Outside the Box Note Investing Strategies | Real Estate Notes Show

Episode: Mark Pantak on "Outside the box" Note Investing Dave's Goals and Plans: - Working on CFD stuff with other things going on - Did an outreach to brokers about 3 weeks ago to get off-market assets - Reaches out to hedge funds when they send tapes Nathan's Goals and Plans: - Put in 8-9 bids last Friday and waiting to hear back - Has backup bids in case primary ones don't go through - Uses combination approach: both reaching out to people and being on automatic send lists Key Recommendations: - Pick one strategy and commit to it - there are many right ways to invest in notes - Overcome introversion through communication training like Toastmasters to build confidence - Focus on people skills and relationship building as foundation for success - Evaluate asset condition as primary factor, not just borrower creditworthiness - Consider worst-case foreclosure scenario when evaluating note deals Topics Discussed: - Asset acquisition strategies - reaching out vs receiving deals automatically - Working with brokers for off-market deals - Note investing returns and yields compared to real estate - Risk management in real estate and note investing - Geographic market selection and analysis - People skills and communication importance in real estate Guest Insights: - Real estate is fundamentally a people business and risk management business - Note investing can yield 15-25% average returns with 50-100%+ home runs vs 8-15% for apartments - Worst-case scenario planning - focus on asset value if forced to foreclose - Best notes often have location challenges that scare others but have strong local demographics - Can structure deals to minimize taxes and note discounts through proper packaging Episode: Mark Pantak on "Outside the box" Note Investing Guest: Mark Pantak Summary: Mark Pantak shares his unconventional approach to note investing, emphasizing that success is built on people skills, strategic networking, and understanding that real estate is fundamentally a people-centric business rather than a transactional one.

Main Topics: Off-market asset sourcing and deal flow strategies, Broker relationships and networking in note investing, Overcoming introversion in real estate business, Multiple approaches to real estate and note investing, Risk management and people-centric business philosophy, Geographic market analysis and selection, Diversification across asset classes Key Takeaways: There are many right ways to approach real estate and note investing - pick one and execute it consistently | Building relationships with brokers and networking contacts is crucial for accessing off-market deals | Overcoming introversion and developing communication skills is essential since real estate business is fundamentally about people | Real estate investing is actually a people business and risk management business first | Consistent networking and staying visible (like engaging on social media) keeps deal flow opportunities open | Geographic market analysis during college can inform long-term investment location decisions Keywords: note investing, off-market deals, broker relationships, networking, deal sourcing, risk management, communication skills, asset classes, market analysis [Music] hey everybody Dave putz here from jkp Holdings longside me as always na Turner how are you doing how's going very good very good cool um I know last week uh we were discussing some stuff you're going to move forward on buying and whatnot I'm still working on some cfd stuff which had some other things going on on our side yeah what's been new with you this week I'm waiting to hear back on some bids I put in uh my I think it was actually last Friday I put in eight or nine bids and I'm just waiting to hear back on those I should hear back today so we'll see see exciting Friday that's awesome I got some some backup ones just in case those don't go through so we'll see how it goes all right so um are you reaching out to look for assets are you what are you doing to typically do are you getting us sent to you or are you reaching out right now a little bit of both um and it you know it varies there there are times it's matching up the the inventory with the money and so for a while everything was tied up so I didn't have any money to spend and then I sold a bunch of stuff so I'm ready to go again so then I'm reaching out to a couple people and then I'm on some other guys list where they just send me stuff automatically so it's a little bit of both cool I know um we did a reach out just about three weeks ago just to get to the off Market stuff hitting people that we typically hit um kind of segue R to what we're talking about today um those people who may do one off here one off there are Brokers but legitimate Brokers where they're actually finding assets yeah we have a few in common that we reach out to and those people actually are really really helpful if they know what they're doing right find the deal make sure it's helpful if they know what they're doing right find the deal make sure it's secure um so it's interesting so for me you know we're reaching out to most of the hedge funds send those tapes when they're ready to send them yeah right the seller send them out you can't reach out and prompt them to send some stuff to him um but people like Mark and people like him we can reach out time to time because they forget about us because they're not built to do what the bigger to yeah and I do the same thing people will ask me if I've got anything for sale and I say you know not right now hit me up again in a month because I I don't have a a you know a set maning list that I send out to maybe I should or could but I just said know just hit me up and see what I got yeah so segue right into what we're doing today um yeah most people here uh n is R right aark so AR Panic so I want to say that you know and I didn't tell before we went live that I think Mark is probably the one person that likes more posts on Facebook than anyone in the world I and he's prompt too which is awesome he's involved in everything and I thought I'd be like kind of s and went to a different group and posted something literally he was with the first people to like it so he is full of information full of networking which is amazing um so it was interesting when Nathan brought up bringing mark on on the program today that his background is different from what we do but he understands what we do as well yeah but he's doing it in a way that most people out there are not and can be replicated for a lot of people out there yeah yeah and yeah and Ray and I talked about what was that like a year year and a half ago and uh had really nice conversation and just uh kind of just comparing notes about how we do things and one of the things that we just discussed here before we started is there's so many ways to do this and yeah there's so many right ways to do it and so you know there you can do almost anything you want there there are some wrong ways don't get me wrong but uh but there are so many right ways to do it just pick one and do it and and go for it that's that's kind of the introduction for for I call you Ray but whatever yeah so those people are online here watching us live um Mark Ray give us a little background who you are where you came from what real estate you done and where you're at today yeah just little quick bio so I grew up in Michigan and uh I'm sure Nathan can appreciate being a Canadian there that we always appreciate enjoy our Canadian friends because it was so close it it was closer to go to Canada than it was to Ohio yeah crossing over to Windsor and uh going to Ontario the outdoors and all that kind of stuff being in Michigan always love that however the cold I didn't have a lot of use for that cold and snow lake effect snow and my whole life I was like Someday I'm getting the heck out of here and literally I graduated college on a Saturday left on Sunday and I was in Dallas Texas on Monday and could not get the heck out of Michigan fast enough plus also just watching what was going on in Detroit and how it was at one time and see the decline and I literally as a college student said last one out of Detroit turn off the lights because I said this place is going to file bankruptcy the way they're going so I just even even in you know college I was looking at business and cycles and different things like that and I also even making my decision I noticed a lot of people when they left Detroit they went to Houston and Detroit had this boom bust with the Auto industry Houston had this boom bust with the oil industry so I sort of evaluated and I was looking at California but geez back in the 1980s a basic house was 250,000 I'm thinking how could they go any higher that's so expensive and and I could I mean Austin Texas in the 1980s you could get a house for 50,000 you know what they're going for today those same houses right yeah a basic house 400,000 plus yeah and so uh anyways I got a guy who's a neighbor here uh where I'm parked and unfortunately I asked him please don't Bank the Bonk that horn oh no no would be no problem and so it's like H anyways so but back to the point the point being that I knew that Texas was going to grow and I looked at Florida I looked at California I looked at Texas and between the three I said what Texas is in the middle and then I looked at the cities Austin Dallas San Antonio Austin and I decided on Dallas so I first went to Dallas and I was shy and I was not only so shy with a college degree I started work as a security guard working 11 oock at night till 7 o'clock in the morning so I could literally avoid people and I work for minimum wage yeah so I I've had I the thing I've seen with this business whether it's real estate or notes or anything is there's people are introverted and they're so introverted that they avoid people and I've had to work a lot to overcome that because most of my business comes from other people I know that might be shocking and some people like to be safely behind their computer and avoid talking to people but the number one thing I tell people is it's a mindset that who I'm going to help has a real estate situation or a note situation that I'm G to have to talk to them communicate so the number one thing that changed my life for me was something called Toast Masters and and Toast Masters really help my communication skills my confidence and things like that and then I also as I study reading all these books I learned about the importance of sales and communication and negotiation influence so I'd say if you're ask me what business I'm in are you in the real estate business are you in the note business are you what business are you in I'm in the people business I'm in the I'm in the business of risk management because the biggest risk is people and so I'm looking for people problems that I can have a unique perspective and I can provide a solution that normal Solutions don't work and so I I start out just focused on single family homes because it's simple now I've gone on and I've done multif family and done commercial and made a run at some multif family um not some multif family but trailer parks things like that and I I I do like different asset classes but and people say to me that know that I do Apartments why don't you just do Apartments I say well here's the thing understand I often get a better return on a simple note than a house than an apartment than anything else there's things I can do with notes that you can't do with anything else in terms of the creativity and leverage and then on top of that put in a raw Ira so so the combination of all these things where you know an apartment you get excited you get 8 10 12 15% return maybe a home run would be 25 my average on notes is going to be 15 to 25 and a home Run's going to be 50 to 100% or better so that kind of yields and re and that's is just first I mean you go into some seconds and it's like but but the opposite of course is those seconds that didn't turn out and so so but I like performing first nonperforming first performing seconds non-performing seconds I like all of it if worst case scenario I'm going to get the asset worst case so that's the difference with my set mindset is I came from I looked at the asset more than the borrower now now not people tradition is looking at the borrower I look at all I look at all because I'm thinking to myself worst case scenario I'm going to foreclose yeah how long is it going to take how much is it gonna cost with the condition of the property and so hm well if I can get this property and I have to foreclose and they trashed it and everything else I can handle that I'm not afraid of that and then I could potentially wholesale or better yet I'm going to turn around create a note so part of my whole mindset and this goes for apartments too geez if I could get in a second lean the right second lean in a hotel in a in a commercial property in in a apartment complex where I wouldn't mind own the asset that's the difference fundamentally with me and most note investors I know because the bank most note investors they just want that income in cash flow so I play Both Sides is what I like to say play both sides and and I literally have found my way into notes through contacting somebody who is in foreclosure and again and then specifically I just talk about one of my little niches I like so one of the niches I found that I like is an area where you've got there's Urban there's suburban and there's rural so I'd say there's three areas most of the time the people they like to not they live in the suburbs and they like to buy a note in the suburb well those are some of the hardest ones the thing I learned early on was a note with a little hair on it part of the hair on it is the location so so so some notes that would scare people I'd look around I go well but there's some good people that live here in this minority area and I literally one time I worked with a guy in San Antonio and uh he was buying a hundred houses a year then he'd sell these houses on seller finance and sell the notes and he was making a million dollars a year nice so I I actually end up coaching him helped to make an extra $200,000 by restructuring some things with what he was doing because he's paying too much in taxes paying too much in the note discount and he just didn't package things for maximizing minimizing the discount and taxes and everything else but that was part of my finance background with my mindset so here's a guy who was real strong with sales and marketing and was doing a 100 houses a year but he's paying through the nose borrowing money discount taxes everything I I saw an opportunity there so I really helped him and that led to because I wasn't doing those low-end houses at that time my houses in Dallas I was doing were in the 80 to 150 range was my typical house so one of the things that happened for me was I go and I'm in I'm in San Antonio and then I go to houst I go to Corpus Christie excuse me I go to Corpus Christie and there's areas in Corpus Christi now Corpus Christie is about 86% Hispanic there's areas you know there you know and so what I learned is I've got a lot of black friends that their parents told them go to college get an education and they did and they moved to the suburbs I've got some good friends and good clients who college graduates and successful investors now but where they used to live is the areas where I buy right and what happens is when people move up and they get you know college degree and education stuff like that they want to live in the suburbs they want to live the better areas so what I find is there's these vacant houses and and along with these vacant houses I would focus on marketing too and they would be probate and theyd be I love probate as a way to find assets because it right now think about this for a moment the courts has been backed up because of coid right yeah and the probate is a legal process that has to go through a court process so there's a window of opportunity right now with probate that there's this backlog and so most note investors most Real Estate Investors they don't deal with that so that's a little unique Niche that I really like and and what I've been able to do then is I had somebody refer me there's an area you know there Houston Texas and then I like the secondary markets so we got an area called Bowmont which is about 120,000 population Port Arthur about 880,000 population and then there's little towns in between well I I got this call one day and this guy asked me if I wanted to buy this property long story short they wanted about 22 25,000 and it was in the hood as they would say but again there's a nice brick house this house with what's happened now the brick house next door flooded when they had all this flooding happen in this area so they completely remodeled that this house is like on the market for $180,000 next door now two-story brick nice the house that I got is like the worst house on the street little frame shotgun with the shiplap you know built to withstand hurricanes right when the hurricanes come the other houses get damaged and this house is still there and so they were wanting 20 something I said well you know you're telling me the electrical works and the the Gas Works and the plumbing works and everything but if any of those systems work I got to deal with the city and I got to get permits and give me master plumber and everything else electrician it's gonna be expensive so they wanted when I even got them down at least 10 I ended up buying that house for $2,000 wow now when you can buy a house that's got good bones and still standing for $2,000 how high is your risk very I mean you can't even buy the dirt for that right and then on top of that there's other houses that are bigger and nicer and brick see one thing I got real clear about there's a shortage of affordable housing yeah in this country yeah and it's not going to get better it's going to get worse we know lumber prices have gone up you know the prices of everything gone up so one thing that will always be poor people that's not going to go away yeah and there's going to be lowincome people there's going to be people that make minimum wage that work at Walmart that work at McDonald's that work and they got to live somewhere so these lowincome people they need housing and they're good people they just happen to live in a high crime area and and it's a small percentage of people that doing the crime most the people have families they care about their families they want Clean safe and I'll never forget the guy I was working with in corporate chy Sam I've been used to these $100,000 houses in Dallas Fort Worth where we tear out and put a new kitchen in new thing I mean we' remodeled the house right update everything so one of the first times I go and I'd heard one of these gurus and it said like the uglier the better right so I'm looking at this house the point I go oh well look at that one that's about ready to fall over and he turned looked at me like I'm crazy said why would we do that one it's close to a tear down we could do this one over here and it's close to rent ready oh never thought about that but you know the guru hype about all this stuff of course and and that really was a turning point for me because I've been thinking how in the world is he doing 100 houses a year we're doing ugly houses it's because he'd cherry-pick the better houses in the better areas and the bad ones he'd let go and the better ones were I mean when we bought these houses the people were asking 25 35,000 for them and I'd get them down to 15 yeah my average purchase price in one of these houses and this was like 800 to 1200 square ft a simple 2131 and I'd buy it for all cash for 15 I'd close on Monday I'd have the crew start we're doing carpet we're doing paint I remember first time I look around I go well aren't you g to replace the sink no aren't youna replace the the countertop no what what what are you g to do here flooring and painting that's it it's GNA be better than the place they're renting yeah go wow never thought about that that's brilliant simple and and they're so grateful because the place that they were living right now in renting from their slum Lord at 450 500 550 a month yeah for the same monthly payment they could buy our house yeah and this time of year this time of year January through April tax refund time yes they'd get a $44,000 check and they could take their $4,000 check and give us 10% down we'd buy it for 15 we'd fix it for five we'd literally close on Monday it'd be done by Friday and I would have on Saturday a group of nice Hispanic people whole family begging me please seor sell to me yeah I say sorry whoever's got the most money sort of a bidding whoever can give me the largest down payment and so the interesting thing is the hardest thing was not finding the property the hardest thing was not finding the buyer the hardest thing was working with people who did not have credit yeah and were used to paying all cash and they didn't have records so I literally I never forget one time I had to sit down with this one guy and help him do his tax return because he hadn't done his tax return and and and just Gathering up you know records paying on cars and whatever records there were you know help them to put together a package so we had something we should show our note buyer and then along with that we had potentially five different note buyers that were all interested and we typically would sell it for about 12% face amount at that time and then with the discount now let me just finish out the numbers so we' sell it for 42,000 we'd get $4,000 down that creates a $38,000 note we DET table funding so I'm sure you all some new people here don't know what table funding is but basically we have a note buyer that before we close the transaction they are using their own paperwork they have their attorney their paperwork everything else so it's the way they like in case they want to foreclose and then that $38,000 note that's being created they fund it at closing and buy our note so there's a big discount because it's table funded there's no payment history or seasoning and so we'd sell it for about 28,000 but when we sold that $338,000 notee for 28,000 at a 12% face yield they'd be pretty happy with that return on a performing first it just didn't have the seasoning but we got 28 plus 4 gave us 32 32 less our 15 less our five was 20 we had about 2,000 holding and closing costs everything went so fast literally we'd close on Monday it'd be sold on Saturday that's awesome so we get some question here yes um there was one thing about taxes you mentioned earlier that you're teaching others how to save on taxes but one question Marco just asked was you know how are you underwriting these borrowers in ensuring that they have the ability to repay good question good question well back in the day we would just do our own underwriting and now of course with the change in laws we have an rmlo so and I'm very upfront with people because back in the old days we could take anybody we liked and and and again they could show because some people don't claim all their money if you know what I mean especially in some lowincome areas or they get a second side hustle where it's like they got their truck or they got their this they got they got whatever side hustle and they're making sometimes as much or more money on their side hustle as they on their full-time job yeah and and so that became the problem then because of literally had some some people I said well sir you need to uh put records together if we're going to sell you a house we we can help but you're gonna need to have six months of Records you're gonna need to have tax returns you're gonna need to you know and so and and here we got Nathan over here he's an rmlo and let me introduce now he's going to charge you $200 and uh but but it's an educational process when you're in the low end about the requirements now that there are to make sure everything's done right but uh we always make sure we want to be compliant with Dodd Frank and the Safe Act and everything and then you know even the whole thing with generating owner occupied properties one of the reasons why I do stuff like this and network is because here's the deal you can do up your first three in Texas with no problem after that there's like you might have to get licens or scrutiny and different things like that however if Nathan over here has never done one before and he's excited guess what I happen to find this deal I say Nathan this is your deal oh really that's great yeah we'll have your entity and everything and then once everything's done my Roth IRA will buy a tail oh really that's so nice of you and then you know of course it's not cost me much for the tail he's got most of the money and then depending on his strategy he's created a nice monthly income for explain for those who don't know what tail means okay great so I'll just finish the thought here so he's got the front end of the loan and let's suppose it's a 15 year and out of the 15 years he's got the first 10 year or 120 payments so he got the 120 payments and then I take the next last five years of the 15 years and I buy that in my IRA so I have an interest in the property but I didn't originate it so because I didn't originate it there's certain laws that I don't have to deal with because it's a first time for him so that's why I like to find new people all the time that I can work with them to originate I still get a piece of the note but I'm putting it in my IRA and my tail and and there's different ways of doing it so tail means that there's the front part of the loan and then I'm buying the last 60 payments of the loan of the whole 180 he gets 120 which is the first 10 years I get the last uh five years for 60 you're buy you're buying a reverse partial pretty much you know you sell partially you sell the front end um and not the tail um yeah any reason why you're not buying the first part of the notes well I will I will do that sometimes I will do that sometimes but typically it's one that I've created myself and for example I I'll just give you I got a lot of different case studies that I could do so part of the thing I see the opportunity right now because a lot of people are saying geez I can't find notes I can't find houses I can't find apartments I can't I can't find any kind of deals yeah I go well there's always deals and so you know what most people do at a time like now is they just sit on their money and do nothing I go no never sit on your money do nothing just get creative and find little niches and opportunities so so the first Niche opportunity I found is go rural get get away from the city and there's and here's what we're saying it doesn't matter if it's Texas or Oklahoma or Arkansas or Mississippi or Alabama or all through the southeast over to North South Carolina up into Kansas and Missouri if you type in you're going to see the population rural Kansas is going down now it's not going like straight down but it's incrementally going down and what happens is in small in Texas too we hear Texas is booming but you go out away from the big city and the kids they don't have jobs so what do they do they leave and they go to Dallas they go the big four cities that's where they go much of the time and so when they get a college degree there're more money in the bigger city now so there's it's like this little town Seymour Texas or Vernon Texas I'll use Vernon Texas because it's the county seat so part of the criteria I'm looking for is stability because I know the county seat's not going to go away it's going to be there and so you got banks are going to be there attorney's going to be there Courthouse going to be there but they also typically have a Walmart so so Walmart people are coming from all over because of Walmart plus they have a McDonald's they've got a holiday and express they've got a they got a college even a community college they've got a hospital so I'm looking for basic infrastructure in this small town now the population might be between 10 and 20,000 in the small town and most people oh my gosh no I'm not going to buy there well there's 10 20,000 people that aren't going anywhere for the most part and you mean a few are going to go but a lot of them are stuck in a lot of renting and these people that are renting they'd buy if they could go ahead so where are you finding these assets I'm presuming you're not work with agents I'm presuming you're finding these in a different are you doing mailers what's your strategy in finding the property great question remember how you start out by talking about how you see me on Facebook all the time so so there was ways I did it in the past and literally what happened one day is somebody contacted me and said hey um I see you buying Vernon and I was like what how's anybody know he said I found you on online because I posted a little ad there one time and so a wholesaler was from Dallas and trying to wholesale this property and so one of the things that happened is they did a search and they came up with me as an investor because in these small towns there aren't cash buyers right yeah you know you get two hours away from Dallas Fort Worth out in the middle of nowhere and you don't have investors and buyers they want to stay close in so there's very little or no competition so the guy said I got this house and um I'll sell it to you for 15,000 immediately I said 15,000 sounds a little high how's the condition well needs some work what's the story well the guy died he lived there forever so it's in livable condition but he died how how long did die oh a couple years ago what's the story well and so we went back and forth and I said there's no way 15 and he kept down down down until finally he said well I guess I can't find anybody else to buy you say you're interest I tell you what just um you go ahead and talk directly to the owner so this is what often happens for me is that somebody finds a lead and they don't know what to do they don't have my experience and and then and they're too high I see this too high too high too high and so and now also I do it from the standpoint too of even higher priced houses where they're offering for $100,000 house 50,000 cash and they owe 60 well those I take subject to the existing loan or do lease options so I play Both Sides so if I get a bigger nicer house with existing loan I'll then buy that and then I'll wrap it and sell it with seller financing so so I I've got a strategy for low priced houses medium priced houses higher priced houses but just def finish these small towns most of the time in small towns they 50,000 or less the typical house I'm getting and think about it in these small towns most people have low income in these small towns they can only afford $450 $500 a month in in in rent and for what they can pay for rent they could buy my house and and again they get their money from tax refund just like I did in Corpus Christie I found in these small towns there there's good people who have a family and they want to have a home that they own and they see themselves as throwing away money for rent so if I can get one of these good people who are willing to scrape together a small down payment and and again most of the time now I'm going to hold on to it I'm going to get some seasoning on it but even I've got I got private lenders I got a lot of different people so I might do a collateral assignment and I might just go on the collateral assignment go ahead and borrow against it from somebody I know and I'll personally guarantee it because I mean I'm borrowing maybe 10 or 20,000 against this house it's worth 40 or 50 so it's a loan to value very low risk so are you using kind of marketing to find properties as well yeah from a standpoint of marketing the main thing I found is I would literally go ahead and have a house in a small town that's for rent or for sale and somebody be calling me and then I'd say I got this going on right now in multiple small towns I'd say well I tell you what um this house doesn't fit or this house is already rented or sold whatever but there's lots of vacant houses around town how about you work with me and you drive around town and you get me phone numbers and addresses I I recruit bird dogs that live right there in that town and they bring me photos and they bring me a list and I can skip Trace so I'm constantly in my mindset how can I leverage how can I leverage other people now the other thing of how things are gone in the old days we used to have the local paper the small little throwaway paper and now it's been replaced by Facebook so literally each and every one of these small towns have now got a Facebook byell trade group and you can post for free in these buy sell trade groups so I post but I also recruit these other people to have them post because they're local people who know people and I find the local people who know people they get even better result and response but I was I was coaching training guy he just want to learn how to like wholesale properties and my goal was train people to wholesale properties to me and then I would go fix them and rehab and Retail them or sell or Finance them so I'll never forget this one day I was in uh Southeast East Texas Bowmont Port Arthur which is one of the markets I like about 90 miles right toward the border of uh Illinois or not Illinois Louisiana Louisiana and so uh I go and I said let me show you so I get on Facebook I go and I had a house I needed to get the grass cut so I said watch this so I post this free ad in the vendor area and I said hey I need somebody to cut grass right now I'll pay top dollar because the city's going to come charge me big bucks yeah please call me immediately and this is lunchtime I said watch this my phone blows up binging ringing and I take the call and I say hi what's your name Dave okay hi Dave and tell me let me ask a few questions here before I go too far how long you've been in business Dave five years that sounds about right how many yards you cut for customers you got about a hundred that sounds about right and let me ask um of those hundred how many are older people what do you mean older of like 50 plus 55 plus oh geez 15 20% really and uh how old is the oldest guy oh gez he's about 922 92 how's his health oh he's in Hospice hospice really what what else you got to tell me well he actually offered to sell me his house really now is this the house he lives in or another one that's vacant oh no this is another one vacant full of his Pack Rat full of stuff right older people pack W for the house the house not on the market turns out it's in the best school district it's a uh two three-bedroom two and a half bath 2,000 square foot house brick nice house in the best school district worth about 150,000 the guy who's the yard guy says he offered to sell it to me for 40,000 I go 40,000 for 150 that sounds pretty good and I said so why didn't you buy now think about this in Port nugget why didn't you buy I don't have the money does it need any repairs well about 25 or 30 okay and so what do you do when you're not doing yards well my dad he does painting and sheetrock well let me ask you question if I would pay you a bird dog fee of$ 500 to $1,000 could you introduce me to the owner well yeah and if what if I buy the house and then I pay you the bird dog fee I give you and your dad the work you make an extra 10 $20,000 on this well yeah so I'm always focused on the other person's incentive to them and I I didn't get that house for 40 sadly to say I only paid 60 for it but I made some money on that house bad and so so so I'm doing things where there's no competition and by the way this is right between uh Port Arthur Texas which is I would give too much information away there don't tell to I'm not worried about because they're not gonna do what I'm gonna do or better yet they're gonna try and it's not going to work and then they're gonna contact me say hey Mark I think it's gonna be better to work with you yeah and so long long story short it's the best school district between Port Arthur and bont and those two cities population is about 200,000 this little community population is 15,000 so that's one of the keys is I like these smaller communities but they're close to bigger ones yeah so your proximity to a bigger city is key superseding school districts superseding everything just outside that rich area that they can't afford but they want to where they work at well and and a good example too you got Waco see see you got the big cities the big four you got Dallas Houston Austin San Antonio you ask anybody those are the cities they think of they don't think about B Port Arthur they don't think about wit stall Falls you people think about Waco now but you know they got the TV show there but but you go an hour outside of Waco there's a ton of small all through Texas all through Oklahoma all through Kansas I'm talking to a lady right now she's retired and so she lives in Chase Kansas Chase Kansas population about 4,000 people I said she says I'm having trouble finding deals I said I can come to Kansas and drive around and I'll point out all kind of vacant houses all over town I can do that really interesting so you and I actually um what you're describing that that's that's how I got started in notes was we had really project very very very similar to that in Columbus Ohio uh and then what what fell apart for us was when Dodd Frank was introduced and we didn't have a registered mortgage loan originator right we had to just Let It Go uh for the time being until mortgage originator started showing up but a very very similar uh take on it right you have a lot of energy my man I I you have a lot of you're you're flying over the coupe I'm impressed because I would say what you the overlying comments you're saying is that work right constantly networking constantly getting involved constantly being there is a lot of work and most people are waiting for it to be handed to them yeah and and and that's the thing with me okay I'm a big believer what do you love what's fun uh there's one of my mentors well Jimmy Napier who wrote a fantastic book called invest in debt and he belonged to a group of four people some Well Jack Miller was great he's passed on but there still is Peter fortunado who's fantastic in the note space and there's a guy named John Shaw so these guys back in the 80s and 90s were great influence and mentors to me and and the thing that I learned from Jimmy is that he do the house side or he do the mobile home side and he do the notes side he played both sides and that's a lot of the influence that I had was Jimmy in his book invest in debt but then also restructuring the debt and going back and Jimmy was a good old boy from shipler Florida and he he'd go to have his calculator and he'd push the buttons in and he hold up say now if I was to pay that much it'd be an error the whole computer I calculat would say error you say it' be an error to pay that yeah so I always thought that sense of humor but to me I learned from these guys someone called EF they said be an elf had do things that are easy lucrative and fun yeah so that's what I focus on I I want things to be easy lucrative and fun so I love to travel and and I love exploring inste acquaint small towns and hole in the- wall places to eat and meet people and have conversations and you know the good old boys who've been around who know everybody they're meeting there for breakfast at the good old you know Granny's Cafe and they've been meeting there every day for years and you get St strike up a conversation with them they know all the farmers they know everybody and they and see that's old school but I combin the old school with the modern technology with the Facebook so I combine the both together go ahead so I know that you're you're gonna be doing a course soon right and I want to get into that um so guys whoever's tuned in we'll be kidding on that uh to finalize the conversation but I think what you know Mark you're saying is that hitting the Avenues in a different direction using the people who are local to help you bird dog to find those vacant properties then you're going to go and Skip Trace to find the owner and you're going to be postc caring calling them or emailing however you're reaching them right or all three and and in these small towns everybody knows everybody people grew up there it's the old way it used to be in the big cities people don't know their nextdoor neighbor in the small towns they often still do and they know people's business and all I literally can walk down the street Miss Jones over there she knows everybody's business and I go talk over Miss Jones and she said oh yeah Betty Lou she was such a good lady she's in a nursing home which nursing home and and see it's I'm like a private investigator but it's fun for me so are you looking I know one of the things we're very similar in a lot of things we do um similar Outlook and stuff like that one of the things that that you do that makes me really nervous is these small towns and I think partially that's just because I'm not local so do you have like a radius like is it within driving distance or or how do you look at that well well here's the thing and you make a very good point because when I was younger and I still had this mindset it was a big big deal for me to go 90 miles right over to Bowmont Port Arthur and I'll never forget when I started in Dallas and people said well why don't you just work Dallas why are you going to Houston I said well because mindset wise when I come to Houston and I'm looking back at Dallas I got a different perspective and then I started working initially Dallas Houston Austin San Antonio going the Ria meetings and I literally would I put 50,000 miles on my vehicle because I was driving every month each of these cities hitting the meetings for networking things are so easy now because you can get on the computer and do zoom and do things are so much easier than they used to be and so big picture uh when we had this whole coid thing I met a guy and he was killing it the black guy that I spoke in Vegas at this thing and I'll never forget the story because I'm listening to him and I met him at his house in Birmingham in in a lowincome predominantly black neighborhood he's a black guy and so I'm in this house looking around it's a nice brick three bedroom one bath maybe 1,200 square foot house and I know even in the hood in Dallas Houston Austin San Antonio in the hood this house used to be 880,000 now they're going for 120 to 150 and I asked him I said what's a house like this sell for he said $40,000 I'm like what now keep in mind this is not five years ago this is about a year ago wow I go 40,000 for a brick house he said man this is a lowincome black neighborhood he said in Birmingham Alama I'm like and what will it rent for oh $7 800 I'm like holy smokes I could pay retail in cash flow this is crazy and then and then I said to him and and what did you buy it for this is this is where it gets really interesting oh I paid about $500 wow you did what what wait wait wait you how in the world did you buy this house for $500 well I bought a tax lean certificate you bought this house as a tax lean certificate well yeah because I'm black and the neighborhood's black and I know people I knew the person died and I checked with the relatives and I knew they weren't going to redeem and in Alabama here as soon as you get possession you can go ahead and clean it up a little bit and start renting it out immediately what yeah I got my money back first month whoa this is crazy so so and I've been studying this for the last year and so each state has its own thing but I've got with the right attorney now and I've been learning here's my next big thing and I'm is that I'm excited buying not just tax leans but tax deeds and then get a tax deed to where I can get the title clean but I'm all in for say $10,000 yeah and the house is worth 4050 well if I could be all in for 10 and it's worth 40 I like those numbers and I think my risk is pretty low yeah just to quickly kind of summarize what's the difference between tax lean and tax deed for those who may not know great great question well I'll just talk about Alabama for a moment so in Alabama they got a two-part process there's the auction when you don't pay your taxes because the look municipalities and schools and everything they need their money so they make a sale and at the sale the hedge funds are coming in and buying these a lot of times even over because it used to be 12% in Alabama guaranteed by the state now it's eight% but that's still pretty darn good and and it's three years of waiting in the Redemption time where they it's a tax lean certificate and so you'll only earn the interest and they can redeem in those three years after three years and this is why a lot of people don't like Alabama it now goes to a tax deed and you got three years of redemption time as a tax deed but quite frankly 90% of the time people don't redeem once it goes to a tax deed because you've got three years of accumulated taxes plus more legal costs and things like that so if I can get a tax deed that's only got six to 12 months left very unlikely going to redeem I got immediate possession and I'm looking for a house that is close enough deliverable condition I can get somebody in there renting it cheap and then once it goes over there's a a quiet title process you can do for an attorney for about 1,500 bucks depending so the whole take it all the way through the process and then these low-end houses I don't want to be a landlord I'm G to sell or Finance them but I'm gonna have a nice little income stream and especially with seasoning I can go ahead and sell those so are you familiar with Guardian tax no no they're they're big tax lean buyers in in Alabama I just paid them I just paid them last month and I got another check going out to them on Monday for redeeming taxes on on properties I foreclosed on and so they're they didn't pay on their taxes and so they're doing the same kind of thing they're big they're out of actually Nebraska yeah well the point is there's so many ways to make money in real estate and you got to decide what's the right Niche for you and so I'd be looking at these pools and I'd look at the numbers and of course the price over the last couple years kept going up and up and skinnier and skinnier on top of that you got the big hedge fund that then bought the smaller hedge and and by the time it's been stacked and stacked and stacked I'm looking going uh no these numbers don't work for me and so I just found going direct and and one last story if I can real quick because again when you work in these neighborhoods I came across I had a client again he said hey this lady she used to be in the nail business she claims the Vietnamese come in undercutter the truth is she got involved with drugs and so she bought this house seller her finance and now she's been paying on it it's 15 years she only had four years left and she got behind six months well by the way didn't just get behind he been stealing the utilities didn't pay the taxes didn't pay the insurance everything you can violate on the de of trust and so she's looking to try just sell for about 16,000 and and that's about the loan balance and she's going to get 500 to $1,000 and uh just walk away so I said hm so I looked at this and I go who who's the Lend oh it's a private individual ding ding ding yeah I said okay well well so so I I come in to buy the house get the house under contract and I say to the lady I need to talk to your lender because I'm going to see if she'll agree to me taking the loan subject to and reinstating and and so it's an older black lady who's moved away she's like on the border with Oklahoma and this is like on the border with Louisiana by by the co Golf coast and I explained to the lady well you're aware that she hasn't paid you in six months yes and that the properties in dis repair needs about 14,000 repairs well yes and she's not paying Insurance not paying taxes and problem problem problem problem problem and I got this little thought I go you know I can go with this subject too and reinstate the loan that'd be a good deal because I have the 16,000 paid off in four years right that's pretty good amortization or I should offer her cash yeah so so I explain all these problems and I said or I could just pay you cash and when I mentioned pay you cash you could have heard a p drop because she's thinking she's about to get a windfall of the full amount of money and oh oh sorry I went too fast no you see because you I'd have to wait you'd have to wait four years I can pay you about 6,000 cash and when I went from 16 to six you could hear a pin drop again and there's this pause and she's like oh well I'd have to talk that over with my husband I say well that's fine I'll wait go ahead and I hear this whisper whisper whisper in a few later she comes back to the phone and says we'll take it so so I backed into this note and we got it for 6,000 but wait it gets better number one I was able this client he had an uncle we were able to borrow $2,000 as a collateral assignment I even had to say the attorney you know what a collateral assignment is no let me explain it to you so we borrowed 20,000 and and actually I had him buy the note and everything I just walked him through the process but we used the 20,000 secured by the note we' not yet bought took out of the 20 six to the seller so she got that the attorney of course took every care of everything we had 14,000 left over that went an escro account to be held for after we foreclosed took possession to rehab the property because we knew right up front that the wholesale value to a buyer would be about 20 so the person who brought loaned the money his money was Secure plus we're paying him 18% interest who wouldn't want 18% but he was an uncle or something and then we go and I made sure before we closed that there was short-term insurance and for three months on that property and then as we proceeded to go forward and try to work it out with the lady she had a criminal defense attorney who told her not to talk to us and then he wouldn't talk to us she wouldn't talk to us so left us as no option but to foreclose yes so we go to begin the foreclosure process and the attorney's assistant missed it by one day and so in Texas it's got to be you know 21 days from the and all that so we missed the whole month but not to worry and again I was trying to work this to the student and everything else so to get all these excuses a month goes by we all know this in the business right about foreclosure right yeah and this is Texas for God's sakes where you can foreclose so fast and so she screwed up a second time and lied about it and the attorney felt so bad he offered to buy us out so we lost two entire months and then as we finally get the Foreclosure done the attorney who's the defense attorney criminal defense attorney files a a lawsuit against my student and yeah for for slander of title and uh he's freaking out he's getting sued I goes no big deal then it goes to a um what do you temporary restraining order it goes to a trro temporary restraining order so they got to go to a court and so he goes shows up he's even got a letter from code enforcement about how they're stealing and all these things they're doing and the judge says you know it's uh what they not not acceptable evidence because you need a witness he's like I can't believe it I said you're learning about the legal system there's a lot to learn and long storing short this whole thing goes and then I'm saying to him you know we only had this insurance for 90 days what's the status of the insurance uh uh well they're giving me a notice that's about to end and uh well we'll get it replaced I I can't because the foreclosure process nobody wants to insure it well get this kind of insurance that you have Force place an excuse after excuse from the student and finally I had a girlfriend I'm in California and I arrive and I check my phone message on Friday morning and I get this message from him cryptic message don't yell at me uh oh that's not a good sign uh and so I call and say what happened uh there there was a fire last night a fire well yeah we don't know if it's arson or not but maybe the lady was in there trying to go sort through her things there was no power and she had candles on and the candle fell over but the whole place burned down it's the total loss I said to him all right well we're calling your insurance company right now no more excuse no more BS and it turned out the fire happened Thursday night this is Friday and the expiration was the upcoming Monday at midnight wow oh thank goodness we just barely made it by that much and the insured amount was $80,000 whoa yeah the insured amount was $80,000 so what ends up happening is and they even said you know it's so unusual that the the Bor the the the lender is contacting us instead of the borer H H well you know you're considered looking the possibility of arson well you know it's a small enough claim we're not even gonna mess with that it's a small claim for us so then now of course the insurance claim 80,000 is made out to the lender and the insured and of course I'm thinking well you know uh oh let me look theida trust here it says that the according to law in Texas the the lender is entitled to the full amount to put the property back in its original condition of course this criminal attorney that she had was getting coached and everything no no no no I said okay well we'll settle because now it went to arbitration and things like that and mediation everything and so I said well we'll do 5050 no we're not going to do that they offered us 20 20 we end up settling for 25 because it just wasn't worth it going back and forth and everything else but if you look at all the numbers he ended up having about $ thousand dollars of his own money in this deal yeah yeah and and the whole thing took about four months and got a check for 25,000 all these stories we all it sounds like you have to have a lot of rehab people that can rehab properties would that be true well where you here's the interesting thing here's the interesting thing I watch for what the problem is and if the problems are too bad I pass or I just put it on a contract to try to wholesale it I'm typically looking for things that are close to livable condition and then I'm talking to people and I say to people in these small towns all the time can you or your boyfriend or your family can somebody do painting sure we can do painting we can do sheetrock we got some tools can you do flooring well yeah we can do that okay and there's always an electrition in town there's always a plumber in town There's always hbac guy in town every one of these towns I've got typically one or more plus it might be a little further away but within 45 minutes to an hour is a bigger city and you pay a premium and bring some milon the bigger city so these are all things I factor in okay right up front when I buy them so let's close with what you're offering people we'll put the link here in the uh chat box we got going on um right what do you what do your what are you looking to do with the people are listening in right now what's your challenge to them what what are you g to challenge him with I'm looking for somebody who's actually psychologically and emotionally ready to take the step and do their first note now maybe they've done one note already or maybe they can't find notes what the situation is but my idea of fun is doing a deal and I'm open to do it in any state that because again in Kansas I'm going to do a contract for deed in Missouri I'm G to do a deed so I do it on a state-by-state basis I make sure the right attorney but the opportunity is Hands-On experiential learning but I'll say Okay Nathan you're in Missouri whatever so and we're going to pick within an hour of where you are some smaller towns and we're going to have you post in Facebook and I'm going to tell you what to say and we're going to have people respond and you're gonna get me on the phone I'm going to bring my 40 years of experience negotiating structuring and everything else and then I'm going to steal this property because they don't want it and again like the one I bought in Vernon Texas for ,000 they wanted 15 six months later it took I made them two offers one was for 3,000 no payments for six months and then the payment would start out of the cash flow or a thousand now he said he took the Thousand now so I've just got all this experience with communication negotiation deal structure creativity and so a person can get Hands-On learning of doing a deal with very low risk there's never no risk but low risk and again they can put up some money and make a return I can put I don't I don't care I just want to do a deal but so typically I might get Nathan we're going to have this be your deal you're going to need an LLC but now you're the one originating the loan not me so under the different laws of you know the state you can only get so many loans you got originate on the case in Texas is like three yeah so typically I don't want to be doing 10 myself I'd rather have 10 people they each do them and I do it with them so what I'm offering in the past I've done this on a group basis I said three weeks is a small enough time that it's like I i' I've done three months with people before but I said let me give a short period of time so I did for 750 bucks last fall seven that's 250 a week I did this group coaching thing where we did a Facebook group I did some conference calls I did some Zoom but I got people out there turning over rocks bringing me the leads and then I work them with the goal is that we got 10 or 20 people somebody's going to get off their assets and they do something and if not I got three more leads yesterday through Facebook like you're seeing all these different posts so I'm constantly trying working leads I'm looking for other people about a third of the leads I get are from other people from my networking and so the big picture I said let me do something crazy because I've been watching with some of his Guru has been out there I said let me make it ridiculous you got to have some skin in the game how low could I go I know what I'll do I'll do $21 for 21 days 21 who I mean come on if you're gonna say oh that's too much money are you kidding me well I gotta think about it I gotta research this well good luck then you know I'm thinking $21 so I I figure I get 20 people and I'm not gonna make any money at $21 but here's what I'm gonna do I'm gonna say Okay Nathan daab you got a question post it in the Facebook group you're not gonna have me on the phone you're not gonna be texting me it's all in the Facebook group and then I'm going to answer your question so everybody gets the benefit of your question when I answer it other people might also input but the whole goal is going to be okay who's taking action right who's talking to somebody who needs help and so the every day every day but meanwhile oh here's another lead I got here's another lead I got okay if you're available oh you're at work no problem we'll record it but I'll go ahead and I'll get on the call they say hey Nathan I'm calling about your property da da da da and I got like five people listening in on a live conference call on a real deal and again I'm buying these houses in small towns I got a bunch of people right now in out toward wi stall Falls I get these calls they're looking for a place to rent because there's windmills going in so that's part of the thing I watch is where there's jobs and where I'm getting a lot of calls cool so Jonathan asked a question are you using kind of Technology like crms to keep all your contacts your plumbers your electricians your buyers all stuff do you use a system and your deals too like how do you keep all those straight yeah good good question so basically over time I've evolved I originally just started out with a good old three- ring binder and dividers and paper and pen and old school and I mean by force I like okay I'll use some podio so so I've done some with pod and I it just you know technology keeps changing and I keep hear about the latest thing and oh well you should use REI Blacklist and you should do this and that so I keep dabbling in but then now I got to take all my data from this and convert to this and everything else so I've got my basic CRM that I do stuff but if all you know if all else fails I've got my simple system that doesn't shut down breakdown and I can just do there and then when it's like okay but followup is a key yeah and and typically what I do is I get about a hundred in my Pipeline and I got a simple system of dividing them up so it's like okay it's time I hey Nathan we talked about a month ago and I just phone up did you ever sell that property no well you said you had an offer whatever happened that they didn't have the money I said okay well I'm I'm still ready to buy when you're ready to sell well I'm ready to sell now and and literally most of the time it's three to six months of followup I don't get these first time out no it's most of the time timing timing is a huge key in this business are you getting on the phone with these people are you emailing are you postcard what's your I'll do I'll do all the above it it really comes down to me talking to them and what they prefer so I will go ahead and I'll say well Dave do you prefer I call you I text you I email you I have said people say oh no don't email me oh no don't text me I just told you I'm 74 years old I don't do any of that kind of stuff just call me yeah and and it all depends on them I saidwell can I I know your ad or can I get an address but I'll I'll do and typically even there's like things where you can do like a nice greeting card or even like a gift and and there's a thing called lumpy mail and so I play with all these different kind of things to get people's attention interes very cool yeah there's always a way so guys it the form we we have uh in the chat box and I could post it in the group as well allows you to fill a form out just kind of giving more information but what it will be attached to the email response will be his little bio little picture of him and his challenge for you right and if you're interested you can reach out to them via email or phone um and go from there so I encourage everyone to just jump in there and try it out what's the worst thing G happen for $21 that's a pizza right for family on Friday night kind of thing give it a shot this is the way that most people are looking to find deals now because of the the way things have evolved over the years right when we first got started tapes of hundreds of thousands of notes were on it we're not seeing that and the pricing is dramatically up there when you're getting these special financing deals they're not going to be sent to you like we've always been sent a tape of assets that doesn't work and contacting Banks I've never heard good success that way but contacting these small rural areas any seller finance deals and being creative is the key to things um so you know I think that this is something if you haven't learned about this stuff rewatch it we use some terminology here that may be new for a lot of newer people but if you live in a rural area this is a process that you can repeat over and over and over again and networking with others right talking to friends just dropping it when you walk around talking to friends or family at Aria hey do you know any abandoned homes do you know any looking to try selling ask the question it's all it is yep talk talk talk talk talk people are more willing to share than you think so just we're in the people business absolutely awesome I see a couple people here thanking you very much for your time your knowledge uh your experience and a few people said they they missed it but they're gonna be watching the replay uh on our YouTube channel or Facebook whatever they're G to do uh but guys if you have any questions Mark's been awesome he's involved in everywhere anywhere so I'm encourag everyone to just jump on the program spend the time not even the money spend the time to go through the education and and experience what it is to be involved on a day-to-day business with Mark he's a hustler right um thank you Mark for joining us thank you for spending a Time us and explaining deals to us I appreciate it yeah you got no excuses jump in and I'd love to come back sometime and talk about some Advanced strategies too I like that idea substitution of collateral combination collateral assignment substitution of collateral first refinery refusal um a few little fancy bells and whistles slicing and dicing the note I got some stories on that too I think a lot of people want to learn about collateralization but most people don't even talk about that yeah it's a very heesy topic of borrowing money against the collateral with those do it right those people don't even know you can do that right people go to find JB money what you can do is you can buy the loan and borrow against that that loan right I've never done that but I've heard of people doing it so definitely tune in check it out so um a lot of people are giving you a lot of props in the in the chat box so everyone feel free to fill out the form or reach out we'll connect you with Mark you can go from there so again have a good week thank you lot thanks everybody great secure um so it's interesting so for me you know we're reaching out to most of the hedge funds send those tapes when they're ready to send them yeah right the seller send them out you can't reach out and prompt them to send some stuff to him um but people like Mark and people like him we can reach out time to time because they forget about us because they're not built to do what the bigger to yeah and I do the same thing people will ask me if I've got anything for sale and I say you know not right now hit me up again in a month because I I don't have a a you know a set maning list that I send out to maybe I should or could but I just said know just hit me up and see what I got yeah so segue right into what we're doing today um yeah most people here uh n is R right aark so AR Panic so I want to say that you know and I didn't tell before we went live that I think Mark is probably the one person that likes more posts on Facebook than anyone in the world I and he's prompt too which is awesome he's involved in everything and I thought I'd be like kind of s and went to a different group and posted something literally he was with the first people to like it so he is full of information full of networking which is amazing um so it was interesting when Nathan brought up bringing mark on on the program today that his background is different from what we do but he understands what we do as well yeah but he's doing it in a way that most people out there are not and can be replicated for a lot of people out there yeah yeah and yeah and Ray and I talked about what was that like a year year and a half ago and uh had really nice conversation and just uh kind of just comparing notes about how we do things and one of the things that we just discussed here before we started is there's so many ways to do this and yeah there's so many right ways to do it and so you know there you can do almost anything you want there there are some wrong ways don't get me wrong but uh but there are so many right ways to do it just pick one and do it and and go for it that's that's kind of the introduction for for I call you Ray but whatever yeah so those people are online here watching us live um Mark Ray give us a little background who you are where you came from what real estate you done and where you're at today yeah just little quick bio so I grew up in Michigan and uh I'm sure Nathan can appreciate being a Canadian there that we always appreciate enjoy our Canadian friends because it was so close it it was closer to go to Canada than it was to Ohio yeah crossing over to Windsor and uh going to Ontario the outdoors and all that kind of stuff being in Michigan always love that however the cold I didn't have a lot of use for that cold and snow lake effect snow and my whole life I was like Someday I'm getting the heck out of here and literally I graduated college on a Saturday left on Sunday and I was in Dallas Texas on Monday and could not get the heck out of Michigan fast enough plus also just watching what was going on in Detroit and how it was at one time and see the decline and I literally as a college student said last one out of Detroit turn off the lights because I said this place is going to file bankruptcy the way they're going so I just even even in you know college I was looking at business and cycles and different things like that and I also even making my decision I noticed a lot of people when they left Detroit they went to Houston and Detroit had this boom bust with the Auto industry Houston had this boom bust with the oil industry so I sort of evaluated and I was looking at California but geez back in the 1980s a basic house was 250,000 I'm thinking how could they go any higher that's so expensive and and I could I mean Austin Texas in the 1980s you could get a house for 50,000 you know what they're going for today those same houses right yeah a basic house 400,000 plus yeah and so uh anyways I got a guy who's a neighbor here uh where I'm parked and unfortunately I asked him please don't Bank the Bonk that horn oh no no would be no problem and so it's like H anyways so but back to the point the point being that I knew that Texas was going to grow and I looked at Florida I looked at California I looked at Texas and between the three I said what Texas is in the middle and then I looked at the cities Austin Dallas San Antonio Austin and I decided on Dallas so I first went to Dallas and I was shy and I was not only so shy with a college degree I started work as a security guard working 11 oock at night till 7 o'clock in the morning so I could literally avoid people and I work for minimum wage yeah so I I've had I the thing I've seen with this business whether it's real estate or notes or anything is there's people are introverted and they're so introverted that they avoid people and I've had to work a lot to overcome that because most of my business comes from other people I know that might be shocking and some people like to be safely behind their computer and avoid talking to people but the number one thing I tell people is it's a mindset that who I'm going to help has a real estate situation or a note situation that I'm G to have to talk to them communicate so the number one thing that changed my life for me was something called Toast Masters and and Toast Masters really help my communication skills my confidence and things like that and then I also as I study reading all these books I learned about the importance of sales and communication and negotiation influence so I'd say if you're ask me what business I'm in are you in the real estate business are you in the note business are you what business are you in I'm in the people business I'm in the I'm in the business of risk management because the biggest risk is people and so I'm looking for people problems that I can have a unique perspective and I can provide a solution that normal Solutions don't work and so I I start out just focused on single family homes because it's simple now I've gone on and I've done multif family and done commercial and made a run at some multif family um not some multif family but trailer parks things like that and I I I do like different asset classes but and people say to me that know that I do Apartments why don't you just do Apartments I say well here's the thing understand I often get a better return on a simple note than a house than an apartment than anything else there's things I can do with notes that you can't do with anything else in terms of the creativity and leverage and then on top of that put in a raw Ira so so the combination of all these things where you know an apartment you get excited you get 8 10 12 15% return maybe a home run would be 25 my average on notes is going to be 15 to 25 and a home Run's going to be 50 to 100% or better so that kind of yields and re and that's is just first I mean you go into some seconds and it's like but but the opposite of course is those seconds that didn't turn out and so so but I like performing first nonperforming first performing seconds non-performing seconds I like all of it if worst case scenario I'm going to get the asset worst case so that's the difference with my set mindset is I came from I looked at the asset more than the borrower now now not people tradition is looking at the borrower I look at all I look at all because I'm thinking to myself worst case scenario I'm going to foreclose yeah how long is it going to take how much is it gonna cost with the condition of the property and so hm well if I can get this property and I have to foreclose and they trashed it and everything else I can handle that I'm not afraid of that and then I could potentially wholesale or better yet I'm going to turn around create a note so part of my whole mindset and this goes for apartments too geez if I could get in a second lean the right second lean in a hotel in a in a commercial property in in a apartment complex where I wouldn't mind own the asset that's the difference fundamentally with me and most note investors I know because the bank most note investors they just want that income in cash flow so I play Both Sides is what I like to say play both sides and and I literally have found my way into notes through contacting somebody who is in foreclosure and again and then specifically I just talk about one of my little niches I like so one of the niches I found that I like is an area where you've got there's Urban there's suburban and there's rural so I'd say there's three areas most of the time the people they like to not they live in the suburbs and they like to buy a note in the suburb well those are some of the hardest ones the thing I learned early on was a note with a little hair on it part of the hair on it is the location so so so some notes that would scare people I'd look around I go well but there's some good people that live here in this minority area and I literally one time I worked with a guy in San Antonio and uh he was buying a hundred houses a year then he'd sell these houses on seller finance and sell the notes and he was making a million dollars a year nice so I I actually end up coaching him helped to make an extra $200,000 by restructuring some things with what he was doing because he's paying too much in taxes paying too much in the note discount and he just didn't package things for maximizing minimizing the discount and taxes and everything else but that was part of my finance background with my mindset so here's a guy who was real strong with sales and marketing and was doing a 100 houses a year but he's paying through the nose borrowing money discount taxes everything I I saw an opportunity there so I really helped him and that led to because I wasn't doing those low-end houses at that time my houses in Dallas I was doing were in the 80 to 150 range was my typical house so one of the things that happened for me was I go and I'm in I'm in San Antonio and then I go to houst I go to Corpus Christie excuse me I go to Corpus Christie and there's areas in Corpus Christi now Corpus Christie is about 86% Hispanic there's areas you know there you know and so what I learned is I've got a lot of black friends that their parents told them go to college get an education and they did and they moved to the suburbs I've got some good friends and good clients who college graduates and successful investors now but where they used to live is the areas where I buy right and what happens is when people move up and they get you know college degree and education stuff like that they want to live in the suburbs they want to live the better areas so what I find is there's these vacant houses and and along with these vacant houses I would focus on marketing too and they would be probate and theyd be I love probate as a way to find assets because it right now think about this for a moment the courts has been backed up because of coid right yeah and the probate is a legal process that has to go through a court process so there's a window of opportunity right now with probate that there's this backlog and so most note investors most Real Estate Investors they don't deal with that so that's a little unique Niche that I really like and and what I've been able to do then is I had somebody refer me there's an area you know there Houston Texas and then I like the secondary markets so we got an area called Bowmont which is about 120,000 population Port Arthur about 880,000 population and then there's little towns in between well I I got this call one day and this guy asked me if I wanted to buy this property long story short they wanted about 22 25,000 and it was in the hood as they would say but again there's a nice brick house this house with what's happened now the brick house next door flooded when they had all this flooding happen in this area so they completely remodeled that this house is like on the market for $180,000 next door now two-story brick nice the house that I got is like the worst house on the street little frame shotgun with the shiplap you know built to withstand hurricanes right when the hurricanes come the other houses get damaged and this house is still there and so they were wanting 20 something I said well you know you're telling me the electrical works and the the Gas Works and the plumbing works and everything but if any of those systems work I got to deal with the city and I got to get permits and give me master plumber and everything else electrician it's gonna be expensive so they wanted when I even got them down at least 10 I ended up buying that house for $2,000 wow now when you can buy a house that's got good bones and still standing for $2,000 how high is your risk very I mean you can't even buy the dirt for that right and then on top of that there's other houses that are bigger and nicer and brick see one thing I got real clear about there's a shortage of affordable housing yeah in this country yeah and it's not going to get better it's going to get worse we know lumber prices have gone up you know the prices of everything gone up so one thing that will always be poor people that's not going to go away yeah and there's going to be lowincome people there's going to be people that make minimum wage that work at Walmart that work at McDonald's that work and they got to live somewhere so these lowincome people they need housing and they're good people they just happen to live in a high crime area and and it's a small percentage of people that doing the crime most the people have families they care about their families they want Clean safe and I'll never forget the guy I was working with in corporate chy Sam I've been used to these $100,000 houses in Dallas Fort Worth where we tear out and put a new kitchen in new thing I mean we' remodeled the house right update everything so one of the first times I go and I'd heard one of these gurus and it said like the uglier the better right so I'm looking at this house the point I go oh well look at that one that's about ready to fall over and he turned looked at me like I'm crazy said why would we do that one it's close to a tear down we could do this one over here and it's close to rent ready oh never thought about that but you know the guru hype about all this stuff of course and and that really was a turning point for me because I've been thinking how in the world is he doing 100 houses a year we're doing ugly houses it's because he'd cherry-pick the better houses in the better areas and the bad ones he'd let go and the better ones were I mean when we bought these houses the people were asking 25 35,000 for them and I'd get them down to 15 yeah my average purchase price in one of these houses and this was like 800 to 1200 square ft a simple 2131 and I'd buy it for all cash for 15 I'd close on Monday I'd have the crew start we're doing carpet we're doing paint I remember first time I look around I go well aren't you g to replace the sink no aren't youna replace the the countertop no what what what are you g to do here flooring and painting that's it it's GNA be better than the place they're renting yeah go wow never thought about that that's brilliant simple and and they're so grateful because the place that they were living right now in renting from their slum Lord at 450 500 550 a month yeah for the same monthly payment they could buy our house yeah and this time of year this time of year January through April tax refund time yes they'd get a $44,000 check and they could take their $4,000 check and give us 10% down we'd buy it for 15 we'd fix it for five we'd literally close on Monday it'd be done by Friday and I would have on Saturday a group of nice Hispanic people whole family begging me please seor sell to me yeah I say sorry whoever's got the most money sort of a bidding whoever can give me the largest down payment and so the interesting thing is the hardest thing was not finding the property the hardest thing was not finding the buyer the hardest thing was working with people who did not have credit yeah and were used to paying all cash and they didn't have records so I literally I never forget one time I had to sit down with this one guy and help him do his tax return because he hadn't done his tax return and and and just Gathering up you know records paying on cars and whatever records there were you know help them to put together a package so we had something we should show our note buyer and then along with that we had potentially five different note buyers that were all interested and we typically would sell it for about 12% face amount at that time and then with the discount now let me just finish out the numbers so we' sell it for 42,000 we'd get $4,000 down that creates a $38,000 note we DET table funding so I'm sure you all some new people here don't know what table funding is but basically we have a note buyer that before we close the transaction they are using their own paperwork they have their attorney their paperwork everything else so it's the way they like in case they want to foreclose and then that $38,000 note that's being created they fund it at closing and buy our note so there's a big discount because it's table funded there's no payment history or seasoning and so we'd sell it for about 28,000 but when we sold that $338,000 notee for 28,000 at a 12% face yield they'd be pretty happy with that return on a performing first it just didn't have the seasoning but we got 28 plus 4 gave us 32 32 less our 15 less our five was 20 we had about 2,000 holding and closing costs everything went so fast literally we'd close on Monday it'd be sold on Saturday that's awesome so we get some question here yes um there was one thing about taxes you mentioned earlier that you're teaching others how to save on taxes but one question Marco just asked was you know how are you underwriting these borrowers in ensuring that they have the ability to repay good question good question well back in the day we would just do our own underwriting and now of course with the change in laws we have an rmlo so and I'm very upfront with people because back in the old days we could take anybody we liked and and and again they could show because some people don't claim all their money if you know what I mean especially in some lowincome areas or they get a second side hustle where it's like they got their truck or they got their this they got they got whatever side hustle and they're making sometimes as much or more money on their side hustle as they on their full-time job yeah and and so that became the problem then because of literally had some some people I said well sir you need to uh put records together if we're going to sell you a house we we can help but you're gonna need to have six months of Records you're gonna need to have tax returns you're gonna need to you know and so and and here we got Nathan over here he's an rmlo and let me introduce now he's going to charge you $200 and uh but but it's an educational process when you're in the low end about the requirements now that there are to make sure everything's done right but uh we always make sure we want to be compliant with Dodd Frank and the Safe Act and everything and then you know even the whole thing with generating owner occupied properties one of the reasons why I do stuff like this and network is because here's the deal you can do up your first three in Texas with no problem after that there's like you might have to get licens or scrutiny and different things like that however if Nathan over here has never done one before and he's excited guess what I happen to find this deal I say Nathan this is your deal oh really that's great yeah we'll have your entity and everything and then once everything's done my Roth IRA will buy a tail oh really that's so nice of you and then you know of course it's not cost me much for the tail he's got most of the money and then depending on his strategy he's created a nice monthly income for explain for those who don't know what tail means okay great so I'll just finish the thought here so he's got the front end of the loan and let's suppose it's a 15 year and out of the 15 years he's got the first 10 year or 120 payments so he got the 120 payments and then I take the next last five years of the 15 years and I buy that in my IRA so I have an interest in the property but I didn't originate it so because I didn't originate it there's certain laws that I don't have to deal with because it's a first time for him so that's why I like to find new people all the time that I can work with them to originate I still get a piece of the note but I'm putting it in my IRA and my tail and and there's different ways of doing it so tail means that there's the front part of the loan and then I'm buying the last 60 payments of the loan of the whole 180 he gets 120 which is the first 10 years I get the last uh five years for 60 you're buy you're buying a reverse partial pretty much you know you sell partially you sell the front end um and not the tail um yeah any reason why you're not buying the first part of the notes well I will I will do that sometimes I will do that sometimes but typically it's one that I've created myself and for example I I'll just give you I got a lot of different case studies that I could do so part of the thing I see the opportunity right now because a lot of people are saying geez I can't find notes I can't find houses I can't find apartments I can't I can't find any kind of deals yeah I go well there's always deals and so you know what most people do at a time like now is they just sit on their money and do nothing I go no never sit on your money do nothing just get creative and find little niches and opportunities so so the first Niche opportunity I found is go rural get get away from the city and there's and here's what we're saying it doesn't matter if it's Texas or Oklahoma or Arkansas or Mississippi or Alabama or all through the southeast over to North South Carolina up into Kansas and Missouri if you type in you're going to see the population rural Kansas is going down now it's not going like straight down but it's incrementally going down and what happens is in small in Texas too we hear Texas is booming but you go out away from the big city and the kids they don't have jobs so what do they do they leave and they go to Dallas they go the big four cities that's where they go much of the time and so when they get a college degree there're more money in the bigger city now so there's it's like this little town Seymour Texas or Vernon Texas I'll use Vernon Texas because it's the county seat so part of the criteria I'm looking for is stability because I know the county seat's not going to go away it's going to be there and so you got banks are going to be there attorney's going to be there Courthouse going to be there but they also typically have a Walmart so so Walmart people are coming from all over because of Walmart plus they have a McDonald's they've got a holiday and express they've got a they got a college even a community college they've got a hospital so I'm looking for basic infrastructure in this small town now the population might be between 10 and 20,000 in the small town and most people oh my gosh no I'm not going to buy there well there's 10 20,000 people that aren't going anywhere for the most part and you mean a few are going to go but a lot of them are stuck in a lot of renting and these people that are renting they'd buy if they could go ahead so where are you finding these assets I'm presuming you're not work with agents I'm presuming you're finding these in a different are you doing mailers what's your strategy in finding the property great question remember how you start out by talking about how you see me on Facebook all the time so so there was ways I did it in the past and literally what happened one day is somebody contacted me and said hey um I see you buying Vernon and I was like what how's anybody know he said I found you on online because I posted a little ad there one time and so a wholesaler was from Dallas and trying to wholesale this property and so one of the things that happened is they did a search and they came up with me as an investor because in these small towns there aren't cash buyers right yeah you know you get two hours away from Dallas Fort Worth out in the middle of nowhere and you don't have investors and buyers they want to stay close in so there's very little or no competition so the guy said I got this house and um I'll sell it to you for 15,000 immediately I said 15,000 sounds a little high how's the condition well needs some work what's the story well the guy died he lived there forever so it's in livable condition but he died how how long did die oh a couple years ago what's the story well and so we went back and forth and I said there's no way 15 and he kept down down down until finally he said well I guess I can't find anybody else to buy you say you're interest I tell you what just um you go ahead and talk directly to the owner so this is what often happens for me is that somebody finds a lead and they don't know what to do they don't have my experience and and then and they're too high I see this too high too high too high and so and now also I do it from the standpoint too of even higher priced houses where they're offering for $100,000 house 50,000 cash and they owe 60 well those I take subject to the existing loan or do lease options so I play Both Sides so if I get a bigger nicer house with existing loan I'll then buy that and then I'll wrap it and sell it with seller financing so so I I've got a strategy for low priced houses medium priced houses higher priced houses but just def finish these small towns most of the time in small towns they 50,000 or less the typical house I'm getting and think about it in these small towns most people have low income in these small towns they can only afford $450 $500 a month in in in rent and for what they can pay for rent they could buy my house and and again they get their money from tax refund just like I did in Corpus Christie I found in these small towns there there's good people who have a family and they want to have a home that they own and they see themselves as throwing away money for rent so if I can get one of these good people who are willing to scrape together a small down payment and and again most of the time now I'm going to hold on to it I'm going to get some seasoning on it but even I've got I got private lenders I got a lot of different people so I might do a collateral assignment and I might just go on the collateral assignment go ahead and borrow against it from somebody I know and I'll personally guarantee it because I mean I'm borrowing maybe 10 or 20,000 against this house it's worth 40 or 50 so it's a loan to value very low risk so are you using kind of marketing to find properties as well yeah from a standpoint of marketing the main thing I found is I would literally go ahead and have a house in a small town that's for rent or for sale and somebody be calling me and then I'd say I got this going on right now in multiple small towns I'd say well I tell you what um this house doesn't fit or this house is already rented or sold whatever but there's lots of vacant houses around town how about you work with me and you drive around town and you get me phone numbers and addresses I I recruit bird dogs that live right there in that town and they bring me photos and they bring me a list and I can skip Trace so I'm constantly in my mindset how can I leverage how can I leverage other people now the other thing of how things are gone in the old days we used to have the local paper the small little throwaway paper and now it's been replaced by Facebook so literally each and every one of these small towns have now got a Facebook byell trade group and you can post for free in these buy sell trade groups so I post but I also recruit these other people to have them post because they're local people who know people and I find the local people who know people they get even better result and response but I was I was coaching training guy he just want to learn how to like wholesale properties and my goal was train people to wholesale properties to me and then I would go fix them and rehab and Retail them or sell or Finance them so I'll never forget this one day I was in uh Southeast East Texas Bowmont Port Arthur which is one of the markets I like about 90 miles right toward the border of uh Illinois or not Illinois Louisiana Louisiana and so uh I go and I said let me show you so I get on Facebook I go and I had a house I needed to get the grass cut so I said watch this so I post this free ad in the vendor area and I said hey I need somebody to cut grass right now I'll pay top dollar because the city's going to come charge me big bucks yeah please call me immediately and this is lunchtime I said watch this my phone blows up binging ringing and I take the call and I say hi what's your name Dave okay hi Dave and tell me let me ask a few questions here before I go too far how long you've been in business Dave five years that sounds about right how many yards you cut for customers you got about a hundred that sounds about right and let me ask um of those hundred how many are older people what do you mean older of like 50 plus 55 plus oh geez 15 20% really and uh how old is the oldest guy oh gez he's about 922 92 how's his health oh he's in Hospice hospice really what what else you got to tell me well he actually offered to sell me his house really now is this the house he lives in or another one that's vacant oh no this is another one vacant full of his Pack Rat full of stuff right older people pack W for the house the house not on the market turns out it's in the best school district it's a uh two three-bedroom two and a half bath 2,000 square foot house brick nice house in the best school district worth about 150,000 the guy who's the yard guy says he offered to sell it to me for 40,000 I go 40,000 for 150 that sounds pretty good and I said so why didn't you buy now think about this in Port nugget why didn't you buy I don't have the money does it need any repairs well about 25 or 30 okay and so what do you do when you're not doing yards well my dad he does painting and sheetrock well let me ask you question if I would pay you a bird dog fee of$ 500 to $1,000 could you introduce me to the owner well yeah and if what if I buy the house and then I pay you the bird dog fee I give you and your dad the work you make an extra 10 $20,000 on this well yeah so I'm always focused on the other person's incentive to them and I I didn't get that house for 40 sadly to say I only paid 60 for it but I made some money on that house bad and so so so I'm doing things where there's no competition and by the way this is right between uh Port Arthur Texas which is I would give too much information away there don't tell to I'm not worried about because they're not gonna do what I'm gonna do or better yet they're gonna try and it's not going to work and then they're gonna contact me say hey Mark I think it's gonna be better to work with you yeah and so long long story short it's the best school district between Port Arthur and bont and those two cities population is about 200,000 this little community population is 15,000 so that's one of the keys is I like these smaller communities but they're close to bigger ones yeah so your proximity to a bigger city is key superseding school districts superseding everything just outside that rich area that they can't afford but they want to where they work at well and and a good example too you got Waco see see you got the big cities the big four you got Dallas Houston Austin San Antonio you ask anybody those are the cities they think of they don't think about B Port Arthur they don't think about wit stall Falls you people think about Waco now but you know they got the TV show there but but you go an hour outside of Waco there's a ton of small all through Texas all through Oklahoma all through Kansas I'm talking to a lady right now she's retired and so she lives in Chase Kansas Chase Kansas population about 4,000 people I said she says I'm having trouble finding deals I said I can come to Kansas and drive around and I'll point out all kind of vacant houses all over town I can do that really interesting so you and I actually um what you're describing that that's that's how I got started in notes was we had really project very very very similar to that in Columbus Ohio uh and then what what fell apart for us was when Dodd Frank was introduced and we didn't have a registered mortgage loan originator right we had to just Let It Go uh for the time being until mortgage originator started showing up but a very very similar uh take on it right you have a lot of energy my man I I you have a lot of you're you're flying over the coupe I'm impressed because I would say what you the overlying comments you're saying is that work right constantly networking constantly getting involved constantly being there is a lot of work and most people are waiting for it to be handed to them yeah and and and that's the thing with me okay I'm a big believer what do you love what's fun uh there's one of my mentors well Jimmy Napier who wrote a fantastic book called invest in debt and he belonged to a group of four people some Well Jack Miller was great he's passed on but there still is Peter fortunado who's fantastic in the note space and there's a guy named John Shaw so these guys back in the 80s and 90s were great influence and mentors to me and and the thing that I learned from Jimmy is that he do the house side or he do the mobile home side and he do the notes side he played both sides and that's a lot of the influence that I had was Jimmy in his book invest in debt but then also restructuring the debt and going back and Jimmy was a good old boy from shipler Florida and he he'd go to have his calculator and he'd push the buttons in and he hold up say now if I was to pay that much it'd be an error the whole computer I calculat would say error you say it' be an error to pay that yeah so I always thought that sense of humor but to me I learned from these guys someone called EF they said be an elf had do things that are easy lucrative and fun yeah so that's what I focus on I I want things to be easy lucrative and fun so I love to travel and and I love exploring inste acquaint small towns and hole in the- wall places to eat and meet people and have conversations and you know the good old boys who've been around who know everybody they're meeting there for breakfast at the good old you know Granny's Cafe and they've been meeting there every day for years and you get St strike up a conversation with them they know all the farmers they know everybody and they and see that's old school but I combin the old school with the modern technology with the Facebook so I combine the both together go ahead so I know that you're you're gonna be doing a course soon right and I want to get into that um so guys whoever's tuned in we'll be kidding on that uh to finalize the conversation but I think what you know Mark you're saying is that hitting the Avenues in a different direction using the people who are local to help you bird dog to find those vacant properties then you're going to go and Skip Trace to find the owner and you're going to be postc caring calling them or emailing however you're reaching them right or all three and and in these small towns everybody knows everybody people grew up there it's the old way it used to be in the big cities people don't know their nextdoor neighbor in the small towns they often still do and they know people's business and all I literally can walk down the street Miss Jones over there she knows everybody's business and I go talk over Miss Jones and she said oh yeah Betty Lou she was such a good lady she's in a nursing home which nursing home and and see it's I'm like a private investigator but it's fun for me so are you looking I know one of the things we're very similar in a lot of things we do um similar Outlook and stuff like that one of the things that that you do that makes me really nervous is these small towns and I think partially that's just because I'm not local so do you have like a radius like is it within driving distance or or how do you look at that well well here's the thing and you make a very good point because when I was younger and I still had this mindset it was a big big deal for me to go 90 miles right over to Bowmont Port Arthur and I'll never forget when I started in Dallas and people said well why don't you just work Dallas why are you going to Houston I said well because mindset wise when I come to Houston and I'm looking back at Dallas I got a different perspective and then I started working initially Dallas Houston Austin San Antonio going the Ria meetings and I literally would I put 50,000 miles on my vehicle because I was driving every month each of these cities hitting the meetings for networking things are so easy now because you can get on the computer and do zoom and do things are so much easier than they used to be and so big picture uh when we had this whole coid thing I met a guy and he was killing it the black guy that I spoke in Vegas at this thing and I'll never forget the story because I'm listening to him and I met him at his house in Birmingham in in a lowincome predominantly black neighborhood he's a black guy and so I'm in this house looking around it's a nice brick three bedroom one bath maybe 1,200 square foot house and I know even in the hood in Dallas Houston Austin San Antonio in the hood this house used to be 880,000 now they're going for 120 to 150 and I asked him I said what's a house like this sell for he said $40,000 I'm like what now keep in mind this is not five years ago this is about a year ago wow I go 40,000 for a brick house he said man this is a lowincome black neighborhood he said in Birmingham Alama I'm like and what will it rent for oh $7 800 I'm like holy smokes I could pay retail in cash flow this is crazy and then and then I said to him and and what did you buy it for this is this is where it gets really interesting oh I paid about $500 wow you did what what wait wait wait you how in the world did you buy this house for $500 well I bought a tax lean certificate you bought this house as a tax lean certificate well yeah because I'm black and the neighborhood's black and I know people I knew the person died and I checked with the relatives and I knew they weren't going to redeem and in Alabama here as soon as you get possession you can go ahead and clean it up a little bit and start renting it out immediately what yeah I got my money back first month whoa this is crazy so so and I've been studying this for the last year and so each state has its own thing but I've got with the right attorney now and I've been learning here's my next big thing and I'm is that I'm excited buying not just tax leans but tax deeds and then get a tax deed to where I can get the title clean but I'm all in for say $10,000 yeah and the house is worth 4050 well if I could be all in for 10 and it's worth 40 I like those numbers and I think my risk is pretty low yeah just to quickly kind of summarize what's the difference between tax lean and tax deed for those who may not know great great question well I'll just talk about Alabama for a moment so in Alabama they got a two-part process there's the auction when you don't pay your taxes because the look municipalities and schools and everything they need their money so they make a sale and at the sale the hedge funds are coming in and buying these a lot of times even over because it used to be 12% in Alabama guaranteed by the state now it's eight% but that's still pretty darn good and and it's three years of waiting in the Redemption time where they it's a tax lean certificate and so you'll only earn the interest and they can redeem in those three years after three years and this is why a lot of people don't like Alabama it now goes to a tax deed and you got three years of redemption time as a tax deed but quite frankly 90% of the time people don't redeem once it goes to a tax deed because you've got three years of accumulated taxes plus more legal costs and things like that so if I can get a tax deed that's only got six to 12 months left very unlikely going to redeem I got immediate possession and I'm looking for a house that is close enough deliverable condition I can get somebody in there renting it cheap and then once it goes over there's a a quiet title process you can do for an attorney for about 1,500 bucks depending so the whole take it all the way through the process and then these low-end houses I don't want to be a landlord I'm G to sell or Finance them but I'm gonna have a nice little income stream and especially with seasoning I can go ahead and sell those so are you familiar with Guardian tax no no they're they're big tax lean buyers in in Alabama I just paid them I just paid them last month and I got another check going out to them on Monday for redeeming taxes on on properties I foreclosed on and so they're they didn't pay on their taxes and so they're doing the same kind of thing they're big they're out of actually Nebraska yeah well the point is there's so many ways to make money in real estate and you got to decide what's the right Niche for you and so I'd be looking at these pools and I'd look at the numbers and of course the price over the last couple years kept going up and up and skinnier and skinnier on top of that you got the big hedge fund that then bought the smaller hedge and and by the time it's been stacked and stacked and stacked I'm looking going uh no these numbers don't work for me and so I just found going direct and and one last story if I can real quick because again when you work in these neighborhoods I came across I had a client again he said hey this lady she used to be in the nail business she claims the Vietnamese come in undercutter the truth is she got involved with drugs and so she bought this house seller her finance and now she's been paying on it it's 15 years she only had four years left and she got behind six months well by the way didn't just get behind he been stealing the utilities didn't pay the taxes didn't pay the insurance everything you can violate on the de of trust and so she's looking to try just sell for about 16,000 and and that's about the loan balance and she's going to get 500 to $1,000 and uh just walk away so I said hm so I looked at this and I go who who's the Lend oh it's a private individual ding ding ding yeah I said okay well well so so I I come in to buy the house get the house under contract and I say to the lady I need to talk to your lender because I'm going to see if she'll agree to me taking the loan subject to and reinstating and and so it's an older black lady who's moved away she's like on the border with Oklahoma and this is like on the border with Louisiana by by the co Golf coast and I explained to the lady well you're aware that she hasn't paid you in six months yes and that the properties in dis repair needs about 14,000 repairs well yes and she's not paying Insurance not paying taxes and problem problem problem problem problem and I got this little thought I go you know I can go with this subject too and reinstate the loan that'd be a good deal because I have the 16,000 paid off in four years right that's pretty good amortization or I should offer her cash yeah so so I explain all these problems and I said or I could just pay you cash and when I mentioned pay you cash you could have heard a p drop because she's thinking she's about to get a windfall of the full amount of money and oh oh sorry I went too fast no you see because you I'd have to wait you'd have to wait four years I can pay you about 6,000 cash and when I went from 16 to six you could hear a pin drop again and there's this pause and she's like oh well I'd have to talk that over with my husband I say well that's fine I'll wait go ahead and I hear this whisper whisper whisper in a few later she comes back to the phone and says we'll take it so so I backed into this note and we got it for 6,000 but wait it gets better number one I was able this client he had an uncle we were able to borrow $2,000 as a collateral assignment I even had to say the attorney you know what a collateral assignment is no let me explain it to you so we borrowed 20,000 and and actually I had him buy the note and everything I just walked him through the process but we used the 20,000 secured by the note we' not yet bought took out of the 20 six to the seller so she got that the attorney of course took every care of everything we had 14,000 left over that went an escro account to be held for after we foreclosed took possession to rehab the property because we knew right up front that the wholesale value to a buyer would be about 20 so the person who brought loaned the money his money was Secure plus we're paying him 18% interest who wouldn't want 18% but he was an uncle or something and then we go and I made sure before we closed that there was short-term insurance and for three months on that property and then as we proceeded to go forward and try to work it out with the lady she had a criminal defense attorney who told her not to talk to us and then he wouldn't talk to us she wouldn't talk to us so left us as no option but to foreclose yes so we go to begin the foreclosure process and the attorney's assistant missed it by one day and so in Texas it's got to be you know 21 days from the and all that so we missed the whole month but not to worry and again I was trying to work this to the student and everything else so to get all these excuses a month goes by we all know this in the business right about foreclosure right yeah and this is Texas for God's sakes where you can foreclose so fast and so she screwed up a second time and lied about it and the attorney felt so bad he offered to buy us out so we lost two entire months and then as we finally get the Foreclosure done the attorney who's the defense attorney criminal defense attorney files a a lawsuit against my student and yeah for for slander of title and uh he's freaking out he's getting sued I goes no big deal then it goes to a um what do you temporary restraining order it goes to a trro temporary restraining order so they got to go to a court and so he goes shows up he's even got a letter from code enforcement about how they're stealing and all these things they're doing and the judge says you know it's uh what they not not acceptable evidence because you need a witness he's like I can't believe it I said you're learning about the legal system there's a lot to learn and long storing short this whole thing goes and then I'm saying to him you know we only had this insurance for 90 days what's the status of the insurance uh uh well they're giving me a notice that's about to end and uh well we'll get it replaced I I can't because the foreclosure process nobody wants to insure it well get this kind of insurance that you have Force place an excuse after excuse from the student and finally I had a girlfriend I'm in California and I arrive and I check my phone message on Friday morning and I get this message from him cryptic message don't yell at me uh oh that's not a good sign uh and so I call and say what happened uh there there was a fire last night a fire well yeah we don't know if it's arson or not but maybe the lady was in there trying to go sort through her things there was no power and she had candles on and the candle fell over but the whole place burned down it's the total loss I said to him all right well we're calling your insurance company right now no more excuse no more BS and it turned out the fire happened Thursday night this is Friday and the expiration was the upcoming Monday at midnight wow oh thank goodness we just barely made it by that much and the insured amount was $80,000 whoa yeah the insured amount was $80,000 so what ends up happening is and they even said you know it's so unusual that the the Bor the the the lender is contacting us instead of the borer H H well you know you're considered looking the possibility of arson well you know it's a small enough claim we're not even gonna mess with that it's a small claim for us so then now of course the insurance claim 80,000 is made out to the lender and the insured and of course I'm thinking well you know uh oh let me look theida trust here it says that the according to law in Texas the the lender is entitled to the full amount to put the property back in its original condition of course this criminal attorney that she had was getting coached and everything no no no no I said okay well we'll settle because now it went to arbitration and things like that and mediation everything and so I said well we'll do 5050 no we're not going to do that they offered us 20 20 we end up settling for 25 because it just wasn't worth it going back and forth and everything else but if you look at all the numbers he ended up having about $ thousand dollars of his own money in this deal yeah yeah and and the whole thing took about four months and got a check for 25,000 all these stories we all it sounds like you have to have a lot of rehab people that can rehab properties would that be true well where you here's the interesting thing here's the interesting thing I watch for what the problem is and if the problems are too bad I pass or I just put it on a contract to try to wholesale it I'm typically looking for things that are close to livable condition and then I'm talking to people and I say to people in these small towns all the time can you or your boyfriend or your family can somebody do painting sure we can do painting we can do sheetrock we got some tools can you do flooring well yeah we can do that okay and there's always an electrition in town there's always a plumber in town There's always hbac guy in town every one of these towns I've got typically one or more plus it might be a little further away but within 45 minutes to an hour is a bigger city and you pay a premium and bring some milon the bigger city so these are all things I factor in okay right up front when I buy them so let's close with what you're offering people we'll put the link here in the uh chat box we got going on um right what do you what do your what are you looking to do with the people are listening in right now what's your challenge to them what what are you g to challenge him with I'm looking for somebody who's actually psychologically and emotionally ready to take the step and do their first note now maybe they've done one note already or maybe they can't find notes what the situation is but my idea of fun is doing a deal and I'm open to do it in any state that because again in Kansas I'm going to do a contract for deed in Missouri I'm G to do a deed so I do it on a state-by-state basis I make sure the right attorney but the opportunity is Hands-On experiential learning but I'll say Okay Nathan you're in Missouri whatever so and we're going to pick within an hour of where you are some smaller towns and we're going to have you post in Facebook and I'm going to tell you what to say and we're going to have people respond and you're gonna get me on the phone I'm going to bring my 40 years of experience negotiating structuring and everything else and then I'm going to steal this property because they don't want it and again like the one I bought in Vernon Texas for ,000 they wanted 15 six months later it took I made them two offers one was for 3,000 no payments for six months and then the payment would start out of the cash flow or a thousand now he said he took the Thousand now so I've just got all this experience with communication negotiation deal structure creativity and so a person can get Hands-On learning of doing a deal with very low risk there's never no risk but low risk and again they can put up some money and make a return I can put I don't I don't care I just want to do a deal but so typically I might get Nathan we're going to have this be your deal you're going to need an LLC but now you're the one originating the loan not me so under the different laws of you know the state you can only get so many loans you got originate on the case in Texas is like three yeah so typically I don't want to be doing 10 myself I'd rather have 10 people they each do them and I do it with them so what I'm offering in the past I've done this on a group basis I said three weeks is a small enough time that it's like I i' I've done three months with people before but I said let me give a short period of time so I did for 750 bucks last fall seven that's 250 a week I did this group coaching thing where we did a Facebook group I did some conference calls I did some Zoom but I got people out there turning over rocks bringing me the leads and then I work them with the goal is that we got 10 or 20 people somebody's going to get off their assets and they do something and if not I got three more leads yesterday through Facebook like you're seeing all these different posts so I'm constantly trying working leads I'm looking for other people about a third of the leads I get are from other people from my networking and so the big picture I said let me do something crazy because I've been watching with some of his Guru has been out there I said let me make it ridiculous you got to have some skin in the game how low could I go I know what I'll do I'll do $21 for 21 days 21 who I mean come on if you're gonna say oh that's too much money are you kidding me well I gotta think about it I gotta research this well good luck then you know I'm thinking $21 so I I figure I get 20 people and I'm not gonna make any money at $21 but here's what I'm gonna do I'm gonna say Okay Nathan daab you got a question post it in the Facebook group you're not gonna have me on the phone you're not gonna be texting me it's all in the Facebook group and then I'm going to answer your question so everybody gets the benefit of your question when I answer it other people might also input but the whole goal is going to be okay who's taking action right who's talking to somebody who needs help and so the every day every day but meanwhile oh here's another lead I got here's another lead I got okay if you're available oh you're at work no problem we'll record it but I'll go ahead and I'll get on the call they say hey Nathan I'm calling about your property da da da da and I got like five people listening in on a live conference call on a real deal and again I'm buying these houses in small towns I got a bunch of people right now in out toward wi stall Falls I get these calls they're looking for a place to rent because there's windmills going in so that's part of the thing I watch is where there's jobs and where I'm getting a lot of calls cool so Jonathan asked a question are you using kind of Technology like crms to keep all your contacts your plumbers your electricians your buyers all stuff do you use a system and your deals too like how do you keep all those straight yeah good good question so basically over time I've evolved I originally just started out with a good old three- ring binder and dividers and paper and pen and old school and I mean by force I like okay I'll use some podio so so I've done some with pod and I it just you know technology keeps changing and I keep hear about the latest thing and oh well you should use REI Blacklist and you should do this and that so I keep dabbling in but then now I got to take all my data from this and convert to this and everything else so I've got my basic CRM that I do stuff but if all you know if all else fails I've got my simple system that doesn't shut down breakdown and I can just do there and then when it's like okay but followup is a key yeah and and typically what I do is I get about a hundred in my Pipeline and I got a simple system of dividing them up so it's like okay it's time I hey Nathan we talked about a month ago and I just phone up did you ever sell that property no well you said you had an offer whatever happened that they didn't have the money I said okay well I'm I'm still ready to buy when you're ready to sell well I'm ready to sell now and and literally most of the time it's three to six months of followup I don't get these first time out no it's most of the time timing timing is a huge key in this business are you getting on the phone with these people are you emailing are you postcard what's your I'll do I'll do all the above it it really comes down to me talking to them and what they prefer so I will go ahead and I'll say well Dave do you prefer I call you I text you I email you I have said people say oh no don't email me oh no don't text me I just told you I'm 74 years old I don't do any of that kind of stuff just call me yeah and and it all depends on them I saidwell can I I know your ad or can I get an address but I'll I'll do and typically even there's like things where you can do like a nice greeting card or even like a gift and and there's a thing called lumpy mail and so I play with all these different kind of things to get people's attention interes very cool yeah there's always a way so guys it the form we we have uh in the chat box and I could post it in the group as well allows you to fill a form out just kind of giving more information but what it will be attached to the email response will be his little bio little picture of him and his challenge for you right and if you're interested you can reach out to them via email or phone um and go from there so I encourage everyone to just jump in there and try it out what's the worst thing G happen for $21 that's a pizza right for family on Friday night kind of thing give it a shot this is the way that most people are looking to find deals now because of the the way things have evolved over the years right when we first got started tapes of hundreds of thousands of notes were on it we're not seeing that and the pricing is dramatically up there when you're getting these special financing deals they're not going to be sent to you like we've always been sent a tape of assets that doesn't work and contacting Banks I've never heard good success that way but contacting these small rural areas any seller finance deals and being creative is the key to things um so you know I think that this is something if you haven't learned about this stuff rewatch it we use some terminology here that may be new for a lot of newer people but if you live in a rural area this is a process that you can repeat over and over and over again and networking with others right talking to friends just dropping it when you walk around talking to friends or family at Aria hey do you know any abandoned homes do you know any looking to try selling ask the question it's all it is yep talk talk talk talk talk people are more willing to share than you think so just we're in the people business absolutely awesome I see a couple people here thanking you very much for your time your knowledge uh your experience and a few people said they they missed it but they're gonna be watching the replay uh on our YouTube channel or Facebook whatever they're G to do uh but guys if you have any questions Mark's been awesome he's involved in everywhere anywhere so I'm encourag everyone to just jump on the program spend the time not even the money spend the time to go through the education and and experience what it is to be involved on a day-to-day business with Mark he's a hustler right um thank you Mark for joining us thank you for spending a Time us and explaining deals to us I appreciate it yeah you got no excuses jump in and I'd love to come back sometime and talk about some Advanced strategies too I like that idea substitution of collateral combination collateral assignment substitution of collateral first refinery refusal um a few little fancy bells and whistles slicing and dicing the note I got some stories on that too I think a lot of people want to learn about collateralization but most people don't even talk about that yeah it's a very heesy topic of borrowing money against the collateral with those do it right those people don't even know you can do that right people go to find JB money what you can do is you can buy the loan and borrow against that that loan right I've never done that but I've heard of people doing it so definitely tune in check it out so um a lot of people are giving you a lot of props in the in the chat box so everyone feel free to fill out the form or reach out we'll connect you with Mark you can go from there so again have a good week thank you lot thanks everybody great [Music] hey everybody Dave putz here from jkp Holdings longside me as always na Turner how are you doing how's going very good very good cool um I know last week uh we were discussing some stuff you're going to move forward on buying and whatnot I'm still working on some cfd stuff which had some other things going on on our side yeah what's been new with you this week I'm waiting to hear back on some bids I put in uh my I think it was actually last Friday I put in eight or nine bids and I'm just waiting to hear back on those I should hear back today so we'll see see exciting Friday that's awesome I got some some backup ones just in case those don't go through so we'll see how it goes all right so um are you reaching out to look for assets are you what are you doing to typically do are you getting us sent to you or are you reaching out right now a little bit of both um and it you know it varies there there are times it's matching up the the inventory with the money and so for a while everything was tied up so I didn't have any money to spend and then I sold a bunch of stuff so I'm ready to go again so then I'm reaching out to a couple people and then I'm on some other guys list where they just send me stuff automatically so it's a little bit of both cool I know um we did a reach out just about three weeks ago just to get to the off Market stuff hitting people that we typically hit um kind of segue R to what we're talking about today um those people who may do one off here one off there are Brokers but legitimate Brokers where they're actually finding assets yeah we have a few in common that we reach out to and those people actually are really really helpful if they know what they're doing right find the deal make sure it's secure um so it's interesting so for me you know we're reaching out to most of the hedge funds send those tapes when they're ready to send them yeah right the seller send them out you can't reach out and prompt them to send some stuff to him um but people like Mark and people like him we can reach out time to time because they forget about us because they're not built to do what the bigger to yeah and I do the same thing people will ask me if I've got anything for sale and I say you know not right now hit me up again in a month because I I don't have a a you know a set maning list that I send out to maybe I should or could but I just said know just hit me up and see what I got yeah so segue right into what we're doing today um yeah most people here uh n is R right aark so AR Panic so I want to say that you know and I didn't tell before we went live that I think Mark is probably the one person that likes more posts on Facebook than anyone in the world I and he's prompt too which is awesome he's involved in everything and I thought I'd be like kind of s and went to a different group and posted something literally he was with the first people to like it so he is full of information full of networking which is amazing um so it was interesting when Nathan brought up bringing mark on on the program today that his background is different from what we do but he understands what we do as well yeah but he's doing it in a way that most people out there are not and can be replicated for a lot of people out there yeah yeah and yeah and Ray and I talked about what was that like a year year and a half ago and uh had really nice conversation and just uh kind of just comparing notes about how we do things and one of the things that we just discussed here before we started is there's so many ways to do this and yeah there's so many right ways to do it and so you know there you can do almost anything you want there there are some wrong ways don't get me wrong but uh but there are so many right ways to do it just pick one and do it and and go for it that's that's kind of the introduction for for I call you Ray but whatever yeah so those people are online here watching us live um Mark Ray give us a little background who you are where you came from what real estate you done and where you're at today yeah just little quick bio so I grew up in Michigan and uh I'm sure Nathan can appreciate being a Canadian there that we always appreciate enjoy our Canadian friends because it was so close it it was closer to go to Canada than it was to Ohio yeah crossing over to Windsor and uh going to Ontario the outdoors and all that kind of stuff being in Michigan always love that however the cold I didn't have a lot of use for that cold and snow lake effect snow and my whole life I was like Someday I'm getting the heck out of here and literally I graduated college on a Saturday left on Sunday and I was in Dallas Texas on Monday and could not get the heck out of Michigan fast enough plus also just watching what was going on in Detroit and how it was at one time and see the decline and I literally as a college student said last one out of Detroit turn off the lights because I said this place is going to file bankruptcy the way they're going so I just even even in you know college I was looking at business and cycles and different things like that and I also even making my decision I noticed a lot of people when they left Detroit they went to Houston and Detroit had this boom bust with the Auto industry Houston had this boom bust with the oil industry so I sort of evaluated and I was looking at California but geez back in the 1980s a basic house was 250,000 I'm thinking how could they go any higher that's so expensive and and I could I mean Austin Texas in the 1980s you could get a house for 50,000 you know what they're going for today those same houses right yeah a basic house 400,000 plus yeah and so uh anyways I got a guy who's a neighbor here uh where I'm parked and unfortunately I asked him please don't Bank the Bonk that horn oh no no would be no problem and so it's like H anyways so but back to the point the point being that I knew that Texas was going to grow and I looked at Florida I looked at California I looked at Texas and between the three I said what Texas is in the middle and then I looked at the cities Austin Dallas San Antonio Austin and I decided on Dallas so I first went to Dallas and I was shy and I was not only so shy with a college degree I started work as a security guard working 11 oock at night till 7 o'clock in the morning so I could literally avoid people and I work for minimum wage yeah so I I've had I the thing I've seen with this business whether it's real estate or notes or anything is there's people are introverted and they're so introverted that they avoid people and I've had to work a lot to overcome that because most of my business comes from other people I know that might be shocking and some people like to be safely behind their computer and avoid talking to people but the number one thing I tell people is it's a mindset that who I'm going to help has a real estate situation or a note situation that I'm G to have to talk to them communicate so the number one thing that changed my life for me was something called Toast Masters and and Toast Masters really help my communication skills my confidence and things like that and then I also as I study reading all these books I learned about the importance of sales and communication and negotiation influence so I'd say if you're ask me what business I'm in are you in the real estate business are you in the note business are you what business are you in I'm in the people business I'm in the I'm in the business of risk management because the biggest risk is people and so I'm looking for people problems that I can have a unique perspective and I can provide a solution that normal Solutions don't work and so I I start out just focused on single family homes because it's simple now I've gone on and I've done multif family and done commercial and made a run at some multif family um not some multif family but trailer parks things like that and I I I do like different asset classes but and people say to me that know that I do Apartments why don't you just do Apartments I say well here's the thing understand I often get a better return on a simple note than a house than an apartment than anything else there's things I can do with notes that you can't do with anything else in terms of the creativity and leverage and then on top of that put in a raw Ira so so the combination of all these things where you know an apartment you get excited you get 8 10 12 15% return maybe a home run would be 25 my average on notes is going to be 15 to 25 and a home Run's going to be 50 to 100% or better so that kind of yields and re and that's is just first I mean you go into some seconds and it's like but but the opposite of course is those seconds that didn't turn out and so so but I like performing first nonperforming first performing seconds non-performing seconds I like all of it if worst case scenario I'm going to get the asset worst case so that's the difference with my set mindset is I came from I looked at the asset more than the borrower now now not people tradition is looking at the borrower I look at all I look at all because I'm thinking to myself worst case scenario I'm going to foreclose yeah how long is it going to take how much is it gonna cost with the condition of the property and so hm well if I can get this property and I have to foreclose and they trashed it and everything else I can handle that I'm not afraid of that and then I could potentially wholesale or better yet I'm going to turn around create a note so part of my whole mindset and this goes for apartments too geez if I could get in a second lean the right second lean in a hotel in a in a commercial property in in a apartment complex where I wouldn't mind own the asset that's the difference fundamentally with me and most note investors I know because the bank most note investors they just want that income in cash flow so I play Both Sides is what I like to say play both sides and and I literally have found my way into notes through contacting somebody who is in foreclosure and again and then specifically I just talk about one of my little niches I like so one of the niches I found that I like is an area where you've got there's Urban there's suburban and there's rural so I'd say there's three areas most of the time the people they like to not they live in the suburbs and they like to buy a note in the suburb well those are some of the hardest ones the thing I learned early on was a note with a little hair on it part of the hair on it is the location so so so some notes that would scare people I'd look around I go well but there's some good people that live here in this minority area and I literally one time I worked with a guy in San Antonio and uh he was buying a hundred houses a year then he'd sell these houses on seller finance and sell the notes and he was making a million dollars a year nice so I I actually end up coaching him helped to make an extra $200,000 by restructuring some things with what he was doing because he's paying too much in taxes paying too much in the note discount and he just didn't package things for maximizing minimizing the discount and taxes and everything else but that was part of my finance background with my mindset so here's a guy who was real strong with sales and marketing and was doing a 100 houses a year but he's paying through the nose borrowing money discount taxes everything I I saw an opportunity there so I really helped him and that led to because I wasn't doing those low-end houses at that time my houses in Dallas I was doing were in the 80 to 150 range was my typical house so one of the things that happened for me was I go and I'm in I'm in San Antonio and then I go to houst I go to Corpus Christie excuse me I go to Corpus Christie and there's areas in Corpus Christi now Corpus Christie is about 86% Hispanic there's areas you know there you know and so what I learned is I've got a lot of black friends that their parents told them go to college get an education and they did and they moved to the suburbs I've got some good friends and good clients who college graduates and successful investors now but where they used to live is the areas where I buy right and what happens is when people move up and they get you know college degree and education stuff like that they want to live in the suburbs they want to live the better areas so what I find is there's these vacant houses and and along with these vacant houses I would focus on marketing too and they would be probate and theyd be I love probate as a way to find assets because it right now think about this for a moment the courts has been backed up because of coid right yeah and the probate is a legal process that has to go through a court process so there's a window of opportunity right now with probate that there's this backlog and so most note investors most Real Estate Investors they don't deal with that so that's a little unique Niche that I really like and and what I've been able to do then is I had somebody refer me there's an area you know there Houston Texas and then I like the secondary markets so we got an area called Bowmont which is about 120,000 population Port Arthur about 880,000 population and then there's little towns in between well I I got this call one day and this guy asked me if I wanted to buy this property long story short they wanted about 22 25,000 and it was in the hood as they would say but again there's a nice brick house this house with what's happened now the brick house next door flooded when they had all this flooding happen in this area so they completely remodeled that this house is like on the market for $180,000 next door now two-story brick nice the house that I got is like the worst house on the street little frame shotgun with the shiplap you know built to withstand hurricanes right when the hurricanes come the other houses get damaged and this house is still there and so they were wanting 20 something I said well you know you're telling me the electrical works and the the Gas Works and the plumbing works and everything but if any of those systems work I got to deal with the city and I got to get permits and give me master plumber and everything else electrician it's gonna be expensive so they wanted when I even got them down at least 10 I ended up buying that house for $2,000 wow now when you can buy a house that's got good bones and still standing for $2,000 how high is your risk very I mean you can't even buy the dirt for that right and then on top of that there's other houses that are bigger and nicer and brick see one thing I got real clear about there's a shortage of affordable housing yeah in this country yeah and it's not going to get better it's going to get worse we know lumber prices have gone up you know the prices of everything gone up so one thing that will always be poor people that's not going to go away yeah and there's going to be lowincome people there's going to be people that make minimum wage that work at Walmart that work at McDonald's that work and they got to live somewhere so these lowincome people they need housing and they're good people they just happen to live in a high crime area and and it's a small percentage of people that doing the crime most the people have families they care about their families they want Clean safe and I'll never forget the guy I was working with in corporate chy Sam I've been used to these $100,000 houses in Dallas Fort Worth where we tear out and put a new kitchen in new thing I mean we' remodeled the house right update everything so one of the first times I go and I'd heard one of these gurus and it said like the uglier the better right so I'm looking at this house the point I go oh well look at that one that's about ready to fall over and he turned looked at me like I'm crazy said why would we do that one it's close to a tear down we could do this one over here and it's close to rent ready oh never thought about that but you know the guru hype about all this stuff of course and and that really was a turning point for me because I've been thinking how in the world is he doing 100 houses a year we're doing ugly houses it's because he'd cherry-pick the better houses in the better areas and the bad ones he'd let go and the better ones were I mean when we bought these houses the people were asking 25 35,000 for them and I'd get them down to 15 yeah my average purchase price in one of these houses and this was like 800 to 1200 square ft a simple 2131 and I'd buy it for all cash for 15 I'd close on Monday I'd have the crew start we're doing carpet we're doing paint I remember first time I look around I go well aren't you g to replace the sink no aren't youna replace the the countertop no what what what are you g to do here flooring and painting that's it it's GNA be better than the place they're renting yeah go wow never thought about that that's brilliant simple and and they're so grateful because the place that they were living right now in renting from their slum Lord at 450 500 550 a month yeah for the same monthly payment they could buy our house yeah and this time of year this time of year January through April tax refund time yes they'd get a $44,000 check and they could take their $4,000 check and give us 10% down we'd buy it for 15 we'd fix it for five we'd literally close on Monday it'd be done by Friday and I would have on Saturday a group of nice Hispanic people whole family begging me please seor sell to me yeah I say sorry whoever's got the most money sort of a bidding whoever can give me the largest down payment and so the interesting thing is the hardest thing was not finding the property the hardest thing was not finding the buyer the hardest thing was working with people who did not have credit yeah and were used to paying all cash and they didn't have records so I literally I never forget one time I had to sit down with this one guy and help him do his tax return because he hadn't done his tax return and and and just Gathering up you know records paying on cars and whatever records there were you know help them to put together a package so we had something we should show our note buyer and then along with that we had potentially five different note buyers that were all interested and we typically would sell it for about 12% face amount at that time and then with the discount now let me just finish out the numbers so we' sell it for 42,000 we'd get $4,000 down that creates a $38,000 note we DET table funding so I'm sure you all some new people here don't know what table funding is but basically we have a note buyer that before we close the transaction they are using their own paperwork they have their attorney their paperwork everything else so it's the way they like in case they want to foreclose and then that $38,000 note that's being created they fund it at closing and buy our note so there's a big discount because it's table funded there's no payment history or seasoning and so we'd sell it for about 28,000 but when we sold that $338,000 notee for 28,000 at a 12% face yield they'd be pretty happy with that return on a performing first it just didn't have the seasoning but we got 28 plus 4 gave us 32 32 less our 15 less our five was 20 we had about 2,000 holding and closing costs everything went so fast literally we'd close on Monday it'd be sold on Saturday that's awesome so we get some question here yes um there was one thing about taxes you mentioned earlier that you're teaching others how to save on taxes but one question Marco just asked was you know how are you underwriting these borrowers in ensuring that they have the ability to repay good question good question well back in the day we would just do our own underwriting and now of course with the change in laws we have an rmlo so and I'm very upfront with people because back in the old days we could take anybody we liked and and and again they could show because some people don't claim all their money if you know what I mean especially in some lowincome areas or they get a second side hustle where it's like they got their truck or they got their this they got they got whatever side hustle and they're making sometimes as much or more money on their side hustle as they on their full-time job yeah and and so that became the problem then because of literally had some some people I said well sir you need to uh put records together if we're going to sell you a house we we can help but you're gonna need to have six months of Records you're gonna need to have tax returns you're gonna need to you know and so and and here we got Nathan over here he's an rmlo and let me introduce now he's going to charge you $200 and uh but but it's an educational process when you're in the low end about the requirements now that there are to make sure everything's done right but uh we always make sure we want to be compliant with Dodd Frank and the Safe Act and everything and then you know even the whole thing with generating owner occupied properties one of the reasons why I do stuff like this and network is because here's the deal you can do up your first three in Texas with no problem after that there's like you might have to get licens or scrutiny and different things like that however if Nathan over here has never done one before and he's excited guess what I happen to find this deal I say Nathan this is your deal oh really that's great yeah we'll have your entity and everything and then once everything's done my Roth IRA will buy a tail oh really that's so nice of you and then you know of course it's not cost me much for the tail he's got most of the money and then depending on his strategy he's created a nice monthly income for explain for those who don't know what tail means okay great so I'll just finish the thought here so he's got the front end of the loan and let's suppose it's a 15 year and out of the 15 years he's got the first 10 year or 120 payments so he got the 120 payments and then I take the next last five years of the 15 years and I buy that in my IRA so I have an interest in the property but I didn't originate it so because I didn't originate it there's certain laws that I don't have to deal with because it's a first time for him so that's why I like to find new people all the time that I can work with them to originate I still get a piece of the note but I'm putting it in my IRA and my tail and and there's different ways of doing it so tail means that there's the front part of the loan and then I'm buying the last 60 payments of the loan of the whole 180 he gets 120 which is the first 10 years I get the last uh five years for 60 you're buy you're buying a reverse partial pretty much you know you sell partially you sell the front end um and not the tail um yeah any reason why you're not buying the first part of the notes well I will I will do that sometimes I will do that sometimes but typically it's one that I've created myself and for example I I'll just give you I got a lot of different case studies that I could do so part of the thing I see the opportunity right now because a lot of people are saying geez I can't find notes I can't find houses I can't find apartments I can't I can't find any kind of deals yeah I go well there's always deals and so you know what most people do at a time like now is they just sit on their money and do nothing I go no never sit on your money do nothing just get creative and find little niches and opportunities so so the first Niche opportunity I found is go rural get get away from the city and there's and here's what we're saying it doesn't matter if it's Texas or Oklahoma or Arkansas or Mississippi or Alabama or all through the southeast over to North South Carolina up into Kansas and Missouri if you type in you're going to see the population rural Kansas is going down now it's not going like straight down but it's incrementally going down and what happens is in small in Texas too we hear Texas is booming but you go out away from the big city and the kids they don't have jobs so what do they do they leave and they go to Dallas they go the big four cities that's where they go much of the time and so when they get a college degree there're more money in the bigger city now so there's it's like this little town Seymour Texas or Vernon Texas I'll use Vernon Texas because it's the county seat so part of the criteria I'm looking for is stability because I know the county seat's not going to go away it's going to be there and so you got banks are going to be there attorney's going to be there Courthouse going to be there but they also typically have a Walmart so so Walmart people are coming from all over because of Walmart plus they have a McDonald's they've got a holiday and express they've got a they got a college even a community college they've got a hospital so I'm looking for basic infrastructure in this small town now the population might be between 10 and 20,000 in the small tow....