Do You Need a License to Buy and Sell Notes? | Real Estate Notes Show

Another real estate note show. I'm your host Dave puts from JKP holdings alongside me as always mr. Nathan Turner Hello. Hello. What's up? We're just talking about the weather out there. It's great time in the air Springtime here we go in the Rockies. That means back and forth between snow and sun and it's all good Yeah, we're just on the fact that we had 26 inches back in February for Jersey Early March order was we're getting up the 70s. It's been good Golf weather for those golf players out there and really awesome and it's a time of year where things start moving and shaking and What not we just talked about the fact that we're literally could be when this airs Going to DME a week later.

So yeah, so I have no clue what diversified mortgage expo is shame on you Share a little bit. Yeah, share a little about this how we could benefit both note buyers note sellers and everything else Well, I'm really excited. I think we're finally starting to crack into the seller finance world I'm talking with some of the seller finance people I think we're we're finally getting the message across like this is the room you need to be in so I'm pretty pumped I think we're gonna get some of the seller finance folks there and that's just gonna continue to grow I think but really those who are creating those notes coming out meeting the people that are buying the notes and We're finally starting to have those conversations where it's like look if you do it this way We'll pay you more and we'll all be happier together and and I think we're getting that message across so super excited about that you do it this way We'll pay you more and we'll all be happier together and and I think we're getting that message across so super excited about that We've got some awesome sessions coming up really great speakers tons of networking You got to be there if you don't have your ticket yet.

You've got a few days left, but get it done Yeah, we hope see eyes all there will be on stage we talking walking around shaking hands Introduce yourselves else what you do where you're from And the biggest thing with you know any no conferences do your best not to be shy walk around introduce yourself You're there to network you're spending time with your family. You're you know spending money time Everything get to know everybody everyone's super friendly. It's not scary Until once you walk in the front door, it's all good. We understand getting up there reach out to us We may be the airport with you guys come up and say hello.

We don't know everyone We apologize for that, but is what it is so in the real estate note show We've talked about a lot of stuff right one of things we've talked about as AI We don't want to dive too much into it because some people just don't get it So I want to make sure everyone knows that mean another note investor Dominic started up an AI group These are for people they're a cool or doing beginner level stuff who are just playing with AI They're doing searches or researches and what I know how tools work and how to prompt things or what can you do with AI? Or are having problems such as hey, I put a quote in it didn't come out hat I know how tools work and how to prompt things or what can you do with AI? Or are having problems such as hey, I put a quote in it didn't come out Right or the information was false and what we want to make sure you understand is most of the time when you play with AI It's what you put in is what you get out So if you don't do a good job of putting stuff in Putting the context in the prompt well, it's not gonna understand It's gonna make things up to make the human happy and that's the problem with AI is that you've got to make sure you do everything Right, so we do have a group We meet Wednesdays a to do a Q&A and then we have our level up in our advanced group Wednesday evening that groups the advanced group is for people who are creating web apps and programs and personal assistance and Phone operators and more operational things right and it's just tools that AI think you think it could work Join up with us and take a look at that at JKP holdings Comm slash AI dash mastermind slash apply just go there you'll find it if you can't find it reach out to us But I want to make sure people know Going to this conference Make sure you bring business cards one Make sure you're all the different events go to all the tables all the speakers and join all event Lastly, this is the most biggest thing for for conferences actually bigger than I think giving your business card change your seats often Move around introduce yourself to as many people I think we should have a challenge who can beat more people and introduce himself to more people because that's the key in the last to as many people I think we should have a challenge who can beat more people and introduce himself to more people because that's the key in the last We're so funny as humans where we do that we get in like this is my spot This is where I'm gonna sit the rest of the time.

It's not your spot Your name's not on there move around meet more people and the last thing which is just a step below that one I think is be ready to buy deals There's gonna be deals in the room and if you have deals bring them to the conference There's gonna be collateral actually at the conference. Just not first time ever. Yeah I'm super excited. We've got one session. I'll just go That thing it's gonna be really cool first thing Saturday morning, so you got to get up You got to get there but we're gonna actually have live deals and we'll have a panel of Investors people that have been doing this for years and years We're gonna be analyzing live deals that are actually available for sale today We're gonna be going through and at the end of like we'll go depending on time three or four or five deals and We'll look at different kinds of deals land Short term notes long term notes, we'll try to spread it out as much as we can We'll go through look at the numbers and at the end of each one Everybody's gonna say on anybody on the panel is gonna say I would pay X And so we'll get a sense of what this note is actually worth To those who are buying notes on a regular basis So it's great for those who are not maybe as familiar with buying notes t this note is actually worth To those who are buying notes on a regular basis So it's great for those who are not maybe as familiar with buying notes So you get a sense of how that works really helpful for people who are creating notes Into the decision-making so that they can create those notes better.

I think it's gonna be a really cool panel and I might I'm excited about it enough. We might do this every year, but I don't know Yeah, so please make sure you're joined you get in the room talk to people get down there We look forward to see you guys down national first week in a May Next week when his heirs. So yeah, one thing we've talked about in the show hit or miss and it's a huge deal Is this idea when we buy notes? States matter. It's not a federal thing. It's a state-by-state law Proposers state-by-state law buying selling creating Even servicing is state-by-state. So yeah, we've had the other guests who actually will be at the DME Cornerstone you says will be there So if you're looking up get into idea of you know, how do I get licensed or whatever? When are so there to kind of help guide you but we've always never had someone who says hey listen I'll be willing to speak up about Do I need a license? What's that process look like? Is it thousands of dollars? Is it a test all the kind of stuff Nathan? Yeah, I don't think we've ever had anyone be able willing to share this information No, we haven't and it's something we've kind of talked around a lot and and for I know for you and I were just like willing to share this information No, we haven't and it's something we've kind of talked around a lot and and for I know for you and I were just like You know what Georgia? No, thanks.

We just Together you don't have to there's a way you can do this and that's what we're gonna talk about today So I'm excited to get into so let's bring her in Roz. Thank you so much for joining us I'm excited to have you um, we have and Nathan if you heard beforehand, this is our first fan We don't have any other fans Roz says she's our only fan we have It's awesome. We have feedback Roz. Thank you so much for joining us. I Am so happy to be here. Thank you so much This is awesome the rise as you probably know we want to learn about you first How did you get into real estate? How did you get into notes? What was your process? Did you have education? What was it like? Well, it was around 2020 and I think we all were revisiting where we are during that time and Prior to new investing I was a licensed esthetician.

I had a beauty bar and when the Mandatory stay in place or shelter-in-place orders came out and with what I was doing at the time I'm operating six inches from someone's face, right during coke. So it's like hmm, maybe I need a backup Maybe I need something else And so I originally started looking at getting into real estate with the hot things like Airbnb short-term rentals but again during the moratorium on short-term rentals in the hottest markets like Miami New York San Francisco that was not an option. I then considered t again during the moratorium on short-term rentals in the hottest markets like Miami New York San Francisco that was not an option.

I then considered Long-term rentals standard by property rented out But same thing I'm looking at all my friends that do have properties and can't collect rent Yet they had a mortgage. No way. Okay, maybe that's not eat either, but I just knew real estate Some avenue would open up an opportunity and of course That's when I dug in deeper and found out about new investing and it's like oh, this is this is great you know get rid of the three T's of Toilets tenants and trash right and so I went into a massive self-education during 2020 And I had some thought leaders JKP Included I was able to find out about the ins and outs of it and I started off doing everything the hard way buying in states like New York Pennsylvania and Ohio And I specialize in non-performing juniors And so I'm buying notes.

They're well beyond the statute of limitations I didn't know how to properly do the due diligence and of course over time Which is the last six years I've gotten better at it Understanding so that's how I got into the notes phase Wow what a story it's a man. I like that. Yeah You learn by hard, you know hard lessons and you know, they make you stronger and they'd be able to talk about it I think a lot of people rely on coaches and trainings to teach them everything and it doesn't it doesn't work You don't learn everything by being in a classroom buying the note and falling your face or gs to teach them everything and it doesn't it doesn't work You don't learn everything by being in a classroom buying the note and falling your face or Realizing afterwards is a really good lesson.

That's amazing So you think for me when you first bought notes for those who are beginners? What kind of advice would you give that first time or what would you tell them to do or not do? Well, I think it's most important to have some direction and guidance And there are wonderful communities tons of people that are willing to give their time their experience their education your groups included and There there are a lot of resources out there you touched on one thing already, which is incorporate some AI Way to help scale up your note investing business and Don't be shy about asking questions Another thing that I I found valuable was initially I started off doing everything myself Including all my own servicing which again, that's not always the best model It's not always the legal route to go either But take advantage of using some great services.

There's a lot of them out there that are approachable. They're willing to lend their expertise and While they're doing a lot of the heavy lifting for you You can still learn from their processes and what's important to maximize your portfolio Awesome. So that's great. You mentioned non-performing seconds. What got you into that area? Well, I was poor when I first started investing I wouldn't say that was poor but I particularly like non-performing just because it's such a bigger spread , I was poor when I first started investing I wouldn't say that was poor but I particularly like non-performing just because it's such a bigger spread You can buy them For you know relatively a low percentage of UPB however Again, you have to tread very very carefully you're operating behind a senior which means your stuff comes second And in addition to that there are a lot more caveats that you have to consider I I also like non-performing seconds because that's just something that's near and dear to my heart These are people that are typically a little bit more cash challenged and so I do take a very Dedicated approach to loss mitigation when it comes to these borrowers under the right circumstances, I believe in giving second chances So it's an opportunity to help some people along the way The seconds I mean you probably didn't get that from us Yes Yes Seconds for those who don't know first leans are the first position Meaning that if anything goes crazy you get your money first second liens are second position Doesn't mean you're gonna get your money.

You could get bounced out BK can crush You know push you down a lot of you can happen However, is non-performing seconds are the cheapest way to get into the game and the most riskiest and sometimes the biggest return I've bought I'm gonna say Maybe 20 if that right I don't it typically is more like hey buy these 10 first and here's some seconds and I just kind of tag on to it. So So I think from understanding is that when we do these kind of things we do it intentionally, right and me seconds and I just kind of tag on to it. So So I think from understanding is that when we do these kind of things we do it intentionally, right and We buy a second, you know the notes I bought second position and typically 8,000 I buy it a crazy yield or crazy return and Be fine with it, right where my IRR is solid and it's a matters It's with seconds the risk factor for you was the price for you.

What made you choose second? Initially what made me choose seconds? Well, there are a couple things first is You can get into it easier I started with a pool of about five Non-performing seconds and I think I acquired them all for about five thousand dollars and And so and and I did really really well with them as I mentioned I started with like the worst of the worst that you could possibly get and Because I I have like a solid 100% track record and either workout loan modification or You know going towards a deed in lieu They've all worked out This is my jam and That was the first reason and second it wasn't as labor intensive Typically buying a second you're coming in behind the first and the first takes care of things like the taxes the insurance and all the escrow accounts and in addition to that You they're typically more expensive But they're also as you mentioned a little bit more solid you come first They're more of a sure thing.

Whereas as you mentioned you take a higher risk, but coming in with the seconds I had every intention like okay well This will be my practice ground and then I'm gonna level up and I'm gonna buy only first ming in with the seconds I had every intention like okay well This will be my practice ground and then I'm gonna level up and I'm gonna buy only first But like I said, I just found that I I worked really well in the space It's been working for me well for the last six years Interesting coming forward because before you could operate just on having that good solid equity But as we all know with things becoming more devalued and depreciating in some markets a little bit you have to be on it with that due diligence Yeah, and probably And that's awesome.

That's good. So obviously you've thought it out. You've experienced it. Now. This is you decided You decided this is your baby which is awesome and that's so much about note investing is just like picking your lane and be like I really like this thing because of whatever you've got everyone's got their reasons But I like that thing and then you just head down and go and that's fantastic This is we most often I think people get into nodes either come from real estate background or for some reason a lot of engineers But I think you're the first one that's been an esthetician background. That's awesome.

I love that. I think that's so great That's amazing So far than waxing So that's great so the really key thing here for those who are not listening or who's listening and never heard of this stuff and we've Me and Nathan spoke at different places and most people don't talk about this world of you know, state-by-state licenses and It's confusing. It's sometimes not understood. Well, it's meant to be confusing in times alk about this world of you know, state-by-state licenses and It's confusing. It's sometimes not understood. Well, it's meant to be confusing in times There's a lot of rules around it per state a lot of people ignore them, right So we're to dive into with Ross here.

What is the debt license for? How do she go about doing it? How much does it cost? What happens if you don't get them? from her experience and Why why even bother right? So let's start with the why first rate, Georgia You said you you have a license in Georgia, that's where we grab you from Why Georgia? What is so fascinating with Georgia? Well, um, I may have mentioned I actually am currently as of the last six months living in Costa Rica but I hail from And so it made sense. It's a market that I know it's a fantastic market. It's highly diverse It's the 13th fastest growing state in the country Home prices are still below the national average I think the national average is something like four hundred and some change and it's a little bit below that in Georgia with it being closer to like three hundred eighty eight thousand.

So it's solid. It's affordable It's a diversified market in terms of employment. There's health care A lot of the car manufacturers have it as a North American base. So it's a good employment base for for that It's an education base with all the colleges and schools. And so it's a good labor market, which means it's a stable income In regards to notes and a mass is this is a almost a softball question and schools. And so it's a good labor market, which means it's a stable income In regards to notes and a mass is this is a almost a softball question Why is notes by notes in Georgia and attract why Georgia versus any other state? What is so attractive at Georgia that makes it easy or easier? Timeline wise for notes Well, it's one of the great non judicial states and we all like non judicial I've I've had enough practice in the in the judicial states to know Can you for those who have no clue we're talking about judicial and nonjudicial Can you explain what that means and what's a timeline for typical Georgia? sure So a judicial state is one in which if you're going through foreclosure It must pass through the court system and that means service processing and getting on the docket and possibly Mediation hearings before you can move forward with foreclosure and those things add time they add money legal costs and exposure and It also gives the borrower an opportunity to contest the foreclosure and that makes it even longer and even more expensive However in non judicial states, there is no court system involvement or if there is it's very light level It's something more about just passing through the steps.

So in Georgia One of the beautiful things about it being non judicial is usually borrowers know that That it is a fast fast path to resolution when it comes to Not a non performing note and what that means is bars are more anxious to meet you at the table They're quicker to have a conversation hen it comes to Not a non performing note and what that means is bars are more anxious to meet you at the table They're quicker to have a conversation About working towards loss mitigation in addition to that if you have to go the full distance of foreclosure You can literally go from Filing will not necessarily filing but from non performance default to Foreclosure in anywhere between 4 and 12 weeks Country and that includes up to the eviction process as well if necessary it is Fast so lightning fast.

So what per what per head what prevents everyone just buying Georgia note Why isn't everyone buy them? What is his debt license that it stands away from me and Nathan sometimes buying and states you explain what that is and We're no creators and does this apply to note buyers and no creators are just no buyer It does unless there are certain caveats. Like if you're doing seller financing on your own home, obviously No license is needed for that. However, a license is needed in order to purchase sell service do any type of modification or workout program in the state of Georgia And I do want to provide one level of clarification Everybody uses it differently debt license lender license broker license and even debt collection license Some states like Florida require you to have a debt collectors license Whereas in Georgia is just one blanket license so that makes it very prohibited for non licensed investors to participate in an attractive state such as Georgia and That's that's the biggest reason why people wouldn't participate here non licensed investors to participate in an attractive state such as Georgia and That's that's the biggest reason why people wouldn't participate here So so if let's say Nathan gets a servicer and they're licensed in Georgia and I buy the debt Do I the note buyer have to go get licensed even though I'm using a licensed servicer we get this question all the time sure, it depends on how you're buying it if you're buying it as a natural person meaning in the name of David Puts Yeah, then yes You can buy a certain number of notes without a license as long as you hire a third party third party servicer to Contain or service the debt now the caveat there is If you're buying a substantial amount which they never quite say what it is I hover for some reason around five But buying them selling them then it can be construed as you are in the business of Purchasing notes and in that triggers a licensing requirement You can also buy without a license if you're doing it through a Self-directed IRA and it's truly passive same caveat You're not doing any type of servicing on the loan And then I I've commonly gotten the question about well, what about a checkbook control? IRA or a cell Self-directed IRA LLC and That's that one too is a little bit tricky it can be you can buy them through the SDIRA LLC However, if you want to dispose of the note and you're doing that regularly That wipes away the protections or the exemption.

So you have to kind of walk a fine line I know most people aren't interested in necessarily buying a note in their own personal name or the exemption. So you have to kind of walk a fine line I know most people aren't interested in necessarily buying a note in their own personal name That opens up all kinds of exposure that we don't want but specifically We as note investors, I think most of us anyway, we we like a certain amount of control That well I want this yield and I want this this type of I'm open to these types of loss mitigation options or I want to structure it a certain way and if You are not buying Passively, then those are the you need a license to be able to do those things it's so interesting when you get into the legal side and then you start getting these like very vague terms like You know a reasonable amount or you know an excessive amount.

Well, that's open to all kinds of interpretation Yes, so it gets really funky and you start dealing with these weird legal terms that are so open to Interpretation that you can be opening yourself up to Potentially a lot of trouble because what you consider reasonable Maybe the court decides is not reasonable regular to you is not regular to the court And so it it gets really funky And so you just you you want to make sure that you're on the right side of that all the time and I'm gonna bring This up a little bit later, but I'm gonna tag it on now for those who are really lost Roz the information will be below bit.ly link Hook up with her she's actually creating a process in a business to help you do this Let's say you're only buying one note in Georgia elow bit.ly link Hook up with her she's actually creating a process in a business to help you do this Let's say you're only buying one note in Georgia We're gonna get into cost a minute and it may not be cost prohibited for you to get your license in Georgia or Connecticut Or Kentucky or Illinois wherever you're buying it Roz is trying to put together a program where she could be able to be your conduit to buy this note and Allow you to put it under her umbrella.

So stay tuned for this I'm sure everyone will be dialing you in and making it happen to Roz What is the process of we'll stay with George's that's a focus on things What is the process of getting your license? How long does it take you have to get test is it classroom hours? Is it an annual thing? Yeah, how does that work? All of it. I feel I've talked about it so much I can just It Is actually not as expensive as you think but some of the Requirements are so first and foremost you have to submit an application and you have to be Qualified to get a license. So that's going to include things like a credit check You do have to have a certain credit score to show that you have a certain level of financial Responsibility if you're out, you know telling people about financing a home So that is one of the first requirements in addition to that You also have to have and this is what makes it harder a certain amount of liquidity You need to have as your business $100,000 plus in net worth now the thing that makes it most challenging and this recently came about I believe it was in July to have as your business $100,000 plus in net worth now the thing that makes it most challenging and this recently came about I believe it was in July Here you also need to have a million dollars in liquidity Now that doesn't mean that you have a million dollars, but you at least have to have access to a warehouse or facility line of credit and when I use terms like warehouse and facility it actually means just like someone that's willing to give you a line of credit for this amount for the purchase or disposition of residential home mortgage That's a lot of work That's a lot of work and for me it didn't happen instantly.

I kind of had to work up to that like I said, I've been licensed at this point for over four years and This requirement just came out. So fortunately, I've had the time to get ahead of that curve and when you're talking about a warehouse line of credit It's not easy to come by they want to see a facility or warehouse would want to see a track record of Originating loans or disposing of loans or carrying a portfolio or even using that portfolio as collateral Against line of credit. So that's probably one of the biggest hurdles that you might get and that's something that's specific to Georgia There are some states that don't even have that So And you mentioned the cost is they including the bond requirement as well It does not there is a bond requirement.

Georgia is one of the highest I think the bond requirement in Texas is like 25,000 Maybe even 50,000 but in Georgia the bond requirement is 250 thousand dollars one of the highest I think the bond requirement in Texas is like 25,000 Maybe even 50,000 but in Georgia the bond requirement is 250 thousand dollars So when most people I get this question all the time. I got to come up with a quarter million dollars cash for a bond No, no, it's a percentage of the bond that you pay as a premium and that premium is paid annually To go back to the numbers of it. We're talking about the license itself the application I believe is about 1000 or 1150 dollars and then you also have to pay an additional $250 to the NMLS that's the National Mortgage Licensing Service Registry And that's for the application of the license It does require an annual renewal.

So you pay a renewal fee every year for that other requirements for a license is you have to submit things which I consider basic and If it's something that might be over someone's head you can always hire people to help you do this But you need a business plan an organizational chart How you plan to operate your business or an operational plan? And by the way, I did all my licensing components myself. I didn't hire anyone I didn't use a consultant so it can be done You just have to take your time with it And if you need to call in professionals to assist with that there are plenty that are available to assist So you mentioned a hundred thousand dollar business equity not personal you're saying has to be business, correct? net worth yes What that could be is like if you have a portfolio that's considered part of your your net worth 're saying has to be business, correct? net worth yes What that could be is like if you have a portfolio that's considered part of your your net worth That can be calculated it in You can also do things like pet if you are a homeowner You can pledge a certain amount of Equity that you might have in your home or the business.

So there's ways to come up with that net worth It's just a matter of how you structure it for the license. It makes sense Interesting so You've done it for a while if you were to start all over How long of a process would this take for application to receiving the certificate of being a licensed? You know, no buyer in Georgia Well, I would say you should allow for at least 90 days or so one of the components you had asked about earlier is like wow, is there any test taking involved and Georgia is one of those states where as Part of being a licensed lender you have what's called a control person So that would be for instance me or myself where it might be you David you Nathan for your business in addition to that also have to have a Mu4 which is also known as an MLO which is a licensed mortgage Licensed mortgage originator mortgage license originator license.

So basically I have one of those as well It's meant primarily for the purpose of originating loans like taking applications from borrowers I I will say in all this time. I have never taken an application I've never originated alone. I have no intention of originating alone yet It is a requirement and this is an area where note investors might also find a little friction ted alone. I have no intention of originating alone yet It is a requirement and this is an area where note investors might also find a little friction Because it does require 20 hours of pre licensing education and you can do that online It doesn't require actual in-person classroom time unless of course, that's how someone learns and retains information better The pass rate on that exam is something like 60% on your first attempt.

Oh, wow Yeah, it's easy. It's not easy. It's not easy and I'm a great test taker But after doing the practice practice exam a couple of times like okay. I need some help And so on top of the pre licensing course, I also took a test prep course Help dial in to make sure that I passed it on the first attempt passing on the first attempt was important to me because if you fail on the first attempt you have to wait 30 days Before you can take the exam again 30 days. I will have forgotten half of it for me. Yeah. Yeah And and then if you fail that time you have to wait another 30 days And if you fail three times you have to wait six months before you can take the exam again Wow, Nathan, it's not like a lot of work and as we both know it's like a lot of work no investing.

We're lazy No, you know Roz. I think I'm gonna go ahead and skip it I'm gonna buy in Georgia and not worry about this whole thing or create a note there Could anything happen to me or my assets if I was the worst it can happen. What's the word? The worst thing the absolute worst is it is actually a felony to purchase a note in Georgia assets if I was the worst it can happen. What's the word? The worst thing the absolute worst is it is actually a felony to purchase a note in Georgia Based on residential property without a license. That's a big deal It's a big deal and a lot of people are like, oh my gosh Honestly, I don't know if you would get hit that hard if you hold like maybe one note Or like oh my gosh Honestly, I don't know if you would get hit that hard if you hold like maybe one or two without a license It's probably more like some fines or a slap on the wrist and the option to either divest and get out of the market Or get licensed.

I actually know of a pretty decent sized firm that Was caught servicing notes without a license and they were given the opportunity to get license Which they did but they still had to pay, you know tens of thousands of dollars in fines and nobody enjoys that enjoys that So it can't happen Georgia investigates they look at things like assignments of mortgages They do audits on different Different foreclosure filings they trace chains of assignments as well so they are proactive when it comes to Making sure that everyone is in compliance interesting Yes, and then Georgia, I think I'm gonna get back off my words of saying we're lazy and screw We'll do it.

I don't look good with a felony in my record for sure Nobody does so This is this is is this in every state rise this something requirement of everything or is this something that is you know? depending on the state It is very very state specific every state rise this something requirement of everything or is this something that is you know? depending on the state It is very very state specific Georgia is one of the the most attractive note markets, but it's also one of the strictest note markets because requirements Other states where there's definitely more leniency What I had done when I started investing and becoming more knowledgeable about compliance rule It is I did use legal counsel to help me identify what's called low volume Threshold states and these are states where you can purchase a few notes a year without a license before a licensing requirement is triggered Georgia is one of the strictest in that regard And then there's also the option of Forming a DST, which is a Delaware statutory trust Many note investors have these and have been very successful operating with them basically you form a trust and the trustee is the one that purchases these notes and because it's within the trust and I have to do that thing where I'm not giving legal advice Yes But you know consult your attorney or financial advisor, but I briefly explored the option and found that it was actually less expensive for me to get licensed than it was to form one of These trusts I think the trust itself is not that expensive maybe five to ten thousand dollars But when you factor in getting the attorneys and the professionals required to make sure everything is in compliance It goes upwards to 20,000 and then depending on how you formed you could trigger some sec fessionals required to make sure everything is in compliance It goes upwards to 20,000 and then depending on how you formed you could trigger some sec Requirements as well, and I want to say it's far away from that as possible So circling back to the original question having a DSDST also gives you more flexibility To operate various states without a license.

It's just a matter of where you are financially and what You're willing to do to be in compliance true now you mentioned, you know 1150 250 Is there besides it? MLO license is there other fees you got to pay every year to Georgia now It's yes, you do have to pay an annual renewal fee I believe mine is about 750 a year The way I look at it is like, okay, that's a couple of no payments. So It's not terribly prohibitive my bond actually costs more my bond to renew every year is about I want to say Maybe twelve hundred dollars a year. So There are definitely some costs that go along with it. And then you have your your requirements like having the warehouse line of predates You also have to have that net worth requirements and then Also, what's required is every quarter you have to fill out a mortgage call report It's the my existence.

But yes, you have to sit down and talk about how many loans you originated How many are performing how many are non performing? How many are 30 days behind 60 days behind 90 days behind if you did modifications, how are they performing? Currently, you know, I think it's a very important question ys behind 60 days behind 90 days behind if you did modifications, how are they performing? Currently, you know, I think it's a very important question Currently and in the last year and two years ago, so it does require a lot of Administrative intensity that's not like an AI into now figured out process that I can probably do very easily right and those who are a big AI people and I can AI the hell out of thing and be and be easy done, right? That'll take us less than a second to do And that's gonna be coming up.

But Roz this is in other states Is the process similar in those states that you've learned? Actually, no, some of them are a great deal more relaxed for instance, I believe in the great state of Texas the the net worth requirement is something like $25,000 and I know this just because I recently looked at licensing there and I Don't think they require an MLO license mortgage loan originator license The surety bond. I don't know if it's a requirement or not So some states are definitely more relaxed. The toughest states are going to be Maryland, New York, California Nevada, Illinois and also those those are also Simultaneously the same states that are very consumer protective Do you see the only surprise there? Yeah, the only surprise there is Nevada that the other ones Yeah, of course, none of those are surprised but Nevada is a bit of a shock Yep.

I thought that would be a little looser just Not so much interesting so rise for those states like Kentucky, you know, we talked earlier a shock Yep. I thought that would be a little looser just Not so much interesting so rise for those states like Kentucky, you know, we talked earlier You're looking to create a help for the industry and help them Either do their own, you know process of getting a debt license or something a little bit actually more powerful What are you offering in the coming months? Not right away, but in the coming months? What are you looking to offer for people? Okay. Well, I'm actually Georgia actively right now I have created a compliant gateway model that allows note investors to purchase notes Through my entity and what makes it different is most people's like hey, I can I can do that with a REIT I can just put my money into a fund and let them invested and and be passive but circling back around We like a certain amount of visibility as note investors.

We want to see our assets We want to see how they're performing. We want to see what our yield is We want to know where they are in the pipeline in terms of you know, what's our break-even? Our IRR our cash on return all of those things and so what makes my gateway different is that by way of an investor committee You can set the parameters that maybe you couldn't do with a REIT type product So you can say we're interested in notes that have this LTV that has this much yield We're willing to do this type of workout. We are Looking to acquire these sorts of assets and this is our exit strategy So where is other places we are more compassionate more passive? orkout.

We are Looking to acquire these sorts of assets and this is our exit strategy So where is other places we are more compassionate more passive? You actually are able to have a great deal of participation in the portfolio in addition to that you also have visibility into the portfolio and We're talking about AI and the beauty of AI and I'm putting together the dashboard right now We're a note investor can purchase through my entity and they can just chime in and say, okay. Well, where are we? What's what's going on and it is to that we're able to have investor committee meetings where we're able to visit and What's required in this market, especially with changes in interest rates and changes in the overall? appreciation or depreciation of Interests we're able to be nimble and decide.

Okay, you know what? We're going to divest as part of our portfolio or we're going to acquire more of this in our portfolio So I find that it gives me an opportunity to collaborate with note investors It's still their note. They are protected with a master services agreement an actual schedule that shows These particular assets are tied to these particular investors Wonderful Wow Yeah, I haven't heard of that before that's that's really great well, thank you so much Yeah, it's exciting I did a lot of consulting with Compliance attorneys just to make sure I'm like I can't do this, right? This is this is in compliance, right and Working in concert with the Department of Banking and Finance It takes a long time to hear back from them ht? This is this is in compliance, right and Working in concert with the Department of Banking and Finance It takes a long time to hear back from them I'm still going through a bit of that process now, but just to make sure that everything is above board We're all protected.

We're all on the same page And no creators if you are creating notes in these states like George and that this is the stuff you need Need that partner you need that resource. You don't want to be doing willy-nilly and I know a lot of Educators out there don't talk about this enough. This is a crucial thing You don't want to be in a spot where if you're looking at a repeatable No creator and you do as well license you can be fine felony during jail all this stuff can happen to you and All because you're trying to invest so be a little bit smarter And we'll at least our contact information for Roz will be below reach out to her and answer some questions Right.

We're not going to talk about fees right now because it depends on your situation It all depends though. I think it's awesome Right. Yeah, very cool. Unfortunately Roz won't be there the DME to talk to this year, but you know, please reach out Yes, reach out to her and just share your information share the stuff with her Roz is a special young lady. I think it's awesome that she's doing is what I said to the industry And I thank you Yeah It's I love the industry I think that there's something to be said about all of us providing value and Creating an industry in an environment where you know, we're good actors.

Yes nk that there's something to be said about all of us providing value and Creating an industry in an environment where you know, we're good actors. Yes Yes All right, so Interesting stuff Ross and and I love the direction you're going you're you're sticking with seconds I Think that I'm sticking with seconds. I'm looking more of us like when I when I see as as Most of us in the industry when you when you get in and you get into your little box And this is where I operate and then you you start going to things like DME. Yeah Well, that looks interesting Yeah, that looks interesting and I like the concept of that and so I probably will start exploring some first The dark side We talked about the all the nuances AI is a game changer It really does allow you to be more flexible and that's why we I created the group me and Dom to really help people who are Newer in it and people are advanced Collaborate learn about it.

Please feel free to apply It's a cheap cost per month and you'll be learning it and what you're what you don't realize the power of it is not just the Sending a message on chat you've been Conversation there is so much more power of using the features of it the strength of it to do more, right? Writing emails drafting emails without you even putting a chat in there We have it so it literally sends email to it It gives it back and put the draft in my email to say send or edit it And it does that for me without looking at it based on previous email So there's a huge power in AI that you really need to learn and understand as you move forward we have personal assistance it based on previous email So there's a huge power in AI that you really need to learn and understand as you move forward we have personal assistance I have field analysis is I have all kinds of stuff and I have some things I'm building on too So please jump into that our applies on our website if you get lost let me know so Roz seconds are Struggling and I'm gonna let Nathan take over from there Nathan.

Yeah, we got a thing. It's a little different for us She listens too much of our podcast. She knows the question coming A little bit for you know, well before we get to that real quick. Can anybody guess what Dave's talking about a DME? Yes So that's gonna be really close so AI is a huge field right now the guy that you are coming DME hit us up ask questions It's gonna be huge in the next year five years. Yeah I know we're not talking But I think that it is pivotal for note investors to really Make the most of having that as a tool It can accelerate the growth of your business and not only that If you're not using it, it's it's it's going to make a difference in you know, your your pricing and and the Competitiveness you have with your portfolio So definitely take advantage so one of the questions that we're asking AI right now is take a deal that you normally can't buy Because the yield IRR is too low How can it structure so you can buy and get the IRR you want? How is it possible? Take a four percent note and I'm training a model to see if we can actually do that But we can take notes at four or five percent what possible methodologies do I need to be in place to turn off four percent? f we can actually do that But we can take notes at four or five percent what possible methodologies do I need to be in place to turn off four percent? No into a twelve percent IR Besides giving a huge discount.

These are other ways. So that's we're building on too. So Nathan we gotta give you some time here What kind of what kind of question do you have a rise to finish this out strong? So, I mean you you've changed careers You've changed entire tactic to what you're doing in your life and even moved to a different country just to maximize I imagine on taxes and things like that Very interesting. So what do you what? We've got a sneak peek into what you're planning here about helping other investors How do you see that changing over time? Like how? What does the note game look like over the next 12 24 months? well, um It's very I talk a lot about being number nimble and flexible There's so much flux right now between interest rates gas prices affordability Some markets some areas are starting to depreciate a little bit Things are level or cooling off in other areas for myself, I see Myself being more of a value to note investors Being able to Have things like not to sell David's Thunder again, but having some tools For my investors if you're investing Gateway having some tools where I can sit down and help maximize portfolio values Love it.

I love it Right That's very cool. I'm gonna tag on here. Do you see more states becoming stricter where this is? Absolutely There's just um, I can't remember. I think it was North Carolina. I think it was North Carolina ore states becoming stricter where this is? Absolutely There's just um, I can't remember. I think it was North Carolina. I think it was North Carolina It was basically a ruling that came out recently where someone had I think it was a DST and They went through I think it was a foreclosure process with a borrower and the DSP did not work It did not work and they You License and I think more states are gonna start getting on board with that.

Yeah California's a big one too The guys and ladies, please hook up a rise and talk to her about some stuff If you are buying any states or creating these states, you need to learn this stuff for it rise open book She does so much good social media. I'm a little jealous of her. It's really great to see you get out there and kick some butt Hopefully we'll get you over to the better side of first and do as well But you know rise Thank you so much for joining us on this afternoon We look forward to seeing you again on social media DME next year Keep up the great work. We thank you again and What not for those who will be seeing us next week when this airs at DME? Make sure you say hello to us Connect with us.

If you have any question about DME reach out to Nathan I get a lot of emails from that which is fine. I pass over to Nathan Nathan runs it towards them to me. Yes Make sure you go to diversified mortgage expo comm get your tickets if you haven't already And for those who don't know the day before it starts There is a one-day conference going on of the entire process of raising capital haven't already And for those who don't know the day before it starts There is a one-day conference going on of the entire process of raising capital Correctly. Yeah, that's a huge deal. That's crowdfunding lawyers putting that up.

Those are the guys that got my fun started They if you even if you're not doing a fund if you're just looking at doing JVs or something They can help you structure that properly. So you're not gonna get yourself in trouble raising capital Using other people's money to do things so so super important on the legal side But then even more so is like how do you actually do it the actual nuts and bolts like that the how-to's? Who to approach what your message should look like? You know what tools you can use all those different things. That's what's being covered that first day On the 30th and separate event.

So you got to make sure you get a separate ticket for that It is available on the DME website Or is the AI? Capital Racing Summit. That's what that one's called. You can go check it out there as well. Awesome Well Roz once again me Nathan Thank you so much for coming on sharing your information with everyone You sure you can hook up a rise at all our social medias and whatnot. But again, thank you so much We she having on yeah, thank you. All right. Take care everyone. Enjoy. See you soon. See you soon.