Building a Sustainable Note Investing Business Without a Finance Background | Real Estate Notes Show

Episode: Chatting Notes with Bill McCafferty Dave's Goals and Plans: - Operating website with consulting services, bid calculator, webinars, and portal - Testing automation features for bid calculator processes - Managing approximately 100 assets currently available for sale - Handles the more technical side of the business - Got into the space initially to help a friend with due diligence and asset valuation Key Recommendations: - Treat note investing like a business regardless of investment degree to achieve success - Know your strengths and leverage them - find people better than you at what you're weak at - Connect with and utilize others' expertise rather than trying to do everything yourself - Don't wait for everything to be perfect before leaving traditional employment to take a chance on entrepreneurship - Start slow and steady in note investing - sustainability is better than rapid growth in this capital-intensive space Topics Discussed: - Note investor business models and portfolio building - Asset management services for non-performing and re-performing second mortgage notes - Transition from traditional employment to full-time investing - Importance of networking and local real estate investment groups - Building businesses without formal finance or mortgage industry background - Risk management and surviving in capital-intensive real estate space Guest Insights: - Bill McCafferty operates two companies: personal portfolio investing and People's Mortgage Relief 2 (asset management serving 150+ investors managing 1000+ seconds) - Built sustainable full-time income through small portfolio growth using note partials and creative collateral assignments - Transitioned from 15-year school facilities management job in 2011 with no banking/mortgage background to become full-time note investor - Gets paid on both successful outcomes and problem resolution (collections, payoffs, short sales, re-performing conversions, bankruptcies, REOs) - Found mentors through local real estate meetups in 2007-2008 (Dave Van Horn, John Sweeney, Bob Paulus) during pre-crash real estate learning period Episode: Chatting Notes with Bill McCafferty Guest: Bill McCafferty Summary: Bill McCafferty discusses his journey from school facilities management to full-time note investing, explaining how he built sustainable businesses in residential mortgage note investing and asset management without a traditional finance background.

Main Topics: Non-performing and re-performing second mortgage notes, Asset management services for note investors, Building a note investing portfolio through slow and steady approach, Leverage strategies including note partials and collateral assignments, Transitioning from traditional employment to full-time note investing, Real estate investing fundamentals and entry barriers Key Takeaways: Bill McCafferty built a sustainable full-time note investing business without a large fund by using a slow and steady approach | People's Mortgage Relief 2 (PMR2) is an asset management company that manages over 1,000 second mortgages for 150+ note investors without owning assets or debt | Success in note investing requires treating it as a business regardless of experience level, and prior mortgage or banking background is not necessary | Creative financing strategies like selling note partials and collateral assignments help leverage a smaller portfolio | Asset managers get paid on both successful outcomes and challenges, providing diverse experience across deal types Keywords: note investing, non-performing notes, second mortgages, asset management, collateral assignments, note partials, real estate investing, portfolio building our website consists of different consulting services bid calculator webinars portal um and things like that we also have some things are coming out where our bid calculators you saw a brief summary of will allow you to automate from processes we're in testing mode with that if you're looking to sell a note we have a sell your note feature which is awesome you fill out a form and go from there if you're a brand new investor we have a form here to just share your information and to let us know a little bit about yourself and what you're looking to learn and lastly uh as you probably all know we have about um about a hundred assets right now that we're looking to sell our latest asset availability list um right here if you go to jkp holdings nda request you can get this information simply by going to this form filling it out and you'll get access to it so it's a little housekeeping to jump in here as we wait for everyone to jump in and join us so let me uh stop my share um and introduce you the guest of the hour a man that i look up to and we talk a lot off camera he knows so much more about face facebook interaction bringing people in in seconds that a lot of people in this space it's awesome to be sharing the space with you my man to jump in here allow you to kind of share your knowledge and answer some questions that people may have and again look for general questions please but thank you bill appreciate you joining in and jumping in with us ah man thank you looking forward to it i appreciate you having me on uh always looking to add value out to the marketplace and share everybody my experience um and you know my knowledge of uh a space that's been very very good to myself and my family um you know it's definitely a uh a life changer awesome and that's what's going on man it's friday it's you know as an entrepreneur it all you know as an entrepreneur it all blends together but i still enjoy my fridays for some reason fridays are always just that that best day it's amazing when you're doing this kind of stuff and you're like oh this is great it's a problem like well every day is a monday every day is a friday it doesn't really blend in um the kids remember quickly right that's it um so guys understand this is gonna be an open conversation right we're not gonna be getting too nitty gritty it's just more of a sharing knowledge um and kind of making sure people are tuning in and learning from each other uh as bill will say we're not the end it'll be all all the answers but we have some awesome stuff that we can share with you so bill can you just briefly for those who may not know who you are would you be shocking who are you and what do you do my man absolutely uh my name's bill mccafferty um i'm a full-time note investor my full concentration um is in institutional residential uh reperforming and non-performing second mortgage notes um i have two companies uh my own portfolio people's debt relief solutions uh people's debt relief solutions uh buys non-performing and re-performing seconds uh i'm a slow and steady guy i don't have a big fund uh like a lot of investors in this business it's one thing i take a lot of pride in don't don't take it for granted very thankful for it but i'm able to maneuver through this business full-time uh with a small portfolio that i built that i slope that i build nice and slow i'm famous for using the term slow and steady you know as dave knows there's a lot of people that come into this space and there's a lot of people that that are gone um it's not an easy space to survive in it's very capital intensive you know i do leverage my portfolio um with selling no partials and doing some creative stuff with collateral assignments um and you know continually building that portfolio where a lot of my knowledge and education comes from and my true experience and what allows me to do this business full-time is uh people's mortgage relief 2 pmr 2 is an asset management company i offer a service to other node investors um that need help managing their delinquent seconds their non-performing seconds uh pmr2 does not own anything and it doesn't owe any debt it's actually taxed as an escort my whole world runs through pmr2 you know pmr2 uh gets hired by different node investors i get an upfront fee and i get a fee when i can collect on a note either through a discounted payoff a regular payoff through a short sale through turning a non-performing loan into a re-performing loan and there's a different you know different clauses in there that i get paid off of bankruptcy um reos i always say that you know what's what's been very good for me is i get i get paid off the good and the bad um and i see it all i'm gonna get it and i get to experience it all so that company alone is managed over a thousand seconds for about 150 different node investors um and once again you know that company doesn't own anything um the investor buys the asset they pay for the manage they pay for the legal the servicing they hire me to manage the whole component and you know what i manage is you know the deal the collateral file the servicers the attorneys the borrowers the foreclosure process anything that comes into the deal for us to you know get through or manage to get paid that is what my asset management company uh does right now i manage about 130 delinquent seconds there are some first sprinkled in there the more i managed first the more i realized how much i like my seconds but that's what i do they're my two companies i'm just a regular guy i love love sports i love time with the family love live music but you know i get it you know this business is powerful you need to treat this no matter what degree you're at in this business um if you're doing it as an investment you need to treat it like a business and it'll treat you well so you know it's funny because most people when you get in this space one of the first questions hey what's your background mortgage background banking background um if you know either one of us we don't have either one of those backgrounds um and you know it is when you get into space is kind of scary right we we just did a couple you know conferences and we go through a list of things that you need to know to get in this space is overwhelming um so you know you know can you share a little bit about what you did before this tell me what bank you work for what hedge fund you did what big stats you ran with so that these people could feel intimidated that they can't get into a space absolutely so i uh i graduated um in 1996 with a uh a bachelor's degree in sociology and a concentration in criminal justice uh from 1996 to 2011 i worked at a school for court committed kids took care of athletic fields and ran a shop um where the kids would get a job and work for me to help me kind of take care of the athletic facilities did that for 15 years um you know in about 20 2004 2005 um you know about eight to ten years into this thing i just started doing some true soul searching you know if this was you know this job was decent um i had okay security good benefits you know if i had to do this the rest of my life you know am i okay with that um and you know doing some deep soul searching i just felt like i had a lot more to offer um out in the world than what i was doing um yeah you know like a lot of people um you know i got married i have two kids um you know they're my they're my why and my support and you know that is the reason that i set out to do what i wanted to do but 2005 2006 started going to uh local real estate investment groups um you know like everybody i saw one of those infra commercials about buying real estate with no money down um and you know i wanted to go figure it out yeah so uh 2006 um you know i bought my first uh rental property dove into real estate pretty aggressively like i do a lot of things leveraged some lines of credit uh did a little bit of everything some things worked out some rehabs worked out some didn't but what i had no idea what i was about to do was start buying a bunch of real estate and leverage a bunch of stuff um right before one of the biggest crashes ever in the history of real estate um but at the same time that that was happening um you know a goal of mine was to find real people that were really making money in this business and i was just very blessed and thankful to uh be at a local real estate uh meetup back in 07 and o8 i met some guys uh partners for payment relief a mentor of mine dave van horn john sweeney and bob paulus uh very successful investors you know they were forming a partnership uh started seeing what they were up to they had their mentors speak one night at this group and it just all started clicking that you know this was an opportunity that was starting to open my eyes up so at that moment i just you know i continue with other real estate stuff but as some stuff worked out and some didn't it was you know me investing in their fund uh buying my first non-performing and re-performing second in 2008 um and just seeing the opportunity and it all wasn't perfect i don't think you know they all didn't work out um but started meeting other investors and local um local meetups um that we're starting to do it too um there's a bunch of us that are still in this business pretty deep that we utilize and leverage each other um for you know um services um questions uh product um you know good buddy of mine fred moskowitz um i met him just when this whole thing was starting to take off him and i are very good friends now he's at a great level um deep to everybody knows her um you know very good friends with deepta she's in the same area as me um and you know like 2010 um tom dunkle and joe downs usmr big investors in this space um they were running a meet up at a camera plan which at that time was in blue bell they ran a monthly note group started attending that ppr ended up putting out a course you know learned that and you know about 2010 it was just you know the eyes were like i you know i got to put i got to put it in the works to get out of here you know i had a i had a wife with a teaching job and good security so that we could take the chance um you know a lot of people want this thing to be perfect before they they leave their nine to five to take a chance i mean i get it um but at that time you know i said you know what if it fails i can go back if it doesn't you know i need to do something so i left in 2011 after 15 years a lot of people thought i was nuts you know god bless my mother she was one of them like what are you doing but i needed it i had to go take a chance um i did that yeah um yeah right around the same time i did that i met some uh other investors um that were starting to dive into this business a little bit and they're like you know if we bought some notes would you manage them whoa i said okay you know maybe we can figure something out here because at this time i may maybe have bought you know about eight notes worked some out um track record it was man i was definitely um right place at right time a lot of times man with this with this storm um you know i was that poster child for ppr you know with their education and you know they utilize me and i absolutely utilize them you know here's a guy that you know took care of athletic fields for 15 years he's jumping into this business he can do it you can do it so it's amazing you know what we talk about a lot is knowing your strengths right and leveraging your strengths and finding those who are not so good at what you are terrible at right someone that's better than you find them and connect with them and let them do their special we also work in our strands um as most people know i do the more technical side right but bill just can figure things out from from dealing with an asset so for me i got into the space just to help a friend out um got into a fun situation i was just doing due diligence valuing assets and for me i did rental properties and got into that did the rear space like you did but what i found was that when we get into it we met each other right around the same time i think and you went towards second i went to her first what i mean obviously the reason you probably went through seconds is the fun you're working with but what was there anything else out there that seconds attract you versus first i mean it was just definitely the the newness of this whole business and you know i mean at the time that i met ppr and they were starting to bodies delinquent mortgages you know my mind was never even on the facet of delinquent first mortgages um you know just being a guy that was really starting to dig deep in soul search you know i understood real estate and i always understood you know i bought my first my primary home i bought in 2002.

so you know i understood the fact that you know you took a loan out on a property you know and then in 2005 you know in a four-year period my house value went up and i was able to refinance and pull some cash out so you know i understood that there was always loans back in properties to a degree but when i when these guys were starting to talk about delinquent seconds and you know i saw their mentor speak i mean i i just wasn't even thinking about delinquent first mortgages yeah but for me it was a little different i was in the first mortgage space right i was dove deep into an a a fund that at that time funny and no it only had like 10 million dollars of assets um they're much much three billion dollars now but we're just doing valuation assets and for the second space it was cheap i mean when we first got started we're buying first at like 30 cents you're probably buying seconds around five and what about you doing workouts you feel is your strength what are you good at with that what i'm good at in this whole business is i learned not to smother it um it's easier said than done you know when you buy two or three loans you're trying to figure everything out and there just isn't a lot to figure out um you know we want to call everybody we want to put tons of pressure on attorneys and servicers and we're you know we want to call these homeowners every day and we want to force them to pay us and they're just the toughest thing in the second space is to learn how to be patient yes and a lot of times there's just no way to push anything along um you know i i think why i was so good is i didn't over analyze stuff i kind of just i listened to what successful people were doing and i ran with it you know i didn't i wasn't scared when people were telling me yeah you could buy a no equity second at this price and it still may work out um you know i didn't fully understand real real estate numbers at the time you know arv and you know all the numbers making sense or it wasn't a good deal yeah um you know i i think um you know even before i was in real estate and and you know one of my true skills is i'm a very organized detailed individual when i took care of these athletic facilities i mean i you know i took care of a school with you know huge facilities um you know i overs i overseeing people you know taking care of my athletic fields um you know from watering them to fertilize and all that stuff um you know setting up sporting events taking down um yeah you know running a shop for kids uh i ran an athletic laundry room so there was a lot of that type of stuff that i was good at and you know even before real estate i was you know always decent with finances and and you know learning how the ways to trim the fat and you know keep some money in my pocket and do a little bit of investing and saving and that type of stuff there are definitely some you know key components um that that make me successful in this whole thing and uh like i said it you know just not it's it's it's a hard thing to think about but it too many people smother the business yes instead of letting it breathe and you know it it's sometime a rush to get success um and oftentimes that caused the problem right if you're rushing borrowers and you're putting pressure on them they get worried because their story is i didn't wasn't able to make the payment or whatever the situation is um you know we we both have horror stories about borrowers and we don't need to rehash them but i i found like you know dive into that property before you get it and learn as much you can about it be organized about the due diligence and make sure what you're buying is real so you know we're going to take questions openly i just want to do a quick intro with bill robin had asked a question in the beginning how do you get past the minimum wage customer service rep when you want to get an update on the first lien from the senior lien holder sometimes you don't know it i mean this is just going to shock people like this is kind of what i'm talking about like you know i buy a lot of what are called unknown on the first mortgage you get them cheaper delinquent seconds that are unknown on the first i can't absolutely confirm what the first mortgage is i don't see any records on title or anywhere i go that the first is actively foreclosing they didn't file a notice at the fault you know we're seeing an old credit report that's at least giving me a balance but i don't 100 know um you know it's not a perfect answer but you know people are going to be surprised i mean i own over 30 reperforming seconds and i can't even tell you last time i checked on the first mortgage and it's so funny because for us people are shocked when we thought the second say i don't pull credit reports i never do you know people say why not you get to learn about the borrower at the end of the day i don't care and i can't care because me knowing the information it ain't going to change anything if someone wants to drive a mercedes benz because they want instead pay their house payment i'm not going to convince me otherwise right and that's what i do every like every year or two i'll shoot through the portfolio check the first however i can um but i mean when i first started this business it was like with your non-performing and your reperforming seconds you need to be checking the first once a month again and you know so sometimes you can't even do that i mean one of the things that's interesting is as i maneuver through this business and start doing business with like bigger players in this space or just different people like it's interesting what they think i really do and what i do i mean this thing is so cookie cutter i mean you know when i start my whole process is set up to to just figure it out like when i start working a non-performing second like i'm just going to force the hand i mean eventually if if we find out the first is non-performing you know we're going to have to make a decision what we want to do and where we want to go but if somebody gives me a file and says to run with it i mean i'm just going yeah it's going legal we're getting an attorney involved right away the attorney's getting involved right away to check the collateral and plus now we're on record and we're going to town and as we move forward things are going to things are gonna come up you know i you know i may not even ever check on the first until until i get it resolved um and at that time you know we'll get the authorization we'll get the first mortgage statement um and and we'll go from there it's funny you you share something i have in common um and i feel guilty until i talk to you probably about five years ago about this people ask you know are you using all these kind of different crms different this different that and i felt guilty when i first came to you and said listen you know i don't think i use any of these kind of fancy dancy products i use spreadsheets i use a different you know a free trello board and i track things just differently because i don't need all this fanciness because what i do all our loans are performing or not performing everything's tracked as a date that we have to follow up on the organization's there i you know those are getting in don't need to buy all these systems just have your network in place have a spreadsheet and really just have something to remind you when things are due i mean salesforce is overkill for most of these people right and you know and with the delinquent seconds you know like you said i mean you know i'm an excel dropbox guy i'm very simple you know i have my setup you know right now i'm looking at three monitors you know i need my monitors i like my workspace yes that's one thing i tell new investors if you're gonna get into space get multiple monitors you'll never you'll never ever go back to having just one it's just i could use a number four i mean it's funny because i mean i used to work off one then i got two and then three it's like you know i couldn't even imagine not having three right now yeah so you know robin asked the follow-up question uh when you get started bill what part of the asset or note made you want to buy it what attracted you to that loan that you want to buy it if you weren't looking at the equity position um the price point you know and it's you know like we said when we started i mean we're buying these things at five to 15 cents and you know it was you know buying off ppr they wanted to put you in a good position they wanted you to succeed um you know now it's different you know you gotta you gotta sort out the trash um you know i i think you know you need to figure out what states you wanna go into um and right from there go you know if you know about bankruptcy you know do you want to buy a chapter 7 discharge you know do you want to deal with something that has been in 13 or out of 13 you know start doing a little elimination that way um there's no magic answer i mean it's just you can totally over analyze stuff i mean you could do so much due diligence on a borrower and at the end of the day maybe that borrower has somebody that has money you know there's so many weird exits in this business and you know the cliche answer is you know i want to help homeowners out i want to keep them in their house like i get it like that's what i want to do but the end of the day you know sometimes it doesn't work that way and you know you have to get to sale yeah you know and then as i started taking these delinquent seconds with no equity to sell and we were starting to get bought out by third-party investors that either knew what they were doing or didn't know what they were doing some were mistakes but some you know like i learned in florida they wanted the land it had nothing to do with the numbers on the house they wanted to land they're going to knock that thing down and build up something big and as i just started seeing all these exits like developing and you know the closer i got the sale the more these people came out and the more money they had and and you know we jump into this space and we fear the word foreclosure um and you know when anyone hears me talking foreclosure they think i want to take the property i never want the property matter of fact even when i go through a sheriff's own in the eviction process i don't even start thinking about the property and this is where it was like interesting working with some of these and big investors like as i was getting close to sale they wanted me doing like values on the property like they really wanted me to get a fielder out there and i didn't want anybody else involved until i actually had to lock the homeowner out and at that time that's when i'm getting a real earner involved because some of these don't work and some of them do but there's so many avenues to make money that we scare ourselves as investors right there's no equity why would i foreclose i get it like i never want the property but i learned that there's so many buckets that i'm going to get paid in and if i don't push the envelope or play the game of chicken yep never going to see those paydays i mean some of the craziest paydays were on you know seconds with no equity in florida like i said because they want the property or yep just you know stuff like that um we get so stuck and fixated on the word equity um as investors and and we we think the word equity means money well in the mortgage space it doesn't always mean that there's people with plenty of money that don't have any equity in their property because they over leverage it or you know i mean i'm an investor dude i got no equity in my property you know i do that as asset protection but you know you say that an interesting point because you know we often look at equity and say this is what it is and sometimes we just don't know all the details of the situation right we may go into a situation where we have ton of equity and it doesn't make sense why the borrower doesn't sell the property and you evict the person who has equity and still doesn't sell the property and the answer is there is no answer we don't know why it happened you know the hundreds you know hundreds of thousands of assets i've been touched and been involved with and and we've owned and traded i don't see that there's no common sense in space there's no rhyme or reason why borrowers do what they do as you probably see a lot of gurus like i've seen over the years they say well you have to go into this note with a game plan and you have to bid it with this game plan who knows what the borrower is going to do or not do common sense is not getting involved here this emotion this isn't money for them it's sometimes emotion a grandma who doesn't want to let go of a house doesn't want to move that's it and you know we're even dealing with that there's a lot of these loans out there people are seeing like 70 and 80-year borrowers and they're nervous about it but what i'm finding out is a lot of the kids are now in the property yeah i mean we we're getting a 60 000 payoff next month i mean next week um you know this was bought as a second but you know all of a sudden we're in first position stuff like that happens um and it's the daughter that is in the house the father's deceased and she had no idea that the loan was even on the property well she now had to go to a local bank and she got a 60 000 loan and she's paying us off so it's amazing you know that loan could have been easily you know passed over by a lot of people um because number one it appeared to be a second number two there was a very old bar on the credit report um one thing that i've learned is it's just a like you said it's it it's a game of emotion and like i get it like equity is important like when you sell a re-performer or you're trying to leverage it um but i also watched a whole market cycle like i watched a lot of these no equity deals that i worked out back in 2010 2011 and 12 are now full-blown equity deals that have been refinanced out over the last three years i mean yeah everybody forgets about that like we're so fixated on the you know the early result and it's like it's such a it's it's a game of a portfolio and it's a long term play like snapshots are not should we not be in the space we should even take a snapshot of today and say this is what's going to be in two years we absolutely there's so many things have changed in two years and not even just property values in the collateral space in different avenues um we get a lot of our assets i hate to share too much of it but we get a lot of our assets from investors who want to get out who are hey listen dave we know you buy assets all the time and blah blah can you buy these assets i don't want to sell them off any kind of exchange dave give me a number that works and they want to get out because they get lost they get confused they went and just jumped in without education and they get lost so i think that most of the people get overly scared and so reach out to other investors you may find that they have assets they want to sell just because they don't know what they're doing um that's one of the most common questions we get is you know calling banks and getting assets you know from banks i never have you heard much success from people buying calling banks and getting assets from them i bought one one delinquent second back in 2012 from a bank in new jersey but besides that i have never called a bank or and it was somebody that we knew that kind of put it in our lap yeah but nah absolutely not um yeah and it's what you said i mean a lot of the stuff that i capitalize now on are what i call tired no buyers or just people for whatever reason they got other life stuff going on that they need funds for and they want to move an asset and because they know your credibility and that you're trustworthy and that you can deliver and you can handle the documents they'd rather sell it to you at a discount than to put it out in the marketplace or deal with anybody else yep and that's you know that's what this business is the better rapport you build with people and the better your network is and your relationships um the better deals that you're gonna get yeah and you know we get a lot of questions i know we put on um our we built some spreadsheets for people to learn terminologies i know we get a lot of spreadsheets and a lot of the terminology sometimes i get lost on and you know we put a product up online that helps people learn all these headers you know what frustrates us a lot of times in our automation systems is headers are never named the same thing and a lot of details on there are just details that we don't look at so you know is there when you get a tape inside that there's a lot do you always understand all the headers and explain every single one of them or are you looking for particular things when you get a tape yeah absolutely i delete probably over half of the tape right off the bat and i reorganize it completely um you know it's it's a combination i know what i'm looking for and you know now i'm very you know i'm very knowledgeable with excel like you know you know i want to freeze the first six frames because i want to see the address the name the social and then you know i want to put everything in in a nice organized flow the fair market value the first the second and that type of stuff um but you know to kind of follow up on some stuff that we were talking about i mean i at the end of the day i can make a decision in less than 15 minutes on you know what i would buy something at what price um both re-performing and non-performing yeah you know it's a combination of i know what i want i don't over analyze i do business with good people and i just believe in this business i've seen the results and i know a lot of the results isn't because i knew everything yes actually i over analyze stuff more than i'm deeper into the business than i did early on um you know i i take chances i mean sometimes my chances don't work out and you know if you're playing this business for the long term you don't want to strike out on deals but when i do i write them off um you know they go to the bottom of the spreadsheet and i need some write-offs at the end of the year and some of my best deals you know you don't know all of a sudden you know they're paying you for six years they go delinquent on the first and they go delinquent on the second and there's nothing you can do about it it's gonna happen and it will happen it's just in the second space you there's so much you just have to deal with in real time and react in real time yeah and it's frustrating because when you get in a space you're hot to trot you want to get into deals um you know we can do the same thing we evaluate assets in about 15 minutes we can pull data down through our portal and then we have our calculating bid things um but i think what people get stuck on is the small minute things that they are worried about or concerned about and i always tell them ask for help you there's enough people in the space if you come from real estate if you're if you're new to the space you come from real estate you go to riaz competition is pretty fierce there um if you're new to notes it's not like that here right it's almost if you're badmouthing or knocking people down or trying to do stuff like that you're frowned upon dramatically immediately so reach out ask for ask a dumb question as people call it right um we bid everything based on our returns so be sure when you're bidding stuff you're not looking just at the data know your returns know a little bit of your numbers you know don't be run some kind of data to know if your returns are going to work out right you look at your borrower and you figure things out from there we look at the property and get an idea but we're not going to the end end game have i been the situation when we saw a property look great from the outside walk in and it's trashed and we lost money absolutely has the reverse happen where we bought an asset and we didn't know we had a second parcel attached to the property and the thing doubled in value yeah so there's things that you come across that you did not even notice that work out so bill when you're getting these assets you know you know one thing you always say that you know we started doing about three years ago is we do door knocks hello letters hello packages to be nice and friendly with these borrowers we've taken on your approach can you share with everyone like what you do when you get an asset that's not performing and it says equity situation what do you do the first step are you calling that borrower are you sending a hello package send them an amazon card what are you doing to get all that borrower you know when we first started this business we tried it all man we tried door knocks we tried letters we tried everything possible sending them gifts like just everything yep and you just eventually realize you only have so much time you start working more assets and there was no other way around it except for starting the foreclosure process and the quicker you started it the better off you were and i i found out early on also like if somebody's calling you in the first 60 or 90 days they're they're calling you to tell you their problem and to push you away they're not calling to resolve it yeah so what i've done i mean everything that i've done and that i do now it's all to create the process and my systems are all to get that homeowner to me when they need me i don't really call or email bars anymore um until they need me you know and it's the legal process that gets them to me now it's a combination of everything now i'm a big advocate of the foreclosure process um you know when we first started this business you know we could buy loans directly into our own company get them resolved and then send them to the servicer now they got to be bought right into a servicer and i like that i like the credibility of it all i like the servicer sending them statements yep i like the attorney starting the foreclosure process and here i come and you know i still send out my letters and it's my letters aren't sent out to have the homeowner call me it's just it's to protect my backside and it's delayed a foundation like you know i i still to this day i send out what i call you know after the transfer letters the respite teal letters i send out what i call my shock package and my shock package is not for them to if they call me they call me but most of the times it's i just want to make sure they know and they got a packet from the get go of here's the cover letter here's their original mortgage and note here's an option letter i put the reinstatement and the payoff from the servicer in there so they now see the servicer name with our name and it starts tying everybody together there's a ftc fax testimonial and i do some other letters but it's just delayed a foundation so they see who everybody is yep um but it it it it's and it's an expense i mean and it's an expense that will put you out of this business if you're not prepared for it but it's the legal foreclosure process that that will get a homeowner it's so funny because you say that how many notes i've been involved with the borrower had no clue where to send payments the notes transferred hands we bought deals where the note was bought a month ago and we're rebuying it and they have no clue where to go with the money because they got two letters in the last two months who owns my loan is it legit are they legit so we've had people sending me hey listen we didn't know where to send the money for last two years because bank of america doesn't own the loan anymore and i got some letter about some servicer that we never heard of and you're right send that welcome package and say hey here i am you're going to receive information from these people we own your loan here's a copy of your mortgage that we actually have we're not just doing the new mortgage at a fly by night we're a real company um it's a great way to transition it besides the the legal letters so you know yeah you know what you just said you know it's true i mean it here's a weird deal situation that's going on and i i'm actually going to try to put a price an offer in to buy this thing but i have a homeowner calling me right now and i know who owns the delinquent loan and they're not doing anything with it and it's not cool like the homeowner's reaching out like they called the servicer they called me because my name is associated with that company with the servicer and you know it's an investor that's not in a note business that's sitting on this thing and he just for some reason isn't doing anything with it and the homeowner wants to start paying at some degree and yeah that's not cool like that person has a delinquent loan that you own on their property you need to figure it out yeah and solve it with them it's amazing that stuff happens all the time on the other side too borrowers will play the game um but yeah like you we got burnt um we're a borrower kept egg is on for four months and it's like listen shut that clock go forward with it um and then they fought bk usually all these kind of things happen that time clock is so sensitive that you will be in a situation you may be in a year and a half waiting for anything to happen um you know collateral files are very confusing um i'll let robin uh if you have a borrower that has not been paying and says he would like to make weekly payments when he gets paid all services no will charge a fee for each payment and not flat month what are your suggestions other than i can collect myself nope i mean i just want normal monthly payments i mean i can't you know i'm not into the bi-weekly the weekly stuff like you know be a big be an adult and put your money in the bank account and pay it monthly i mean it just like even early on with a lot of these you know this is one thing i take a lot of pride in with some of these loan mods early on we'd be creative we put incentives and all that stuff i i can't stand the incentives anymore with people you know we're buying some of these reperformers and they're just weird incentives like just make it clean you know and maybe you know it could be okay that if you make payments for two years we'll wipe away a certain amount but like just you know you get paid next year on your tax return you owe us some money like if you're going to keep that loan you can put whatever you want in it but if you're going to put it into the marketplace make it a clean loan you know yeah person paying monthly you know it's got to be clean because that homeowner puts a lot of trust in you yeah you know one thing i take a lot of pride in is i put my name on the loan mods um because i want my name out in the marketplace um and you know i always tell these borrowers to always call me if there's ever an issue even if i'm not involved with the loan anymore you'll get a lot of those calls it's interesting because you said that because we we're just in a loan recently we're modding now um it was forbearance agreement moved over to a mod and we kind of actually felt bad for the borrower they took out a loan for like 65 it was a second in i think alabama and the loan balance now is like 78 000 and it's they've made payments but all the interest in arrears and it's ridiculous so we'll work on the deal and say listen you will double whatever payment you make in so if you put down three we'll make it six we'll cut off six and we'll take 20 grand off your premium your principal because it's just at this point we're just eating them alive on a deal that just what it is so we're knock off 20 grand they went from a 60 000 almost 80 000 upb after paying it for eight years we're moving it down to 52 grand because it makes sense right they're gonna do what's right and i can sell a thing in a second if i want to you know and i've grown and i've adapted to try to keep my world moving and my business moving but you know i work for a very good buddy of mine in this business a very good friend of mine and i love the business that he puts my way but i'm not a fan of what i have to do for his loan mods and yeah you know this is how i deal with my own loan mods okay a homeowner owes a upb of 50 grand and they owe 20 grand in arrears if you can pay me maybe five or ten in arrears up front i'm gonna defer the other five or ten or give you some credits whatever you know if you put five down i give you five credit we're going to defer the 10 to the back of the loan and we're just going to amortize the 50.

yep this client you know he makes me homeowner puts five down he takes that remaining 15 and he wants me to roll it into the upb and amortize it again and charge interest on recoverable legal fees late fees and owed interest and i that's not cool and it's not clean and i i you know it's yeah you know like we always talk about you stomach a lot you sacrifice and it's an emotional space and you're going to make money either way right at the end i've catered to that but i'm not a fan of that and he knows i'm not a fan of it i mean i've always been in the uh the advocate too of i never went over an eight percent on an interest rate oh yeah he's got me up in the nines and tens and i get it like this fund needs to liquidate all these at the end of their fund and they need to have them as marketable and as up as they can and i get it i'm just you know i've been out of my comfort zone a little bit with seconds we using it depending on on what was the before we're usually in the eight nines uh for first we're usually using the seven to nine that we can mod it that way um seven to eight really so you know it's interesting to hear the different perspective right and there is there a right answer no no whatever you feel best is for you and what you think that borrower can you know pay so one of the things i always look at is that financial documents when they send information you want to make sure you're not making a loan that will fault in six months you know make sure they have the money i mean people want to promise anything to keep their home and it's stupid to do things like that we get a lot we had a lot of phone calls from people who were looking for our consulting services similar like you and they say well what it's money well at the end of the day it doesn't work right when we reach out to our borrower we're trying to help them successfully do it but we're not going to be mr nice guy all the time unless they're able to come to the table with something to help us out you know we're not giving out stuff but and that's the nature of the seconds like you know you deal with some of these smaller bounces 10 20 30 40 you can get the higher interest rates on them yeah you know if they start getting up higher you got to go with the lower interest rates it's just the way it is because it is about what they can afford um and you know sometimes even you know with like this particular client he plays the big equity game and it's like they better afford it or i'm going to take their house like that's not and that's not how i do this business but you know i manage assets for clients and yep i need to keep my business moving so the fun i came from the fun i came from same idea if there's equity i ain't gonna do any deal with you you pay it up or for closing hard ball boom you know we're not doing forbearance agreements we're not doing mods you come up with that 20 grand or you're gonna lose your house and it's like you know holy crap if there's equity not sell the house give me my money because it's a fun situation when you're in a smaller space you know we're not doing that and when i first got when i bought my first loan in 2012 my perspective was equity deal done and i've learned over time it just doesn't i've gotten more payoffs and more beneficial and more able to resell that loan so much better than having a situation where in a year from now they're they're defaulting so i think of the question from catherine here um in your welcome pack are you sit letting them know that you're starting foreclosure um or do you give a bar a certain time to respond so after my shock package i send a second letter out that has my option letter and it's just a no response letter letting them know hey reach out um company's gonna start legal soon and then there is a third letter that has the option letter and it basically lets them know that you know we start a foreclosure and what's the time period between those letters that usually send out shock packages uh usually like first like three to five days and then the second letter is like day eight and day twelve okay but i just snowballed all at once i mean it's you know sometimes the good attorneys will even have my demand letter out before my last letter gets toned but yeah um some are a little slower and it takes a little bit i just snowball it all at once you know we're not buying as many non-performers as we did once uh years ago because pricing's just astonically high um victims are getting harder and everything else we're buying a lot of performers um but what our non-performers we found work is you know writing a nice relaxed letter and you say listen here's the situation we're a small company here's what's happening reach out to a servicer here's who we are about you know just letting him know that this is we're being serious but we're not bank of america we're not gonna we we can if your previous lender was unable to do a loan mod we may be able to do it so please reach out because a lot of these bars are scared they're timid they've been told before no no all day long i'm and i'm the same boat man i mean as deep as i am in the non-performing space i bet you you know my last 20 purchases probably 16 or 17 of them have been reperforming seconds yeah it's pricing we're up you know you're getting these off your yield yep um and you know if you're playing this game long term you see what's going on in the marketplace i mean people are refinancing left and right like if i can buy a reperformer and get a 10 10 15k you know coupon you know loan balance discount doesn't matter what my yield is or how small the payment is i'll take that and um i'll take the refi yeah you know the worry about that is that when there's a low payment you know we're always worried about having to pay that service or fee right if you have a 150 hour payment you're paying 30 bucks whatever to re-perform a performing servicer it eats a lot of that dollars um do you want to hear what we think about the increase of defaults or not the defaults what's your i guess the state of the market i know i'll be talking next week about that uh with another guy in the space what's your thoughts about this whole next six eight 12 months of increase or what do you think the fault's gonna be like i mean it's it's scary right i mean who knows what's going to happen with you know defaults or re-performings defaulting um you know you could scare yourself out of this business every single day by thinking about a lot of the horror stories um instead of just playing it and reacting in real time i mean you know it's going to happen i mean i was talking not to get sidetracked and i was talking to an investor before we jumped on yeah a new guy who just you know watched the dme last week and i i've been saying this since i got into business you know sometimes if you watch a presentation from a service or an attorney it'll scare you out of this business and this guy was scared to death after listening to the attorney presentation last week it was a lot yeah it is i mean and i get it like compliance is real regulations and you got to keep it clean but a lot of people can talk you out of this business um very easily but in the flip side i think you know do we think there'll be a lot more defaults well this you know i i'm gonna cheek do we have the 2010 2011 mass amount of quantity of assets that were there will we have anything close to that number and i don't think we will i don't think the numbers and i want to give you one example rob and why i don't think so there's so many more people in this space in a bigger edge a lot of hedge funds than there was in 2010 there you know there wasn't a lot of mom and pops and there wasn't a lot of funds so you know there may be the default level close to what it was which i don't think it will be but i also don't think that you're it's a trickle down as much as we are but what bill's saying is don't go hoping you know you know bill would you if someone asked should i sit on the sideline with some cash or should i get in and invest what's your thoughts on that you know i mean you know you have to be smart as an investor i mean you know i came out of this year and every year my goal is to buy 12 assets if it's re-performing or non-performing and the goal is to buy one per month so when covet hit i didn't i didn't buy anything at the point and i sat on the sidelines until till june um and then you know i i just i said i can't just sit here so you know i ended up i think i bought eight so far just between june and now um you know one non-performer and seven re-performers yeah um and you know and once again i mean i'm buying re-performers in the market where in a few months people could start defaulting yeah um it may happen and then i'm just going to have to deal with it in real time and you know it's we've talked about this a lot like with uh with the deals like i get the word yield and i buy my re-performers based off yield i've never bought a non-performing loan thinking about yield i know this business works i know some yields are going to blow you out of the world some are going to be okay some notes you can sell some you can't but i've never bought a non-performing second based off what my perspective yield is um and same thing like as much as i buy a re-performing second based off my yield you know sometimes the yield might not be there you can't be scared about it you know you might have to throw some legal at it you might have to clean it up you might have to renegotiate um so everything happens in this business i mean it's what i've said a few times on this calls it's you just have to react in real time it's a very easy business to talk yourself out of yeah you know i hear a lot of people who are getting new or been in space maybe two three years adjusting their pricing right while the sellers won't sell at this the yield i want so i'm going to drop my guild down and i i tell people over and over again don't drop your yield because of what the seller's telling you if a seller's telling you they're going to sell it at a six yield and you can't stomach a six yield don't buy it like you know don't be intimidated nor be motivated by someone buying you know hey he bought eight loans i gotta buy eight loans you know the numbers aren't matching don't buy it i i get i hear a lot of people trying to chase the deal instead of say the numbers don't work and that's okay it doesn't you know it's kind of what you know you and i've talked about and you know that i feel is a little different about the second space it's like you know it's so much more about the portfolio than it is or deal and you know a lot of my decisions are based off my portfolio rather than the deal itself and it's like i said i believe in this business so much and you know my systems and the way that i handle things that you know a lot of times you know you know with the non-performers i just buy them and i play the game and i see where they land and sometimes they work out sometimes they're singles doubles triples sometimes they it's a home run and some a lot of times the home runs aren't aren't home runs that you saw when you bought the note it's just the way it ended um either through a sheriff's sale or a homeowner getting access to capital that they didn't have um and stuff like that you know and it's there's been so many deals that i've capitalized on that when you look at it on the surface you might not have ever bought that loan yeah whereas ones that look great don't turn out good you know it's it's like the second space i say it all the time like we see equity and we think money it doesn't mean the homeowner has money yeah yeah you know some of the biggest you know upfront arrears payments came on no equity deals and that's where the returns start getting crazy and like i said i get it equity protects you when i buy reperformers i want to buy with equity because i want to get cashed out um but you know that's what fluctuates your return you want some great returns you're going to be buying some not so great equity deals you know your lower equity deals you're not going to get huge yields on yeah it's amazing that you know we make it sound so simple and in some of the aspects it is simple knowing your numbers knowing what you're looking for and knowing what you're you have a stomach for right um for those who are new to space what do you suggest them doing this is one of the most common questions asked what do you do you're watching this watch dme or watch this and you say this new person you know i'll give you my answer as well but they're day one what should they be doing right now you know it's kind of what we talked about a little while ago it's like you know we buy these things and we want to smother them you're better off working on your processes and your systems and it's it's it's a cliche saying that you hear but you know it's it's like my wife says how long can you how long can you work on a spreadsheet like well my spreadsheets are a lot of my processes that's how i keep track of everything it's how i keep flow of everything um you know when covet hit i put together a 200 page business uh manual it's my business is just me there's nobody else did i have to do that no but you know i i now i have a business manual if i ever hire somebody or you know with compliance and regulations i have a full business uh file of you know ftc facts the fair debit collect collection practice act i have my business manual i have my processes i have all that stuff in folders and you know what nobody may ever see that stuff but that's how you run a real business that's how you move forward at some time you've got to take the leap and buy an asset and figure it out um you know sometimes people buy these smaller balance seconds just to get their feet wet but at the end of the time you know even the smaller balance you're still going to spend the same amount of money on legal and all that stuff and you know just just put yourself in a good position i mean at some time you have to take to chance i am a big advocate of you know try to buy a re-performing loan before you buy a non-performing loan um yeah so you you know learn how to go through a transaction you get credibility with a seller you learn how to set it up with a servicer um you know maybe you collect payments for a year and then sell it or maybe you keep it but you get cash flow from day one um you know i definitely get the upside of the non-performing note space i see the opportunity but you know just ease in and be slow and steady it's not going to happen overnight um you know it's it's a weird year but the conferences once we can get back are great um resources to meet people um and you know it's it's just taking action i mean at the end of the day it's you know we we throw out all these kulushay like statements and stuff but it's true right i mean you know the deal like there's nobody that tells me what to do every day i have to take action some days i don't want to sit at my desk but i make it happen and you know you just kind of start start building it and and figuring it out yeah and it's weird because we get this question all the time what should we what should we start with and i agree with you creating a system jumping on a performer is a great avenue to go that track because you do learn what a servicer is you don't learn what a mortgage note is um you know we always tell people to be weary about deals where the property's worth less than 50 grand because a kitchen is never going to be worth spending 100 hours to fix a kitchen up you're always gonna spend some money if you're in a situation where you take the property back your kitchen bathrooms rugs paint all that stuff if you're gonna put lipstick lipstick on a pig it's still gonna cost money if you bought a ten thousand dollar property for 100 bucks you go to foreclose on it your foreclosure costs don't change right your cost rehab and that property don't change and your property agent to sell that property doesn't change if you take the property back now granted if you get reperforming you get a situation where you're buying a loan that may only have a hundred dollar payment know the fact that your services are gonna cut into that little bit right your expenses aboard that loan is gonna be a little bit so it it what i tell people when they first get in is buy a performer or even better buy a partial right um great because if those who don't know what partials are you're gonna get a payment string if i have a loan that i have another you know 15 years of payments i could sell you five years of that payment string you can make a return and sell back to me if it goes non-performer i take the property back i take the note back and i work the process absolutely um right i'm doing a deal right now with uh i don't know if i should throw it out there my mailman my mailman has you know seen me maneuver for the last 15 years he sees what comes in and out he's a little bit of an investor himself has some properties and him and i have been talking and finally he's like you know he's telling me you know what bonds are paying right now what cds are paying and i'm just like i said let me put some stuff in front of you so um put some stuff in front of him and you know just going back and forth you know he's trying to figure out the worst case scenario and i'm like at least with me because when you buy a partial you need to understand not only the deal but who you're getting it from and what they're up to because i've seen plenty of people over leverage themselves and you know i do not over leverage myself i usually sell a partial um every five re-performing loans that i own um because i want to always be able to have backup i need the cash flow and i don't want to be over leveraged so he's like what's the worst case scenario so worst case scenario is you get your 65 payments over 65 months and he's like what do you mean i'm like well i'm always number one i'm going to keep you whole yep i'm either going to shift your asset i said technically in my agreement i can't guarantee anything but yep you're getting your money dude it's a great avenue for people to get in because it's like buying a performer but you have the backing of your seller to kind of bail you out if it goes default as long as your seller's legit and the contracts written up you know it's weird when i first got into the space i was afraid of two things attorneys right and understanding the process of working with a seller i remember talking with one of the sellers and saying listen i'm only gonna buy one or two so i probably shouldn't sign your nda um that changed dramatically quickly with getting into it right we have over 100 assets for sale but you know we learned quickly that sellers just want to sell the asset long as you agree not to disclose information to the borrower and please don't contact the borrower before you buy stuff it was no big deal and the attorneys in the space are super friendly mostly they're amazing they become and you we've been in situations where we've been asked to jv with a couple of them which shocks us because we're thinking this attorney's going to run their own deals but these attorneys are just attorneys and they love this space because it's like clockwork for them right you get paid on the situation they interact with us and we do deal in the deal after we also buy assets and that states that we have a great relationship with our attorney because legal is one of the biggest factors in the space right if your legal is solid your deal is usually solid so be sure to check out that kind of stuff you know and then with that point like you know it's not like the pricing fluctuates too much once you find some decent attorneys yep but you know at the end of the day man sometimes you gotta pay a little extra to get the right people man in this business you know i yeah you know i see it way too often i mean there's attorney i use in pa in jersey that you know they nick won't dime you for everything that they do but guess what man they get it done better than anybody yeah yeah and you know if you don't know who what to use ask reach out to one of us or whoever and ask we're not hiding this stuff right you know we're going to beat you at our own game doing our own thing we're not gonna beat you with resources resources just we hand out those kind of things and that's what this business has been so good about and what i love about it it's it's you know it's of course we're you know of course we're all doing the same thing but i mean never once have i felt like i was competing with anybody in this business i mean i have my own stuff my own portfolio everybody has their own business model and that's what's cool is you know people get a little intimidated like why are somebody selling this what are they doing why aren't they keeping it and it's like you know i'm helping a student of mine right now by two uh reperformers and what was kind of cool was there's like six like assignments in the uh chain and you know just trying to educate him and his wife and you know make sure they understand everything was kind of cool to be able to go down the assignment chain i knew everybody except for the originator and i was able to share with them what everybody's business model was and everybody's business model was different yeah all the way down to who's buying it and who he bought it from you know clearly some of the funds are selling them because they need the turn yep some of the funds buy them keep them for a couple of years and then they need to liquidate yep before they put a bulk and they just want to trade off some of the bottom end and stuff boom i mean the person he's buying from um his business model is he gets them modded and sells them right away yeah um i just sold a non-performing second two weeks ago yeah and were you trying to screw the investor exactly i just i'm a firm believer in that you know sometimes the asset needs to see a new person behind it you know it it was up and down for me for a while as a re-performer and then it went delinquent i sat on it for a few years and then yeah you know my friend deep that reached out she said something to me i said let me see what i can do and i threw it at her we agreed to a price and i sold it that day i mean yeah it happens we were talking one of our students as well and the clatter file's overwhelming for a lot of people because it's a lot of stuff they don't know about and they signed it probably when they bought their house they have no clue what it looks like and going through a title chain is so interesting because when you pull the o e up and you walk through the steps it's overwhelmed because it's new information we get all that you know take a time learn that stuff because those title chains are one of the key items in the space if there's a blank you don't have to panic but know the fact that there's a space between you know seller a and you see buyer c and there's a space there it's not an end all be all just understand that whole process we walk one of our students through that and it was amazing their ideas like whoa the chain is broken here but it's fixable absolutely hey listen we know the seller and we we know what that situation is we can reach out them for you and we've done that that's the name of the game dude and i i say it all the time and i say it with note sellers but i mean it with the whole business like credible and reputable note sellers it just means do business with good people i mean i have a client right now he's real fixated on this affidavit that he thinks he needs because the note seller's gonna not the person he bought it from but the person that she bought it from he like they only said 30 days and they're gonna disappear i'm like no i know the person whatever we ask them to do if it's two years from now they're going to do it for us i'm also you know i'm a big advocate of let's not brew up any issues until we need to deal with it and you know i'm not looking to delay stuff but if we see something let's just make sure an attorney does if he sees it we'll deal with it if he says it's not a big deal we'll move on with it yeah um you know that's what i've always liked about this business is man when we when we first started buying these collateral files sometimes there was just like i mean there was nothing in it and we had to get everything done like i get it like and that's why it's that yeah it's important to do you know business with decent people um and we've all taken chances but everything can be fixed um it might delay it a little bit or it might rewind it i mean i even learned something this year i've always felt like uh blank endorsements on the note always needed to line up and be filled in and i just learned this year that it's an open-ended endorsement good means anybody can collect on it it's like a blank check right if you find a blank check on the side of the road right you know you're always learning in this business and you're never gonna yeah and you're never gonna learn everything and that's what people try to do before they dive in yeah and you're never gonna learn everything yeah and it it because you watch webinars and conferences and you get overwhelmed and it's like whoa whoa and you hear all these compliance issues and whatnot there there's so many ways just talk to your attorneys you know we talked to our attorneys when buying a file and say listen what do we have to watch out for here um we used to read our own claudio files sometimes we still do but we always want an attorney to look over it make sure we're not missing something stupid um because it's just at the end of the day if that collateral follows is not legal or something wrong with it we may not be able to collect on it i mean i was an investor email inbox me yesterday he might actually be on this call and i still need to investigate it um and now that maybe you can bring some uh yeah light to it but he was being told by an attorney about you know having to pay off the first mortgage when he foreclosed up you know from the second position um and man i went through my records and i only had two that i actually went through the sale in ohio but both of them i went through subject to yep um and you know i didn't have to pay off the first now the one we're still waiting to see if the third party that bought us out at sale is going to follow through and i want to do a little research on my own because i know some states are different like kentucky's a little weird um and there are some states that are just different with the sal but majority of them are subject to the first it was just weird and you know it's it's it's what i tell a lot of people it's like there's a lot of nine to five people in our business and they're all good people but a lot of them are investors um and they don't have your pocket so just be aware of that and some of them might tell you something but it might not be 100 true yeah and believe me i you know i learned from a lot of the nine to five workers in the business and we need them um but just you know always double check um ask other people so it's weird you know one of the things we run into and you know it also intimidated us when we first got in is we're doing a review right and it took us longer than we expected to do it um communication to the seller saying hey it's taking me longer xyz happened you know i've been in a situation where my situation comes up at home and i can't do anything and i'm stuck communication with this seller hey i need some more days it goes a long way i mean sellers just want to know what's happening in the deal just communication brother it's a huge aspect in this business and in life like the most successful relationships and businesses know how to communicate yeah and apologize hey listen i'm sorry stuff came up and ignoring a situation is the worst thing you can do you know be courteous be understanding they just want to sell the asset and like you said before they may not want to sell this asset for any other reason but that the funds closing they may be in a situation where they have an infinity return you know the fund i came from they're buying bankruptcy loans all the time they could have got a huge arrears payments and now that loan is down in negatives and they could sell to whatever they want to sell it for it's positive we have a bunch of infinity returns right now that i could sell right now for a dollar and someone said whoa why you sell for so cheap i mean i was just two two about two months ago i'm looking at a bunch of loans that are re-performers out of ohio seconds and i'm like i'm looking at like three of them i'm like i was working these loans about a year ago and then i realized what happened one of my clients didn't feel like dealing with the ohio license so we sold a bunch of his non-performing seconds to another investor and now you know it was just neat to see like what he actually collected like the one loan i was shocked he got like 10k up front and it's like you know the guy sold him because he didn't want to get licensed ohio he's liquidating he's moving and that's what goes on in this business i mean one of my best notes that i own um i actually worked this out for a client and then about two years later i bought it as a re-performer off them i collected 15k up front when i got this resolved for the borrower i mean for the my client and the borrower and that loan had eight assignments on it and it went through everybody in our business everybody and it was just it was kind of cool when i got that worked out it actually took me 15 months and i got the i got the 15k like three weeks before the sheriff's out i never even talked to the homeowner it went through our attorney um wow so you know fast forward two years when my client was wanting to sell this i didn't even look i i knew the history of it yeah i got a good deal on it um but knowing that they put that much down up front i knew it was a great deal and like i said you know a regular nor a new person in the business would see eight assignments that went through everybody in this business would say oh this is a bad deal yeah um so why does everyone get rid of it everyone get rid of it for a reason right and um i think that people get nervous with that mindset um chris jumped in chris coombs uh he's a jersey guy by the way we're he's pa i'm a jersey if everyone's kind of curious about that so we're local but he was asking about ohio and the law in the license needed in ohio good question um there's been some speculation of what it is because it's not it's not exactly precise yet um but the understanding is that you do need a license in ohio i'm trying to bring up my spreadsheet to remind me what was said yeah and here's some good feedback while you're bringing this up yeah because as much as everybody says check with the attorneys what i do is i get the email address from the state and i email the state directly and they tell me what the deal is and i'm real specific on what i'm asking like if i'm buying two loans and i'm never buying again and they're non-performing seconds and i didn't originate them and they're being serviced with a licensed servicer i'm real specific on who i am what i'm doing and what i got and you know you'd be surprised sometimes the answer you should get um and then you now have that in email and writing that you can show your attorneys um and as good as the attorneys know some of these states are just they're all over the place yeah um so you know everybody is definitely um worried about the compliance and the regulation and it's an absolute big thing um but just don't be intimidated by just email either an attorney or like i said i go directly to the nmls get the email address and i go directly to the state yeah you know um i for my analogy that yeah they are coming out with a license um but there's some parameters around that um what bill says there's a mortgage and banking i think is the the place in the state that you reach out to and say listen i've heard you know i'm just curious what is the state law on this um and you may be surprised i know you were when you reached out and everyone told you something wrong you got to hold them and they said no you're fine right sometimes there's a lot of gossip that goes around and you find out isn't true um going right to that estate asking the bank and mortgage company people what is situation um they don't know who you are they don't know what's going on but yes can borrowers use this stuff against you absolutely absolutely so just reach out and ask they're there to know what's going on um there are states like georgia and stuff like that that are intimidating but when you're buying loans knowing the compliancing no one else is going to teach you that stuff it's up to you to figure that out but you can ask post a question and you know sometimes we hear compliance and regulations and you know we think a major process or a lot of money um and right now you know where we're at you know when i first started we could buy in all 50 states and not even think twice about it you know now maybe you need to pinpoint two or three states yep and just get compliant regulated and figure it out it might cost you a little bit of money but what you're going to do is you're going to put yourself in the states where tons of investors don't want to go and there's going to be a lot of ohio that most people never talk about there's a 10 000 bond when you're going through foreclosure that most counties don't actually implement but it's on the books so if i told you you bought a loan for 40 grand and you have to put up a 10 000 bond in foreclosure you may be worried so but how many times have i had to put the bond up i haven't right have i got lucky absolutely but there are certain counties in ohio that i won't buy him but it's not because of that it due to timelines and i get it like i used to love the state of washington i used to love maryland and now i don't do anything there because of what's going on and um you know as a small investor i've been able to bounce around but it is getting more difficult and uh that's what this business is just figure it out and you know make it happen man yeah just plug in and ask that's the biggest two things communication other investors i ask questions all the time um and you know that's intimidating to do it first but typically it's you'll get the answer and people are not going to look at you twice for not knowing an answer right now we're working on a project that we want to grab all the stats limitations of the entire country to know when things happen those kind of things are important to us because sometimes based off the maturity date we're bringing out the bid calculator that we'll be allowing people in the first place to use um it will have statute limitations involved in that and we're trying to figure out the trigger points maturity date of last payment and a different thing so if anyone has an information feel free to let us know about i love that we have some states but we want more um but those are the kind of things we need to know because if you're past statute limitations some states allow you to do certain things some states don't but again i just ask right um we're getting closer to an hour and a half here man i didn't realize how long it's been all good you and i think we can talk forever on this business so if anyone had any particular questions before we wrap up um i want to make sure we answer anything um and i know there's gonna be questions afterwards most of the time i get more questions after this runs but if you have anything you want to ask live please do um as we said before i'm more in the first space i've been doing this in 2010 we've i've touched hundreds of loans um i've done due diligence on thousands um when i work at the fund we're doing three thousand probably a month or so um pricing has changed but just don't be intimidated reach out talk people um i know you know bill has some education courses uh mentorships i have some mentorships we're coming out with a beginner course um and mentorship we have consulting services and it it's nothing else than helping those people who are just lost and need someone to have a one-on-one conversation with emma interaction understand our time is valuable we have kids we have a wife we don't want good stuff and we want to work on our business we want to help but we just can't give it away everything that we need to do we do we can um but i appreciate compliments um this is kind of just a round table talk and we'll probably do it again um but i wanted just to touch base interact with you on a friday afternoon hopefully we don't get any rain here man let me know if it starts raining over there but no it's good the sun's out here a little foggy and drizzling this morning but all good man in football tonight high school football so oh yeah yeah you rock oh well man i appreciate you jumping in here with me for a few minutes and uh i i appreciate the those who are watching live it's awesome to see people jumping in here um it's good to go to connect man well i'm sure we'll see each other soon all right brother i appreciate it thanks everyone take care guys see you brother later buddy dave puts here from jkp holdings as we get started we always cover some housekeeping items so let's start off with as most of you guys are aware we have a facebook group called the east coast of stress note investing this group is a private group that was established back in 2014 this group is geared for note investors to answer and ask questions and to network most questions are answered by seasoned investors we also give access to our resources and tools through our announcements and other note investors share their own content with others next item we have our facebook page well this facebook page allows you to see the latest news and note investing see jkp holdings products and services along with us posting our weekly watch party which is previously recorded webinars that we show every wednesday at 1 30 eastern next we have is our facebook page as you can see here we have a facebook page that it has all kinds of tools resources and other things from a first page just a little bit about us and a welcome message um this website does a bunch of different items and services for you guys so one thing you can do is you can contact us through clicking on here and filling out a form or using our message we're investors but we'll be posting more and more content in the coming months so if you are a new investor we have a new investor form we ask you guys to fill this out and let us know a little bit more about what you're looking for as we're creating a product that will assist you and um it's a be a series of videos about different topics of note investing so we're looking to help you guys out we have a section called services in the services we have our webinars which is our series of webinars you can check out that are previously recorded that are just like our weekly watch party we also have our sell your note this is a website here you can fill out a form if you have a note you're looking to sell you list it here and within typically 48 business hours we respond with the offer on the asset we also have through our services our jkp portal this is our due diligence automation tool there's all different features about this that are extremely helpful from finding a local reo experience agent to finding a local rental average for a property as well as property information we have over 60 different data points that we can capture including values uh property demographics foreclosure and listing information if that's something you're interested take a look at the video and register and to get access to that we also will be bringing out our bid calculator this bid calculator is a condensed version of our bigger version that users can use to utilize and help them make it offer based on your specific returns so you put in some variables and the calculator will calculate what your bid price should be based on the information you provide to us we also have our consulting so if you're stuck on a project or a deal or you need help with due diligence looking for spreadsheet assistance schedule 30 minute call or screen share with us and lastly we have our products page we'll be adding more to this as we go along we have our 13 recommended indicative offer questions that you can purchase a spreadsheet of that information as well as our tape headers defined in bid calculator recommendation items so if you're not sure what a tape header you know phrasing and tape means feel free to check that out and if you're looking for what should go into a big calculator we help you with that so definitely dive into our product section and order those items so you can get the information you're looking for and lastly and most importantly if you are looking for assets we have just over 100 available asset for sale right now so all you need to do is go to our nda page nda request page and you'll get a form you're going to fill it out and get a link sent to your email so that you can get access to our electronically completed nda form if you are an investor who's looking to sell your asset you can also let us know that and we can add that to our list of available assets and help you sell that now get ready for some great content blends together but i still enjoy my fridays for some reason fridays are always just that that best day it's amazing when you're doing this kind of stuff and you're like oh this is great it's a problem like well every day is a monday every day is a friday it doesn't really blend in um the kids remember quickly right that's it um so guys understand this is gonna be an open conversation right we're not gonna be getting too nitty gritty it's just more of a sharing knowledge um and kind of making sure people are tuning in and learning from each other uh as bill will say we're not the end it'll be all all the answers but we have some awesome stuff that we can share with you so bill can you just briefly for those who may not know who you are would you be shocking who are you and what do you do my man absolutely uh my name's bill mccafferty um i'm a full-time note investor my full concentration um is in institutional residential uh reperforming and non-performing second mortgage notes um i have two companies uh my own portfolio people's debt relief solutions uh people's debt relief solutions uh buys non-performing and re-performing seconds uh i'm a slow and steady guy i don't have a big fund uh like a lot of investors in this business it's one thing i take a lot of pride in don't don't take it for granted very thankful for it but i'm able to maneuver through this business full-time uh with a small portfolio that i built that i slope that i build nice and slow i'm famous for using the term slow and steady you know as dave knows there's a lot of people that come into this space and there's a lot of people that that are gone um it's not an easy space to survive in it's very capital intensive you know i do leverage my portfolio um with selling no partials and doing some creative stuff with collateral assignments um and you know continually building that portfolio where a lot of my knowledge and education comes from and my true experience and what allows me to do this business full-time is uh people's mortgage relief 2 pmr 2 is an asset management company i offer a service to other node investors um that need help managing their delinquent seconds their non-performing seconds uh pmr2 does not own anything and it doesn't owe any debt it's actually taxed as an escort my whole world runs through pmr2 you know pmr2 uh gets hired by different node investors i get an upfront fee and i get a fee when i can collect on a note either through a discounted payoff a regular payoff through a short sale through turning a non-performing loan into a re-performing loan and there's a different you know different clauses in there that i get paid off of bankruptcy um reos i always say that you know what's what's been very good for me is i get i get paid off the good and the bad um and i see it all i'm gonna get it and i get to experience it all so that company alone is managed over a thousand seconds for about 150 different node investors um and once again you know that company doesn't own anything um the investor buys the asset they pay for the manage they pay for the legal the servicing they hire me to manage the whole component and you know what i manage is you know the deal the collateral file the servicers the attorneys the borrowers the foreclosure process anything that comes into the deal for us to you know get through or manage to get paid that is what my asset management company uh does right now i manage about 130 delinquent seconds there are some first sprinkled in there the more i managed first the more i realized how much i like my seconds but that's what i do they're my two companies i'm just a regular guy i love love sports i love time with the family love live music but you know i get it you know this business is powerful you need to treat this no matter what degree you're at in this business um if you're doing it as an investment you need to treat it like a business and it'll treat you well so you know it's funny because most people when you get in this space one of the first questions hey what's your background mortgage background banking background um if you know either one of us we don't have either one of those backgrounds um and you know it is when you get into space is kind of scary right we we just did a couple you know conferences and we go through a list of things that you need to know to get in this space is overwhelming um so you know you know can you share a little bit about what you did before this tell me what bank you work for what hedge fund you did what big stats you ran with so that these people could feel intimidated that they can't get into a space absolutely so i uh i graduated um in 1996 with a uh a bachelor's degree in sociology and a concentration in criminal justice uh from 1996 to 2011 i worked at a school for court committed kids took care of athletic fields and ran a shop um where the kids would get a job and work for me to help me kind of take care of the athletic facilities did that for 15 years um you know in about 20 2004 2005 um you know about eight to ten years into this thing i just started doing some true soul searching you know if this was you know this job was decent um i had okay security good benefits you know if i had to do this the rest of my life you know am i okay with that um and you know doing some deep soul searching i just felt like i had a lot more to offer um out in the world than what i was doing um yeah you know like a lot of people um you know i got married i have two kids um you know they're my they're my why and my support and you know that is the reason that i set out to do what i wanted to do but 2005 2006 started going to uh local real estate investment groups um you know like everybody i saw one of those infra commercials about buying real estate with no money down um and you know i wanted to go figure it out yeah so uh 2006 um you know i bought my first uh rental property dove into real estate pretty aggressively like i do a lot of things leveraged some lines of credit uh did a little bit of everything some things worked out some rehabs worked out some didn't but what i had no idea what i was about to do was start buying a bunch of real estate and leverage a bunch of stuff um right before one of the biggest crashes ever in the history of real estate um but at the same time that that was happening um you know a goal of mine was to find real people that were really making money in this business and i was just very blessed and thankful to uh be at a local real estate uh meetup back in 07 and o8 i met some guys uh partners for payment relief a mentor of mine dave van horn john sweeney and bob paulus uh very successful investors you know they were forming a partnership uh started seeing what they were up to they had their mentors speak one night at this group and it just all started clicking that you know this was an opportunity that was starting to open my eyes up so at that moment i just you know i continue with other real estate stuff but as some stuff worked out and some didn't it was you know me investing in their fund uh buying my first non-performing and re-performing second in 2008 um and just seeing the opportunity and it all wasn't perfect i don't think you know they all didn't work out um but started meeting other investors and local um local meetups um that we're starting to do it too um there's a bunch of us that are still in this business pretty deep that we utilize and leverage each other um for you know um services um questions uh product um you know good buddy of mine fred moskowitz um i met him just when this whole thing was starting to take off him and i are very good friends now he's at a great level um deep to everybody knows her um you know very good friends with deepta she's in the same area as me um and you know like 2010 um tom dunkle and joe downs usmr big investors in this space um they were running a meet up at a camera plan which at that time was in blue bell they ran a monthly note group started attending that ppr ended up putting out a course you know learned that and you know about 2010 it was just you know the eyes were like i you know i got to put i got to put it in the works to get out of here you know i had a i had a wife with a teaching job and good security so that we could take the chance um you know a lot of people want this thing to be perfect before they they leave their nine to five to take a chance i mean i get it um but at that time you know i said you know what if it fails i can go back if it doesn't you know i need to do something so i left in 2011 after 15 years a lot of people thought i was nuts you know god bless my mother she was one of them like what are you doing but i needed it i had to go take a chance um i did that yeah um yeah right around the same time i did that i met some uh other investors um that were starting to dive into this business a little bit and they're like you know if we bought some notes would you manage them whoa i said okay you know maybe we can figure something out here because at this time i may maybe have bought you know about eight notes worked some out um track record it was man i was definitely um right place at right time a lot of times man with this with this storm um you know i was that poster child for ppr you know with their education and you know they utilize me and i absolutely utilize them you know here's a guy that you know took care of athletic fields for 15 years he's jumping into this business he can do it you can do it so it's amazing you know what we talk about a lot is knowing your strengths right and leveraging your strengths and finding those who are not so good at what you are terrible at right someone that's better than you find them and connect with them and let them do their special we also work in our strands um as most people know i do the more technical side right but bill just can figure things out from from dealing with an asset so for me i got into the space just to help a friend out um got into a fun situation i was just doing due diligence valuing assets and for me i did rental properties and got into that did the rear space like you did but what i found was that when we get into it we met each other right around the same time i think and you went towards second i went to her first what i mean obviously the reason you probably went through seconds is the fun you're working with but what was there anything else out there that seconds attract you versus first i mean it was just definitely the the newness of this whole business and you know i mean at the time that i met ppr and they were starting to bodies delinquent mortgages you know my mind was never even on the facet of delinquent first mortgages um you know just being a guy that was really starting to dig deep in soul search you know i understood real estate and i always understood you know i bought my first my primary home i bought in 2002.

so you know i understood the fact that you know you took a loan out on a property you know and then in 2005 you know in a four-year period my house value went up and i was able to refinance and pull some cash out so you know i understood that there was always loans back in properties to a degree but when i when these guys were starting to talk about delinquent seconds and you know i saw their mentor speak i mean i i just wasn't even thinking about delinquent first mortgages yeah but for me it was a little different i was in the first mortgage space right i was dove deep into an a a fund that at that time funny and no it only had like 10 million dollars of assets um they're much much three billion dollars now but we're just doing valuation assets and for the second space it was cheap i mean when we first got started we're buying first at like 30 cents you're probably buying seconds around five and what about you doing workouts you feel is your strength what are you good at with that what i'm good at in this whole business is i learned not to smother it um it's easier said than done you know when you buy two or three loans you're trying to figure everything out and there just isn't a lot to figure out um you know we want to call everybody we want to put tons of pressure on attorneys and servicers and we're you know we want to call these homeowners every day and we want to force them to pay us and they're just the toughest thing in the second space is to learn how to be patient yes and a lot of times there's just no way to push anything along um you know i i think why i was so good is i didn't over analyze stuff i kind of just i listened to what successful people were doing and i ran with it you know i didn't i wasn't scared when people were telling me yeah you could buy a no equity second at this price and it still may work out um you know i didn't fully understand real real estate numbers at the time you know arv and you know all the numbers making sense or it wasn't a good deal yeah um you know i i think um you know even before i was in real estate and and you know one of my true skills is i'm a very organized detailed individual when i took care of these athletic facilities i mean i you know i took care of a school with you know huge facilities um you know i overs i overseeing people you know taking care of my athletic fields um you know from watering them to fertilize and all that stuff um you know setting up sporting events taking down um yeah you know running a shop for kids uh i ran an athletic laundry room so there was a lot of that type of stuff that i was good at and you know even before real estate i was you know always decent with finances and and you know learning how the ways to trim the fat and you know keep some money in my pocket and do a little bit of investing and saving and that type of stuff there are definitely some you know key components um that that make me successful in this whole thing and uh like i said it you know just not it's it's it's a hard thing to think about but it too many people smother the business yes instead of letting it breathe and you know it it's sometime a rush to get success um and oftentimes that caused the problem right if you're rushing borrowers and you're putting pressure on them they get worried because their story is i didn't wasn't able to make the payment or whatever the situation is um you know we we both have horror stories about borrowers and we don't need to rehash them but i i found like you know dive into that property before you get it and learn as much you can about it be organized about the due diligence and make sure what you're buying is real so you know we're going to take questions openly i just want to do a quick intro with bill robin had asked a question in the beginning how do you get past the minimum wage customer service rep when you want to get an update on the first lien from the senior lien holder sometimes you don't know it i mean this is just going to shock people like this is kind of what i'm talking about like you know i buy a lot of what are called unknown on the first mortgage you get them cheaper delinquent seconds that are unknown on the first i can't absolutely confirm what the first mortgage is i don't see any records on title or anywhere i go that the first is actively foreclosing they didn't file a notice at the fault you know we're seeing an old credit report that's at least giving me a balance but i don't 100 know um you know it's not a perfect answer but you know people are going to be surprised i mean i own over 30 reperforming seconds and i can't even tell you last time i checked on the first mortgage and it's so funny because for us people are shocked when we thought the second say i don't pull credit reports i never do you know people say why not you get to learn about the borrower at the end of the day i don't care and i can't care because me knowing the information it ain't going to change anything if someone wants to drive a mercedes benz because they want instead pay their house payment i'm not going to convince me otherwise right and that's what i do every like every year or two i'll shoot through the portfolio check the first however i can um but i mean when i first started this business it was like with your non-performing and your reperforming seconds you need to be checking the first once a month again and you know so sometimes you can't even do that i mean one of the things that's interesting is as i maneuver through this business and start doing business with like bigger players in this space or just different people like it's interesting what they think i really do and what i do i mean this thing is so cookie cutter i mean you know when i start my whole process is set up to to just figure it out like when i start working a non-performing second like i'm just going to force the hand i mean eventually if if we find out the first is non-performing you know we're going to have to make a decision what we want to do and where we want to go but if somebody gives me a file and says to run with it i mean i'm just going yeah it's going legal we're getting an attorney involved right away the attorney's getting involved right away to check the collateral and plus now we're on record and we're going to town and as we move forward things are going to things are gonna come up you know i you know i may not even ever check on the first until until i get it resolved um and at that time you know we'll get the authorization we'll get the first mortgage statement um and and we'll go from there it's funny you you share something i have in common um and i feel guilty until i talk to you probably about five years ago about this people ask you know are you using all these kind of different crms different this different that and i felt guilty when i first came to you and said listen you know i don't think i use any of these kind of fancy dancy products i use spreadsheets i use a different you know a free trello board and i track things just differently because i don't need all this fanciness because what i do all our loans are performing or not performing everything's tracked as a date that we have to follow up on the organization's there i you know those are getting in don't need to buy all these systems just have your network in place have a spreadsheet and really just have something to remind you when things are due i mean salesforce is overkill for most of these people right and you know and with the delinquent seconds you know like you said i mean you know i'm an excel dropbox guy i'm very simple you know i have my setup you know right now i'm looking at three monitors you know i need my monitors i like my workspace yes that's one thing i tell new investors if you're gonna get into space get multiple monitors you'll never you'll never ever go back to having just one it's just i could use a number four i mean it's funny because i mean i used to work off one then i got two and then three it's like you know i couldn't even imagine not having three right now yeah so you know robin asked the follow-up question uh when you get started bill what part of the asset or note made you want to buy it what attracted you to that loan that you want to buy it if you weren't looking at the equity position um the price point you know and it's you know like we said when we started i mean we're buying these things at five to 15 cents and you know it was you know buying off ppr they wanted to put you in a good position they wanted you to succeed um you know now it's different you know you gotta you gotta sort out the trash um you know i i think you know you need to figure out what states you wanna go into um and right from there go you know if you know about bankruptcy you know do you want to buy a chapter 7 discharge you know do you want to deal with something that has been in 13 or out of 13 you know start doing a little elimination that way um there's no magic answer i mean it's just you can totally over analyze stuff i mean you could do so much due diligence on a borrower and at the end of the day maybe that borrower has somebody that has money you know there's so many weird exits in this business and you know the cliche answer is you know i want to help homeowners out i want to keep them in their house like i get it like that's what i want to do but the end of the day you know sometimes it doesn't work that way and you know you have to get to sale yeah you know and then as i started taking these delinquent seconds with no equity to sell and we were starting to get bought out by third-party investors that either knew what they were doing or didn't know what they were doing some were mistakes but some you know like i learned in florida they wanted the land it had nothing to do with the numbers on the house they wanted to land they're going to knock that thing down and build up something big and as i just started seeing all these exits like developing and you know the closer i got the sale the more these people came out and the more money they had and and you know we jump into this space and we fear the word foreclosure um and you know when anyone hears me talking foreclosure they think i want to take the property i never want the property matter of fact even when i go through a sheriff's own in the eviction process i don't even start thinking about the property and this is where it was like interesting working with some of these and big investors like as i was getting close to sale they wanted me doing like values on the property like they really wanted me to get a fielder out there and i didn't want anybody else involved until i actually had to lock the homeowner out and at that time that's when i'm getting a real earner involved because some of these don't work and some of them do but there's so many avenues to make money that we scare ourselves as investors right there's no equity why would i foreclose i get it like i never want the property but i learned that there's so many buckets that i'm going to get paid in and if i don't push the envelope or play the game of chicken yep never going to see those paydays i mean some of the craziest paydays were on you know seconds with no equity in florida like i said because they want the property or yep just you know stuff like that um we get so stuck and fixated on the word equity um as investors and and we we think the word equity means money well in the mortgage space it doesn't always mean that there's people with plenty of money that don't have any equity in their property because they over leverage it or you know i mean i'm an investor dude i got no equity in my property you know i do that as asset protection but you know you say that an interesting point because you know we often look at equity and say this is what it is and sometimes we just don't know all the details of the situation right we may go into a situation where we have ton of equity and it doesn't make sense why the borrower doesn't sell the property and you evict the person who has equity and still doesn't sell the property and the answer is there is no answer we don't know why it happened you know the hundreds you know hundreds of thousands of assets i've been touched and been involved with and and we've owned and traded i don't see that there's no common sense in space there's no rhyme or reason why borrowers do what they do as you probably see a lot of gurus like i've seen over the years they say well you have to go into this note with a game plan and you have to bid it with this game plan who knows what the borrower is going to do or not do common sense is not getting involved here this emotion this isn't money for them it's sometimes emotion a grandma who doesn't want to let go of a house doesn't want to move that's it and you know we're even dealing with that there's a lot of these loans out there people are seeing like 70 and 80-year borrowers and they're nervous about it but what i'm finding out is a lot of the kids are now in the property yeah i mean we we're getting a 60 000 payoff next month i mean next week um you know this was bought as a second but you know all of a sudden we're in first position stuff like that happens um and it's the daughter that is in the house the father's deceased and she had no idea that the loan was even on the property well she now had to go to a local bank and she got a 60 000 loan and she's paying us off so it's amazing you know that loan could have been easily you know passed over by a lot of people um because number one it appeared to be a second number two there was a very old bar on the credit report um one thing that i've learned is it's just a like you said it's it it's a game of emotion and like i get it like equity is important like when you sell a re-performer or you're trying to leverage it um but i also watched a whole market cycle like i watched a lot of these no equity deals that i worked out back in 2010 2011 and 12 are now full-blown equity deals that have been refinanced out over the last three years i mean yeah everybody forgets about that like we're so fixated on the you know the early result and it's like it's such a it's it's a game of a portfolio and it's a long term play like snapshots are not should we not be in the space we should even take a snapshot of today and say this is what's going to be in two years we absolutely there's so many things have changed in two years and not even just property values in the collateral space in different avenues um we get a lot of our assets i hate to share too much of it but we get a lot of our assets from investors who want to get out who are hey listen dave we know you buy assets all the time and blah blah can you buy these assets i don't want to sell them off any kind of exchange dave give me a number that works and they want to get out because they get lost they get confused they went and just jumped in without education and they get lost so i think that most of the people get overly scared and so reach out to other investors you may find that they have assets they want to sell just because they don't know what they're doing um that's one of the most common questions we get is you know calling banks and getting assets you know from banks i never have you heard much success from people buying calling banks and getting assets from them i bought one one delinquent second back in 2012 from a bank in new jersey but besides that i have never called a bank or and it was somebody that we knew that kind of put it in our lap yeah but nah absolutely not um yeah and it's what you said i mean a lot of the stuff that i capitalize now on are what i call tired no buyers or just people for whatever reason they got other life stuff going on that they need funds for and they want to move an asset and because they know your credibility and that you're trustworthy and that you can deliver and you can handle the documents they'd rather sell it to you at a discount than to put it out in the marketplace or deal with anybody else yep and that's you know that's what this business is the better rapport you build with people and the better your network is and your relationships um the better deals that you're gonna get yeah and you know we get a lot of questions i know we put on um our we built some spreadsheets for people to learn terminologies i know we get a lot of spreadsheets and a lot of the terminology sometimes i get lost on and you know we put a product up online that helps people learn all these headers you know what frustrates us a lot of times in our automation systems is headers are never named the same thing and a lot of details on there are just details that we don't look at so you know is there when you get a tape inside that there's a lot do you always understand all the headers and explain every single one of them or are you looking for particular things when you get a tape yeah absolutely i delete probably over half of the tape right off the bat and i reorganize it completely um you know it's it's a combination i know what i'm looking for and you know now i'm very you know i'm very knowledgeable with excel like you know you know i want to freeze the first six frames because i want to see the address the name the social and then you know i want to put everything in in a nice organized flow the fair market value the first the second and that type of stuff um but you know to kind of follow up on some stuff that we were talking about i mean i at the end of the day i can make a decision in less than 15 minutes on you know what i would buy something at what price um both re-performing and non-performing yeah you know it's a combination of i know what i want i don't over analyze i do business with good people and i just believe in this business i've seen the results and i know a lot of the results isn't because i knew everything yes actually i over analyze stuff more than i'm deeper into the business than i did early on um you know i i take chances i mean sometimes my chances don't work out and you know if you're playing this business for the long term you don't want to strike out on deals but when i do i write them off um you know they go to the bottom of the spreadsheet and i need some write-offs at the end of the year and some of my best deals you know you don't know all of a sudden you know they're paying you for six years they go delinquent on the first and they go delinquent on the second and there's nothing you can do about it it's gonna happen and it will happen it's just in the second space you there's so much you just have to deal with in real time and react in real time yeah and it's frustrating because when you get in a space you're hot to trot you want to get into deals um you know we can do the same thing we evaluate assets in about 15 minutes we can pull data down through our portal and then we have our calculating bid things um but i think what people get stuck on is the small minute things that they are worried about or concerned about and i always tell them ask for help you there's enough people in the space if you come from real estate if you're if you're new to the space you come from real estate you go to riaz competition is pretty fierce there um if you're new to notes it's not like that here right it's almost if you're badmouthing or knocking people down or trying to do stuff like that you're frowned upon dramatically immediately so reach out ask for ask a dumb question as people call it right um we bid everything based on our returns so be sure when you're bidding stuff you're not looking just at the data know your returns know a little bit of your numbers you know don't be run some kind of data to know if your returns are going to work out right you look at your borrower and you figure things out from there we look at the property and get an idea but we're not going to the end end game have i been the situation when we saw a property look great from the outside walk in and it's trashed and we lost money absolutely has the reverse happen where we bought an asset and we didn't know we had a second parcel attached to the property and the thing doubled in value yeah so there's things that you come across that you did not even notice that work out so bill when you're getting these assets you know you know one thing you always say that you know we started doing about three years ago is we do door knocks hello letters hello packages to be nice and friendly with these borrowers we've taken on your approach can you share with everyone like what you do when you get an asset that's not performing and it says equity situation what do you do the first step are you calling that borrower are you sending a hello package send them an amazon card what are you doing to get all that borrower you know when we first started this business we tried it all man we tried door knocks we tried letters we tried everything possible sending them gifts like just everything yep and you just eventually realize you only have so much time you start working more assets and there was no other way around it except for starting the foreclosure process and the quicker you started it the better off you were and i i found out early on also like if somebody's calling you in the first 60 or 90 days they're they're calling you to tell you their problem and to push you away they're not calling to resolve it yeah so what i've done i mean everything that i've done and that i do now it's all to create the process and my systems are all to get that homeowner to me when they need me i don't really call or email bars anymore um until they need me you know and it's the legal process that gets them to me now it's a combination of everything now i'm a big advocate of the foreclosure process um you know when we first started this business you know we could buy loans directly into our own company get them resolved and then send them to the servicer now they got to be bought right into a servicer and i like that i like the credibility of it all i like the servicer sending them statements yep i like the attorney starting the foreclosure process and here i come and you know i still send out my letters and it's my letters aren't sent out to have the homeowner call me it's just it's to protect my backside and it's delayed a foundation like you know i i still to this day i send out what i call you know after the transfer letters the respite teal letters i send out what i call my shock package and my shock package is not for them to if they call me they call me but most of the times it's i just want to make sure they know and they got a packet from the get go of here's the cover letter here's their original mortgage and note here's an option letter i put the reinstatement and the payoff from the servicer in there so they now see the servicer name with our name and it starts tying everybody together there's a ftc fax testimonial and i do some other letters but it's just delayed a foundation so they see who everybody is yep um but it it it it's and it's an expense i mean and it's an expense that will put you out of this business if you're not prepared for it but it's the legal foreclosure process that that will get a homeowner it's so funny because you say that how many notes i've been involved with the borrower had no clue where to send payments the notes transferred hands we bought deals where the note was bought a month ago and we're rebuying it and they have no clue where to go with the money because they got two letters in the last two months who owns my loan is it legit are they legit so we've had people sending me hey listen we didn't know where to send the money for last two years because bank of america doesn't own the loan anymore and i got some letter about some servicer that we never heard of and you're right send that welcome package and say hey here i am you're going to receive information from these people we own your loan here's a copy of your mortgage that we actually have we're not just doing the new mortgage at a fly by night we're a real company um it's a great way to transition it besides the the legal letters so you know yeah you know what you just said you know it's true i mean it here's a weird deal situation that's going on and i i'm actually going to try to put a price an offer in to buy this thing but i have a homeowner calling me right now and i know who owns the delinquent loan and they're not doing anything with it and it's not cool like the homeowner's reaching out like they called the servicer they called me because my name is associated with that company with the servicer and you know it's an investor that's not in a note business that's sitting on this thing and he just for some reason isn't doing anything with it and the homeowner wants to start paying at some degree and yeah that's not cool like that person has a delinquent loan that you own on their property you need to figure it out yeah and solve it with them it's amazing that stuff happens all the time on the other side too borrowers will play the game um but yeah like you we got burnt um we're a borrower kept egg is on for four months and it's like listen shut that clock go forward with it um and then they fought bk usually all these kind of things happen that time clock is so sensitive that you will be in a situation you may be in a year and a half waiting for anything to happen um you know collateral files are very confusing um i'll let robin uh if you have a borrower that has not been paying and says he would like to make weekly payments when he gets paid all services no will charge a fee for each payment and not flat month what are your suggestions other than i can collect myself nope i mean i just want normal monthly payments i mean i can't you know i'm not into the bi-weekly the weekly stuff like you know be a big be an adult and put your money in the bank account and pay it monthly i mean it just like even early on with a lot of these you know this is one thing i take a lot of pride in with some of these loan mods early on we'd be creative we put incentives and all that stuff i i can't stand the incentives anymore with people you know we're buying some of these reperformers and they're just weird incentives like just make it clean you know and maybe you know it could be okay that if you make payments for two years we'll wipe away a certain amount but like just you know you get paid next year on your tax return you owe us some money like if you're going to keep that loan you can put whatever you want in it but if you're going to put it into the marketplace make it a clean loan you know yeah person paying monthly you know it's got to be clean because that homeowner puts a lot of trust in you yeah you know one thing i take a lot of pride in is i put my name on the loan mods um because i want my name out in the marketplace um and you know i always tell these borrowers to always call me if there's ever an issue even if i'm not involved with the loan anymore you'll get a lot of those calls it's interesting because you said that because we we're just in a loan recently we're modding now um it was forbearance agreement moved over to a mod and we kind of actually felt bad for the borrower they took out a loan for like 65 it was a second in i think alabama and the loan balance now is like 78 000 and it's they've made payments but all the interest in arrears and it's ridiculous so we'll work on the deal and say listen you will double whatever payment you make in so if you put down three we'll make it six we'll cut off six and we'll take 20 grand off your premium your principal because it's just at this point we're just eating them alive on a deal that just what it is so we're knock off 20 grand they went from a 60 000 almost 80 000 upb after paying it for eight years we're moving it down to 52 grand because it makes sense right they're gonna do what's right and i can sell a thing in a second if i want to you know and i've grown and i've adapted to try to keep my world moving and my business moving but you know i work for a very good buddy of mine in this business a very good friend of mine and i love the business that he puts my way but i'm not a fan of what i have to do for his loan mods and yeah you know this is how i deal with my own loan mods okay a homeowner owes a upb of 50 grand and they owe 20 grand in arrears if you can pay me maybe five or ten in arrears up front i'm gonna defer the other five or ten or give you some credits whatever you know if you put five down i give you five credit we're going to defer the 10 to the back of the loan and we're just going to amortize the 50.

yep this client you know he makes me homeowner puts five down he takes that remaining 15 and he wants me to roll it into the upb and amortize it again and charge interest on recoverable legal fees late fees and owed interest and i that's not cool and it's not clean and i i you know it's yeah you know like we always talk about you stomach a lot you sacrifice and it's an emotional space and you're going to make money either way right at the end i've catered to that but i'm not a fan of that and he knows i'm not a fan of it i mean i've always been in the uh the advocate too of i never went over an eight percent on an interest rate oh yeah he's got me up in the nines and tens and i get it like this fund needs to liquidate all these at the end of their fund and they need to have them as marketable and as up as they can and i get it i'm just you know i've been out of my comfort zone a little bit with seconds we using it depending on on what was the before we're usually in the eight nines uh for first we're usually using the seven to nine that we can mod it that way um seven to eight really so you know it's interesting to hear the different perspective right and there is there a right answer no no whatever you feel best is for you and what you think that borrower can you know pay so one of the things i always look at is that financial documents when they send information you want to make sure you're not making a loan that will fault in six months you know make sure they have the money i mean people want to promise anything to keep their home and it's stupid to do things like that we get a lot we had a lot of phone calls from people who were looking for our consulting services similar like you and they say well what it's money well at the end of the day it doesn't work right when we reach out to our borrower we're trying to help them successfully do it but we're not going to be mr nice guy all the time unless they're able to come to the table with something to help us out you know we're not giving out stuff but and that's the nature of the seconds like you know you deal with some of these smaller bounces 10 20 30 40 you can get the higher interest rates on them yeah you know if they start getting up higher you got to go with the lower interest rates it's just the way it is because it is about what they can afford um and you know sometimes even you know with like this particular client he plays the big equity game and it's like they better afford it or i'm going to take their house like that's not and that's not how i do this business but you know i manage assets for clients and yep i need to keep my business moving so the fun i came from the fun i came from same idea if there's equity i ain't gonna do any deal with you you pay it up or for closing hard ball boom you know we're not doing forbearance agreements we're not doing mods you come up with that 20 grand or you're gonna lose your house and it's like you know holy crap if there's equity not sell the house give me my money because it's a fun situation when you're in a smaller space you know we're not doing that and when i first got when i bought my first loan in 2012 my perspective was equity deal done and i've learned over time it just doesn't i've gotten more payoffs and more beneficial and more able to resell that loan so much better than having a situation where in a year from now they're they're defaulting so i think of the question from catherine here um in your welcome pack are you sit letting them know that you're starting foreclosure um or do you give a bar a certain time to respond so after my shock package i send a second letter out that has my option letter and it's just a no response letter letting them know hey reach out um company's gonna start legal soon and then there is a third letter that has the option letter and it basically lets them know that you know we start a foreclosure and what's the time period between those letters that usually send out shock packages uh usually like first like three to five days and then the second letter is like day eight and day twelve okay but i just snowballed all at once i mean it's you know sometimes the good attorneys will even have my demand letter out before my last letter gets toned but yeah um some are a little slower and it takes a little bit i just snowball it all at once you know we're not buying as many non-performers as we did once uh years ago because pricing's just astonically high um victims are getting harder and everything else we're buying a lot of performers um but what our non-performers we found work is you know writing a nice relaxed letter and you say listen here's the situation we're a small company here's what's happening reach out to a servicer here's who we are about you know just letting him know that this is we're being serious but we're not bank of america we're not gonna we we can if your previous lender was unable to do a loan mod we may be able to do it so please reach out because a lot of these bars are scared they're timid they've been told before no no all day long i'm and i'm the same boat man i mean as deep as i am in the non-performing space i bet you you know my last 20 purchases probably 16 or 17 of them have been reperforming seconds yeah it's pricing we're up you know you're getting these off your yield yep um and you know if you're playing this game long term you see what's going on in the marketplace i mean people are refinancing left and right like if i can buy a reperformer and get a 10 10 15k you know coupon you know loan balance discount doesn't matter what my yield is or how small the payment is i'll take that and um i'll take the refi yeah you know the worry about that is that when there's a low payment you know we're always worried about having to pay that service or fee right if you have a 150 hour payment you're paying 30 bucks whatever to re-perform a performing servicer it eats a lot of that dollars um do you want to hear what we think about the increase of defaults or not the defaults what's your i guess the state of the market i know i'll be talking next week about that uh with another guy in the space what's your thoughts about this whole next six eight 12 months of increase or what do you think the fault's gonna be like i mean it's it's scary right i mean who knows what's going to happen with you know defaults or re-performings defaulting um you know you could scare yourself out of this business every single day by thinking about a lot of the horror stories um instead of just playing it and reacting in real time i mean you know it's going to happen i mean i was talking not to get sidetracked and i was talking to an investor before we jumped on yeah a new guy who just you know watched the dme last week and i i've been saying this since i got into business you know sometimes if you watch a presentation from a service or an attorney it'll scare you out of this business and this guy was scared to death after listening to the attorney presentation last week it was a lot yeah it is i mean and i get it like compliance is real regulations and you got to keep it clean but a lot of people can talk you out of this business um very easily but in the flip side i think you know do we think there'll be a lot more defaults well this you know i i'm gonna cheek do we have the 2010 2011 mass amount of quantity of assets that were there will we have anything close to that number and i don't think we will i don't think the numbers and i want to give you one example rob and why i don't think so there's so many more people in this space in a bigger edge a lot of hedge funds than there was in 2010 there you know there wasn't a lot of mom and pops and there wasn't a lot of funds so you know there may be the default level close to what it was which i don't think it will be but i also don't think that you're it's a trickle down as much as we are but what bill's saying is don't go hoping you know you know bill would you if someone asked should i sit on the sideline with some cash or should i get in and invest what's your thoughts on that you know i mean you know you have to be smart as an investor i mean you know i came out of this year and every year my goal is to buy 12 assets if it's re-performing or non-performing and the goal is to buy one per month so when covet hit i didn't i didn't buy anything at the point and i sat on the sidelines until till june um and then you know i i just i said i can't just sit here so you know i ended up i think i bought eight so far just between june and now um you know one non-performer and seven re-performers yeah um and you know and once again i mean i'm buying re-performers in the market where in a few months people could start defaulting yeah um it may happen and then i'm just going to have to deal with it in real time and you know it's we've talked about this a lot like with uh with the deals like i get the word yield and i buy my re-performers based off yield i've never bought a non-performing loan thinking about yield i know this business works i know some yields are going to blow you out of the world some are going to be okay some notes you can sell some you can't but i've never bought a non-performing second based off what my perspective yield is um and same thing like as much as i buy a re-performing second based off my yield you know sometimes the yield might not be there you can't be scared about it you know you might have to throw some legal at it you might have to clean it up you might have to renegotiate um so everything happens in this business i mean it's what i've said a few times on this calls it's you just have to react in real time it's a very easy business to talk yourself out of yeah you know i hear a lot of people who are getting new or been in space maybe two three years adjusting their pricing right while the sellers won't sell at this the yield i want so i'm going to drop my guild down and i i tell people over and over again don't drop your yield because of what the seller's telling you if a seller's telling you they're going to sell it at a six yield and you can't stomach a six yield don't buy it like you know don't be intimidated nor be motivated by someone buying you know hey he bought eight loans i gotta buy eight loans you know the numbers aren't matching don't buy it i i get i hear a lot of people trying to chase the deal instead of say the numbers don't work and that's okay it doesn't you know it's kind of what you know you and i've talked about and you know that i feel is a little different about the second space it's like you know it's so much more about the portfolio than it is or deal and you know a lot of my decisions are based off my portfolio rather than the deal itself and it's like i said i believe in this business so much and you know my systems and the way that i handle things that you know a lot of times you know you know with the non-performers i just buy them and i play the game and i see where they land and sometimes they work out sometimes they're singles doubles triples sometimes they it's a home run and some a lot of times the home runs aren't aren't home runs that you saw when you bought the note it's just the way it ended um either through a sheriff's sale or a homeowner getting access to capital that they didn't have um and stuff like that you know and it's there's been so many deals that i've capitalized on that when you look at it on the surface you might not have ever bought that loan yeah whereas ones that look great don't turn out good you know it's it's like the second space i say it all the time like we see equity and we think money it doesn't mean the homeowner has money yeah yeah you know some of the biggest you know upfront arrears payments came on no equity deals and that's where the returns start getting crazy and like i said i get it equity protects you when i buy reperformers i want to buy with equity because i want to get cashed out um but you know that's what fluctuates your return you want some great returns you're going to be buying some not so great equity deals you know your lower equity deals you're not going to get huge yields on yeah it's amazing that you know we make it sound so simple and in some of the aspects it is simple knowing your numbers knowing what you're looking for and knowing what you're you have a stomach for right um for those who are new to space what do you suggest them doing this is one of the most common questions asked what do you do you're watching this watch dme or watch this and you say this new person you know i'll give you my answer as well but they're day one what should they be doing right now you know it's kind of what we talked about a little while ago it's like you know we buy these things and we want to smother them you're better off working on your processes and your systems and it's it's it's a cliche saying that you hear but you know it's it's like my wife says how long can you how long can you work on a spreadsheet like well my spreadsheets are a lot of my processes that's how i keep track of everything it's how i keep flow of everything um you know when covet hit i put together a 200 page business uh manual it's my business is just me there's nobody else did i have to do that no but you know i i now i have a business manual if i ever hire somebody or you know with compliance and regulations i have a full business uh file of you know ftc facts the fair debit collect collection practice act i have my business manual i have my processes i have all that stuff in folders and you know what nobody may ever see that stuff but that's how you run a real business that's how you move forward at some time you've got to take the leap and buy an asset and figure it out um you know sometimes people buy these smaller balance seconds just to get their feet wet but at the end of the time you know even the smaller balance you're still going to spend the same amount of money on legal and all that stuff and you know just just put yourself in a good position i mean at some time you have to take to chance i am a big advocate of you know try to buy a re-performing loan before you buy a non-performing loan um yeah so you you know learn how to go through a transaction you get credibility with a seller you learn how to set it up with a servicer um you know maybe you collect payments for a year and then sell it or maybe you keep it but you get cash flow from day one um you know i definitely get the upside of the non-performing note space i see the opportunity but you know just ease in and be slow and steady it's not going to happen overnight um you know it's it's a weird year but the conferences once we can get back are great um resources to meet people um and you know it's it's just taking action i mean at the end of the day it's you know we we throw out all these kulushay like statements and stuff but it's true right i mean you know the deal like there's nobody that tells me what to do every day i have to take action some days i don't want to sit at my desk but i make it happen and you know you just kind of start start building it and and figuring it out yeah and it's weird because we get this question all the time what should we what should we start with and i agree with you creating a system jumping on a performer is a great avenue to go that track because you do learn what a servicer is you don't learn what a mortgage note is um you know we always tell people to be weary about deals where the property's worth less than 50 grand because a kitchen is never going to be worth spending 100 hours to fix a kitchen up you're always gonna spend some money if you're in a situation where you take the property back your kitchen bathrooms rugs paint all that stuff if you're gonna put lipstick lipstick on a pig it's still gonna cost money if you bought a ten thousand dollar property for 100 bucks you go to foreclose on it your foreclosure costs don't change right your cost rehab and that property don't change and your property agent to sell that property doesn't change if you take the property back now granted if you get reperforming you get a situation where you're buying a loan that may only have a hundred dollar payment know the fact that your services are gonna cut into that little bit right your expenses aboard that loan is gonna be a little bit so it it what i tell people when they first get in is buy a performer or even better buy a partial right um great because if those who don't know what partials are you're gonna get a payment string if i have a loan that i have another you know 15 years of payments i could sell you five years of that payment string you can make a return and sell back to me if it goes non-performer i take the property back i take the note back and i work the process absolutely um right i'm doing a deal right now with uh i don't know if i should throw it out there my mailman my mailman has you know seen me maneuver for the last 15 years he sees what comes in and out he's a little bit of an investor himself has some properties and him and i have been talking and finally he's like you know he's telling me you know what bonds are paying right now what cds are paying and i'm just like i said let me put some stuff in front of you so um put some stuff in front of him and you know just going back and forth you know he's trying to figure out the worst case scenario and i'm like at least with me because when you buy a partial you need to understand not only the deal but who you're getting it from and what they're up to because i've seen plenty of people over leverage themselves and you know i do not over leverage myself i usually sell a partial um every five re-performing loans that i own um because i want to always be able to have backup i need the cash flow and i don't want to be over leveraged so he's like what's the worst case scenario so worst case scenario is you get your 65 payments over 65 months and he's like what do you mean i'm like well i'm always number one i'm going to keep you whole yep i'm either going to shift your asset i said technically in my agreement i can't guarantee anything but yep you're getting your money dude it's a great avenue for people to get in because it's like buying a performer but you have the backing of your seller to kind of bail you out if it goes default as long as your seller's legit and the contracts written up you know it's weird when i first got into the space i was afraid of two things attorneys right and understanding the process of working with a seller i remember talking with one of the sellers and saying listen i'm only gonna buy one or two so i probably shouldn't sign your nda um that changed dramatically quickly with getting into it right we have over 100 assets for sale but you know we learned quickly that sellers just want to sell the asset long as you agree not to disclose information to the borrower and please don't contact the borrower before you buy stuff it was no big deal and the attorneys in the space are super friendly mostly they're amazing they become and you we've been in situations where we've been asked to jv with a couple of them which shocks us because we're thinking this attorney's going to run their own deals but these attorneys are just attorneys and they love this space because it's like clockwork for them right you get paid on the situation they interact with us and we do deal in the deal after we also buy assets and that states that we have a great relationship with our attorney because legal is one of the biggest factors in the space right if your legal is solid your deal is usually solid so be sure to check out that kind of stuff you know and then with that point like you know it's not like the pricing fluctuates too much once you find some decent attorneys yep but you know at the end of the day man sometimes you gotta pay a little extra to get the right people man in this business you know i yeah you know i see it way too often i mean there's attorney i use in pa in jersey that you know they nick won't dime you for everything that they do but guess what man they get it done better than anybody yeah yeah and you know if you don't know who what to use ask reach out to one of us or whoever and ask we're not hiding this stuff right you know we're going to beat you at our own game doing our own thing we're not gonna beat you with resources resources just we hand out those kind of things and that's what this business has been so good about and what i love about it it's it's you know it's of course we're you know of course we're all doing the same thing but i mean never once have i felt like i was competing with anybody in this business i mean i have my own stuff my own portfolio everybody has their own business model and that's what's cool is you know people get a little intimidated like why are somebody selling this what are they doing why aren't they keeping it and it's like you know i'm helping a student of mine right now by two uh reperformers and what was kind of cool was there's like six like assignments in the uh chain and you know just trying to educate him and his wife and you know make sure they understand everything was kind of cool to be able to go down the assignment chain i knew everybody except for the originator and i was able to share with them what everybody's business model was and everybody's business model was different yeah all the way down to who's buying it and who he bought it from you know clearly some of the funds are selling them because they need the turn yep some of the funds buy them keep them for a couple of years and then they need to liquidate yep before they put a bulk and they just want to trade off some of the bottom end and stuff boom i mean the person he's buying from um his business model is he gets them modded and sells them right away yeah um i just sold a non-performing second two weeks ago yeah and were you trying to screw the investor exactly i just i'm a firm believer in that you know sometimes the asset needs to see a new person behind it you know it it was up and down for me for a while as a re-performer and then it went delinquent i sat on it for a few years and then yeah you know my friend deep that reached out she said something to me i said let me see what i can do and i threw it at her we agreed to a price and i sold it that day i mean yeah it happens we were talking one of our students as well and the clatter file's overwhelming for a lot of people because it's a lot of stuff they don't know about and they signed it probably when they bought their house they have no clue what it looks like and going through a title chain is so interesting because when you pull the o e up and you walk through the steps it's overwhelmed because it's new information we get all that you know take a time learn that stuff because those title chains are one of the key items in the space if there's a blank you don't have to panic but know the fact that there's a space between you know seller a and you see buyer c and there's a space there it's not an end all be all just understand that whole process we walk one of our students through that and it was amazing their ideas like whoa the chain is broken here but it's fixable absolutely hey listen we know the seller and we we know what that situation is we can reach out them for you and we've done that that's the name of the game dude and i i say it all the time and i say it with note sellers but i mean it with the whole business like credible and reputable note sellers it just means do business with good people i mean i have a client right now he's real fixated on this affidavit that he thinks he needs because the note seller's gonna not the person he bought it from but the person that she bought it from he like they only said 30 days and they're gonna disappear i'm like no i know the person whatever we ask them to do if it's two years from now they're going to do it for us i'm also you know i'm a big advocate of let's not brew up any issues until we need to deal with it and you know i'm not looking to delay stuff but if we see something let's just make sure an attorney does if he sees it we'll deal with it if he says it's not a big deal we'll move on with it yeah um you know that's what i've always liked about this business is man when we when we first started buying these collateral files sometimes there was just like i mean there was nothing in it and we had to get everything done like i get it like and that's why it's that yeah it's important to do you know business with decent people um and we've all taken chances but everything can be fixed um it might delay it a little bit or it might rewind it i mean i even learned something this year i've always felt like uh blank endorsements on the note always needed to line up and be filled in and i just learned this year that it's an open-ended endorsement good means anybody can collect on it it's like a blank check right if you find a blank check on the side of the road right you know you're always learning in this business and you're never gonna yeah and you're never gonna learn everything and that's what people try to do before they dive in yeah and you're never gonna learn everything yeah and it it because you watch webinars and conferences and you get overwhelmed and it's like whoa whoa and you hear all these compliance issues and whatnot there there's so many ways just talk to your attorneys you know we talked to our attorneys when buying a file and say listen what do we have to watch out for here um we used to read our own claudio files sometimes we still do but we always want an attorney to look over it make sure we're not missing something stupid um because it's just at the end of the day if that collateral follows is not legal or something wrong with it we may not be able to collect on it i mean i was an investor email inbox me yesterday he might actually be on this call and i still need to investigate it um and now that maybe you can bring some uh yeah light to it but he was being told by an attorney about you know having to pay off the first mortgage when he foreclosed up you know from the second position um and man i went through my records and i only had two that i actually went through the sale in ohio but both of them i went through subject to yep um and you know i didn't have to pay off the first now the one we're still waiting to see if the third party that bought us out at sale is going to follow through and i want to do a little research on my own because i know some states are different like kentucky's a little weird um and there are some states that are just different with the sal but majority of them are subject to the first it was just weird and you know it's it's it's what i tell a lot of people it's like there's a lot of nine to five people in our business and they're all good people but a lot of them are investors um and they don't have your pocket so just be aware of that and some of them might tell you something but it might not be 100 true yeah and believe me i you know i learned from a lot of the nine to five workers in the business and we need them um but just you know always double check um ask other people so it's weird you know one of the things we run into and you know it also intimidated us when we first got in is we're doing a review right and it took us longer than we expected to do it um communication to the seller saying hey it's taking me longer xyz happened you know i've been in a situation where my situation comes up at home and i can't do anything and i'm stuck communication with this seller hey i need some more days it goes a long way i mean sellers just want to know what's happening in the deal just communication brother it's a huge aspect in this business and in life like the most successful relationships and businesses know how to communicate yeah and apologize hey listen i'm sorry stuff came up and ignoring a situation is the worst thing you can do you know be courteous be understanding they just want to sell the asset and like you said before they may not want to sell this asset for any other reason but that the funds closing they may be in a situation where they have an infinity return you know the fund i came from they're buying bankruptcy loans all the time they could have got a huge arrears payments and now that loan is down in negatives and they could sell to whatever they want to sell it for it's positive we have a bunch of infinity returns right now that i could sell right now for a dollar and someone said whoa why you sell for so cheap i mean i was just two two about two months ago i'm looking at a bunch of loans that are re-performers out of ohio seconds and i'm like i'm looking at like three of them i'm like i was working these loans about a year ago and then i realized what happened one of my clients didn't feel like dealing with the ohio license so we sold a bunch of his non-performing seconds to another investor and now you know it was just neat to see like what he actually collected like the one loan i was shocked he got like 10k up front and it's like you know the guy sold him because he didn't want to get licensed ohio he's liquidating he's moving and that's what goes on in this business i mean one of my best notes that i own um i actually worked this out for a client and then about two years later i bought it as a re-performer off them i collected 15k up front when i got this resolved for the borrower i mean for the my client and the borrower and that loan had eight assignments on it and it went through everybody in our business everybody and it was just it was kind of cool when i got that worked out it actually took me 15 months and i got the i got the 15k like three weeks before the sheriff's out i never even talked to the homeowner it went through our attorney um wow so you know fast forward two years when my client was wanting to sell this i didn't even look i i knew the history of it yeah i got a good deal on it um but knowing that they put that much down up front i knew it was a great deal and like i said you know a regular nor a new person in the business would see eight assignments that went through everybody in this business would say oh this is a bad deal yeah um so why does everyone get rid of it everyone get rid of it for a reason right and um i think that people get nervous with that mindset um chris jumped in chris coombs uh he's a jersey guy by the way we're he's pa i'm a jersey if everyone's kind of curious about that so we're local but he was asking about ohio and the law in the license needed in ohio good question um there's been some speculation of what it is because it's not it's not exactly precise yet um but the understanding is that you do need a license in ohio i'm trying to bring up my spreadsheet to remind me what was said yeah and here's some good feedback while you're bringing this up yeah because as much as everybody says check with the attorneys what i do is i get the email address from the state and i email the state directly and they tell me what the deal is and i'm real specific on what i'm asking like if i'm buying two loans and i'm never buying again and they're non-performing seconds and i didn't originate them and they're being serviced with a licensed servicer i'm real specific on who i am what i'm doing and what i got and you know you'd be surprised sometimes the answer you should get um and then you now have that in email and writing that you can show your attorneys um and as good as the attorneys know some of these states are just they're all over the place yeah um so you know everybody is definitely um worried about the compliance and the regulation and it's an absolute big thing um but just don't be intimidated by just email either an attorney or like i said i go directly to the nmls get the email address and i go directly to the state yeah you know um i for my analogy that yeah they are coming out with a license um but there's some parameters around that um what bill says there's a mortgage and banking i think is the the place in the state that you reach out to and say listen i've heard you know i'm just curious what is the state law on this um and you may be surprised i know you were when you reached out and everyone told you something wrong you got to hold them and they said no you're fine right sometimes there's a lot of gossip that goes around and you find out isn't true um going right to that estate asking the bank and mortgage company people what is situation um they don't know who you are they don't know what's going on but yes can borrowers use this stuff against you absolutely absolutely so just reach out and ask they're there to know what's going on um there are states like georgia and stuff like that that are intimidating but when you're buying loans knowing the compliancing no one else is going to teach you that stuff it's up to you to figure that out but you can ask post a question and you know sometimes we hear compliance and regulations and you know we think a major process or a lot of money um and right now you know where we're at you know when i first started we could buy in all 50 states and not even think twice about it you know now maybe you need to pinpoint two or three states yep and just get compliant regulated and figure it out it might cost you a little bit of money but what you're going to do is you're going to put yourself in the states where tons of investors don't want to go and there's going to be a lot of ohio that most people never talk about there's a 10 000 bond when you're going through foreclosure that most counties don't actually implement but it's on the books so if i told you you bought a loan for 40 grand and you have to put up a 10 000 bond in foreclosure you may be worried so but how many times have i had to put the bond up i haven't right have i got lucky absolutely but there are certain counties in ohio that i won't buy him but it's not because of that it due to timelines and i get it like i used to love the state of washington i used to love maryland and now i don't do anything there because of what's going on and um you know as a small investor i've been able to bounce around but it is getting more difficult and uh that's what this business is just figure it out and you know make it happen man yeah just plug in and ask that's the biggest two things communication other investors i ask questions all the time um and you know that's intimidating to do it first but typically it's you'll get the answer and people are not going to look at you twice for not knowing an answer right now we're working on a project that we want to grab all the stats limitations of the entire country to know when things happen those kind of things are important to us because sometimes based off the maturity date we're bringing out the bid calculator that we'll be allowing people in the first place to use um it will have statute limitations involved in that and we're trying to figure out the trigger points maturity date of last payment and a different thing so if anyone has an information feel free to let us know about i love that we have some states but we want more um but those are the kind of things we need to know because if you're past statute limitations some states allow you to do certain things some states don't but again i just ask right um we're getting closer to an hour and a half here man i didn't realize how long it's been all good you and i think we can talk forever on this business so if anyone had any particular questions before we wrap up um i want to make sure we answer anything um and i know there's gonna be questions afterwards most of the time i get more questions after this runs but if you have anything you want to ask live please do um as we said before i'm more in the first space i've been doing this in 2010 we've i've touched hundreds of loans um i've done due diligence on thousands um when i work at the fund we're doing three thousand probably a month or so um pricing has changed but just don't be intimidated reach out talk people um i know you know bill has some education courses uh mentorships i have some mentorships we're coming out with a beginner course um and mentorship we have consulting services and it it's nothing else than helping those people who are just lost and need someone to have a one-on-one conversation with emma interaction understand our time is valuable we have kids we have a wife we don't want good stuff and we want to work on our business we want to help but we just can't give it away everything that we need to do we do we can um but i appreciate compliments um this is kind of just a round table talk and we'll probably do it again um but i wanted just to touch base interact with you on a friday afternoon hopefully we don't get any rain here man let me know if it starts raining over there but no it's good the sun's out here a little foggy and drizzling this morning but all good man in football tonight high school football so oh yeah yeah you rock oh well man i appreciate you jumping in here with me for a few minutes and uh i i appreciate the those who are watching live it's awesome to see people jumping in here um it's good to go to connect man well i'm sure we'll see each other soon all right brother i appreciate it thanks everyone take care guys see you brother later buddy dave puts here from jkp holdings as we get started we always cover some housekeeping items so let's start off with as most of you guys are aware we have a facebook group called the east coast of stress note investing this group is a private group that was established back in 2014 this group is geared for note investors to answer and ask questions and to network most questions are answered by seasoned investors we also give access to our resources and tools through our announcements and other note investors share their own content with others next item we have our facebook page well this facebook page allows you to see the latest news and note investing see jkp holdings products and services along with us posting our weekly watch party which is previously recorded webinars that we show every wednesday at 1 30 eastern next we have is our facebook page as you can see here we have a facebook page that it has all kinds of tools resources and other things from a first page just a little bit about us and a welcome message um this website does a bunch of different items and services for you guys so one thing you can do is you can contact us through clicking on here and filling out a form or using our message we're investors but we'll be posting more and more content in the coming months so if you are a new investor we have a new investor form we ask you guys to fill this out and let us know a little bit more about what you're looking for as we're creating a product that will assist you and um it's a be a series of videos about different topics of note investing so we're looking to help you guys out we have a section called services in the services we have our webinars which is our series of webinars you can check out that are previously recorded that are just like our weekly watch party we also have our sell your note this is a website here you can fill out a form if you have a note you're looking to sell you list it here and within typically 48 business hours we respond with the offer on the asset we also have through our services our jkp portal this is our due diligence automation tool there's all different features about this that are extremely helpful from finding a local reo experience agent to finding a local rental average for a property as well as property information we have over 60 different data points that we can capture including values uh property demographics foreclosure and listing information if that's something you're interested take a look at the video and register and to get access to that we also will be bringing out our bid calculator this bid calculator is a condensed version of our bigger version that users can use to utilize and help them make it offer based on your specific returns so you put in some variables and the calculator will calculate what your bid price should be based on the information you provide to us we also have our consulting so if you're stuck on a project or a deal or you need help with due diligence looking for spreadsheet assistance schedule 30 minute call or screen share with us and lastly we have our products page we'll be adding more to this as we go along we have our 13 recommended indicative offer questions that you can purchase a spreadsheet of that information as well as our tape headers defined in bid calculator recommendation items so if you're not sure what a tape header you know phrasing and tape means feel free to check that out and if you're looking for what should go into a big calculator we help you with that so definitely dive into our product section and order those items so you can get the information you're looking for and lastly and most importantly if you are looking for assets we have just over 100 available asset for sale right now so all you need to do is go to our nda page nda request page and you'll get a form you're going to fill it out and get a link sent to your email so that you can get access to our electronically completed nda form if you are an investor who's looking to sell your asset you can also let us know that and we can add that to our list of available assets and help you sell that now get ready for some great content our website consists of different consulting services bid calculator webinars portal um and things like that we also have some things are coming out where our bid calculators you saw a brief summary of will allow you to automate from processes we're in testing mode with that if you're looking to sell a note we have a sell your note feature which is awesome you fill out a form and go from there if you're a brand new investor we have a form here to just share your information and to let us know a little bit about yourself and what you're looking to learn and lastly uh as you probably all know we have about um about a hundred assets right now that we're looking to sell our latest asset availability list um right here if you go to jkp holdings nda request you can get this information simply by going to this form filling it out and you'll get access to it so it's a little housekeeping to jump in here as we wait for everyone to jump in and join us so let me uh stop my share um and introduce you the guest of the hour a man that i look up to and we talk a lot off camera he knows so much more about face facebook interaction bringing people in in seconds that a lot of people in this space it's awesome to be sharing the space with you my man to jump in here allow you to kind of share your knowledge and answer some questions that people may have and again look for general questions please but thank you bill appreciate you joining in and jumping in with us ah man thank you looking forward to it i appreciate you having me on uh always looking to add value out to the marketplace and share everybody my experience um and you know my knowledge of uh a space that's been very very good to myself and my family um you know it's definitely a uh a life changer awesome and that's what's going on man it's friday it's you know as an entrepreneur it all blends together but i still enjoy my fridays for some reason fridays are always just that that best day it's amazing when you're doing this kind of stuff and you're like oh this is great it's a problem like well every day is a monday every day is a friday it doesn't really blend in um the kids remember quickly right that's it um so guys understand this is gonna be an open conversation right we're not gonna be getting too nitty gritty it's just more of a sharing knowledge um and kind of making sure people are tuning in and learning from each other uh as bill will say we're not the end it'll be all all the answers but we have some awesome stuff that we can share with you so bill can you just briefly for those who may not know who you are would you be shocking who are you and what do you do my man absolutely uh my name's bill mccafferty um i'm a full-time note investor my full concentration um is in institutional residential uh reperforming and non-performing second mortgage notes um i have two companies uh my own portfolio people's debt relief solutions uh people's debt relief solutions uh buys non-performing and re-performing seconds uh i'm a slow and steady guy i don't have a big fund uh like a lot of investors in this business it's one thing i take a lot of pride in don't don't take it for granted very thankful for it but i'm able to maneuver through this business full-time uh with a small portfolio that i built that i slope that i build nice and slow i'm famous for using the term slow and steady you know as dave knows there's a lot of people that come into this space and there's a lot of people that that are gone um it's not an easy space to survive in it's very capital intensive you know i do leverage my portfolio um with selling no partials and doing some creative stuff with collateral assignments um and you know continually building that portfolio where a lot of my knowledge and education comes from and my true experience and what allows me to do this business full-time is uh people's mortgage relief 2 pmr 2 is an asset management company i offer a service to other node investors um that need help managing their delinquent seconds their non-performing seconds uh pmr2 does not own anything and it doesn't owe any debt it's actually taxed as an escort my whole world runs through pmr2 you know pmr2 uh gets hired by different node investors i get an upfront fee and i get a fee when i can collect on a note either through a discounted payoff a regular payoff through a short sale through turning a non-performing loan into a re-performing loan and there's a different you know different clauses in there that i get paid off of bankruptcy um reos i always say that you know what's what's been very good for me is i get i get paid off the good and the bad um and i see it all i'm gonna get it and i get to experience it all so that company alone is managed over a thousand seconds for about 150 different node investors um and once again you know that company doesn't own anything um the investor buys the asset they pay for the manage they pay for the legal the servicing they hire me to manage the whole component and you know what i manage is you know the deal the collateral file the servicers the attorneys the borrowers the foreclosure process anything that comes into the deal for us to you know get through or manage to get paid that is what my asset management company uh does right now i manage about 130 delinquent seconds there are some first sprinkled in there the more i managed first the more i realized how much i like my seconds but that's what i do they're my two companies i'm just a regular guy i love love sports i love time with the family love live music but you know i get it you know this business is powerful you need to treat this no matter what degree you're at in this business um if you're doing it as an investment you need to treat it like a business and it'll treat you well so you know it's funny because most people when you get in this space one of the first questions hey what's your background mortgage background banking background um if you know either one of us we don't have either one of those backgrounds um and you know it is when you get into space is kind of scary right we we just did a couple you know conferences and we go through a list of things that you need to know to get in this space is overwhelming um so you know you know can you share a little bit about what you did before this tell me what bank you work for what hedge fund you did what big stats you ran with so that these people could feel intimidated that they can't get into a space absolutely so i uh i graduated um in 1996 with a uh a bachelor's degree in sociology and a concentration in criminal justice uh from 1996 to 2011 i worked at a school for court committed kids took care of athletic fields and ran a shop um where the kids would get a job and work for me to help me kind of take care of the athletic facilities did that for 15 years um you know in about 20 2004 2005 um you know about eight to ten years into this thing i just started doing some true soul searching you know if this was you know this job was decent um i had okay security good benefits you know if i had to do this the rest of my life you know am i okay with that um and you know doing some deep soul searching i just felt like i had a lot more to offer um out in the world than what i was doing um yeah you know like a lot of people um you know i got married i have two kids um you know they're my they're my why and my support and you know that is the reason that i set out to do what i wanted to do but 2005 2006 started going to uh local real estate investment groups um you know like everybody i saw one of those infra commercials about buying real estate with no money down um and you know i wanted to go figure it out yeah so uh 2006 um you know i bought my first uh rental property dove into real estate pretty aggressively like i do a lot of things leveraged some lines of credit uh did a little bit of everything some things worked out some rehabs worked out some didn't but what i had no idea what i was about to do was start buying a bunch of real estate and leverage a bunch of stuff um right before one of the biggest crashes ever in the history of real estate um but at the same time that that was happening um you know a goal of mine was to find real people that were really making money in this business and i was just very blessed and thankful to uh be at a local real estate uh meetup back in 07 and o8 i met some guys uh partners for payment relief a mentor of mine dave van horn john sweeney and bob paulus uh very successful investors you know they were forming a partnership uh started seeing what they were up to they had their mentors speak one night at this group and it just all started clicking that you know this was an opportunity that was starting to open my eyes up so at that moment i just you know i continue with other real estate stuff but as some stuff worked out and some didn't it was you know me investing in their fund uh buying my first non-performing and re-performing second in 2008 um and just seeing the opportunity and it all wasn't perfect i don't think you know they all didn't work out um but started meeting other investors and local um local meetups um that we're starting to do it too um there's a bunch of us that are still in this business pretty deep that we utilize and leverage each other um for you know um services um questions uh product um you know good buddy of mine fred moskowitz um i met him just when this whole thing was starting to take off him and i are very good friends now he's at a great level um deep to everybody knows her um you know very good friends with deepta she's in the same area as me um and you know like 2010 um tom dunkle and joe downs usmr big investors in this space um they were running a meet up at a camera plan which at that time was in blue bell they ran a monthly note group started attending that ppr ended up putting out a course you know learned that and you know about 2010 it was just you know the eyes were like i you know i got to put i got to put it in the works to get out of here you know i had a i had a wife with a teaching job and good security so that we could take the chance um you know a lot of people want this thing to be perfect before they they leave their nine to five to take a chance i mean i get it um but at that time you know i said you know what if it fails i can go back if it doesn't you know i need to do something so i left in 2011 after 15 years a lot of people thought i was nuts you know god bless my mother she was one of them like what are you doing but i needed it i had to go take a chance um i did that yeah um yeah right around the same time i did that i met some uh other investors um that were starting to dive into this business a little bit and they're like you know if we bought some notes would you manage them whoa i said okay you know maybe we can figure something out here because at this time i may maybe have bought you know about eight notes worked some out um track record it was man i was definitely um right place at right time a lot of times man with this with this storm um you know i was that poster child for ppr you know with their education and you know they utilize me and i absolutely utilize them you know here's a guy that you know took care of athletic fields for 15 years he's jumping into this business he can do it you can do it so it's amazing you know what we talk about a lot is knowing your strengths right and leveraging your strengths and finding those who are not so good at what you are terrible at right someone that's better than you find them and connect with them and let them do their special we also work in our strands um as most people know i do the more technical side right but bill just can figure things out from from dealing with an asset so for me i got into the space just to help a friend out um got into a fun situation i was just doing due diligence valuing assets and for me i did rental properties and got into that did the rear space like you did but what i found was that when we get into it we met each other right around the same time i think and you went towards second i went to her first what i mean obviously the reason you probably went through seconds is the fun you're working with but what was there anything else out there that seconds attract you versus first i mean it was just definitely the the newness of this whole business and you know i mean at the time that i met ppr and they were starting to bodies delinquent mortgages you know my mind was never even on the facet of delinquent first mortgages um you know just being a guy that was really starting to dig deep in soul search you know i understood real estate and i always understood you know i bought my first my primary home i bought in 2002.

so you know i understood the fact that you know you took a loan out on a property you know and then in 2005 you know in a four-year period my house value went up and i was able to refinance and pull some cash out so you know i understood that there was always loans back in properties to a degree but when i when these guys were starting to talk about delinquent seconds and you know i saw their mentor speak i mean i i just wasn't even thinking about delinquent first mortgages yeah but for me it was a little different i was in the first mortgage space right i was dove deep into an a a fund that at that time funny and no it only had like 10 million dollars of assets um they're much much three billion dollars now but we're just doing valuation assets and for the second space it was cheap i mean when we first got started we're buying first at like 30 cents you're probably buying seconds around five and what about you doing workouts you feel is your strength what are you good at with that what i'm good at in this whole business is i learned not to smother it um it's easier said than done you know when you buy two or three loans you're trying to figure everything out and there just isn't a lot to figure out um you know we want to call everybody we want to put tons of pressure on attorneys and servicers and we're you know we want to call these homeowners every day and we want to force them to pay us and they're just the toughest thing in the second space is to learn how to be patient yes and a lot of times there's just no way to push anything along um you know i i think why i was so good is i didn't over analyze stuff i kind of just i listened to what successful people were doing and i ran with it you know i didn't i wasn't scared when people were telling me yeah you could buy a no equity second at this price and it still may work out um you know i didn't fully understand real real estate numbers at the time you know arv and you know all the numbers making sense or it wasn't a good deal yeah um you know i i think um you know even before i was in real estate and and you know one of my true skills is i'm a very organized detailed individual when i took care of these athletic facilities i mean i you know i took care of a school with you know huge facilities um you know i overs i overseeing people you know taking care of my athletic fields um you know from watering them to fertilize and all that stuff um you know setting up sporting events taking down um yeah you know running a shop for kids uh i ran an athletic laundry room so there was a lot of that type of stuff that i was good at and you know even before real estate i was you know always decent with finances and and you know learning how the ways to trim the fat and you know keep some money in my pocket and do a little bit of investing and saving and that type of stuff there are definitely some you know key components um that that make me successful in this whole thing and uh like i said it you know just not it's it's it's a hard thing to think about but it too many people smother the business yes instead of letting it breathe and you know it it's sometime a rush to get success um and oftentimes that caused the problem right if you're rushing borrowers and you're putting pressure on them they get worried because their story is i didn't wasn't able to make the payment or whatever the situation is um you know we we both have horror stories about borrowers and we don't need to rehash them but i i found like you know dive into that property before you get it and learn as much you can about it be organized about the due diligence and make sure what you're buying is real so you know we're going to take questions openly i just want to do a quick intro with bill robin had asked a question in the beginning how do you get past the minimum wage customer service rep when you want to get an update on the first lien from the senior lien holder sometimes you don't know it i mean this is just going to shock people like this is kind of what i'm talking about like you know i buy a lot of what are called unknown on the first mortgage you get them cheaper delinquent seconds that are unknown on the first i can't absolutely confirm what the first mortgage is i don't see any records on title or anywhere i go that the first is actively foreclosing they didn't file a notice at the fault you know we're seeing an old credit report that's at least giving me a balance but i don't 100 know um you know it's not a perfect answer but you know people are going to be surprised i mean i own over 30 reperforming seconds and i can't even tell you last time i checked on the first mortgage and it's so funny because for us people are shocked when we thought the second say i don't pull credit reports i never do you know people say why not you get to learn about the borrower at the end of the day i don't care and i can't care because me knowing the information it ain't going to change anything if someone wants to drive a mercedes benz because they want instead pay their house payment i'm not going to convince me otherwise right and that's what i do every like every year or two i'll shoot through the portfolio check the first however i can um but i mean when i first started this business it was like with your non-performing and your reperforming seconds you need to be checking the first once a month again and you know so sometimes you can't even do that i mean one of the things that's interesting is as i maneuver through this business and start doing business with like bigger players in this space or just different people like it's interesting what they think i really do and what i do i mean this thing is so cookie cutter i mean you know when i start my whole process is set up to to just figure it out like when i start working a non-performing second like i'm just going to force the hand i mean eventually if if we find out the first is non-performing you know we're going to have to make a decision what we want to do and where we want to go but if somebody gives me a file and says to run with it i mean i'm just going yeah it's going legal we're getting an attorney involved right away the attorney's getting involved right away to check the collateral and plus now we're on record and we're going to town and as we move forward things are going to things are gonna come up you know i you know i may not even ever check on the first until until i get it resolved um and at that time you know we'll get the authorization we'll get the first mortgage statement um and and we'll go from there it's funny you you share something i have in common um and i feel guilty until i talk to you probably about five years ago about this people ask you know are you using all these kind of different crms different this different that and i felt guilty when i first came to you and said listen you know i don't think i use any of these kind of fancy dancy products i use spreadsheets i use a different you know a free trello board and i track things just differently because i don't need all this fanciness because what i do all our loans are performing or not performing everything's tracked as a date that we have to follow up on the organization's there i you know those are getting in don't need to buy all these systems just have your network in place have a spreadsheet and really just have something to remind you when things are due i mean salesforce is overkill for most of these people right and you know and with the delinquent seconds you know like you said i mean you know i'm an excel dropbox guy i'm very simple you know i have my setup you know right now i'm looking at three monitors you know i need my monitors i like my workspace yes that's one thing i tell new investors if you're gonna get into space get multiple monitors you'll never you'll never ever go back to having just one it's just i could use a number four i mean it's funny because i mean i used to work off one then i got two and then three it's like you know i couldn't even imagine not having three right now yeah so you know robin asked the follow-up question uh when you get started bill what part of the asset or note made you want to buy it what attracted you to that loan that you want to buy it if you weren't looking at the equity position um the price point you know and it's you know like we said when we started i mean we're buying these things at five to 15 cents and you know it was you know buying off ppr they wanted to put you in a good position they wanted you to succeed um you know now it's different you know you gotta you gotta sort out the trash um you know i i think you know you need to figure out what states you wanna go into um and right from there go you know if you know about bankruptcy you know do you want to buy a chapter 7 discharge you know do you want to deal with something that has been in 13 or out of 13 you know start doing a little elimination that way um there's no magic answer i mean it's just you can totally over analyze stuff i mean you could do so much due diligence on a borrower and at the end of the day maybe that borrower has somebody that has money you know there's so many weird exits in this business and you know the cliche answer is you know i want to help homeowners out i want to keep them in their house like i get it like that's what i want to do but the end of the day you know sometimes it doesn't work that way and you know you have to get to sale yeah you know and then as i started taking these delinquent seconds with no equity to sell and we were starting to get bought out by third-party investors that either knew what they were doing or didn't know what they were doing some were mistakes but some you know like i learned in florida they wanted the land it had nothing to do with the numbers on the house they wanted to land they're going to knock that thing down and build up something big and as i just started seeing all these exits like developing and you know the closer i got the sale the more these people came out and the more money they had and and you know we jump into this space and we fear the word foreclosure um and you know when anyone hears me talking foreclosure they think i want to take the property i never want the property matter of fact even when i go through a sheriff's own in the eviction process i don't even start thinking about the property and this is where it was like interesting working with some of these and big investors like as i was getting close to sale they wanted me doing like values on the property like they really wanted me to get a fielder out there and i didn't want anybody else involved until i actually had to lock the homeowner out and at that time that's when i'm getting a real earner involved because some of these don't work and some of them do but there's so many avenues to make money that we scare ourselves as investors right there's no equity why would i foreclose i get it like i never want the property but i learned that there's so many buckets that i'm going to get paid in and if i don't push the envelope or play the game of chicken yep never going to see those paydays i mean some of the craziest paydays were on you know seconds with no equity in florida like i said because they want the property or yep just you know stuff like that um we get so stuck and fixated on the word equity um as investors and and we we think the word equity means money well in the mortgage space it doesn't always mean that there's people with plenty of money that don't have any equity in their property because they over leverage it or you know i mean i'm an investor dude i got no equity in my property you know i do that as asset protection but you know you say that an interesting point because you know we often look at equity and say this is what it is and sometimes we just don't know all the details of the situation right we may go into a situation where we have ton of equity and it doesn't make sense why the borrower doesn't sell the property and you evict the person who has equity and still doesn't sell the property and the answer is there is no answer we don't know why it happened you know the hundreds you know hundreds of thousands of assets i've been touched and been involved with and and we've owned and traded i don't see that there's no common sense in space there's no rhyme or reason why borrowers do what they do as you probably see a lot of gurus like i've seen over the years they say well you have to go into this note with a game plan and you have to bid it with this game plan who knows what the borrower is going to do or not do common sense is not getting involved here this emotion this isn't money for them it's sometimes emotion a grandma who doesn't want to let go of a house doesn't want to move that's it and you know we're even dealing with that there's a lot of these loans out there people are seeing like 70 and 80-year borrowers and they're nervous about it but what i'm finding out is a lot of the kids are now in the property yeah i mean we we're getting a 60 000 payoff next month i mean next week um you know this was bought as a second but you know all of a sudden we're in first position stuff like that happens um and it's the daughter that is in the house the father's deceased and she had no idea that the loan was even on the property well she now had to go to a local bank and she got a 60 000 loan and she's paying us off so it's amazing you know that loan could have been easily you know passed over by a lot of people um because number one it appeared to be a second number two there was a very old bar on the credit report um one thing that i've learned is it's just a like you said it's it it's a game of emotion and like i get it like equity is important like when you sell a re-performer or you're trying to leverage it um but i also watched a whole market cycle like i watched a lot of these no equity deals that i worked out back in 2010 2011 and 12 are now full-blown equity deals that have been refinanced out over the last three years i mean yeah everybody forgets about that like we're so fixated on the you know the early result and it's like it's such a it's it's a game of a portfolio and it's a long term play like snapshots are not should we not be in the space we should even take a snapshot of today and say this is what's going to be in two years we absolutely there's so many things have changed in two years and not even just property values in the collateral space in different avenues um we get a lot of our assets i hate to share too much of it but we get a lot of our assets from investors who want to get out who are hey listen dave we know you buy assets all the time and blah blah can you buy these assets i don't want to sell them off any kind of exchange dave give me a number that works and they want to get out because they get lost they get confused they went and just jumped in without education and they get lost so i think that most of the people get overly scared and so reach out to other investors you may find that they have assets they want to sell just because they don't know what they're doing um that's one of the most common questions we get is you know calling banks and getting assets you know from banks i never have you heard much success from people buying calling banks and getting assets from them i bought one one delinquent second back in 2012 from a bank in new jersey but besides that i have never called a bank or and it was somebody that we knew that kind of put it in our lap yeah but nah absolutely not um yeah and it's what you said i mean a lot of the stuff that i capitalize now on are what i call tired no buyers or just people for whatever reason they got other life stuff going on that they need funds for and they want to move an asset and because they know your credibilit....