Finding the Right Seller Financed Note | Real Estate Notes Show

Episode: Jeff Armstrong: Finding the Right Seller Financed Note Full length Nathan Turner & David Putz Dave's Goals and Plans: - Recently getting a pool of assets from paper source related to seller finance - Currently buying some reverse mortgages as they are available - Winding down and building up portfolio simultaneously, moving assets into a fund - Sold a couple of loans being held to consolidate into the fund - Planning to offer a spreadsheet training course for partial yield calculator creation Nathan's Goals and Plans: - Bought a few partials recently - Looked at and purchased formulas, considering two non-performing notes but may not proceed - Currently holding a few different reverse mortgages - Holding a regular first mortgage - Planning cool training course content for September Key Recommendations: - Treat note investing as a legitimate business, not a casual investment - Understand that most businesses fail in the first year - give the business sufficient time to ramp up and grow - Be willing to pivot between different note types (seller finance, reverse mortgages, etc.) based on market availability - Learn to use spreadsheets with formulas for deal analysis rather than relying solely on financial calculators - Do not expect success overnight - building a business takes years of consistent work Topics Discussed: - Seller financed notes as a growing market segment - Difference between institutional notes and seller financed notes - Reverse mortgages as alternative investment opportunity - Tools for deal analysis: spreadsheets vs calculators - Partial note purchases - Non-performing notes evaluation - Transitioning from landlording to note investing Guest Insights: - Started in note business in May 1991 - 31 year track record, focused exclusively on notes for entire career - Initial pivot was prompted by realizing rental properties don't generate reliable cash flow due to unexpected maintenance expenses - Started with 27 rental doors by age 25 but was barely breaking even - seller finance notes provided superior business model - Experienced significant setback with divorce in 2011 but rebuilt business using improved systems like Excel spreadsheets - Only began using spreadsheets systematically after 2011 - evolved practices over 31 years based on experience and technology [Music] hey everyone dave putz from jkp holdings good afternoon mr nathan turner was inside next to me how are you hello hello very good very good awesome it's gonna connect um we had a great session last two weeks ago um we talked about a lot of awesome stuff i would definitely recommend anyone who missed it take a look at the podcast youtube channel whatever you can get a hold of that um recently you know things have kind of started to change for me um we're seeing some new product they're coming from different areas um i know that recently we've got a pool of assets we've talked to paper source with a gentleman about some seller finance stuff that's coming about which kind of lends to what we talked with tracy about the cell refinance world being something that's growing it is it's an interesting and interesting time and we'll uh you know one of the cool things about notes is um it's very easy to pivot yeah uh so if if seller financing notes are more available and and that looks better do that um i'm also buying some reverse mortgages right now they're available so i'm doing that you know and it just you can pretty easily just kind of go back and forth and whatever is available whatever works at the time that's that's good yeah um one thing about seller financing and and notes in general is unexchanged numbers i want to let everyone know that i'm going to run a spreadsheet training course for everyone just understand how to create a partial yield calculator i could post whoever wants it but it's going to be a two three hour and you create your own spreadsheet to understand time value understand the formulas and get away from this brick and mortar financial calculator that some people find confusing where you can plug and play numbers on a spreadsheet right for me i like the spreadsheet it's not as grand as a calculator but i think spreadsheets make a lot of things easier for newer investors to kind of grasp notes so an individual investor maybe a real estate investor but an individual investor uh will fund the loan to purchase the house so the person's taking money out of their pocket 100 providing the loan for the person to buy the property that's a private mortgage note a debt instrument created when an individual not a bank finances the sale of real estate then we have what's called a purchase money mortgage this is a debt instrument right now we're not seeing that screen jeff we're just looking at the we've got value-based investing versus speculation that's the one we'll see right now what um what i'm showing this one this is my screen are you sharing a screen or i uh yeah it says it says i'm sharing my screen correct you may be sharing a um oh how about i stop and then i'll share again let's see if it works now i'm sorry guys no problem boom and boom now there it is boom okay okay so we did a commercial note bank you know private mortgage note individual a person uh giving a loan right for someone uh and then a purchase money mortgage note a debt instrument note and mortgage note d to trust sometimes a recordable land contract carried back by the seller of their property to facilitate the sale of their own property a seller finance note that's that's the whole key a seller of their own property selling their own property carrying back the note on the property they own that is a seller finance no and the differences between them are as follows you can have when when a conventional or private note loan is given they have to follow all of these rules and more there's a together and and uh they're a little bit goofy sometimes but i mean people are paying yes sometimes that's all that matters yeah so without further ado we have gentlemen here that could be tuning in with us if you don't know jeff um get known he's a wealth of information um his experience is no other um he's been doing notes for a long time since the 80s i know right and we ran into him at paper source his knowledge is amazing but he's a science sour finance person right this is his bread and butter yeah i i i admire jeff's analytical skills to look at it and and treat this like a real like a real business like a real project and something that can be um tweaked and and you can look at different things and what works and what doesn't work and i i like that approach i like you know kind of the systematic approach to it that's good so jeff welcome a man how are you yes sir hello guys how are you i'm doing good good well let's start from the beginning you know we all start where we're at today some people that's overwhelming some people it's exciting where did you get started with real estate and how did you get into notes if you can keep it under four hours it'd be great yeah that's the trick here um well let's see uh long story short uh when i was 19 i purchased my first property a triplex i lived in one unit rented out the other two covered the mortgage um i learned that and i purchased that property at 19 i decided when i was young about 15 and a half years old i read the book think and grow rich someone gave it to me and that's like the cornerstone of my success for sure and um in reading that book i decided uh about 16 years old that i would never be a and we want to make sure people understand that where you are today and which we're going to get into is not anywhere close to where you began at right it's years and years of work and hard work to get into where you're at today and the knowledge you have and experience you have so can you in the beginning what were some of the hurdles you came across and struggles that you had that they can probably relate to uh well the biggest hurdle is that you see the potential and everybody else making money with notes or supposedly making money with notes and you want to be that guy tomorrow next month in six months you know and it doesn't happen like that it is going back already to it's a business and most businesses fail seven out of ten businesses fail any business in the first year of their business whether it's a restaurant a gym uh i don't know a beauty shop uh a store front uh you're starting an online business i mean most businesses fail in the first year and this is this is just like any other business if you don't attack it and think of it as a business you're not going to last long as a business we're not talking about just buying a note here and there for as an investment in your ira and stuff we're talking about running it out as business and i think a lot of people when they get into the business they think they're gonna be successful in six months in in a year and they don't give it enough time to really ramp it up and build your business and grow your business um and that's that's a huge hurdle i think people need to get out over is that uh do i just want a dilly dally in this or am i am i gonna have an actual business and one day hopefully quit my job right and nothing ever moves as fast as you'd like it to never and you just gotta understand that and be okay with it yes absolutely yeah it takes time and and uh um you renter i'd own when i moved out i was going to own and buy something so i bought my first property when i was 19 a triplex lived in one unit went out the other two and then from there i i purchased and lived in and fixed up and moved uh several times by the time i was 25 i had 25 27 doors at 25 years old i had 27 doors and i was taking care of them all myself we're talking within you know a half hour hour driving distance of my house and um being a landlord i i know it all we can go over stories with that another time but um you know landlording is is not all it's cracked up to be and neither is uh rental cash flow um you know a lot of people tell hey i got a rental property you know the the the expenses are 1200 a month and i'm getting 1500 a month and that's 300 a month positive cash flow until something happens right until the water heater breaks and there goes four months five months of cash flow uh or a bigger expense comes up so i was always you know people think oh my god 27 doors you must have been rolling in it no i was barely making ends meet keeping all the the maintenance on all the properties covering you know 18 different mortgages and and and doing what i had to do and i there had to be a better way went to a boot camp seminar you guys know these dog and pony shows right you go to him free come learn how to be a millionaire and so i went to dozens and dozens of those i tried everything you know i was an entrepreneur and a mindset and i still am and and i uh i went to this one and the guy said be the bank not the landlord and i was like i don't have to be a landlord what uh went back back in the room within 20 minutes signed up 7 500 5 day boot camp right called in sick for a week know since 1991 are there things i do differently now than i did then oh for sure right i'm not as tech savvy as you guys but you know for instance i didn't really start using excel spreadsheets till about the divorce 2011.

so i have an email that i just saw recently that said exactly that which i was like whoa right yeah so that that was that that made me more efficient and and things like that but uh it's uh but i still use hey come on don't don't don't diss the calculator man right i can't pull a spreadsheet up when uh when i'm out on the boat and someone asked me about a mortgage i could pull up the app on my phone right this is true this is true and i think the difference between you know the the calculator itself in um the spreadsheet is it we get a tape of assets that comes in right of 50 assets to run 50 assets on a calculator would take some time and go right down the sheet and say okay here's my number so yes and there's certain things that spreadsheets actually struggle with with the calculator i'll be going into that eventually uh they don't do points right it's not 34.38 it's 34 payments it doesn't do it rounds it off and there's ways to avoid that but for some people that kind of gets overwhelming right and then what they do is they just avoid it instead of working with it and understanding it oh my god yeah it's it's uh people watching this in the future and stuff hp 10b2 calculator i teach it it's it's the calculator to use i have a whole calculator secrets book with 120 plus examples and practice things in it it is so simple it's five buttons that's it guys don't be afraid of the calculator i i do usually one at a time from individuals one note at a time and you're right when there's a lot more when i get a tape in or something like that you gotta use uh the excel spreadsheet you're not running it through or another program called t-value i use a lot of loan application references are asked for they run your credit there's income requirements right debt to income ratios lending guidelines employment ltv regulation z truth and lending and all these different things when when a seller sells their property and carries back a note none of that is applicable none of that is applicable so if i buy a conventional or private note guess what what happens i have to follow all those same rules and requirements if i buy a seller finance note there's no regulations right we'll go one more when you purchase a conventional or private note you have to follow all the regulations that they do when they gave the loan just as if you gave the loan yourself including the collection regulations um when you buy a seller finance note a purchase money mortgage the regulations lenders follow do not apply as defined and discussed uh uh in a class that i do um i i have a little home study course and this is on day one we call it it's called a holder and due course there is a technical legal term for it it's called a holder in due course it says if i sold the property myself and carried back the note myself i become that person so it's the same with a conventional or private note if you buy a note from a bank or a mortgage company or a private individual that gave a loan it's as if you gave the loan and you have to follow those regulations when i buy a stellar finance note it's as if i sold the home and carry back the note myself so i don't have to follow these regulations okay so that that's the differences between what you guys normally do which is go after bank loans and tapes and mortgage company loans and what uh what i do which is go after the individually held uh first position performing seller finance grand as a calculator but i think spreadsheets make a lot of things easier for newer investors to kind of grasp deal flown deals what's going on with you we're we've bought a few partials recently uh we've actually looked at a few formulas we purchased and then there's two non-performing notes that we kind of back and forth on that i may not go with yeah um what's been with you what's been going on with you i've got these uh that's a few different reverse mortgages uh another uh just a kind of a regular first mortgage and then i sold a couple of of the loans that i've been holding on to uh just because it's time and i'm i'm selling off stuff and getting everything kind of going into the fund and so we're also winding down and building up at the same time so it's a lot of fun that's awesome um for those who are interested uh leave a comment just go to jkp holdings spreadsheet dash calculator training and we'll go through it um and i'll be talking nathan afterwards we have some really cool stuff that's gonna be coming about for september um so tune in for that kind of information it'll be a training course but with that said um seller financing notes we both came from the institutional world we did some lease options the seller finance notes is the wild west that we thought we walked into when we bought into notes you know notes was like this wild west theory for a long time and then we gotta grasp it and then you walk into seller france notes i feel like i'm back to the wild west on just different things i like seller finance that's the same thing that's kind of where i got my start is um uh i it very at the very beginning i was creating notes and that was i was doing seller finance and so that was uh an interesting learning curve figuring out how to write paper and how to make it a good piece of paper to be able to resell if i choose to in the future yeah so i'm i'm a big fan uh there's there's all kinds of fun ways that people put them i was working at ralph's grocery store in southern california um since i was 15 and a half and uh at 25 i went to this boot camp and it changed the direction of my life i was like oh my god this is for me now if there were 200 plus other people in that class after about six months nobody was around anymore they went off to the next shiny object but i i knew in my heart of hearts that that this seller finance note business was for me at first brokering notes and then eventually to buy them and be the bank um and that's the short story of how i got into it what year was this this was 1991.

yeah started in may of 91 so i just had my 31 year anniversary last month and i do nothing else i don't invest in anything else no stocks no crypto um no nothing else just notes it's all about the cash flow sold off all the properties carried back notes on some got cash to buy notes with others built up the portfolio life happens got a divorce lost everything started over and uh building building it back up it's been 11 years since the divorce but you know still got to build it back up to where it was um and uh you know i know how to do it so it's uh it's been uh you know nothing happens overnight and to to grow businesses and to start these and i'm glad you mentioned too nathan that that it is a business uh we're not going after it like it's a business we're going after it as it's a business it is a business and if you're just lala gagging around thinking that you're going to find a note by building a website it's not going to happen that way guys not in these days yeah yeah you said all that you know we do have some members and people who follow us are probably born after you got started right it's kind of absolutely i'm not as young as i look and um so yeah with the numbers i mean we could talk about numbers all day long but uh yeah so you you hear all about this you know bankruptcy loans that we all pretty much came off of right this is what we did in 2010 and most of the people in the space did a lot of origination loans where you were in a different track right you did the seller france world where getting inventory you're not getting a 500 tape asset list right you're putting in work to get asset lists yeah yeah when did you guys start what year 2010 2010 yeah 10.

okay so um yeah before the crash yeah there's not a lot of tapes around you guys right there they're worked you know it and and you're talking about you know we all deal with banks well we all don't i don't you know deal they we do if they come across us and and you know if someone comes across us we we're happy to deal with things but there's a difference if i could share my screen a second let me show you the difference between uh different types of notes is that okay one second uh open all right i'll hit the little button here tell me when you should be good okay boom and then i'm gonna pick uh i made a few documents here yeah perfect so that you can we can see this so oh wrong one we're talking about notes we'll get to that one in a minute here it is okay there's three types of notes here they are this is it a conventional note a bank mortgage company gives someone a loan it's a debt instrument created when a bank or mortgage company finances the sale of real estate right most people understand that you want to buy a property you go get a loan from somewhere that is a conventional no okay and then you have a private mortgage note maybe the person can't get a bank loan can't fit in that box which is getting tighter and tighter these days right um and then there's private mortgage notes and then you're just looking for already created like you're not even creating your own necessarily yes existing absolutely yeah i don't i don't want to buy properties carry back notes you know let that like yeah that's a lot more work man i want to sit home and go bass fishing and go snow skiing and go hiking and you know uh that's awesome stuff right yeah yeah but uh yeah okay so i'll stop this now we can continue to so does that kind of uh explain it and then you ask the question and that's why i brought that up yeah what was that did that answer the question or is was there more to it no i think for most people they have to understand the differences right that was a good explanation of what that looked like um and good definitions um i did we did one question that came through for steve from steve johnson regarding you know mobile home parks and notes like that do you get involved with the mobile home parks and buying notes on yeah well that those are seller finance usually um however most of the time we just go for mobile homes on land so it's not in a park they own the land and the mobile home it becomes real property it's the same as a note on a house can you buy notes on mobile homes on leased land on a lot where they pay lot rent yes you can but it's a whole different ball game of requirements and due diligence because that is not real property just because someone's living in it doesn't make it real estate yeah and when when they're in it you know in my world if a mobile home is older than 10 or 15 years old it's old it's like vintage right and it's not worth much it's a it's a wobbly box it's a it's a pregnant roller skate on wheels it's just you know just like cars depreciate so do mobile homes right so there's different things to look at can they be purchased yes uh there's just different due diligence and things to go for like that have i purchased them absolutely right yeah it's awesome we did have another question regarding your due diligence when you're going through your diligence who helps you with your due diligence on an asset um people are looking for companies and teams and you know local walmart to get their their due diligence who's just special god like you know secret person that you use for your due diligence to review assets time on the water man time on the water if you don't know all about it yourself and you're gonna trust someone else to do that that that's a scary situation for me i am not a risk person i do not like risk so when i buy notes yes there's still risk right there's always a risk but i try to minimize it and keep myself in a position where you know even if it goes bad it'll still be good you know if you follow me there um and that now i forgot the question no just due diligence right you know due diligence so so is there a place you can go i believe there's a few people out there that will process your notes for you and things like that uh however in the beginning you should absolutely try to do it all yourself make that phone call to the title company order a title insurance policy right make make that connection to the appraisal company and order that appraisal yourself see how the process works learn how to read an appraisal learn how to how to read a title insurance policy learn how to read the documents we just read a security instrument yesterday that had some language in it that i couldn't believe that was put in and i caught it and so now there's a different price because there was like this person doesn't have to uh this person gets a 15 discount if they pay off before 2025 and i'm like whoa that's a whole different ball game now yeah it's a different number i have to guys 31 years i mean both of you have seen my marketing presentations and and you know thinking of it as a business uh i think my last figures that i quoted at the vapor source convention was you know over all 31 years over 709 000 people have responded to me yeah and i've closed you know 2 300 transactions you know a very very small percentage of them um but that's a lot that's a lot and when you when you uh talk about you know what cool technology is there to find notes guys these notes aren't aren't online usually you know and if they are they've they've usually been through us us meeting the people that regularly buy seller finance notes the institutions some of us larger privates and uh i've seen notes that we've cancelled up on those uh up online and uh you know if if that's your mode of finding you know deals great trust but verify we talked about trust earlier with the due diligence stuff trust but verify look at that stuff read it yourself get what you need to get if they don't give you enough time bail right you need to know what you're doing you need to know your investor mindset and you need to know what you're doing when we're trying to find seller finance notes um yes there are some online marketing strategies that we use uh social at um social media uh every now and then uh google adwords things like that uh search engine optimization all these different kinds of things but um the core of finding an individually held seller finance note is marketing right i talk about marketing all the time marketing is something you have to do for every business and uh for me i'll quickly go through it it's it's you've got to have three to five things working for you at any one point in time and of percent for 50 years and you're just like oh my god do you have any more properties and so we see everything from those to you know two percent three percent four percent and you're just like what are you a bank yeah now with interest rates going up in three to six months we'll see some higher interest rates i'm sure however going with that our yields are going up too because we got to keep the same the same profit going right um so prices are still going to be um the same if not lower in the coming future but uh yeah that's that's uh that's a big thing all over the place yeah all over the place yeah yeah okay you know would you buy a no a note with a zero percent interest rate for 50 years is going to get a huge discount performance or not right so it's it's one of the fun things about the business that really keeps me doing it year after year is that every person that contacts me it's a whole different puzzle how am i gonna fit the pieces in right how's this gonna work right with uh with 29 different ways to buy a note which one's going to work for this guy yeah yeah it keeps it fun keeps it interesting so let's get into some fun stuff here you don't want to share your screens give us example what note you've seen what numbers have come across in the last eight year or two give us a kind of a general situation you've run across in some numbers of a property okay so let me share my screen okay and here and i'll hopefully get the right one this time jeff you're in california and you you buy all over the place right i i'm in arizona now i was in california where you've been looking at lake havasu city arizona now for uh seven plus years okay yeah it's 97 degrees already it'll be 107 today and he's already running so you guys up there don't know what that course this person had contacted some other uh companies right competition to see what they could buy there were some poor credit on this one so that that's the reason for the higher um for for the yield and for the for the discount okay um i don't know what that is since on the dollar but it looks like about 75 you know or somewhere around there so paul's right there i i stress this traumatically because people don't realize this people bid percentage of upv or bpo this is a case example jeff doesn't even know what the percentage of upbeat is or bpo is because he's based on a return not based on a percentage number right he's guessing because it doesn't matter if this is 80 or 20 his numbers based on a return he's looking for based on the situation sorry josh correct based on the situation because we use all all four or five different ways right yield investment to value um cents on the dollar uh et cetera et cetera right there's there's other ones that are blanking now but those are the the three major ones that we use yeah uh uh oh cents on the dollar i if we didn't say that um to calculate our prices in this case the final number did come from yield a yield based calculation right and of course when we this is an initial price subject to verification of the information that they gave us and acceptance of the payer's credit appraisal and title we already saw the credit right and and did a soft pull and we saw the credit so we already knew that so now this price is still subject to a appraisal coming in for at least a sales price and like we talked about early clean and clear chain of title um and with that said and then we do one last calculation to check our safety and security uh is investment to value investment to value is the purchase price you're paying compared to the value of the collateral itv this is a term you got to learn in a lower my price and adjust for everything but you you've got to learn yourself if you start out and you just trust people to do things for you you are eventually going to get burned because it's not their job to keep you safe it's their job to do the due diligence and then give it to you so and it's a different perspective like yes sometimes i'll buy a note and i have this kind of exit strategy in mind right and then what if it changes and what if i i don't decide i don't want to do that for this particular note i wanted to do something different and i mean if you're trusting somebody else to do it for you they may not know your end game right they won't be able to guess your end game and so that and that makes a difference on your due diligence also make sure we're clear we're doing what title policy really means right it's an insurance policy saying that there's the titles clean when the loan is originated and why is that important for registration as well as buying is that we can hold then we order our own e which says from the time it was purchased to now what has happened so the title policy is there and something comes up you actually have an insurance policy to deal with the issue and sometimes pay you off if the circumstance is right so it's a huge tool that if you don't see a title policy you should be a little worried but you need to make sure that there's a clear title besides just your liens absolutely yeah the chain of title to the property and in 31 years you know knock on wood i've never had a claim with a title insurance policy but it's just like it's like car insurance or house insurance yeah you pay it every year one you pay one time and you know just like house insurance or car insurance you might not ever use it right right so um you've got to think about that and i see so a lot of now someone might bring up the fact that well aren't seller finance notes messier well a little bit yeah they are because they don't they don't have to get an those five things um half of my business comes from direct mail i purchase names of names and addresses of note holders and i direct mail to them uh that's half of my business every year half my deal is closed even and last year was like 62 but uh of my deals that i closed were from my direct mail campaign and it's not a one-time throw out a thousand letters and get a deal it's a consistent program over time a thousand a month two thousand a month whatever you can afford it's expensive but it does get me deals second is classified ads in small outlying rural areas uh third is building a referral network it takes more time you got to be in business for a few years for people to start getting to know what you do and that you can do what you say you can do and then those referrals can start coming in um online marketing we already talked about uh and then direct contact talking to people all the time about what you do because it it is such a niche within a niche within a niche right oh you're a real estate investor oh well buy properties well no oh you give loans well not exactly and you know so we're in a niche within a niche within a niche and in the note industry itself there's a bunch of little niches i do this one little thing you guys do that thing and other people do this thing and you've gotta focus on one and build up your marketing i offered the marketing plan to people at the paper source convention dozens of people requested it i said it to them i haven't seen one back yet obviously i'm like hey i'll i'll do it for you i'll i'll go through it i'll help you i'll make you make sure everything's good and get your on your you know get your bus footage accepted and you're just like people don't want to do the work they want the easy way out oh my gosh if it was that easy everyone would be doing it right because that question always comes up why isn't everyone doing it if it's so great well because there's work involved right so fantastic how many people would be quick and never has been and never will be it's never roseman never will be how is yeah i'm experiencing 90 today we're hitting 90 in jersey oh my gosh 90.

that's a cool day here we pray for 90 degree days no but you're buying all over the place right like it yeah but we're buying nationwide yes nationwide we even did a deal once puerto rico and guam um all all the states uh i think maybe there's one or two states i haven't done a transaction in in all these years you know like maine is one i think means anyway yeah yeah this is nationwide oh that's cool yeah oh what did i finish the question or no yeah you're good we were looking for another we're going to share a screen i was going to share a screen and show you some numbers yeah i do want to go over that investor mindset too so let's let's sure boom this is a recent transaction i want to share that one there you guys see kingston georgia yeah okay cool so here's a a recent one that that we took down meaning purchased uh for myself directed roth ira you know we're all doing this the right way that's that's one of the best ways to do it is build up a self-directed roth ira and yeah put him in there so long story short the uh a person in kingston georgia a little small rural town in georgia so the regular house owner occupied ooh single-family home owner occupied single family home and get that out of the way that's distracting there we go and uh 120 000 sales price you got 20 000 cash down payment 100 000 seller carry back note uh 30 years at eight and a half percent interest this guy knew something right this guy's a little more savvy than a regular individual seller finance note holder yeah um he knew to get the interest rate a little bit higher he knew to get a a decent down payment um so that's great so we plug it number you have to calculate this is your security we're at 62 investment to value meaning there's 38 uh uh security above me equity above me that if something goes wrong worst case scenario happens and i have to foreclose take back the property fix it up resell it and carry back another note or sell it for cash i'm going to have enough room to do all those things and still at a minimum get my seventy four thousand dollars back and what the market is today the this is a big deal because if the market drops at all you have to be the spot to absorb that impact of property values correct increasing correct correct so so i like to keep myself from my own personal uh portfolio and my personal preferences under 70 investment to value and usually under 60 uh investment to value uh i am i am not risk averse i i'm i manage my risk and uh again in 31 years i've had two foreclosures and and i actually made a ton of money on both of those we had one question about how much if someone begins how much should they budget for marketing oh geez you know look guys when i started out um there was no internet right and i was working night crew at a grocery store and work nights and and take care of the properties in the daytime and try to start this business in the daytime and my budget was was really small a couple hundred bucks a month you know as deal started closing i could put more towards it i would prefer when when people work with me and and i i mentor them or i coach them on their way to to start their business um i i like them to have a minimum of a thousand dollars a month for 12 months commit to 12 months commit to at least a application they don't have to get you know truth and lending and write out everything and sign this and fiduciary responsibilities and stuff the guy sits at the table and says so you want to buy my house for 120 000 great give me twenty thousand down i'll hold the note for this long how does that sound great sign the documents done and some i've gotten a note written on a on a piece a yellow legal pad right so that had to be corrected you know so there's in seller finance notes uh we do a lot of work not a lot we do some work on cleaning up the file making it presentable to investors whether institutional or private and and for myself making sure i have everything i need in case after i buy it i need to take action and get things corrected so so you'll you'll buy it and then do some fix up and then may or may not sell it i'll make sure it's fixed up before i as i'm buying it during the process uh there's one right now we're doing a land contract in georgia and um uh they recorded a warranty deed and they have a note but there's no security instrument there's no deed of trust oh okay well that's to be fixed right and if you want us to do it our price is going to go down a little bit if you do it before that we'll keep our price the same got it so the guy is like and he used an attorney guys attorneys you know no offense to anyone that's an attorney but they don't know everything and they especially don't know about about seller finance notes if they haven't if that's not like their core business yeah they're not a real estate attorney they probably haven't done these transactions and and they just i don't know look it up on google and do their best i have no idea before we get into some deals right everyone wants numbers it's exciting can you share a little bit about how you come across these assets the secret ideas new cool technology that you use to find great new deals we would just love it if there was some new cool technology to find us seller finance notes but i'll tell you what many pieces of mail do you think that the 2300 you close on average those people received how many marketing you know letters competition yeah you know and it probably came directly from me telling people to do it right uh but it's okay because there's plenty of notes however i'm gonna say at least a dozen if not a couple dozen how many pieces of letter did you send to that person that closed how many do you send three they get four things from me in 19 months so they'll get a they'll get a letter um you know right away uh six months later they get a follow-up postcard 12 months later another follow-up postcard and 18 months later a follow-up postcard it's a program right i'll i'll get i'll get that first contact in they'll call me or email me or fill out the worksheet online from the letter and then not everybody needs to sell right now a lot of them are just curious right right i'm usually the first person to tell them no you're not going to get the balance of the note there's a discount involved and let's see let's see how bad yours is going to be right yeah or how good it's going to be sometimes they're good smaller discounts but uh yeah it's it's action and and marketing and in a program uh a consistent program that's what that's why the direct mail works because it's a consistent program not a one-time thing yeah so i got a question on um on the notes that you're seeing uh where people are responding and you're you're reviewing all the documentation and stuff what's kind of an average interest rate that these loans are being written at i know it varies wildly but so so you know people carrying back notes on their properties most the ones that do it most of them it's only one in their lifetime material yeah right it's not a business for them it's i had to sell my property i carried back a note so they don't know what they're doing and if they don't contact us beforehand we see stuff you know uh zero down zero in the calculator we run the numbers the payment amounts 768 91 there first step second step verify the balance when they call you they've received a few payments so we got to know what the balance that we're purchasing is so we run it through the calculator here's the little steps the balance is 99 630.

then the next thing i do is i'll calculate the loan to value right balance of the note divided by the sales price the property in this case came out to be 83 loan to value yeah but but jeff uh if the property was sold you know a year ago the the property is probably worth more so the loan to value is going to be lower yes but initially on the initial per pr price we don't know what it's going to come in at we don't know what it's going to appraise at even with going online and stuff because i don't really trust the values zillow and all those other ones give i i trust the numbers right so the numbers i know that it sold for 120 it's going to be at least worth that so my loan to value is at least you know at the most let's say right now 83 so if the appraisal comes in for higher later on when we're doing a transaction then great my loan the value is lower and i'm actually safer okay or let's not use the word safer more secure right yeah um and then i go with my full purchase on this one we had a good down payment on this one i wanted a 12 yield on this not the greatest i usually like higher um but it's it's a bit competitive out there right now i came in at a 12 percent uh for a purchase prices 74 620 to the note holder this is direct i'm i'm doing this direct i didn't broke for this and everything so that was the price of normal and yeah okay it's a 25 000 discount but i have to wait 30 years to get my money yeah and i want to make some money yeah so the issue with this one was of thousand dollars a month and and you'll see some uh of progress you'll see some deals starting to come does that help yeah i think it does yeah absolutely yeah it makes sense you can't be bootstrapping his business on because you're never getting traction right again it's it's not a get rich quick and it's not uh you're gonna make a million dollars in a month not not that's just not nice so so there you go yes good question um so i do the the itv and then we have on the bottom there we have the information that we verified on the calculator and the numbers we calculated and this guy went for it uh appraisal came in for like 122 so we were okay on that one uh title was easy they had a title insurance policy so we just had to do an update or a date down it's called from the time they got the policy until now and uh and that was one we recently uh purchased uh and those payments are just going in the roth ira every single month that's a good looking note i like that one yeah yep now are they all like that and that simple to do and easy no i picked out a smooth one for you but you know there's always hurdles and surprises just like with you guys i'm sure you guys have a few more hurdles and surprises with some of the non-performing and stuff um but uh people seem to think that i don't purchase non-performing i i do just not at the prices you guys do so it's definitely changed over the last couple years yeah yeah we have another question regarding it again yeah yeah regarding from april regarding when someone says no to your price right what do you say then how do you overcome some objections so okay so part of the business is marketing and getting those calls to come in right all right so i can get the calls to come in for people starting a new business or starting out and stuff but what happens when you pick up that phone and start negotiating and talking and communicating with these people that's where the deal is made right so on that very first phone call i have an idea uh by the time we're done with it i'll have an idea of what they're looking for if they're looking for par you know 100 of the balance or a 5 discount or a 10 percent discount guys you know don't waste my time this is not how this works if you can get 90 cents on the dollar you should have this that and the other thing you don't so your discount's going to be a lot less so when i do call with the prices they are already thinking in their head oh my gosh this guy might not even buy this note right because as i'm going through getting their information and filling out the worksheet most of the time verbally i would say maybe a third of them go through the website first and put their information on my form and send it to me guess what i'll call them up right away when i get it and start verifying the information that that person-to-person contact that relationship building is is what this business is all about it's not all about numbers sometimes right i bought lots of notes at lesser prices than competitors because they i built a relationship and they like liked me better whatever that means you know um so and that's worth something like that's not that's not nothing that that's definitely worth something right and that didn't happen over in the first year that took years to learn how to negotiate and talk to people so on that first phone call we're getting to when they say no on that first phone call ooh a three percent it's a straight ah what are you a bank dude why would you do that you should get got like an eight or nine or ten he's like well that's what the banks are giving well arnold writers aren't gonna like that right and uh uh oh you got you got a thousand require a debt buyer to be licensed um do you do that or without going through this is seller finance notes uh the only state that i know of that has regulations on uh brokering notes if you're buying them for yourself and you keep it full term you're not a broker you're a buyer and a holder and that's one thing but if you are going to broker them the only state that i know of that has regulations is california california requires that you have a real estate broker's license to broker notes and uh that's hard for some people to swallow because there's a lot of notes in california um i have my license there because i lived there and that's where i started so i just got it you know don't need anybody slapping my wrist or checking up on me but other than that you know as far as i know you know i'm not a licensing expert but as far as i know you can broker notes everywhere except california if you don't have a california real estate broker's license yeah that's cool yeah and classic california yeah well let's not get into that this is a business call so i'd like to know give us your worst story you ran into where it just was just bad or your worst mistake you know even you know i try to forget about bad things that happen even like an argument with the wife you know last week i'll forget about it because yeah it just drains your energy and stuff but um the worst and successful one yeah it just affected lessons from others who are watching and saying successful meaning i purchased it the worst one there's a i i guys i i'm really struggling i have other people's stories of their horse deals but you know like uh buying uh what you thought was an owner-occupied single-family home a note on a phone and the time involved in the investment he thrives on the concept of the greater the risk the greater the returns speculative investors want a home run every time they'll take large risk for the possibility of large profit will use their last dime with a promise of huge gains we'll pay little or no attention to the downside risk will abandon strict standards of valuation and risk aversion these are the differences these are the two types of investors out there and i can go on and on about this for for an hour or two as well but i really want people to start thinking i think that's one thing i got out of the conference at paper source last month when we met um and we talked is that uh people want that quick buck they want to make a decision they don't want to do the work and they they get away from um what a real investor should be doing which is knowing what they're investing in you know uh crypto for example oh my god the people that were raving about crypto last year whoo i i can't even count how many people where are they at now right cash me outside right how about that it's down like 90 percent and that that's always been crypto's always been in in and into the foreseeable future here a very speculative investment so i i think at the at the conference where i was going with that is that a lot of people do not know their investor id they do not know what where they're at and it takes a while for you to figure it out so while you're figuring it out why don't you broker some notes flip some to investors that know what they're doing and see how the process works and see if you like how that investor does it or you like how that investor does it and then you narrow it down to what what you're i'm looking at your picture that should be looking up here what you guys are are looking at as far as what your investor id is you guys for having me thanks jeff everyone have a good weekend we will be catching up with everyone soon but uh if you have any questions feel free to take a look at the youtube channel facebook group and all that good stuff and uh take a look at the note training that will be coming out shortly thanks everyone for tuning in and uh we'll talk soon down on a 200 000 property underwriters aren't going to like that oh it goes for 50 years underwriters aren't going to like that so by the end of the phone call they're like oh my god my notes really crappy i hope i can get something for it yeah so when i call them back and give them a price the discount's not going to be a shock to them right they're going to oh there there's a discount involved i get it and and they'll they'll be more open to hearing the options right it's not all about the full purchase then we got the options so when they say no i go back and i said well on the first phone call wait a minute didn't you say you know you'd like to pay off some debt or you know buy your your daughter a car or pay for your son's college or so let's see how we can work this out you know here's three options here's a full purchase price here's here's a way to get just what you need to pay that call is tuition this year here's a way to get a couple years of that and i give them some different options um now i i don't get everybody to say yes obviously right i don't what what's the i think my stats are like 2.3 percent over 31 years have accepted and closed yeah i'd probably get 10 to say yes it's the other you know some of the a lot of them don't work out um and uh so when they say no i'm just i just go with those other ones i try to figure out what's going to work for them um and you know then sometimes they still say no you know a lot of times they still say no however then you just follow up with them call them next month call them three months six months and i keep saying call yes people we gotta talk to these these people it's not all about oh i could just send them a price and an email and if they say yes great if they don't get you're just throwing stuff against the fan wallers to see if it'll stick right that's not the business right you can send out numbers all day long we're not quote machines right we want to get a deal if i'm sending you a price as a broker you you negotiate the occupied single family home in oklahoma and it turns out that it was built out of hay it was there's a process i looked it up there's a way to do it but it had burned down and they didn't have insurance um but again that's that's not my story that's uh an associate's story but um yeah my worst i've had there there are transactions where you're like you're like nail biting wondering if it's going to get the closing or not because of title issues or because the note payor is is not friendly with the seller of the property right there's a little battle going on they don't have a good relationship they hate each other and it gets it gets sticky you know it gets stressful on our part because we're like the mediators trying to make everyone happy and uh and things like that gosh uh i really wasn't prepared for that question i i don't have even like my two foreclosures i i had a windfall on them so yeah you know those aren't even bad stories oh go ahead have you lost money on a deal no never why because i purchased it properly yeah right if you purchase it if if someone says hey this is this is how much i'm selling my note for and you buy it for that price without doing your due diligence your own due diligence you know it's a crapshoot you're you're taking a risk you're being you're being a speculative investor at that point right right oh is it is this a good time to do that before we're almost done yeah we've got not a lot of time yet yeah let me let me i'm going to share this real quick because um i really want uh your listeners to know the difference i'm pretty sure it's this one value-based investing versus speculation okay i i learned this from this big thick book this is graham dodds so i wanted to get that out there for the for the public in general you got to know what kind of investor you're on before you start investing in anything absolutely so we you you we kind of hinted at it before but you you talked about uh looking out to the horizon here uh with the non-performing and the and just market conditions and and all of those kinds of things what's your take what do you see coming well we've never seen nothing like this in history right all of these different things that are happening at once uh with the war in ukraine in in ukraine and and the gas prices and the oil stuff and and the inflation hitting 8.6 and then interest rates just bumped for a 30-year fixed 6.1 now two months ago was like in the fours yes unprecedented how fast interest rates are going up right now i'll tell you this though been doing this for 31 years i know when interest rates hit six percent for me my opinion my statistics when interest rates hit six percent much much fewer people are going to be able to qualify for conventional bank financing and there's going to be a lot more seller financing coming up here right so i'm jumping up and down i've been waiting since the early 2000s right go up i as note investors yes performing individually held singapore i want interest rates to go up because then they'll get closer to my yield and i can give a little bit better prices sometimes yes so uh i think that we're going to see more seller finance notes on the horizon um i don't know how all this is going to play out you know with the economy and everything like that uh we just dipped into a bear market a recession is looming um and and we're just going to continue to move forward i'm going to continue to do the marketing uh but i do expect that i'll be very busy in the next couple years yeah yeah heck out of it right that's your job and that's that skills to be learned also is is the negotiating side yeah deals are made on the phone emails are for confirming details and things like that but deals are made on the phone lots of phone time and you get information about that you wouldn't get on a forum right why they said sell the loan yes one of the numbers you know hey situation hear the tone of voice you can get a grasp of what's really going on and more than just the asset itself absolutely and you can hear their tone and i'll tell you this and and whether it's a bank that you're buying it from or or a mortgage company tape or an individual note holder their stuff they're not telling you right and our job in due diligence is to peel that onion and find out what they're not telling us because there's always always always something they're not telling us yeah right oh you showed this to other buyers why didn't they buy it yeah well i don't want to tell you well i'm going to find the same stuff so you might as well tell me right now yeah right and not waste neither of our time so how many assets do you see are actually serviced by a licensed servicer uh half maybe half yeah like sometimes it's more than a wire some states require it like arizona requires that if you carry back a note it has to be serviced by a licensed servicing company um and other states have have similar rules but you know no no holders again you know this is they carry back one note in their lifetime right it's not their business and they just get the payments every month and and these days they they get cash app or a venmo or uh or a paypal or something and and that's where we get the payment histories from but i would say about half already have a servicing company in place right that's pretty good actually yeah i'm i'm kind of surprised by that right you know most these are backwoods kind of deals that just happen and whatever how do you deal with are you licensed in all states to buy debt right there are certain states out there that graham and dodd security analysis mcgraw-hill this book is huge look at that half my face and it was written a long time ago and it's it's a lot about stocks and different things like that but it it really stresses the difference between a value-based investor and a speculator a value-based investor i'll just read this off because i think that'll go quicker a typical note investor seeks an investment that provides current income preservation of capital and growth potential with minimal risk the typical note investor seeks a relatively safe secure trouble-free cash flowing investment this is me what what do value-based investors want epi this is a a phrase i've coined epi stands for extreme passive income extreme passive income because the check comes into your your box every month or you get your ach payment deposited every month and there's no one calling you up about toilets termites taxes or tenants right extreme passive income um value-based investors want to take advantage of the power of compounding right what is that when when you got when you've gotten a loan in the past and you signed your truth and lending document and you it shows you you're getting a hundred thousand dollars loan but you're gonna pay the bank 272 000 that's the power of compounding that's what we're taking advantage of here uh we want preservation of capital we don't want to lose money we want minimal risk there's still risk we just mitigate it uh we want a relatively safe secure investment for the long term would a value-based investor buy non-performing notes absolutely but not for the prices that speculators would pay for them let's talk about speculation a speculative investor is as follows a speculative investor knowingly assumes the risk of incurring a large loss if he or she believes the possibility of a large gain exists the speculative investor understands the risks expenses so awesome we'll see if i know april said that it gave your t-w-i-t-a comment on in the thread so oh twitter yes uh twitter's my little slogan i came up with i i thought way back when i watched austin powers i was just like that's what i'm talking about right everyone says it now that's what i'm talking about that's just a mouthful right five that's what i'm talking about i'd rather just say twitter p-w-i-t-a twitter and uh and get it out i use it when anything is exciting happening when something's positive when i catch a fish i'll shout it out [Laughter] when i you know when i hit a good golf shot boom twitter you know yeah so uh that's that's my little thing kind of like i guess branding you know or whatever that's my thing i'm jeff twitter armstrong find me on facebook at twitter jeff on facebook i appreciate you coming on for the hour giving us great absolutely good it was awesome just that experience and knowledge is overwhelmingly awesome and guys feel free to reach out to jeff he puts out a newsletter that you can progress so much great information from um just stay in tune with them take a look up on linkedin twitter everything else out there and just tune in with him and learn some room he's a great guy to learn from his open book so thank you dave yeah um it's you know my website armstrongcapital.com i i send out uh every wednesday i'm pretty sure you guys get it i hope you get it yeah tips and training by jeff just little tidbits an article every month things like that just to keep that motivation going yeah you know please feel free to sign up for that that newsletter on my website and yeah questions email me i'll get back to you yeah email's always best i'm really busy on the phone so most of those go to voicemail and i return phone calls but uh email me is best you'll find it on the website thank deal flown deals what's going on with you we're we've bought a few partials recently uh we've actually looked at a few formulas we purchased and then there's two non-performing notes that we kind of back and forth on that i may not go with yeah um what's been with you what's been going on with you i've got these uh that's a few different reverse mortgages uh another uh just a kind of a regular first mortgage and then i sold a couple of of the loans that i've been holding on to uh just because it's time and i'm i'm selling off stuff and getting everything kind of going into the fund and so we're also winding down and building up at the same time so it's a lot of fun that's awesome um for those who are interested uh leave a comment just go to jkp holdings spreadsheet dash calculator training and we'll go through it um and i'll be talking nathan afterwards we have some really cool stuff that's gonna be coming about for september um so tune in for that kind of information it'll be a training course but with that said um seller financing notes we both came from the institutional world we did some lease options the seller finance notes is the wild west that we thought we walked into when we bought into notes you know notes was like this wild west theory for a long time and then we gotta grasp it and then you walk into seller france notes i feel like i'm back to the wild west on just different things i like seller finance that's the same thing that's kind of where i got my start is um uh i it very at the very beginning i was creating notes and that was i was doing seller finance and so that was uh an interesting learning curve figuring out how to write paper and how to make it a good piece of paper to be able to resell if i choose to in the future yeah so i'm i'm a big fan uh there's there's all kinds of fun ways that people put them together and and uh they're a little bit goofy sometimes but i mean people are paying yes sometimes that's all that matters yeah so without further ado we have gentlemen here that could be tuning in with us if you don't know jeff um get known he's a wealth of information um his experience is no other um he's been doing notes for a long time since the 80s i know right and we ran into him at paper source his knowledge is amazing but he's a science sour finance person right this is his bread and butter yeah i i i admire jeff's analytical skills to look at it and and treat this like a real like a real business like a real project and something that can be um tweaked and and you can look at different things and what works and what doesn't work and i i like that approach i like you know kind of the systematic approach to it that's good so jeff welcome a man how are you yes sir hello guys how are you i'm doing good good well let's start from the beginning you know we all start where we're at today some people that's overwhelming some people it's exciting where did you get started with real estate and how did you get into notes if you can keep it under four hours it'd be great yeah that's the trick here um well let's see uh long story short uh when i was 19 i purchased my first property a triplex i lived in one unit rented out the other two covered the mortgage um i learned that and i purchased that property at 19 i decided when i was young about 15 and a half years old i read the book think and grow rich someone gave it to me and that's like the cornerstone of my success for sure and um in reading that book i decided uh about 16 years old that i would never be a renter i'd own when i moved out i was going to own and buy something so i bought my first property when i was 19 a triplex lived in one unit went out the other two and then from there i i purchased and lived in and fixed up and moved uh several times by the time i was 25 i had 25 27 doors at 25 years old i had 27 doors and i was taking care of them all myself we're talking within you know a half hour hour driving distance of my house and um being a landlord i i know it all we can go over stories with that another time but um you know landlording is is not all it's cracked up to be and neither is uh rental cash flow um you know a lot of people tell hey i got a rental property you know the the the expenses are 1200 a month and i'm getting 1500 a month and that's 300 a month positive cash flow until something happens right until the water heater breaks and there goes four months five months of cash flow uh or a bigger expense comes up so i was always you know people think oh my god 27 doors you must have been rolling in it no i was barely making ends meet keeping all the the maintenance on all the properties covering you know 18 different mortgages and and and doing what i had to do and i there had to be a better way went to a boot camp seminar you guys know these dog and pony shows right you go to him free come learn how to be a millionaire and so i went to dozens and dozens of those i tried everything you know i was an entrepreneur and a mindset and i still am and and i uh i went to this one and the guy said be the bank not the landlord and i was like i don't have to be a landlord what uh went back back in the room within 20 minutes signed up 7 500 5 day boot camp right called in sick for a week i was working at ralph's grocery store in southern california um since i was 15 and a half and uh at 25 i went to this boot camp and it changed the direction of my life i was like oh my god this is for me now if there were 200 plus other people in that class after about six months nobody was around anymore they went off to the next shiny object but i i knew in my heart of hearts that that this seller finance note business was for me at first brokering notes and then eventually to buy them and be the bank um and that's the short story of how i got into it what year was this this was 1991.

yeah started in may of 91 so i just had my 31 year anniversary last month and i do nothing else i don't invest in anything else no stocks no crypto um no nothing else just notes it's all about the cash flow sold off all the properties carried back notes on some got cash to buy notes with others built up the portfolio life happens got a divorce lost everything started over and uh building building it back up it's been 11 years since the divorce but you know still got to build it back up to where it was um and uh you know i know how to do it so it's uh it's been uh you know nothing happens overnight and to to grow businesses and to start these and i'm glad you mentioned too nathan that that it is a business uh we're not going after it like it's a business we're going after it as it's a business it is a business and if you're just lala gagging around thinking that you're going to find a note by building a website it's not going to happen that way guys not in these days yeah yeah you said all that you know we do have some members and people who follow us are probably born after you got started right it's kind of absolutely i'm not as young as i look and we want to make sure people understand that where you are today and which we're going to get into is not anywhere close to where you began at right it's years and years of work and hard work to get into where you're at today and the knowledge you have and experience you have so can you in the beginning what were some of the hurdles you came across and struggles that you had that they can probably relate to uh well the biggest hurdle is that you see the potential and everybody else making money with notes or supposedly making money with notes and you want to be that guy tomorrow next month in six months you know and it doesn't happen like that it is going back already to it's a business and most businesses fail seven out of ten businesses fail any business in the first year of their business whether it's a restaurant a gym uh i don't know a beauty shop uh a store front uh you're starting an online business i mean most businesses fail in the first year and this is this is just like any other business if you don't attack it and think of it as a business you're not going to last long as a business we're not talking about just buying a note here and there for as an investment in your ira and stuff we're talking about running it out as business and i think a lot of people when they get into the business they think they're gonna be successful in six months in in a year and they don't give it enough time to really ramp it up and build your business and grow your business um and that's that's a huge hurdle i think people need to get out over is that uh do i just want a dilly dally in this or am i am i gonna have an actual business and one day hopefully quit my job right and nothing ever moves as fast as you'd like it to never and you just gotta understand that and be okay with it yes absolutely yeah it takes time and and uh um you know since 1991 are there things i do differently now than i did then oh for sure right i'm not as tech savvy as you guys but you know for instance i didn't really start using excel spreadsheets till about the divorce 2011.

so i have an email that i just saw recently that said exactly that which i was like whoa right yeah so that that was that that made me more efficient and and things like that but uh it's uh but i still use hey come on don't don't don't diss the calculator man right i can't pull a spreadsheet up when uh when i'm out on the boat and someone asked me about a mortgage i could pull up the app on my phone right this is true this is true and i think the difference between you know the the calculator itself in um the spreadsheet is it we get a tape of assets that comes in right of 50 assets to run 50 assets on a calculator would take some time and go right down the sheet and say okay here's my number so yes and there's certain things that spreadsheets actually struggle with with the calculator i'll be going into that eventually uh they don't do points right it's not 34.38 it's 34 payments it doesn't do it rounds it off and there's ways to avoid that but for some people that kind of gets overwhelming right and then what they do is they just avoid it instead of working with it and understanding it oh my god yeah it's it's uh people watching this in the future and stuff hp 10b2 calculator i teach it it's it's the calculator to use i have a whole calculator secrets book with 120 plus examples and practice things in it it is so simple it's five buttons that's it guys don't be afraid of the calculator i i do usually one at a time from individuals one note at a time and you're right when there's a lot more when i get a tape in or something like that you gotta use uh the excel spreadsheet you're not running it through or another program called t-value i use a lot of and um so yeah with the numbers i mean we could talk about numbers all day long but uh yeah so you you hear all about this you know bankruptcy loans that we all pretty much came off of right this is what we did in 2010 and most of the people in the space did a lot of origination loans where you were in a different track right you did the seller france world where getting inventory you're not getting a 500 tape asset list right you're putting in work to get asset lists yeah yeah when did you guys start what year 2010 2010 yeah 10.

okay so um yeah before the crash yeah there's not a lot of tapes around you guys right there they're worked you know it and and you're talking about you know we all deal with banks well we all don't i don't you know deal they we do if they come across us and and you know if someone comes across us we we're happy to deal with things but there's a difference if i could share my screen a second let me show you the difference between uh different types of notes is that okay one second uh open all right i'll hit the little button here tell me when you should be good okay boom and then i'm gonna pick uh i made a few documents here yeah perfect so that you can we can see this so oh wrong one we're talking about notes we'll get to that one in a minute here it is okay there's three types of notes here they are this is it a conventional note a bank mortgage company gives someone a loan it's a debt instrument created when a bank or mortgage company finances the sale of real estate right most people understand that you want to buy a property you go get a loan from somewhere that is a conventional no okay and then you have a private mortgage note maybe the person can't get a bank loan can't fit in that box which is getting tighter and tighter these days right um and then there's private mortgage notes so an individual investor maybe a real estate investor but an individual investor uh will fund the loan to purchase the house so the person's taking money out of their pocket 100 providing the loan for the person to buy the property that's a private mortgage note a debt instrument created when an individual not a bank finances the sale of real estate then we have what's called a purchase money mortgage this is a debt instrument right now we're not seeing that screen jeff we're just looking at the we've got value-based investing versus speculation that's the one we'll see right now what um what i'm showing this one this is my screen are you sharing a screen or i uh yeah it says it says i'm sharing my screen correct you may be sharing a um oh how about i stop and then i'll share again let's see if it works now i'm sorry guys no problem boom and boom now there it is boom okay okay so we did a commercial note bank you know private mortgage note individual a person uh giving a loan right for someone uh and then a purchase money mortgage note a debt instrument note and mortgage note d to trust sometimes a recordable land contract carried back by the seller of their property to facilitate the sale of their own property a seller finance note that's that's the whole key a seller of their own property selling their own property carrying back the note on the property they own that is a seller finance no and the differences between them are as follows you can have when when a conventional or private note loan is given they have to follow all of these rules and more there's a loan application references are asked for they run your credit there's income requirements right debt to income ratios lending guidelines employment ltv regulation z truth and lending and all these different things when when a seller sells their property and carries back a note none of that is applicable none of that is applicable so if i buy a conventional or private note guess what what happens i have to follow all those same rules and requirements if i buy a seller finance note there's no regulations right we'll go one more when you purchase a conventional or private note you have to follow all the regulations that they do when they gave the loan just as if you gave the loan yourself including the collection regulations um when you buy a seller finance note a purchase money mortgage the regulations lenders follow do not apply as defined and discussed uh uh in a class that i do um i i have a little home study course and this is on day one we call it it's called a holder and due course there is a technical legal term for it it's called a holder in due course it says if i sold the property myself and carried back the note myself i become that person so it's the same with a conventional or private note if you buy a note from a bank or a mortgage company or a private individual that gave a loan it's as if you gave the loan and you have to follow those regulations when i buy a stellar finance note it's as if i sold the home and carry back the note myself so i don't have to follow these regulations okay so that that's the differences between what you guys normally do which is go after bank loans and tapes and mortgage company loans and what uh what i do which is go after the individually held uh first position performing seller finance notes and then you're just looking for already created like you're not even creating your own necessarily yes existing absolutely yeah i don't i don't want to buy properties carry back notes you know let that like yeah that's a lot more work man i want to sit home and go bass fishing and go snow skiing and go hiking and you know uh that's awesome stuff right yeah yeah but uh yeah okay so i'll stop this now we can continue to so does that kind of uh explain it and then you ask the question and that's why i brought that up yeah what was that did that answer the question or is was there more to it no i think for most people they have to understand the differences right that was a good explanation of what that looked like um and good definitions um i did we did one question that came through for steve from steve johnson regarding you know mobile home parks and notes like that do you get involved with the mobile home parks and buying notes on yeah well that those are seller finance usually um however most of the time we just go for mobile homes on land so it's not in a park they own the land and the mobile home it becomes real property it's the same as a note on a house can you buy notes on mobile homes on leased land on a lot where they pay lot rent yes you can but it's a whole different ball game of requirements and due diligence because that is not real property just because someone's living in it doesn't make it real estate yeah and when when they're in it you know in my world if a mobile home is older than 10 or 15 years old it's old it's like vintage right and it's not worth much it's a it's a wobbly box it's a it's a pregnant roller skate on wheels it's just you know just like cars depreciate so do mobile homes right so there's different things to look at can they be purchased yes uh there's just different due diligence and things to go for like that have i purchased them absolutely right yeah it's awesome we did have another question regarding your due diligence when you're going through your diligence who helps you with your due diligence on an asset um people are looking for companies and teams and you know local walmart to get their their due diligence who's just special god like you know secret person that you use for your due diligence to review assets time on the water man time on the water if you don't know all about it yourself and you're gonna trust someone else to do that that that's a scary situation for me i am not a risk person i do not like risk so when i buy notes yes there's still risk right there's always a risk but i try to minimize it and keep myself in a position where you know even if it goes bad it'll still be good you know if you follow me there um and that now i forgot the question no just due diligence right you know due diligence so so is there a place you can go i believe there's a few people out there that will process your notes for you and things like that uh however in the beginning you should absolutely try to do it all yourself make that phone call to the title company order a title insurance policy right make make that connection to the appraisal company and order that appraisal yourself see how the process works learn how to read an appraisal learn how to how to read a title insurance policy learn how to read the documents we just read a security instrument yesterday that had some language in it that i couldn't believe that was put in and i caught it and so now there's a different price because there was like this person doesn't have to uh this person gets a 15 discount if they pay off before 2025 and i'm like whoa that's a whole different ball game now yeah it's a different number i have to lower my price and adjust for everything but you you've got to learn yourself if you start out and you just trust people to do things for you you are eventually going to get burned because it's not their job to keep you safe it's their job to do the due diligence and then give it to you so and it's a different perspective like yes sometimes i'll buy a note and i have this kind of exit strategy in mind right and then what if it changes and what if i i don't decide i don't want to do that for this particular note i wanted to do something different and i mean if you're trusting somebody else to do it for you they may not know your end game right they won't be able to guess your end game and so that and that makes a difference on your due diligence also make sure we're clear we're doing what title policy really means right it's an insurance policy saying that there's the titles clean when the loan is originated and why is that important for registration as well as buying is that we can hold then we order our own e which says from the time it was purchased to now what has happened so the title policy is there and something comes up you actually have an insurance policy to deal with the issue and sometimes pay you off if the circumstance is right so it's a huge tool that if you don't see a title policy you should be a little worried but you need to make sure that there's a clear title besides just your liens absolutely yeah the chain of title to the property and in 31 years you know knock on wood i've never had a claim with a title insurance policy but it's just like it's like car insurance or house insurance yeah you pay it every year one you pay one time and you know just like house insurance or car insurance you might not ever use it right right so um you've got to think about that and i see so a lot of now someone might bring up the fact that well aren't seller finance notes messier well a little bit yeah they are because they don't they don't have to get an application they don't have to get you know truth and lending and write out everything and sign this and fiduciary responsibilities and stuff the guy sits at the table and says so you want to buy my house for 120 000 great give me twenty thousand down i'll hold the note for this long how does that sound great sign the documents done and some i've gotten a note written on a on a piece a yellow legal pad right so that had to be corrected you know so there's in seller finance notes uh we do a lot of work not a lot we do some work on cleaning up the file making it presentable to investors whether institutional or private and and for myself making sure i have everything i need in case after i buy it i need to take action and get things corrected so so you'll you'll buy it and then do some fix up and then may or may not sell it i'll make sure it's fixed up before i as i'm buying it during the process uh there's one right now we're doing a land contract in georgia and um uh they recorded a warranty deed and they have a note but there's no security instrument there's no deed of trust oh okay well that's to be fixed right and if you want us to do it our price is going to go down a little bit if you do it before that we'll keep our price the same got it so the guy is like and he used an attorney guys attorneys you know no offense to anyone that's an attorney but they don't know everything and they especially don't know about about seller finance notes if they haven't if that's not like their core business yeah they're not a real estate attorney they probably haven't done these transactions and and they just i don't know look it up on google and do their best i have no idea before we get into some deals right everyone wants numbers it's exciting can you share a little bit about how you come across these assets the secret ideas new cool technology that you use to find great new deals we would just love it if there was some new cool technology to find us seller finance notes but i'll tell you what guys 31 years i mean both of you have seen my marketing presentations and and you know thinking of it as a business uh i think my last figures that i quoted at the vapor source convention was you know over all 31 years over 709 000 people have responded to me yeah and i've closed you know 2 300 transactions you know a very very small percentage of them um but that's a lot that's a lot and when you when you uh talk about you know what cool technology is there to find notes guys these notes aren't aren't online usually you know and if they are they've they've usually been through us us meeting the people that regularly buy seller finance notes the institutions some of us larger privates and uh i've seen notes that we've cancelled up on those uh up online and uh you know if if that's your mode of finding you know deals great trust but verify we talked about trust earlier with the due diligence stuff trust but verify look at that stuff read it yourself get what you need to get if they don't give you enough time bail right you need to know what you're doing you need to know your investor mindset and you need to know what you're doing when we're trying to find seller finance notes um yes there are some online marketing strategies that we use uh social at um social media uh every now and then uh google adwords things like that uh search engine optimization all these different kinds of things but um the core of finding an individually held seller finance note is marketing right i talk about marketing all the time marketing is something you have to do for every business and uh for me i'll quickly go through it it's it's you've got to have three to five things working for you at any one point in time and of those five things um half of my business comes from direct mail i purchase names of names and addresses of note holders and i direct mail to them uh that's half of my business every year half my deal is closed even and last year was like 62 but uh of my deals that i closed were from my direct mail campaign and it's not a one-time throw out a thousand letters and get a deal it's a consistent program over time a thousand a month two thousand a month whatever you can afford it's expensive but it does get me deals second is classified ads in small outlying rural areas uh third is building a referral network it takes more time you got to be in business for a few years for people to start getting to know what you do and that you can do what you say you can do and then those referrals can start coming in um online marketing we already talked about uh and then direct contact talking to people all the time about what you do because it it is such a niche within a niche within a niche right oh you're a real estate investor oh well buy properties well no oh you give loans well not exactly and you know so we're in a niche within a niche within a niche and in the note industry itself there's a bunch of little niches i do this one little thing you guys do that thing and other people do this thing and you've gotta focus on one and build up your marketing i offered the marketing plan to people at the paper source convention dozens of people requested it i said it to them i haven't seen one back yet obviously i'm like hey i'll i'll do it for you i'll i'll go through it i'll help you i'll make you make sure everything's good and get your on your you know get your bus footage accepted and you're just like people don't want to do the work they want the easy way out oh my gosh if it was that easy everyone would be doing it right because that question always comes up why isn't everyone doing it if it's so great well because there's work involved right so fantastic how many people would be quick and never has been and never will be it's never roseman never will be how many pieces of mail do you think that the 2300 you close on average those people received how many marketing you know letters competition yeah you know and it probably came directly from me telling people to do it right uh but it's okay because there's plenty of notes however i'm gonna say at least a dozen if not a couple dozen how many pieces of letter did you send to that person that closed how many do you send three they get four things from me in 19 months so they'll get a they'll get a letter um you know right away uh six months later they get a follow-up postcard 12 months later another follow-up postcard and 18 months later a follow-up postcard it's a program right i'll i'll get i'll get that first contact in they'll call me or email me or fill out the worksheet online from the letter and then not everybody needs to sell right now a lot of them are just curious right right i'm usually the first person to tell them no you're not going to get the balance of the note there's a discount involved and let's see let's see how bad yours is going to be right yeah or how good it's going to be sometimes they're good smaller discounts but uh yeah it's it's action and and marketing and in a program uh a consistent program that's what that's why the direct mail works because it's a consistent program not a one-time thing yeah so i got a question on um on the notes that you're seeing uh where people are responding and you're you're reviewing all the documentation and stuff what's kind of an average interest rate that these loans are being written at i know it varies wildly but so so you know people carrying back notes on their properties most the ones that do it most of them it's only one in their lifetime material yeah right it's not a business for them it's i had to sell my property i carried back a note so they don't know what they're doing and if they don't contact us beforehand we see stuff you know uh zero down zero percent for 50 years and you're just like oh my god do you have any more properties and so we see everything from those to you know two percent three percent four percent and you're just like what are you a bank yeah now with interest rates going up in three to six months we'll see some higher interest rates i'm sure however going with that our yields are going up too because we got to keep the same the same profit going right um so prices are still going to be um the same if not lower in the coming future but uh yeah that's that's uh that's a big thing all over the place yeah all over the place yeah yeah okay you know would you buy a no a note with a zero percent interest rate for 50 years is going to get a huge discount performance or not right so it's it's one of the fun things about the business that really keeps me doing it year after year is that every person that contacts me it's a whole different puzzle how am i gonna fit the pieces in right how's this gonna work right with uh with 29 different ways to buy a note which one's going to work for this guy yeah yeah it keeps it fun keeps it interesting so let's get into some fun stuff here you don't want to share your screens give us example what note you've seen what numbers have come across in the last eight year or two give us a kind of a general situation you've run across in some numbers of a property okay so let me share my screen okay and here and i'll hopefully get the right one this time jeff you're in california and you you buy all over the place right i i'm in arizona now i was in california where you've been looking at lake havasu city arizona now for uh seven plus years okay yeah it's 97 degrees already it'll be 107 today and he's already running so you guys up there don't know what that is yeah i'm experiencing 90 today we're hitting 90 in jersey oh my gosh 90.

that's a cool day here we pray for 90 degree days no but you're buying all over the place right like it yeah but we're buying nationwide yes nationwide we even did a deal once puerto rico and guam um all all the states uh i think maybe there's one or two states i haven't done a transaction in in all these years you know like maine is one i think means anyway yeah yeah this is nationwide oh that's cool yeah oh what did i finish the question or no yeah you're good we were looking for another we're going to share a screen i was going to share a screen and show you some numbers yeah i do want to go over that investor mindset too so let's let's sure boom this is a recent transaction i want to share that one there you guys see kingston georgia yeah okay cool so here's a a recent one that that we took down meaning purchased uh for myself directed roth ira you know we're all doing this the right way that's that's one of the best ways to do it is build up a self-directed roth ira and yeah put him in there so long story short the uh a person in kingston georgia a little small rural town in georgia so the regular house owner occupied ooh single-family home owner occupied single family home and get that out of the way that's distracting there we go and uh 120 000 sales price you got 20 000 cash down payment 100 000 seller carry back note uh 30 years at eight and a half percent interest this guy knew something right this guy's a little more savvy than a regular individual seller finance note holder yeah um he knew to get the interest rate a little bit higher he knew to get a a decent down payment um so that's great so we plug it in the calculator we run the numbers the payment amounts 768 91 there first step second step verify the balance when they call you they've received a few payments so we got to know what the balance that we're purchasing is so we run it through the calculator here's the little steps the balance is 99 630.

then the next thing i do is i'll calculate the loan to value right balance of the note divided by the sales price the property in this case came out to be 83 loan to value yeah but but jeff uh if the property was sold you know a year ago the the property is probably worth more so the loan to value is going to be lower yes but initially on the initial per pr price we don't know what it's going to come in at we don't know what it's going to appraise at even with going online and stuff because i don't really trust the values zillow and all those other ones give i i trust the numbers right so the numbers i know that it sold for 120 it's going to be at least worth that so my loan to value is at least you know at the most let's say right now 83 so if the appraisal comes in for higher later on when we're doing a transaction then great my loan the value is lower and i'm actually safer okay or let's not use the word safer more secure right yeah um and then i go with my full purchase on this one we had a good down payment on this one i wanted a 12 yield on this not the greatest i usually like higher um but it's it's a bit competitive out there right now i came in at a 12 percent uh for a purchase prices 74 620 to the note holder this is direct i'm i'm doing this direct i didn't broke for this and everything so that was the price of normal and yeah okay it's a 25 000 discount but i have to wait 30 years to get my money yeah and i want to make some money yeah so the issue with this one was of course this person had contacted some other uh companies right competition to see what they could buy there were some poor credit on this one so that that's the reason for the higher um for for the yield and for the for the discount okay um i don't know what that is since on the dollar but it looks like about 75 you know or somewhere around there so paul's right there i i stress this traumatically because people don't realize this people bid percentage of upv or bpo this is a case example jeff doesn't even know what the percentage of upbeat is or bpo is because he's based on a return not based on a percentage number right he's guessing because it doesn't matter if this is 80 or 20 his numbers based on a return he's looking for based on the situation sorry josh correct based on the situation because we use all all four or five different ways right yield investment to value um cents on the dollar uh et cetera et cetera right there's there's other ones that are blanking now but those are the the three major ones that we use yeah uh uh oh cents on the dollar i if we didn't say that um to calculate our prices in this case the final number did come from yield a yield based calculation right and of course when we this is an initial price subject to verification of the information that they gave us and acceptance of the payer's credit appraisal and title we already saw the credit right and and did a soft pull and we saw the credit so we already knew that so now this price is still subject to a appraisal coming in for at least a sales price and like we talked about early clean and clear chain of title um and with that said and then we do one last calculation to check our safety and security uh is investment to value investment to value is the purchase price you're paying compared to the value of the collateral itv this is a term you got to learn in a number you have to calculate this is your security we're at 62 investment to value meaning there's 38 uh uh security above me equity above me that if something goes wrong worst case scenario happens and i have to foreclose take back the property fix it up resell it and carry back another note or sell it for cash i'm going to have enough room to do all those things and still at a minimum get my seventy four thousand dollars back and what the market is today the this is a big deal because if the market drops at all you have to be the spot to absorb that impact of property values correct increasing correct correct so so i like to keep myself from my own personal uh portfolio and my personal preferences under 70 investment to value and usually under 60 uh investment to value uh i am i am not risk averse i i'm i manage my risk and uh again in 31 years i've had two foreclosures and and i actually made a ton of money on both of those we had one question about how much if someone begins how much should they budget for marketing oh geez you know look guys when i started out um there was no internet right and i was working night crew at a grocery store and work nights and and take care of the properties in the daytime and try to start this business in the daytime and my budget was was really small a couple hundred bucks a month you know as deal started closing i could put more towards it i would prefer when when people work with me and and i i mentor them or i coach them on their way to to start their business um i i like them to have a minimum of a thousand dollars a month for 12 months commit to 12 months commit to at least a thousand dollars a month and and you'll see some uh of progress you'll see some deals starting to come does that help yeah i think it does yeah absolutely yeah it makes sense you can't be bootstrapping his business on because you're never getting traction right again it's it's not a get rich quick and it's not uh you're gonna make a million dollars in a month not not that's just not nice so so there you go yes good question um so i do the the itv and then we have on the bottom there we have the information that we verified on the calculator and the numbers we calculated and this guy went for it uh appraisal came in for like 122 so we were okay on that one uh title was easy they had a title insurance policy so we just had to do an update or a date down it's called from the time they got the policy until now and uh and that was one we recently uh purchased uh and those payments are just going in the roth ira every single month that's a good looking note i like that one yeah yep now are they all like that and that simple to do and easy no i picked out a smooth one for you but you know there's always hurdles and surprises just like with you guys i'm sure you guys have a few more hurdles and surprises with some of the non-performing and stuff um but uh people seem to think that i don't purchase non-performing i i do just not at the prices you guys do so it's definitely changed over the last couple years yeah yeah we have another question regarding it again yeah yeah regarding from april regarding when someone says no to your price right what do you say then how do you overcome some objections so okay so part of the business is marketing and getting those calls to come in right all right so i can get the calls to come in for people starting a new business or starting out and stuff but what happens when you pick up that phone and start negotiating and talking and communicating with these people that's where the deal is made right so on that very first phone call i have an idea uh by the time we're done with it i'll have an idea of what they're looking for if they're looking for par you know 100 of the balance or a 5 discount or a 10 percent discount guys you know don't waste my time this is not how this works if you can get 90 cents on the dollar you should have this that and the other thing you don't so your discount's going to be a lot less so when i do call with the prices they are already thinking in their head oh my gosh this guy might not even buy this note right because as i'm going through getting their information and filling out the worksheet most of the time verbally i would say maybe a third of them go through the website first and put their information on my form and send it to me guess what i'll call them up right away when i get it and start verifying the information that that person-to-person contact that relationship building is is what this business is all about it's not all about numbers sometimes right i bought lots of notes at lesser prices than competitors because they i built a relationship and they like liked me better whatever that means you know um so and that's worth something like that's not that's not nothing that that's definitely worth something right and that didn't happen over in the first year that took years to learn how to negotiate and talk to people so on that first phone call we're getting to when they say no on that first phone call ooh a three percent it's a straight ah what are you a bank dude why would you do that you should get got like an eight or nine or ten he's like well that's what the banks are giving well arnold writers aren't gonna like that right and uh uh oh you got you got a thousand down on a 200 000 property underwriters aren't going to like that oh it goes for 50 years underwriters aren't going to like that so by the end of the phone call they're like oh my god my notes really crappy i hope i can get something for it yeah so when i call them back and give them a price the discount's not going to be a shock to them right they're going to oh there there's a discount involved i get it and and they'll they'll be more open to hearing the options right it's not all about the full purchase then we got the options so when they say no i go back and i said well on the first phone call wait a minute didn't you say you know you'd like to pay off some debt or you know buy your your daughter a car or pay for your son's college or so let's see how we can work this out you know here's three options here's a full purchase price here's here's a way to get just what you need to pay that call is tuition this year here's a way to get a couple years of that and i give them some different options um now i i don't get everybody to say yes obviously right i don't what what's the i think my stats are like 2.3 percent over 31 years have accepted and closed yeah i'd probably get 10 to say yes it's the other you know some of the a lot of them don't work out um and uh so when they say no i'm just i just go with those other ones i try to figure out what's going to work for them um and you know then sometimes they still say no you know a lot of times they still say no however then you just follow up with them call them next month call them three months six months and i keep saying call yes people we gotta talk to these these people it's not all about oh i could just send them a price and an email and if they say yes great if they don't get you're just throwing stuff against the fan wallers to see if it'll stick right that's not the business right you can send out numbers all day long we're not quote machines right we want to get a deal if i'm sending you a price as a broker you you negotiate the heck out of it right that's your job and that's that skills to be learned also is is the negotiating side yeah deals are made on the phone emails are for confirming details and things like that but deals are made on the phone lots of phone time and you get information about that you wouldn't get on a forum right why they said sell the loan yes one of the numbers you know hey situation hear the tone of voice you can get a grasp of what's really going on and more than just the asset itself absolutely and you can hear their tone and i'll tell you this and and whether it's a bank that you're buying it from or or a mortgage company tape or an individual note holder their stuff they're not telling you right and our job in due diligence is to peel that onion and find out what they're not telling us because there's always always always something they're not telling us yeah right oh you showed this to other buyers why didn't they buy it yeah well i don't want to tell you well i'm going to find the same stuff so you might as well tell me right now yeah right and not waste neither of our time so how many assets do you see are actually serviced by a licensed servicer uh half maybe half yeah like sometimes it's more than a wire some states require it like arizona requires that if you carry back a note it has to be serviced by a licensed servicing company um and other states have have similar rules but you know no no holders again you know this is they carry back one note in their lifetime right it's not their business and they just get the payments every month and and these days they they get cash app or a venmo or uh or a paypal or something and and that's where we get the payment histories from but i would say about half already have a servicing company in place right that's pretty good actually yeah i'm i'm kind of surprised by that right you know most these are backwoods kind of deals that just happen and whatever how do you deal with are you licensed in all states to buy debt right there are certain states out there that require a debt buyer to be licensed um do you do that or without going through this is seller finance notes uh the only state that i know of that has regulations on uh brokering notes if you're buying them for yourself and you keep it full term you're not a broker you're a buyer and a holder and that's one thing but if you are going to broker them the only state that i know of that has regulations is california california requires that you have a real estate broker's license to broker notes and uh that's hard for some people to swallow because there's a lot of notes in california um i have my license there because i lived there and that's where i started so i just got it you know don't need anybody slapping my wrist or checking up on me but other than that you know as far as i know you know i'm not a licensing expert but as far as i know you can broker notes everywhere except california if you don't have a california real estate broker's license yeah that's cool yeah and classic california yeah well let's not get into that this is a business call so i'd like to know give us your worst story you ran into where it just was just bad or your worst mistake you know even you know i try to forget about bad things that happen even like an argument with the wife you know last week i'll forget about it because yeah it just drains your energy and stuff but um the worst and successful one yeah it just affected lessons from others who are watching and saying successful meaning i purchased it the worst one there's a i i guys i i'm really struggling i have other people's stories of their horse deals but you know like uh buying uh what you thought was an owner-occupied single-family home a note on a phone occupied single family home in oklahoma and it turns out that it was built out of hay it was there's a process i looked it up there's a way to do it but it had burned down and they didn't have insurance um but again that's that's not my story that's uh an associate's story but um yeah my worst i've had there there are transactions where you're like you're like nail biting wondering if it's going to get the closing or not because of title issues or because the note payor is is not friendly with the seller of the property right there's a little battle going on they don't have a good relationship they hate each other and it gets it gets sticky you know it gets stressful on our part because we're like the mediators trying to make everyone happy and uh and things like that gosh uh i really wasn't prepared for that question i i don't have even like my two foreclosures i i had a windfall on them so yeah you know those aren't even bad stories oh go ahead have you lost money on a deal no never why because i purchased it properly yeah right if you purchase it if if someone says hey this is this is how much i'm selling my note for and you buy it for that price without doing your due diligence your own due diligence you know it's a crapshoot you're you're taking a risk you're being you're being a speculative investor at that point right right oh is it is this a good time to do that before we're almost done yeah we've got not a lot of time yet yeah let me let me i'm going to share this real quick because um i really want uh your listeners to know the difference i'm pretty sure it's this one value-based investing versus speculation okay i i learned this from this big thick book this is graham dodds graham and dodd security analysis mcgraw-hill this book is huge look at that half my face and it was written a long time ago and it's it's a lot about stocks and different things like that but it it really stresses the difference between a value-based investor and a speculator a value-based investor i'll just read this off because i think that'll go quicker a typical note investor seeks an investment that provides current income preservation of capital and growth potential with minimal risk the typical note investor seeks a relatively safe secure trouble-free cash flowing investment this is me what what do value-based investors want epi this is a a phrase i've coined epi stands for extreme passive income extreme passive income because the check comes into your your box every month or you get your ach payment deposited every month and there's no one calling you up about toilets termites taxes or tenants right extreme passive income um value-based investors want to take advantage of the power of compounding right what is that when when you got when you've gotten a loan in the past and you signed your truth and lending document and you it shows you you're getting a hundred thousand dollars loan but you're gonna pay the bank 272 000 that's the power of compounding that's what we're taking advantage of here uh we want preservation of capital we don't want to lose money we want minimal risk there's still risk we just mitigate it uh we want a relatively safe secure investment for the long term would a value-based investor buy non-performing notes absolutely but not for the prices that speculators would pay for them let's talk about speculation a speculative investor is as follows a speculative investor knowingly assumes the risk of incurring a large loss if he or she believes the possibility of a large gain exists the speculative investor understands the risks expenses and the time involved in the investment he thrives on the concept of the greater the risk the greater the returns speculative investors want a home run every time they'll take large risk for the possibility of large profit will use their last dime with a promise of huge gains we'll pay little or no attention to the downside risk will abandon strict standards of valuation and risk aversion these are the differences these are the two types of investors out there and i can go on and on about this for for an hour or two as well but i really want people to start thinking i think that's one thing i got out of the conference at paper source last month when we met um and we talked is that uh people want that quick buck they want to make a decision they don't want to do the work and they they get away from um what a real investor should be doing which is knowing what they're investing in you know uh crypto for example oh my god the people that were raving about crypto last year whoo i i can't even count how many people where are they at now right cash me outside right how about that it's down like 90 percent and that that's always been crypto's always been in in and into the foreseeable future here a very speculative investment so i i think at the at the conference where i was going with that is that a lot of people do not know their investor id they do not know what where they're at and it takes a while for you to figure it out so while you're figuring it out why don't you broker some notes flip some to investors that know what they're doing and see how the process works and see if you like how that investor does it or you like how that investor does it and then you narrow it down to what what you're i'm looking at your picture that should be looking up here what you guys are are looking at as far as what your investor id is so i wanted to get that out there for the for the public in general you got to know what kind of investor you're on before you start investing in anything absolutely so we you you we kind of hinted at it before but you you talked about uh looking out to the horizon here uh with the non-performing and the and just market conditions and and all of those kinds of things what's your take what do you see coming well we've never seen nothing like this in history right all of these different things that are happening at once uh with the war in ukraine in in ukraine and and the gas prices and the oil stuff and and the inflation hitting 8.6 and then interest rates just bumped for a 30-year fixed 6.1 now two months ago was like in the fours yes unprecedented how fast interest rates are going up right now i'll tell you this though been doing this for 31 years i know when interest rates hit six percent for me my opinion my statistics when interest rates hit six percent much much fewer people are going to be able to qualify for conventional bank financing and there's going to be a lot more seller financing coming up here right so i'm jumping up and down i've been waiting since the early 2000s right go up i as note investors yes performing individually held singapore i want interest rates to go up because then they'll get closer to my yield and i can give a little bit better prices sometimes yes so uh i think that we're going to see more seller finance notes on the horizon um i don't know how all this is going to play out you know with the economy and everything like that uh we just dipped into a bear market a recession is looming um and and we're just going to continue to move forward i'm going to continue to do the marketing uh but i do expect that i'll be very busy in the next couple years yeah yeah so awesome we'll see if i know april said that it gave your t-w-i-t-a comment on in the thread so oh twitter yes uh twitter's my little slogan i came up with i i thought way back when i watched austin powers i was just like that's what i'm talking about right everyone says it now that's what i'm talking about that's just a mouthful right five that's what i'm talking about i'd rather just say twitter p-w-i-t-a twitter and uh and get it out i use it when anything is exciting happening when something's positive when i catch a fish i'll shout it out [Laughter] when i you know when i hit a good golf shot boom twitter you know yeah so uh that's that's my little thing kind of like i guess branding you know or whatever that's my thing i'm jeff twitter armstrong find me on facebook at twitter jeff on facebook i appreciate you coming on for the hour giving us great absolutely good it was awesome just that experience and knowledge is overwhelmingly awesome and guys feel free to reach out to jeff he puts out a newsletter that you can progress so much great information from um just stay in tune with them take a look up on linkedin twitter everything else out there and just tune in with him and learn some room he's a great guy to learn from his open book so thank you dave yeah um it's you know my website armstrongcapital.com i i send out uh every wednesday i'm pretty sure you guys get it i hope you get it yeah tips and training by jeff just little tidbits an article every month things like that just to keep that motivation going yeah you know please feel free to sign up for that that newsletter on my website and yeah questions email me i'll get back to you yeah email's always best i'm really busy on the phone so most of those go to voicemail and i return phone calls but uh email me is best you'll find it on the website thank you guys for having me thanks jeff everyone have a good weekend we will be catching up with everyone soon but uh if you have any questions feel free to take a look at the youtube channel facebook group and all that good stuff and uh take a look at the note training that will be coming out shortly thanks everyone for tuning in and uh we'll talk soon [Music] hey everyone dave putz from jkp holdings good afternoon mr nathan turner was inside next to me how are you hello hello very good very good awesome it's gonna connect um we had a great session last two weeks ago um we talked about a lot of awesome stuff i would definitely recommend anyone who missed it take a look at the podcast youtube channel whatever you can get a hold of that um recently you know things have kind of started to change for me um we're seeing some new product they're coming from different areas um i know that recently we've got a pool of assets we've talked to paper source with a gentleman about some seller finance stuff that's coming about which kind of lends to what we talked with tracy about the cell refinance world being something that's growing it is it's an interesting and interesting time and we'll uh you know one of the cool things about notes is um it's very easy to pivot yeah uh so if if seller financing notes are more available and and that looks better do that um i'm also buying some reverse mortgages right now they're available so i'm doing that you know and it just you can pretty easily just kind of go back and forth and whatever is available whatever works at the time that's that's good yeah um one thing about seller financing and and notes in general is unexchanged numbers i want to let everyone know that i'm going to run a spreadsheet training course for everyone just understand how to create a partial yield calculator i could post whoever wants it but it's going to be a two three hour and you create your own spreadsheet to understand time value understand the formulas and get away from this brick and mortar financial calculator that some people find confusing where you can plug and play numbers on a spreadsheet right for me i like the spreadsheet it's not as grand as a calculator but i think spreadsheets make a lot of things easier for newer investors to kind of grasp deal flown deals what's going on with you we're we've bought a few partials recently uh we've actually looked at a few formulas we purchased and then there's two non-performing notes that we kind of back and forth on that i may not go with yeah um what's been with you what's been going on with you i've got these uh that's a few different reverse mortgages uh another uh just a kind of a regular first mortgage and then i sold a couple of of the loans that i've been holding on to uh just because it's time and i'm i'm selling off stuff and getting everything kind of going into the fund and so we're also winding down and building up at the same time so it's a lot of fun that's awesome um for those who are interested uh leave a comment just go to jkp holdings spreadsheet dash calculator training and we'll go through it um and i'll be talking nathan afterwards we have some really cool stuff that's gonna be coming about for september um so tune in for that kind of information it'll be a training course but with that said um seller financing notes we both came from the institutional world we did some lease options the seller finance notes is the wild west that we thought we walked into when we bought into notes you know notes was like this wild west theory for a long time and then we gotta grasp it and then you walk into seller france notes i feel like i'm back to the wild west on just different things i like seller finance that's the same thing that's kind of where i got my start is um uh i it very at the very beginning i was creating notes and that was i was doing seller finance and so that was uh an interesting learning curve figuring out how to write paper and how to make it a good piece of paper to be able to resell if i choose to in the future yeah so i'm i'm a big fan uh there's there's all kinds of fun ways that people put them together and and uh they're a little bit goofy sometimes but i mean people are paying yes sometimes that's all that matters yeah so without further ado we have gentlemen here that could be tuning in with us if you don't know jeff um get known he's a wealth of information um his experience is no other um he's been doing notes for a long time since the 80s i know right and we ran into him at paper source his knowledge is amazing but he's a science sour finance person right this is his bread and butter yeah i i i admire jeff's analytical skills to look at it and and treat this like a real like a real business like a real project and something that can be um tweaked and and you can look at different things and what works and what doesn't work and i i like that approach i like you know kind of the systematic approach to it that's good so jeff welcome a man how are you yes sir hello guys how are you i'm doing good good well let's start from the beginning you know we all start where we're at today some people that's overwhelming some people it's exciting where did you get started with real estate and how did you get into notes if you can keep it under four hours it'd be great yeah that's the trick here um well let's see uh long story short uh when i was 19 i purchased my first property a triplex i lived in one unit rented out the other two covered the mortgage um i learned that and i purchased that property at 19 i decided when i was young about 15 and a half years old i read the book think and grow rich someone gave it to me and that's like the cornerstone of my success for sure and um in reading that book i decided uh about 16 years old that i would never be a renter i'd own when i moved out i was going to own and buy something so i bought my first property when i was 19 a triplex lived in one unit went out the other two and then from there i i purchased and lived in and fixed up and moved uh several times by the time i was 25 i had 25 27 doors at 25 years old i had 27 doors and i was taking care of them all myself we're talking within you know a half hour hour driving distance of my house and um being a landlord i i know it all we can go over stories with that another time but um you know landlording is is not all it's cracked up to be and neither is uh rental cash flow um you know a lot of people tell hey i got a rental property you know the the the expenses are 1200 a month and i'm getting 1500 a month and that's 300 a month positive cash flow until something happens right until the water heater breaks and there goes four months five months of cash flow uh or a bigger expense comes up so i was always you know people think oh my god 27 doors you must have been rolling in it no i was barely making ends meet keeping all the the maintenance on all the properties covering you know 18 different mortgages and and and doing what i had to do and i there had to be a better way went to a boot camp seminar you guys know these dog and pony shows right you go to him free come learn how to be a millionaire and so i went to dozens and dozens of those i tried everything you know i was an entrepreneur and a mindset and i still am and and i uh i went to this one and the guy said be the bank not the landlord and i was like i don't have to be a landlord what uh went back back in the room within 20 minutes signed up 7 500 5 day boot camp right called in sick for a week i was working at ralph's grocery store in southern california um since i was 15 and a half and uh at 25 i went to this boot camp and it changed the direction of my life i was like oh my god this is for me now if there were 200 plus other people in that class after about six months nobody was around anymore they went off to the next shiny object but i i knew in my heart of hearts that that this seller finance note business was for me at first brokering notes and then eventually to buy them and be the bank um and that's the short story of how i got into it what year was this this was 1991.

yeah started in may of 91 so i just had my 31 year anniversary last month and i do nothing else i don't invest in anything else no stocks no crypto um no nothing else just notes it's all about the cash flow sold off all the properties carried back notes on some got cash to buy notes with others built up the portfolio life happens got a divorce lost everything started over and uh building building it back up it's been 11 years since the divorce but you know still got to build it back up to where it was um and uh you know i know how to do it so it's uh it's been uh you know nothing happens overnight and to to grow businesses and to start these and i'm glad you mentioned too nathan that that it is a business uh we're not going after it like it's a business we're going after it as it's a business it is a business and if you're just lala gagging around thinking that you're going to find a note by building a website it's not going to happen that way guys not in these days yeah yeah you said all that you know we do have some members and people who follow us are probably born after you got started right it's kind of absolutely i'm not as young as i look and we want to make sure people understand that where you are today and which we're going to get into is not anywhere close to where you began at right it's years and years of work and hard work to get into where you're at today and the knowledge you have and experience you have so can you in the beginning what were some of the hurdles you came across and struggles that you had that they can probably relate to uh well the biggest hurdle is that you see the potential and everybody else making money with notes or supposedly making money with notes and you want to be that guy tomorrow next month in six months you know and it doesn't happen like that it is going back already to it's a business and most businesses fail seven out of ten businesses fail any business in the first year of their business whether it's a restaurant a gym uh i don't know a beauty shop uh a store front uh you're starting an online business i mean most businesses fail in the first year and this is this is just like any other business if you don't attack it and think of it as a business you're not going to last long as a business we're not talking about just buying a note here and there for as an investment in your ira and stuff we're talking about running it out as business and i think a lot of people when they get into the business they think they're gonna be successful in six months in in a year and they don't give it enough time to really ramp it up and build your business and grow your business um and that's that's a huge hurdle i think people need to get out over is that uh do i just want a dilly dally in this or am i am i gonna have an actual business and one day hopefully quit my job right and nothing ever moves as fast as you'd like it to never and you just gotta understand that and be okay with it yes absolutely yeah it takes time and and uh um you know since 1991 are there things i do differently now than i did then oh for sure right i'm not as tech savvy as you guys but you know for instance i didn't really start using excel spreadsheets till about the divorce 2011.

so i have an email that i just saw recently that said exactly that which i was like whoa right yeah so that that was that that made me more efficient and and things like that but uh it's uh but i still use hey come on don't don't don't diss the calculator man right i can't pull a spreadsheet up when uh when i'm out on the boat and someone asked me about a mortgage i could pull up the app on my phone right this is true this is true and i think the difference between you know the the calculator itself in um the spreadsheet is it we get a tape of assets that comes in right of 50 assets to run 50 assets on a calculator would take some time and go right down the sheet and say okay here's my number so yes and there's certain things that spreadsheets actually struggle with with the calculator i'll be going into that eventually uh they don't do points right it's not 34.38 it's 34 payments it doesn't do it rounds it off and there's ways to avoid that but for some people that kind of gets overwhelming right and then what they do is they just avoid it instead of working with it and understanding it oh my god yeah it's it's uh people watching this in the future and stuff hp 10b2 calculator i teach it it's it's the calculator to use i have a whole calculator secrets book with 120 plus examples and practice things in it it is so simple it's five buttons that's it guys don't be afraid of the calculator i i do usually one at a time from individuals one note at a time and you're right when there's a lot more when i get a tape in or something like that you gotta use uh the excel spreadsheet you're not running it through or another program called t-value i use a lot of and um so yeah with the numbers i mean we could talk about numbers all day long but uh yeah so you you hear all about this you know bankruptcy loans that we all pretty much came off of right this is what we did in 2010 and most of the people in the space did a lot of origination loans where you were in a different track right you did the seller france world where getting inventory you're not getting a 500 tape asset list right you're putting in work to get asset lists yeah yeah when did you guys start what year 2010 2010 yeah 10.

okay so um yeah before the crash yeah there's not a lot of tapes around you guys right there they're worked you know it and and you're talking about you know we all deal with banks well we all don't i don't you know deal they we do if they come across us and and you know if someone comes across us we we're happy to deal with things but there's a difference if i could share my screen a second let me show you the difference between uh different types of notes is that okay one second uh open all right i'll hit the little button here tell me when you should be good okay boom and then i'm gonna pick uh i made a few documents here yeah perfect so that you can we can see this so oh wrong one we're talking about notes we'll get to that one in a minute here it is okay there's three types of notes here they are this is it a conventional note a bank mortgage company gives someone a loan it's a debt instrument created when a bank or mortgage company finances the sale of real estate right most people understand that you want to buy a property you go get a loan from somewhere that is a conventional no okay and then you have a private mortgage note maybe the person can't get a bank loan can't fit in that box which is getting tighter and tighter these days right um and then there's private mortgage notes so an individual investor maybe a real estate investor but an individual investor uh will fund the loan to purchase the house so the person's taking money out of their pocket 100 providing the loan for the person to buy the property that's a private mortgage note a debt instrument created when an individual not a bank finances the sale of real estate then we have what's called a purchase money mortgage this is a debt instrument right now we're not seeing that screen jeff we're just looking at the we've got value-based investing versus speculation that's the one we'll see right now what um what i'm showing this one this is my screen are you sharing a screen or i uh yeah it says it says i'm sharing my screen correct you may be sharing a um oh how about i stop and then i'll share again let's see if it works now i'm sorry guys no problem boom and boom now there it is boom okay okay so we did a commercial note bank you know private mortgage note individual a person uh giving a loan right for someone uh and then a purchase money mortgage note a debt instrument note and mortgage note d to trust sometimes a recordable land contract carried back by the seller of their property to facilitate the sale of their own property a seller finance note that's that's the whole key a seller of their own property selling their own property carrying back the note on the property they own that is a seller finance no and the differences between them are as follows you can have when when a conventional or private note loan is given they have to follow all of these rules and more there's a loan application references are asked for they run your credit there's income requirements right debt to income ratios lending guidelines employment ltv regulation z truth and lending and all these different things when when a seller sells their property and carries back a note none of that is applicable none of that is applicable so if i buy a conventional or private note guess what what happens i have to follow all those same rules and requirements if i buy a seller finance note there's no regulations right we'll go one more when you purchase a conventional or private note you have to follow all the regulations that they do when they gave the loan just as if you gave the loan yourself including the collection regulations um when you buy a seller finance note a purchase money mortgage the regulations lenders follow do not apply as defined and discussed uh uh in a class that i do um i i have a little home study course and this is on day one we call it it's called a holder and due course there is a technical legal term for it it's called a holder in due course it says if i sold the property myself and carried back the note myself i become that person so it's the same with a conventional or private note if you buy a note from a bank or a mortgage company or a private individual that gave a loan it's as if you gave the loan and you have to follow those regulations when i buy a stellar finance note it's as if i sold the home and carry back the note myself so i don't have to follow these regulations okay so that that's the differences between what you guys normally do which is go after bank loans and tapes and mortgage company loans and what uh what i do which is go after the individually held uh first position performing seller finance notes and then you're just looking for already created like you're not even creating your own necessarily yes existing absolutely yeah i don't i don't want to buy properties carry back notes you know let that like yeah that's a lot more work man i want to sit home and go bass fishing and go snow skiing and go hiking and you know uh that's awesome stuff right yeah yeah but uh yeah okay so i'll stop this now we can continue to so does that kind of uh explain it and then you ask the question and that's why i brought that up yeah what was that did that answer the question or is was there more to it no i think for most people they have to understand the differences right that was a good explanation of what that looked like um and good definitions um i did we did one question that came through for steve from steve johnson regarding you know mobile home parks and notes like that do you get involved with the mobile home parks and buying notes on yeah well that those are seller finance usually um however most of the time we just go for mobile homes on land so it's not in a park they own the land and the mobile home it becomes real property it's the same as a note on a house can you buy notes on mobile homes on leased land on a lot where they pay lot rent yes you can but it's a whole different ball game of requirements and due diligence because that is not real property just because someone's living in it doesn't make it real estate yeah and when when they're in it you know in my world if a mobile home is older than 10 or 15 years old it's old it's like vintage right and it's not worth much it's a it's a wobbly box it's a it's a pregnant roller skate on wheels it's just you know just like cars depreciate so do mobile homes right so there's different things to look at can they be purchased yes uh there's just different due diligence and things to go for like that have i purchased them absolutely right yeah it's awesome we did have another question regarding your due diligence when you're going through your diligence who helps you with your due diligence on an asset um people are looking for companies and teams and you know local walmart to get their their due diligence who's just special god like you know secret person that you use for your due diligence to review assets time on the water man time on the water if you don't know all about it yourself and you're gonna trust someone else to do that that that's a scary situation for me i am not a risk person i do not like risk so when i buy notes yes there's still risk right there's always a risk but i try to minimize it and keep myself in a position where you know even if it goes bad it'll still be good you know if you follow me there um and that now i forgot the question no just due diligence right you know due diligence so so is there a place you can go i believe there's a few people out there that will process your notes for you and things like that uh however in the beginning you should absolutely try to do it all yourself make that phone call to the title company order a title insurance policy right make make that connection to the appraisal company and order that appraisal yourself see how the process works learn how to read an appraisal learn how to how to read a title insurance policy learn how to read the documents we just read a security instrument yesterday that had some language in it that i couldn't believe that was put in and i caught it and so now there's a different price because there was like this person doesn't have to uh this person gets a 15 discount if they pay off before 2025 and i'm like whoa that's a whole different ball game now yeah it's a different number i have to lower my price and adjust for everything but you you've got to learn yourself if you start out and you just trust people to do things for you you are eventually going to get burned because it's not their job to keep you safe it's their job to do the due diligence and then give it to you so and it's a different perspective like yes sometimes i'll buy a note and i have this kind of exit strategy in mind right and then what if it changes and what if i i don't decide i don't want to do that for this particular note i wanted to do something different and i mean if you're trusting somebody else to do it for you they may not know your end game right they won't be able to guess your end game and so that and that makes a difference on your due diligence also make sure we're clear we're doing what title policy really means right it's an insurance policy saying that there's the titles clean when the loan is originated and why is that important for registration as well as buying is that we can hold then we order our own e which says from the time it was purchased to now what has happened so the title policy is there and something comes up you actually have an insurance policy to deal with the issue and sometimes pay you off if the circumstance is right so it's a huge tool that if you don't see a title policy you should be a little worried but you need to make sure that there's a clear title besides just your liens absolutely yeah the chain of title to the property and in 31 years you know knock on wood i've never had a claim with a title insurance policy but it's just like it's like car insurance or house insurance yeah you pay it every year one you pay one time and you know just like house insurance or car insurance you might not ever use it right right so um you've got to think about that and i see so a lot of now someone might bring up the fact that well aren't seller finance notes messier well a little bit yeah they are because they don't they don't have to get an application they don't have to get you know truth and lending and write out everything and sign this and fiduciary responsibilities and stuff the guy sits at the table and says so you want to buy my house for 120 000 great give me twenty thousand down i'll hold the note for this long how does that sound great sign the documents done and some i've gotten a note written on a on a piece a yellow legal pad right so that had to be corrected you know so there's in seller finance notes uh we do a lot of work not a lot we do some work on cleaning up the file making it presentable to investors whether institutional or private and and for myself making sure i have everything i need in case after i buy it i need to take action and get things corrected so so you'll you'll buy it and then do some fix up and then may or may not sell it i'll make sure it's fixed up before i as i'm buying it during the process uh there's one right now we're doing a land contract in georgia and um uh they recorded a warranty deed and they have a note but there's no security instrument there's no deed of trust oh okay well that's to be fixed right and if you want us to do it our price is going to go down a little bit if you do it before that we'll keep our price the same got it so the guy is like and he used an attorney guys attorneys you know no offense to anyone that's an attorney but they don't know everything and they especially don't know about about seller finance notes if they haven't if that's not like their core business yeah they're not a real estate attorney they probably haven't done these transactions and and they just i don't know look it up on google and do their best i have no idea before we get into some deals right everyone wants numbers it's exciting can you share a little bit about how you come across these assets the secret ideas new cool technology that you use to find great new deals we would just love it if there was some new cool technology to find us seller finance notes but i'll tell you what guys 31 years i mean both of you have seen my marketing presentations and and you know thinking of it as a business uh i think my last figures that i quoted at the vapor source convention was you know over all 31 years over 709 000 people have responded to me yeah and i've closed you know 2 300 transactions you know a very very small percentage of them um but that's a lot that's a lot and when you when you uh talk about you know what cool technology is there to find notes guys these notes aren't aren't online usually you know and if they are they've they've usually been through us us meeting the people that regularly buy seller finance notes the institutions some of us larger privates and uh i've seen notes that we've cancelled up on those uh up online and uh you know if if that's your mode of finding you know deals great trust but verify we talked about trust earlier with the due diligence stuff trust but verify look at that stuff read it yourself get what you need to get if they don't give you enough time bail right you need to know what you're doing you need to know your investor mindset and you need to know what you're doing when we're trying to find seller finance notes um yes there are some online marketing strategies that we use uh social at um social media uh every now and then uh google adwords things like that uh search engine optimization all these different kinds of things but um the core of finding an individually held seller finance note is marketing right i talk about marketing all the time marketing is something you have to do for every business and uh for me i'll quickly go through it it's it's you've got to have three to five things working for you at any one point in time and of those five things um half of my business comes from direct mail i purchase names of names and addresses of note holders and i direct mail to them uh that's half of my business every year half my deal is closed even and last year was like 62 but uh of my deals that i closed were from my direct mail campaign and it's not a one-time throw out a thousand letters and get a deal it's a consistent program over time a thousand a month two thousand a month whatever you can afford it's expensive but it does get me deals second is classified ads in small outlying rural areas uh third is building a referral network it takes more time you got to be in business for a few years for people to start getting to know what you do and that you can do what you say you can do and then those referrals can start coming in um online marketing we already talked about uh and then direct contact talking to people all the time about what you do because it it is such a niche within a niche within a niche right oh you're a real estate investor oh well buy properties well no oh you give loans well not exactly and you know so we're in a niche within a niche within a niche and in the note industry itself there's a bunch of little niches i do this one little thing you g....