stay tuned for that that plan. But we're trying to grow and networking a team of different kind of investors with different backgrounds, different knowledge and different success rates.

To give a little bit more color on that, so she's selling those 40 notes because she wants to invest into this hotel. I mean that's fantastic. That's that's wonderful. I I can't even, you know, put my head around that. I've looked at hotels, but anyway, that's a different story. But but she's taking what she's got uh getting the capital back out of it so she can go invest in something else that she finds fun and exciting. And even better than that, she's like, "Listen, I'm going to take that money and make 300%. So, do you guys want a little 20% deal?" Sure. Sure. She's literally gonna make hundreds of 100%.

Yeah. Um, so it doesn't really matter what her yield is to her. She seems to capital. So there's a win-win on both sides that's passionable. So definitely jump into the class for that. Um, we look forward to having them on too and be part of a growing. So yeah. Um Dave, before we let you go, um and before Nathan asks this question too, uh for those people who are interested in getting in, um any final thoughts of, you know, why they should do it or why they why they shouldn't be held up on either the cost or the time? What are they investing in to make sure they get out of what they're putting in? Yeah.

No, I mean just based on my experience, I mean I started off with wanting to do a lot of things but not really knowing the road map and uh I feel like you guys provide a really solid detailed road map you know where it takes the emotion out of it where you just feel like okay based on this and this and this you know this is what the purchase price should be and then all the pre-bid and post bid steps absolutely you get the road map you get a a really strong solid road map and you get confidence because when you know what you know where you know where you're going and why you're doing it you just get a lot of confidence too.

So I mean I I I I mean I'm ready to jump in the the the second part immediately like I'm like when do we start you know because I it's it's given me like a whole road map of where I want to go where I want to take it. Uh yeah I'm I'm super excited and I would defin I mean I would recommend it wholeheartedly. It's uh it just gives you the steps of what to do and why. Thank you. That's that's really good to hear because that was our our goal. We wanted to give people confidence and just be on being able to move forward and actually get going like not just thinking about it, not just, you know, right? Oh, this is really cool.

No, no, it's so easy to do that. You can watch a bunch of videos and this and that and dabble around, you know, but this actually gives you step by step and gives you that confidence to to get out there. Oh, that's great. Good. So, um, before we let you go, Nathan has one last question for those who tune in usually probably know this question, but go ahead. So, you've got an interesting background coming from the countrywide in your own mortgage company. I mean, you saw it coming before and so what given that background and what you saw in the past, where are we today? Like, are we what kind of Yeah.

No, great question. And here's why I believe it's different this time around. Not saying that obviously values are already starting to come down. I mean I I I I see it here in California. Uh but back then there was no income documentation, not even assets verified like that you had them in a bank statement. It was all just made up basically. You know, it got to the point where they didn't want payubs, W2s. You'd literally get pe the underwriter saying, "Hey, don't send it to me because if you send it to me, we have to look at it. Don't send it to me." Right? that that was what was going on back then.

So it it was built on just a house of cards. Today, all the loans that have been done in the last, you know, 10 years, they're all income verification. You know, they're they're they're legit loans. So that's why I don't think we're going to see the crash that we saw back then. Okay? You know, they're real loans. They were actually originated the right way. Whereas back then, there was no originating at one point. I mean, underwriting at one point. It was just all just, you know, signing papers. Yeah. Yeah. Yeah. So, I mean, although I think values are going to, you know, come down and stuff like that based on high interest rates, etc., I don't think we're going to have the crash anything close to what we had back then.

Okay. Interesting. Do you still see a recession causing some kind of foreclosure influx? Yeah, I mean, I think so. So, I mean, obviously, you know, out here, I mean, I see the California real estate market, the the high rates have definitely pumped the brakes on it. I see sellers dropping their, you know, I still get all those emails and I see sellers just dropping their prices every week. They seem to be coming down. Yeah. Um, and then obviously the economy, nobody knows exactly where it's heading, but everybody's talking about recession. So, I think it'll slow things down, but it just I don't think it's going to go off a cliff like it did, you know, 10 12 years ago.

Yeah. Right. Right. Yeah. Interesting. We'll see what happens here. It'll be interesting to see. We'll definitely be sharing some of the things we'll be doing 2023 in the class. I think that is the angle that if you still want to be with notes, I think you need to just shift what you've been doing to a different sector. Um, and there's a lot a lot a lot a lot available in that sector. So, I look forward a year. Three billion was it something like that? It was nuts. I think wasn't it 30 billion 30 billion now I mean yeah that that are available and there's different ways of getting access to things of that but we're we're just tipping our ticking our toe in it and it seems to be just pure gold at this point so we're excited by it so oh yeah well I I again I'm going to disconnect from the Facebook live but we're going to do an after talk here but I appreciate everyone coming on um I hope everyone's weekend is good and healthy and healthy uh I know there's some people in our space are feeling ill right now.

I hope you guys get better. Um, and things going to work out for you guys. Um, but stay safe. Uh, hope you have a great New Year's and we look for you coming on. Join us January 13th that we have um, Mar coming on Monroe and then we also have uh, Nick coming on who are two big subject to originator who've created thousands and thousands of thousands of loans. Um, and it will structure no certain way. um and talk about how to make it so it's sellable um and protect the borrower because the the push is we're going to protect borrowers, protect borrowers, protect borrowers um which is the Dodd Frank kind of mindset and we'll also have Max join as well to talk about structuring notes in a way that is legal and binding but also a way to sell the note for the highest dollar amount that you can you can get and what what ways or options you have.

So cool. Well, thank you again, David. I appreciate you joining us on the live feed. We're disconnecting there and I hope everyone does well for the weekend. Anytime, guys. Thank you. All right. I started off with wanting to do a lot of things but not really knowing the road map and uh I feel like you guys provide a really solid detailed road map you know where it takes the emotion out of it where you just feel like okay based on this and this and this you know this is what the purchase price should be and then all the pre-bid and post bid steps absolutely you get the road map you get a a really strong solid road map and you get confidence because when you know what you know where you know where you're going and why you're doing it.

You just get a lot of confidence too. So I mean I I I I mean I'm ready to jump in the the the the second part immediately like I'm like when do we start you know because I it's it's given me like a whole road map of where I want to go where I want to take it. Uh yeah I'm I'm super excited and I would I mean I would recommend it wholeheartedly. It's u it just gives you the steps of what to do and why. [Music] Welcome everybody. Dave Puts here from JKP Holdings. Alongside me as always, Mr. Nathan Turner. Good morning, good afternoon, wherever you happen to be. Hopefully everyone can hear us fine today.

Hopefully everyone's having a good Friday day. Um, and look forward to enjoyable weekend. Safe and healthy weekend. Um, I know people will be celebrating everything else. Please be safe. Yeah, you know, it's this time of year things are hectic. Preparing for next year, but this week's been crazy for me. How's it been for you? Yeah, Nats. We had some house guests show up here earlier this week, and so it's just been go, go, go. And they're out at the ski hill today. I'm gonna join him later after we're done. Good. Um, so interesting to say that, you know, you know, we spend time with our kids and our family during this time.

Um, but we see each other video enough. It's really awesome. And, uh, for those who don't know, me and Nathan exchange Christmas gifts every year to kind of just celebrate our time together and whatnot. Um, so I look forward to opening it this weekend. Um, and I'm sure we'll enjoy it. Um, I presume we got our gift from We did. Awesome. We did it. It was very good. Thank you very much. Awesome. So, I I wanted to get into this topic which is really cool because a lot of people take a lot of beginner classes out there. Um, and we run into a lot of people out there who don't understand the space, want to dive in, nervously dive in, which is good.

What are your thoughts on um how people approach a space when they first get in? You know, I' I've been approached by a number of people that ask about books, and there are a few books out there, but um because it's such a broad topic, it's tough to put everything into one book. And you can put like a few case studies and things like that. And the books that are out there are great. Um, but it's it's limited because there's only so much you can explain and talk about in a book versus in some kind of a class uh where you've got different participation and questions and things and all those kind of things come up and it it really helps just to have uh kind of that discussion going.

So I there are a couple of books out there. They're great and I know the guys that wrote them and they're fantastic. Uh but but it's only a slice of what you can learn. um because it's such a big topic. Yeah. And also the networking is a big thing, right? Yes. Watching a video YouTube is great out there, but just bouncing thought processes live feed uh to other people and those people around you need to be the same level you are. Um yeah, I've been part of these mastermind classes where you kind of be the smartest person in the room or the people are way above your level and it just doesn't fit what you're looking for, right? Um, and practicality, doing the work, not just worrying about theory, but actually diving in and practicing and making mistakes is, I think, a key item learning anything you do.

Yeah. Absolutely. Absolutely. And and I know both you and I both took classes early on and and learned I I took classes from several different people actually and and took bits and pieces that I liked. And not that the rest of it wasn't valuable, but uh but a big part of that was just the networking and getting to meet a different crowd of people. Uh that was a big deal. Absolutely. I agree with you. I think you know meeting different people and different people in the space that have different processes of how they do things and making your own is crucial. Um and I'm excited to hear um some of the guests.

I know um what our plan today was have David and Candace come on. Candace actually had a backout last minute. Um, so it's unfortunate. Um, but it's it's interesting when we first got connected, Dave, who joined our our last class on this, he had experience he didn't realize he had. Yeah. And then he brought that that connection which was really cool. Um, and we're going to introduce in just a moment. But before we go there, I I want to say that um those who are watching us or who are seller clients people um you guys are awesome. It is blowing up like crazy on the back end uh with seller finance deals and opportunities and whatnot.

I got presented as a commercial opportunity today that I'm probably buy the first and the second created um and then we have our own connections. So if you guys are sell financing subject to please let us know some assets you're looking to sell. Um and the people want to buy we'll be you know passing along anything that doesn't fit our our cup of tea. But it's been awesome. Yeah, I talked to just somebody yesterday, actually two people yesterday, and the one lady, she's she says, "Wait a second. Wait a second. So, I can create a note like this. I can pay off what I'm into it for, plus make some money, plus keep a second and get some residual income." I'm like, "Yeah, you can do all that." And she's like, "Oh my good." And she's like, "Oh, okay.

I can do this a lot." I'm like, "That's fantastic. Keep it." We got to bridge that gap, right? the note buyer world and the originator world which those we haven't publicized it yet we will after this January 13th we'll be having two big big subject two buyers originators on to talk about how to create a note securely successfully so that it followed all laws but also what would make that note the most valuable part what features of it do you make sure you add to the note when you create it there's originations there's licenses debt lic and all that stuff, but making notes that are sellable but also secure enough is crucial.

So, and you're creating it. Usually, you're creating it. Um, most people, I think, get into seller financing so that they can create their note and keep it. What if you wanted to sell it? What if you wanted a lump sum of cash at some point? Uh wouldn't it be nice to be able to have it created properly so that you can get that uh and then if you want there it you can actually structure it as a business where you can go out and keep creating notes and selling them and creating notes and selling them and just have that ongoing. So things to think about. Yeah, absolutely. So um please feel free to let us know what you got going on the outside.

Post some comments in the feed. We're on LinkedIn and Facebook and this will obviously be on YouTube. Um feel free to take a look at it. We also have our podcast. Um, but let's dive into uh what we got going on here. It is amazing. Uh, when we first did this idea of um getting into a uh Sorry about that. So, getting into this idea of teaching, we really weren't looking planning on doing a teaching method, but we walked into um Paper Source last May. um we got approached by a few people that took some advanced classes and stuff like that, but when they heard us speak, they didn't learn some of the stuff that we talk about, right? So, we decided to put together uh a five and a 10 week, which is an extension of fiveweek class uh of topics that we feel is crucial in homeworks and sessions and whatnot.

So, we have David Gomez with us today. David, I appreciate you coming on. uh spend a few minutes on a Friday morning to you in California and uh sharing your your information. Yeah. No, I'm glad to be here. It's funny you mentioned Paper Source because I actually went to Paper Source. It was the first thing I kind of dipped in there. I'm in Vegas quite a bit and uh I stopped by one of those and and uh one of the days and and saw a little bit of talk and this and that and but yeah, I I it's funny because I I I had kind of looked dabbled around a little bit, looked at it. I'm obviously interested.

I have a pretty deep mortgage background. Um, and I was interested in investing my own money in something that I can have a lot of control over. I'd heard about notes. Uh, figured I've done just about everything in mortgage loans. This shouldn't be too hard to figure out. It kind of was. It really was. I mean, I I was confused from the get-go just kind of looking around because everybody kept talking about bidding on UPB, percentage of UPB, and this and that, and just having a mortgage background and understanding rates. I kept thinking like, well, this doesn't make sense. Like, just a percentage off of it's not all everything's not equal.

It's different rates. And then I happened to catch um a video with you guys and Joe Kennedy where you guys talked about bidding based on a specific yield or return. And that's when I was like, there it is. Yeah. Okay. Now this this is starting to make sense. And that's that's how I got turned on to you guys. And uh and uh yeah, then I signed up for the mastermind course and got going. So let's back up for a minute. Yeah. What is your background or what's your background in? How did you come across notes? Give us a little bit of the backstory. Yeah. Yeah. So, um I uh years ago I started working at well currently I I I run a solar energy provider.

Uh I've done for about eight nine years before that long before that I got into the mortgage industry as a mortgage originator with countrywide. So started off with Countrywide like 20 like 20 year a little over 20 years ago. Um was there for a while was great place to learn. Did hundreds and hundreds probably thousands of loans every month. I mean total um and then opened up my own mortgage company and uh from there I mean we rode the wave of the mid 2000s you know mortgage market. Yeah it really was it was like the wild west of like you know mortgage originating right? like it's before you know before the big crash and everything.

It was uh we did we did it all and uh you know saw the crash up and close you know saw the cracks starting to show and then eventually it was like you know it just it just really got crazy. Um and then from there we also got into uh loan modifications. We did a ton working with banks. We did a ton of modifications. Um so plenty of experience there. From there, I I I entered the the solar energy industry, but I always, you know, I I did mortgage loans for so long that I understand it. I love the idea of it being collateralized by real estate. So, uh about a year ago, I had a friend of mine that I used to work with at Countrywide mentioned that he had worked at a place with another guy, another mutual friend from Countrywide, um and they were working in notes.

and he originally came to me about getting a job working at Solar and he started talking about notes and I was like well hold on forget yeah we can talk about the job later but let's talk about this this is interesting you know and he started talking about um you know performing notes non-performing notes and and how they did modifications and this and that and I just thought like oh wow this is really interesting because this is this is like right up my alley what I understand and and so I thought at that point I thought this this isn't going to be very hard at all. I'm just going to like figure it out, get into it, you know.

And uh my friend couldn't really tell me like cuz I was trying like, okay, so how do you figure out exactly like how to what what to bid and he didn't really even though he had worked on the backend collecting and all that stuff, doing modifications. He didn't really understand how to bid on it or how it was. And I talked to a couple of people trying to figure out figure that out and nobody could really tell me, you know, it was a lot of like, oh yeah, just you just bid on a percentage of the UPB. So I'm like, okay, I get that you but how you know how does they didn't make sense. And a lot of a lot of people couldn't really give me a straight answer on that.

I just bid on it. You know, you bid low and then you sell high. Okay. Yeah. All right. But so it didn't really make sense until I saw that video where I was like, "That's it. Of course, you have a specific yield or return in mind and then you back your way into what the purchase price is going to be." That made perfect sense. Yeah. Yeah. So, but yeah, it it's definitely a little more confusing than what I would, you know, with my background in mortgages. I thought like, "Oh, yeah. I'm just going to dive right in and figure this out." But yeah, there's that's uh it's a little different. There's a whole world in notes that doesn't seem to like follow the whole yield or specific return.

Isn't that interesting with that kind of background and it was demand there, right? Yeah. Yeah. Yeah. Yeah. I thought it was just a m I mean a mortgage calculator, you whip it out and you you know, but yeah, it it took quite some time and I talked to a lot of people. It's amazing. Yeah. Yeah. we're hopefully going to change the world with the theories out there and whoever is teaching it hopefully will convert them as well. Yeah. So, one of some of the things that you shared in the class was really interesting to me is that like while you're country wire, which those who don't know, go watch Big Short.

It's not all about country, right? Um that you every week you walked in and your origination got easier and easier. Yeah. Yeah. Yeah. Yeah. And that was actually even like after I left Countrywide when I was running my own mortgage company because then you had you had wholesale reps or account managers show up and they're pushing their product basically like, "Hey, we're from so and so bank. These are our underwriting guidelines." And every week practically they got smaller and smaller. Like you would go from, you know, and you would be able to lend more. That was the crazy thing. like you know your LTV got higher and higher to the point where you were at 100% financing and they went from wanting to see income documentation on everything payubs and W2s to not wanting to see payubs or W2s but show us a bank statement that they have money at least and then it went to don't show us the bank statement just tell us how much they have you know so it just it got smaller and smaller and smaller and uh yeah eventually there really weren't any guidelines you know how looks.

Yeah. Why everything kind of changed, right? Right. Which sounds totally insane. At that just curious at that time, did you think this is dangerous or was it just like ah whatever? At the time, everybody was so into that values will just keep, you know, values were just just increasing and increasing and everybody had the idea, oh, you'll just refinance. You'll just refinance. You you you just bail yourself out, you know. Okay, great. You're in this pay option arm which is you where you pay 1% of the interest but your rate is 6% so your balance is actually growing every month. Pretty scary, right? But you'll just refinance.

It's like it it you know we we used to always show show everybody a 30-year fixed. Yeah. But it got to the point that you know here's a 30-year fix. Okay. So here's the 3% interest only, you know, and the payment is a third of what it is on 30-year fix. No homeowner would ever touch that 30-year fix. It got to the point where you could try to push this, but you wouldn't you wouldn't do any loans. You had to like have the coolest, newest product. Um, and that's so everything was just I think every everything was just based on that the values were going to keep rising. Yeah. Fascinating, huh? Well, it's weird that you you came on the scene with very little education because you leaned on your history and your knowledge and your experience to kind of get you into a sector that you partially knew already.

Yeah. Yeah. So, you dove in with us head first. Um, what was your first impression of this idea of the pathway of class homework taking, you know, accountability kind of thing and having that kind of conversation? What was your first impression of walking in? I loved it because there's structure to it. You know, first we started talking about a buy box, about creating your buy box and what do you want to have in it and this and that. Super structured, right? Like that's that's and that was the first time I really heard about a buy box. Yeah. Yeah. Yeah. I think I actually heard about it first, I think, on in on I saw a video with you guys and Candace.

Yes. You guys did. And she mentioned her by you guys you guys were talking about it by box. So once you guys started talking about that, putting that together felt really like, okay, this is structured. This is actually, you know, we kind have intentions here of what I want to do. Um, so that and then from there, I mean, obviously we just we started looking at buy box, filtering tape based on your buy box, not just looking at all these, you know, loans just because they're on the tape, filtering it down so you actually look at what it is you're interested in or what you, you know. Yeah. Which was really cool.

And then just just just going from there, the whole calculator, you know, building your own calculator, putting it together and and uh and I love that whole idea. I mean, there's so much more that eventually I want to like, you know, help, you know, with you guys' help like build that up. You know, it's easy to run a calculation on one single last on a financial calculator, right? That the yield is a very easy quick formula. Yeah. But working on non-performing or even performing with the possibility of going non-performing. Yeah. That calculator is completely different from an easy simple time value financial calculator, right? Can you share a little about what you learned with building building a non-performing bid calculator that can automate your bidding process? Yeah.

Yeah. I mean, you know, the the whole the the fact that it takes into account expenses like foreclosure expenses. Um, you know, and you start you really start focusing on worst case scenarios and the scenarios that are most likely to happen right off the bat bas because you have everything spread out. I I love that. I mean, it's it's and it it takes into account all those, you know, potential foreclosure, you know, insurance time frames, right? Yeah. Time, right? Time frames and then, you know, and then backing right back into the specific rate that you're looking for or return that you're looking for, yield that you're looking for.

Um, yeah. So that it's just so structured, you know, it's not it's not just sitting there with a loan calculator in your hand and just like, you know, okay, uh, here's what I wanna what I'm hoping, you know, and deducting the the servicing fee out of the payment, you know, and then backing into it to see what, you know, what the actual real rate is. Yeah. Because that off the right off the bat, I mean, I'm I'm a mortgage guy and I Right. I didn't think of that. Like, of course, that whatever it is, $35, $30, whatever it is, you deduct that out of the payment, that's going to change your rate of return.

Yes. Immediately. Yeah. Um, no. So, I I love that the whole structure of the calculator and there's a lot more that I need to learn there. I mean, you know, net present value and all that stuff, like really understanding it, wrapping my head around it. But, um, IR, right? People calculate everything on yield and whatnot. We discussed in class that not all loans go 30 years, right? You may not have a loan go for 20 years. It may only last for seven. And you have to project that that what happens if and you can sell a loan in five years. So it's Yeah. Yeah. And reinstatement, you know, that's one thing I haven't really taken into account.

What if they reinstate, you know, stuff like that. I mean, the possibility, you know. Yeah. Yeah. It could be a great thing. It could be a terrible thing. Yeah. Yeah. Right. Right. Right. Yeah. So when you're building that calculator, it you're right. you can constantly add on. There's nothing fixed about it, it it morphs as you grow. Um, but having that mindset and that addition to do it, but you can do it for multiple assets. We we're showing you how you can go by row and pop up pop and just change it and automatically calculate all your information within seconds. Yeah, I've got Right now, mine's like a hybrid of it's like got Nate's calculator, but then it's got Dave's like, you know, being able to pull from different, you know, you can have like 15 different loans and you just change the number and all of a sudden all the numbers change and which is really cool.

Yeah, that's awesome. If you didn't take this class, this this class, where do you think you'd be with your new investing? I feel like I would be in the kind of in the same spot where I just realized it's about bidding on a specific yield, but you know the the actual structure of it because that that's where I start to get confidence is the structure laying it out a certain way. you know, the buy box and then from there filtering the tape and then, you know, put adding making sure you have everything covered, you know, all the different worst case scenarios based on a certain rate that you want or a yield that you want, rate of return that you want.

Um, and you know, kind of backing into it and then at that point start selecting ones that you want to bid on. And then the whole pre-bid due diligence, you know, you guys went really deep into that step by step by step. you know, I basically took notes and then I rewrote the notes every week just to like really go over it, have it nice and clean. Um, yeah, you know, the the pre- bid and then the post bit like after the the bid's been accepted. So, just having step it's you guys really went through it step by step by step by step and I think a lot of people need that especially when you're when you're starting off.

Yeah. It's just like a road map of like, okay, all right, this is it's easy. Yeah. It also takes the emotion out of it, right? Yeah. I like this. I don't like that. It really kind of clearly goes through and says, "Okay, here's your scenarios. Here's what happens." And it almost turn your brain off point go because you set up the box to accept things and then kick back out. Yeah. Yeah. It just becomes a numbers game at that point. Absolutely. People ask me all the time, "So, do you travel to go look at these houses?" And I said, "No, I don't." And and part of it is because it's convenient and I don't have to.

But part of it is once you actually get into a property, if you if if you spend too much time on a property, you get emotionally involved in that property. Right. Right. And then you're like, well, this could work. If we just did this, this could work. And if we just, you know, did I think I can make this one work. And I I learned that early early on is like don't try to make something work. Yeah. Go by the numbers. That Yeah. Yeah. If the numbers work, do it. But don't try to push the numbers to make them work. Yeah. No, no. If it works, great. If it doesn't, there's another one. Yeah. It's okay.

Yeah. No, I love the idea of taking the emotion out of it that it's just it's just numbers. It's going to fit into and this is the purchase price based on your numbers and everything you've put into the calculator. Yeah. What was one big surprise that you didn't expect from the class? Either what you learned or how you feel now that if you look back, you say, "Ah, I didn't know that was going to happen." anything that you learned or what you feel like now that was different prior to taking it? I think the the the loan calculator just being just that getting get it being so structured to me like there there's that that just makes me feel comfortable because it's like all right let me just go through the process the steps here and at the end of the day it's going to spit out what you know what I can pay for something.

Yeah. Based on the return. It was just so structured and I love that. I I I love structure period. But that just it makes it makes you confident, you know. It's not you're not winging it, you know, or like off the top of your head trying to remember things. It's all there. You know, it's very similar when you originate a note, right? There's no feeling when you originate a note. You bro, you run the numbers, you run the calculation, you plug it into into a agreement form and you go with it, right? Yeah. Yeah. Yeah. It's only the loan officer just like, you know, please approach approve this. Yeah.

But no, there's it's it's you either that's the way it's supposed to be with originating with underwriting. You know, you either qualify or you don't. Right. Right. So, uh like I said before, Candace was unable to make it. Um Dave is going to be part of our second fiveweek course. We're going to run that in February. We are restarting the the fiveweek course uh January 3rd, next Tuesday. Um so, uh I'm going to provide you guys with a link uh into the form for those who are attending today's webinar. I'll put that in the uh Facebook chat as well as in the uh Z uh the LinkedIn um for those who are interested.

And if you're interested in getting into it, let us know. Um we're inside the email should be a code uh to get some discount off on the first five weeks or whatnot if you want to get into it. Um to me, I think it's valued awesomely. Um because I think that the the resources, the data points, the time frames for foreclosure, all that's built into this and you have the resources at your fingertips. It's almost like you just plug and play from here and you're now in a position to start buying notes in that first five weeks. You're ready to go. And and it the fun thing for Dave and I is this is actually fun for us.

We It's not like we're trying to build an empire of of students and all that kind of thing. We actually just enjoy doing this. It's just fun. And so we're we're more than happy just to share what we've learned and and our process and and what we do today versus what we did 10 years ago. And we share a lot. You know, before we went on, I was sharing with David about some of the stuff we got going on in the background and some of the cool stuff building 2023, which I think will be ridiculously awesome. Um some of the stuff we're already getting into has changed how I'm looking at doing already. Um and that's okay.

um we're not going to buy traditional situations as we used to uh because of the returns we're getting on other ends of things. Um and we'll talk about that in the class as well. And quick plug, we'll be talking about that kind of thing at DME. Please make sure you get down to Nashville, I got DMV. Yeah. Um and you know, networking with people, right? It's all about the networking. get down and DM me, join the classes, and start networking and have that constant conversation because these people will help you grow and challenge you and make you better. I like to be challenged. I'm sure you guys all do, too.

Um, if you have a question, David, please feel free to put in the chat. I know it's a holiday weekend. Um, so we'll see what goes on with everyone else going on here. Yeah. Um, when you go through due diligence, you know, I'm no....