Marketing Seller Carry Note Holders | Real Estate Notes Show

Episode: Marketing Seller Carry Note Holders | Scott Arpan Dave's Goals and Plans: - Fine-tuning fourth quarter activities - Shifted from buying bank notes to seller finance notes in 2020 due to poor returns - Teaching a class on how to create successful valuable notes with Nathan - Planning Diversified Mortgage Expo conference in Nashville May 2-3 with focus on note investing diversification Nathan's Goals and Plans: - Bought first short-term hard money loan for fix and flip this week - Currently dealing with a borrower struggling with payments and property sale logistics - Sent third or fourth demand letter on a difficult note - Pivoting business strategy and exploring reverse mortgages alongside traditional note buying - Meeting regularly on private calls with other note buyers to share information Key Recommendations: - Put emotional strings aside and apply business logic when dealing with non-performing notes - Network extensively and build relationships to find seller finance notes rather than relying solely on purchased lists - Connect with other note investors regularly to learn about market shifts and avoid being late to pivot - Diversify within the notes space by understanding multiple note types and approaches - Focus on the human side and emotional challenges of note investing, not just due diligence and numbers Topics Discussed: - Marketing and finding seller carry note holders - Shift from bank notes to seller financed notes post-2020 - Managing difficult borrower situations and collections - Human and emotional aspects of note investing - Inventory of seller carry notes created in 2023-2024 (89,000) - Diversification strategies within note investing - Reverse mortgages and business pivoting decisions Guest Insights: - Guest has 30 years in note space, 20+ years creating seller finance note lists - Father started buying and brokering notes in 1990, guest joined in 1994 - Originally collected database through mailing 20,000 mailers monthly with 6 employees - Subprime meltdown in 2000s refinanced away much of market, forced migration to seller carry backs focus - Institutional investors and industry referrals became primary customers; now relies entirely on referrals rather than active marketing - List includes all types of residential and commercial seller financed properties Episode: Marketing Seller Carry Note Holders | Scott Arpan Guest: N/A Summary: Hosts Dave Putz and Nathan Turner discuss the challenges of marketing and managing seller carry notes, the shift from bank notes to seller financed notes, and the human complexities of note investing that extend beyond financial analysis.

Main Topics: Marketing and managing seller carry notes, Non-performing note strategies and borrower communication, Transition from bank notes to seller financed notes, Emotional and human aspects of note investing, Portfolio diversification within note investing, Due diligence and underwriting challenges Key Takeaways: The hidden complexities of note investing go beyond numbers and require human problem-solving skills | Market shifts between 2010-2024 have made seller financed notes more attractive than bank notes due to availability and pricing | Networking with other note investors is crucial for staying informed about market changes and new opportunities | Successfully managing non-performing notes often requires difficult decisions balancing business objectives with borrower circumstances | Portfolio pivoting and diversification within note investing is possible and sometimes necessary to adapt to market conditions Keywords: seller carry notes, non-performing notes, note investing, seller financed notes, real estate notes, portfolio diversification, borrower management [Music] so [Music] hey welcome back for another real estate notes show I'm your host Dave putz from jkp Holdings alongside me as always Mr Nathan Turner recording in progress hello you man very good very good awesome I'm glad connected today it's the uh holiday season um and uh lot stuff going on right we're kind of fine-tuning the fourth quarter of everything happening um but it's really interesting to see that uh it's always good to connect and kind of learn from each other today we're talking about Market marketing seller Carri note holders which is a huge inventory of we're talking uh before getting on 89,000 was created 2023 and about the same 2024 but before we get there how you been really good really good I got asked to be uh a wise man in the Nativity this year so I'm growing out the beard getting all fancy but I actually just bought to for business stuff I just bought my first short-term note this week so I'm excited about that I want to see how that's going to go I think that could be really good thing for uh for my fund uh is a hard money loan good fit yeah yeah it's for a Fix and Flip it's interesting really interesting um I don't know if you know her Wendy's sweet uh yeah it's from her company she's gonna be at DME next year Y and he's gonna be speaking to us a little bit so I'm I'm cautiously optimistic I just because I've never done it I'm sure it's gonna be great but first time so you know you always get a little bit of is it a rehab loan a rehab loan yeah hey all right here we go yeah so I think it's gonna be a good thing I think I'll be buying more of those awesome um I know that recently we're dealing with a borrower who you know just dealing with some stroubles and like that and you know we've been back and forth they're trying to sell a property yeah in lack of payment and we just do you kick someone out or do you take over some property Mill you know Christmas is hard the emotional strings comeing and you have to put that aside and put the business hat on and say fine and then you deal with the fact of do we let them sell the property do you take it back and how much time you get give them just all the little things that come into play you know yeah there's a point where you say here's a cut off and you have to be that person and you know what I think that's the that's the module that most teachers don't teach yeah is that that's a big part of the business is like what do you do when this happens Y and and a lot of like human stories and and they can't pay because and I've heard some heart-wrenching stories and and then what and then how do you deal with that and that's not an easy challenge so that's that's one of those hidden hidden parts of node investing that not a lot of people talk about yeah and it's not a performing or non-performing you know the person that you know father passed away and AR wrenching this is their child home I believe and it's just like okay how can we help them and it's like just sell the property ton of equity right yeah and we've this is I think our third or fourth demand letter it's been fa members so it's hard um but and we're really good at coming up with Solutions but yes getting on the phone often is the toughest part yep absolutely anything else deals with you going on right now anything Bruin besides that one any craziness bankruptcy stuff looking just kind of looking at the end of the year I had another note speaking of non-performing another note where uh I had it actually under contract I was selling out to First National and they they went to do their inspection and uh they say oh actually the house is vacant oh what so here we go I mean she's been in there over a year and she's been paying just great and they've never had an issue and now all of a sudden she's not there so now I got to figure out what to do with that so all these things these things that come up and happen and notes are easy right yes it's everything in between it makes it difficult right it's like listen due diligence and running numbers and all stuff is pretty easy in our book right I think for us just figuring out the Human Side like you said before and I think it definitely has to be talked about more because you know those who were haven't bought a note or bought one that's their baby right they're spent a lot of time on that we're kind of saying well there's more to it right um and then juggling it all right and what do you focus on what do you do um we're we're looking at you know you've bought reverse mortgages and do you swing that way or do you hold your ground some people say stay your lane people say well you got to Branch out your land when do you make that decision when you not make that decision is often typical for a lot of people yeah yeah I talked to uh you know Josh Andrews talked to him this week and you know talking about how we're pivoting and how we're we're changing the business a little bit the beautiful thing about notes is you have room to do that and you can go different directions uh but just you know figuring out what are you going to do next and if this isn't working as well as you wanted it to then what else can you do and think your way through it and I think most people don't realize that right is that you know talk to other note buyers not creators we meet regularly on a private call and just sharing information you never know what you don't know and I think that people have to see the shift um and recognize it and sometimes you're late and that's okay long as you see it um and I know we've seen some post people asking hey you know how can we get started believe me Nathan and I have been doing this for 15 plus years both not buyers for a long time and we'll tell you we have plenty of mistakes all of them we have and mistakes issues concerns all of it the Market's different from what it was 2010 201 to 2020 and 2024 now and it'll be different next year um we made the huge shift from buying Bank notes to buying sell Finance notes in 2020 because the returns weren't there yeah yeah and and that's again the beautiful thing is there's room to Pivot but you if you don't know all the options it's hard to know what you're going to do so quick plug for Diversified mortgage Expo that's actually kind of the theme of next year's conference is we're g to we're going to have different presentations different people that are doing different kinds of node investing uh and we're going to kind of lean into that diversification uh all within notes but different ways that you can approach noes so I think that's going to be a lot of fun yeah I'll try through in the uh in the chat the link for it for everyone um but yeah if you don't have it please feel free uh to check it out it will be you little tell everyone where it's going to be at and what day yeah Nashville Tennessee May 2nd and 3rd uh and we are well into making plans and getting things all under control and so looking forward to to next year's conference already is going to be great and remember guys this isn't just for no Fires for no creators this is for everyone right so if you're doing rap notes or whatever um everyone is you know available so uh hopefully you guys get that information and share it also so remember you guys this is recorded um it's also on LinkedIn Facebook YouTube now and whatnot talking about s Finance notes some we really didn't buy much you started there went away from it came back right yeah and share with the crowd why did we switch from buying Bank notes sell our finance notes Bank notes were so planful and easy to get a hold of they were for a long time that that's like what there was there were tons of them there were tons of them so it was really Easy Pickins pricing was ridiculous and so it worked it was a it was a really great model for the time and then as the market shifts and as inventory runs out and as the pricing shifted on those non-performers that was one of the biggest reasons availability and pricing and so we started looking at other things and so seller finance is it's been around forever so it's a really great place to uh to kind of fall back on and get back into so yeah I'm excited to be in that space right now it's really great biggest thing happened 2019 2020 is rates went down right we no longer have this High interest rate loans and we couldn't buy the 3% and you guys who were doing seller plance we love you guys right creating 10 11 12% loans um we talk about a lot the infinity return I have a calculator on our website that's a perfect way and Nathan and I teach a class on how to create successful valuable notes right um but it's funny you and I forever have searched for through our marketing our networking and social media on how to buy these seller finance notes right this is what you and I have always done um to find them um yeah I 2012 2013 or so I bought a list uh from a commercial company and it wasn't good yeah right and it was struggling but what I found out now is there are people out there who understand our business who have the knowledge of what we do but also the knowledge of creating a list that makes it work for us yeah and that's killer yeah that's fantastic I people ask me that all the time where do you find these notes and Ty Al my answer is lots and lots of networking all kinds of just getting to know people and making sure people know who you are but there's there's more ways than one to find a note and so that's what we've got on for our show today so let's bring him in here right got welcome to the show my man I appreciate you spending the Friday afternoon with us it's good to see you my man hey David and Nathan thank you for having me really appreciate being here and being able to talk about what I do yeah so so got share a little bit about your background how did you get started in the notes space and all that well my dad started buying and brokering notes in 1990 I joined him in '94 and we started out as a basically a brokerage but were able to start buying notes for our own portfolio and grew in there and we actually grew um just basically through our database and collecting the data uh we had six employees mailling you know 20,000 Millers a month and going full bore and then about 20 or about 2,000 the subprimes kind of came in and uh everything they they kind of refinanced and took away a lot of that market so I um you know have this database that we've been collecting and invested in pretty heavily to to make sure it was a just seller carrybacks and was kind of a horned in list but I was kind of okay the returns aren't so great so like you I migrated to different markets and uh but my uh friends that were in the industry people I nwork within the industry and then also a big b um Institutional Investor a subprime investor knew about my list so they offered to start buying it from me and that's really how I got started uh creating my list and just kept growing my list uh from there um it kept you know growing expanding counties trying to improve it uh by making sure we're just pned in locked in on sell our finance notes because that's all we that's our only product we're not trying to uh Market der Realtors or mortgage brokers for other types of uh you know financing in markets you know we all we do is sell our financing um that's awesome and so you over that time we've been you I've been buying notes for myself but then also creating the list you know kind of after everything fell down in the subprime Meltdown kind of got back into focusing just on seller financing and um you have a core group of customers that just you know keep keep me going I don't really Market myself anymore uh it's all referrals and return uh customers and uh so been doing this now for over 20 years as far as just the just the list and then uh B in the note space for 30 interesting that's a lot of history that's your seller plance properties residential commercial or vary every uh all kinds you know for um at me as a private investor I'm looking at more of the the stuff the uh institutional type Banks won't buy or you know because you know I want higher yields than uh finac or those other places are getting you know so most of it's commercial I we also were doing hard moneyy loans uh commercial hard money loans and so I'm I'm pretty well versed in in commercial lending and uh so land and Commercial are kind of my my sweet spot from a private investor standpoint amazing good interesting interesting so when you look at these things you know I like I said without naming names I've bought these list before and they they turned out to be release leans assign stuff it just was dirty do you guys clean up the lists and how do that look to the end investor who's buying the lists yeah we have our own set of criteria in in matching Logic the in software that we've written where you know we're looking for certain characteristics of the every loan transaction to determine if to seller carry back we try not to pull in any hard money loans you know we maybe one in 5,000 of our records is a hard money lender or something just because it falls in there but it's all clean for that you we have no institutional lenders for sure in our database we divide our database into kind of a mom and pop you know oneoff individual you know sold their home after living it in 30 years that kind of thing and then we also pull uh leads for uh more the um corporate entities you know the rehabbers the developers and who do a lot of seller financing but our Core Business is the Mom and Pops because that's really what most of my customers want to Target yeah are you in all 50 states pretty much yeah we're in all 50 states and you know every County pretty much with a population over 10,000 or more um you know we we've kind of drilled down to as many counties as we can uh operate in profitably you know there that small County in South Dakota that has you know 50 people in it you know we're we're not going there you know not so much interesting and so when you're reselling these um let's say there's somebody out there who's who's saying you know what maybe I'd like to try buying a list is there something that they should be looking for or like what do you recommend for people that are looking for a list when they're looking for a list they you know their first thing is criteria and they need to know what either they want to purchase or their investors will buy so you know talk to your investors if they only like single F or you know Residential Properties okay don't buy land if you have investors that will buy land pretty competitively um you know that's a good Niche because that that's kind of a more of a specialty um and so you know after you talk to your investors that uh and kind of get a feel for what they want and that and what kind of product you should be be producing for them that you know that's kind of where at the starting point um then when you're uh you're trying to reach out to your note holders you know the the number one thing is being credible being truthful so they can trust you uh you know not holders you know they're they're not going to just take anyone off the street and and trust them with probably what's their largest asset and want to discount it by 20 or 30% to sell it they they have to trust you and that's really the correct of I think all marketing whether it's direct mail or web based or or whatever uh marketting Avenue you you work in what is some of the responses that you get you've marketed to from these note holders who may never knew you can sell a note you know in the old days I think that was more of a a thing uh nowadays we really have kind of two two submarkets for uh direct mail I have customers that every month they want the newest and greatest list that probably hits 95% of all not holders maybe you know or or or more and So within the first month or two they know they can sell sell the note um yeah in the in the past it was probably something more you they'll get a letter every now and then um and they didn't know they could sell it and and they you know maybe the first little while they had to warm up the idea but it's um but it's rare I think for a no holder nowadays because of direct mail to uh not get touched by somebody and say oh okay I I can sell this note um and Market it you know since I don't D work directly with the do holders anymore yeah I don't do my I don't do Direct Mail uh I the notes I buy is for my customers um you know I I don't have I'm not on the front line to really know what their responses are because obviously there's that first mailer they they get maybe three weeks after they recorded and um you know I'm sure that's an interesting conversation um and but people I think the not holders are more educated on their ability to liquidate their notes makes sense so and that's I think part of the challenge with the direct marketing is they're getting these letters from multiple people all the time so how do you how do you stand out how do you make sure that your letter is the one that gets read and taken seriously uh one is you know like I said been being truthful honest credible uh building Rapport um and that's why maybe myig biggest advice to a lot of people starting out is you got to look at things like letters and something a little more substantial than postcards uh because you know postcard you okay it doesn't really build credibility but what we call number 10 package in the mailing World basically a letter um will at least get they'll they'll be able to read a little bit about you more importantly you're selling benefits know what benefits the no holder gets working with you um you don't want to toot your horn so much as you want to sell your the benefits of um the note holder selling their note and getting them their image and imagining themselves selling their note and being you know happy and all the worries and all that are relieved um so that that's kind of the the corrects where you want to go um but there's you know there's all kinds of different ways to Target with Direct Mail too and you did do Direct Mail back in the day right um what is it you know I've heard a line you have to Market them three times on average to get a hold of them you think that's still true yeah yeah it helps to have more touches um you know so you you might do an introductory letter um and and tell them who you are but then you know sell sell sell your benefits uh your next letter maybe continue the conversation um hey you didn't I you know I didn't hear from you I want to let you know I can you know you can get all this money for your note I'd love to hear from you you know and you got to kind of do it in your own tone and and marketing voice um and and you know keep reaching out because there's there's a certain number of people that will want that didn't want to hold a note and are willing to liquidate it in the first six months uh we you know we collect assignment data and there'll be a little bit of a blip right in the first maybe six months and then it just is a perfectly flat line as far as amount of seasoning and notes sold per records um Vital Records still in the database so yet people that don't want to hold a note they want to they'll sell it so the people that mail early are getting the low hanging fruit but they're always moving on to the next next new list they're not you working their list then you got people that come in maybe a you know 10 to 12 months later they you know they start the conversation and um usually they'll they're the ones that will kind of stick with it and the note holder probably won't react until they have that need to sell the know they need you know they need cash for some reason um and and so that's when you get your calls and if we bought a if people buy list from you guys and is there a way to tell if that person's Wroten more than one note or they're more familiar with it or that's their first note they' written kind of thing is their way to kind of determine that if they wrote in 10 notes in last year yeah yeah we we track how many notes each of our not holders has created um we can do it a couple ways basically by last name and address uh and so you know obviously if they've been creating multiple notes we throw them more in the the uh rehabber corporate entity type uh package uh and they're not in our mom and pop uh database we we try to farad out the professionals from the Mom and Pops in our list because uh they're two different Market marketing techniques that are required to to reach them and then how much can you filter down like how much can you like I guess if you're just doing the the mortgage there's not a ton of information on there that you can pull like I'm I'm thinking like you know uh interest rates can you filter it by interest rates and and probably not so much no no we we don't have interest rates with h sell or financed notes yeah mainly it's general property type you know residential uh commercial land yeah it's a loan amount um amount of seasoning uh and then State um youall people want to just mail their little County and that really isn't enough volume for Direct Mail you need you you need to be mailing a thousand or more at least you know pretty much every month on a regular basis to be consistent and uh and make a good business out of direct mail yeah uh so we we have a question coming in church by state from uh our LinkedIn feed was uh what the different criteria no buyer is going to ask you to filter on and why would some prefer certain criteria versus other I think it pretty much goes back to what your investors will buy and then also familiarity there's a lot of especially people new in the space are intimidated by commercial land MH you know there's a whole another subset of underwriting questions that need to be asked for those property types versus a residential you most people own a house or at least they they rent a house or you know they're familiar with with that space and the questions aren't quite as deep as far as how you know different uses and um but what would be the top say three note buyers in general ask you to filter by uh State because a lot of them will just want regions you know they they'll mark it to the West Coast or the East Coast or Southeast or something um by loan amount and then by property type that's and then when you do that um you're the process you fill it out and you send them a tape and on that is there uh the bar the the lender's name what different information is on there about the lender that they can reach out to about for so on all our list we have the lenders name their address the county it was recorded in the the loan amount we provide the sell amount the sell price if it's in a non-disclosure State and we can't pull sell price from Texas or other nondisclosure um and let's see loan amount sell amount and then for then that's basically our basic starter package then we also have what we call a professional list that includes like the buyer names the property address uh the APN or tax ID number uh we have a kind of a a a investability score is what we call it and when we were buying in brokery notes especially for the big institutional investors we would rank equity and whether it was a mom and pop uh owner occupied property type we took all these variables and and put it into a a score and the idea is okay we mail everything at least once because you know some of those gas stations or whatever might be able to do something with them um yeah but you know the private invest but um you know we focused on things we could vote um at that time there was a life insurance company that was buying the biggest note broker or excuse me note buyer and so you know we make sure we targeted maybe the top 25% of our list um multiple times over and over again to hit those you know best notes and that's how that score came about um yeah you get the due date if there's a balloon du uh if we have it um yeah that's the basic information and and the approach is different we had Marco berio on a few weeks ago uh talking about the approach is different if it's a mom and pop seller versus an Institutional like a for lack of better term yeah a professional uh that's selling it that's that's a different conversation and I personally I prefer the the professionals uh that's who I'm looking for to sell their notes um and Marco goes after the mom and pops and and definitely a different conversation a different approach and you it is talk about it different it is right yeah Mom and Pops you want to be very conversational with you want to be um you know you got kind of drilled down right at maybe a sixth grade writing level there's all kinds of little nuances on how to write a a good marketing script for Mom and Pops yeah where is a I think you want to do a basically a business proposal and and sound like you're very credible and knowledgeable and maybe large enough to and competent enough to handle their right transaction multiple times so if we had a question from our YouTube feed is that if there's a mobile home that's placed on land is that typically recorded as a raw land or a improved land on your database good question now that's based on the county okay we pulled data from the county so we're beholding to the county to take give us information if it's a fix to the land it very well could be this you'll come back as a a single family in some counties others will just say it's a mobile home in land if it's not a fixed it might come home back as a mobile home in land or it might just come back as land um it it just really depends on at the county level what data is available for us to to connect to and what we can pull out of it makes sense um what happens we do our best to figure that out but um it it's really not there's no way to to really know yeah absolutely what happens if that note has been you know sold or released how do you guys account for that so we collect assignment records and so what we'll do is we try to match up the the note information in our database with the information in the assignment um recordings and you it's not perfect because the data again there's a mismatch of data a lot of times but if we can match it up okay we'll know that not's been assigned um it's gone to finac or a private investor or whatever and so we'll take it out of the of our list so you won't receive that so we we do try to clean up our list where you won't receive assigned notes or notes that have been sold or paid off um you know so we clean it up as as much as possible you know I'm not going to say it's perfect but it's a lot better than um anybody else out there because you know nobody else is uh doing that that I'm aware of abely that's interesting I was just thinking like as you were saying that that um I've never actually I don't think I've ever received a letter saying hey you own a note I would like to buy it uh like that's never happened to me so that's interesting I'll have to look for you see if the absolutely that's a good test is it in your own name or is it in a corporate entity it's my company name but but mine isn't assigned so I don't typically do the origination this is uh it's one that's been assigned to me somebody else does the origination and I buy it so I that's probably yes that would be a reason I'm not showing up on people's list all right yeah so yeah if it's been assigned it's off our list and um I don't have the assigner mailing address so they can't there's not a way to follow up to buy notes that have been assigned already that's what I'm thinking yeah part of a list that you can pull or could we do that you can figure out that it's been assigned but you know you'll get a bunch of names like Equity Trust interest you know that that that's where a lot of assignments are going or it'll go to the major banks that are buying and obviously they're not selling um because there's very very few individuals that um whose name we can get but then we have to actually go to the county to get the uh recorded information because we don't have their address or any other contact information we just know there's we find a way to like find a list that have been assigned already right cuz let's be honest me Nathan are not the most hardworking like Mar Marco is right that we that that work is really hard to do and could I just buy a list say in Dallas Texas that's been assigned to people and then I come through the list and I find Ernest investing and go I knowest let me go find his he bought a note here or hey I can Google Happy's names if it's not an IRA if it's not in a fun name I could Google or look up these companies and say I know this person this person this person let me hit them up and see if they're willing to sell is that a list that people can buy from you if they wanted to um it's we've played around with it it hasn't really worked out because there's just not enough volume in there ex you know most notes are are paid off versus assigned yeah you'll find maybe 2% of all notes have been assigned and the majority of them to institutional type of all notes have been assigned that's interesting by itself yeah I mean you figure 89,000 loans created last year and you said this year 2% of that I I was expecting a whole lot more because that's all we see as assigned notes really but that means holy God and these are notes I can match up you know there's a lot of notes because the assignment data is a lot different than yep my datab database data so we can't it it's kind of a a mish mash so we do as much as we can to line them up but you know okay there's maybe some elements that are matched up and some that are not and so we can't you know determine whether it was assigned or not but you know we do what we can to clean up our list make sure you're not mailing dead um a dead list as much as possible yeah um you know but uh it it there's an art and a science to uh m L management so so you mentioned before the call that in 2023 there was about 89,000 loans created what your guesstimate what 2024 looks like we are right on track with 2023 I looked at the numbers uh earlier this week and pretty much lock step quarter for quarter um same numbers uh coming coming back so I would expect you know as long as 2024 finishes out normally we'll see about 990,000 records again in for 2024 in dollar Mount is that gone up not I know off the cuff here but in dollar amount created has that increased or because houses are more expensive um yeah I didn't really look at that closely okay uh this year to that year um you know this year to 23 but I I think it feels about the same you know maybe a slight increase for um inflation or the increase in the housing stock but it's not you I'm not going to say there's a huge jump in the uh the volume but still 90,000 is still a pretty solid that's a lot number that's a lot we might have to wait for uh Fred and Tracy to come out with their report so I think Fred Tracy get it from you right Scott is that correct they usually get it from you it's got they do yeah yeah yeah Tracy asked for it for years ago so I always give it to her first the final numbers that's awesome and then it gets published elsewhere so out of the 89,000 I'm presuming those you know are broken down you said 2% of those are are assigned um and what do you think percentage wise as raw land we see a lot of raw land right is there in what state would you guess the most common state is right now uh probably Texas for raw land for sure and yeah raw land there's definitely a a lot less raw land notes going out being sold than say residential you know I I you know it's a a niche and you got to find I think the right investor to uh to Market to Raw land it's hard Nathan and I both won't buy raw land right we is but but yeah we're we're not so interested but we know people that's all they do and they they love it so that's I you know a niche within a niche and that's kind of how notes goes interesting and would what would be the second state your guessing is in a step order Texas being number one overall for no Cre what do you think number two is uh Califoria and Florida are pretty lock step oh yeah I think Florida maybe few hundred more than California okay um but you they're both High producing states you know those three states produce maybe 60% of the volume in the country okay just I think there's a longer tradition of people carrying their notes in those States versus a lot of other states MH and what do you think you know for those people who are Buy bu notes from you um is there any fear about getting the same list if me and Nathan are both looking at Dallas Texas where is that kind of come out that do we get the same list if we both buy say 5,000 list um I get the fact that Nathan may look 10 you know re write 10 males to them and I write one right but do we get similar list as other because it's only finite number of notes he no with the wider The Wider the criteria you can give me the more exclusive I want to say exclusive but the longer you'll it'll have been since the no holders received a letter because what we do is you know you give me your criteria and say there's a pool of 10,000 records within that criteria you give us and Nathan wants 5,000 notes so I I pull for Nathan and what we are um software does is we'll take the 5,000 within Nathan's criteria that have gone the longest since we have sold them and so that way I I I try to spread everybody out and you're not stepping on each other's toes and you know those um records aren't any better or worse than anything else it's all within your criteria but the final step is to to give you the list or the note holders that gone the longest you know since they've been mailed and in that way there's a lot more breathing time you're not right mailing right on top of somebody um you know for for the seasoned list you know if it's been 10 12 months of seasoning or more you know there's a lot more Breathing Room between when people receive their their list versus we filter the list and say listen I want only notes that created 10 years to 15 years ago from say 2015 to 2010 we I could I could do that um the response rate would probably be very low but I'm sure nobody's received a mailer from there right you have issues like people a lot of people will move with no forwarding address they'll be deceased and again we try to figure that out as much as possible but when the list gets that old um it you know you'll either find the gold nugget or you'll get you know a lot of um dead air it's kind of hard to to market for notes in that time frame is the best time frame is it right away is it a year is it two three what do you think your best time frame is to for a deal on that kind of stuff well I have you have two sets of customers one that want the newest list every month and they're all you know they're on top of each other they're competing with each other but they're all going after that lwh hanging fruit they're going after the no holder who just who didn't want to carry their note they want to um you know get rid of it and get on with their life yeah and so uh in the first three months a no Holder will get hit multiple times and it there's not really a set number it'll just it'll kind of depend on the region and and all because a lot of my customers are more Regional and they might buy for their own portfolios and stuff but you know they they keep moving on to the next newest list and then so in the first three months a no holder might get hit say three to six maybe seven times um and and your marketing piece and your timeliness will determine who gets the call then after that I kind of encouraged kind of a breathing room because most people who are anxious to sell their Note have sold it so maybe 10 to 12 months of seasoning then I have what I call my season list and my guys who buy that you those are the ones that will buy blocks of a TH or 2,000 maybe every month or every three months and I can take all their criteria and give them the list that's gone the longest since it's been hit by anybody MH and and so usually no holders once they get that much seasoning you know they'll get hit every couple of months uh three months you maybe more um if they have multiple notes uh but they you know I try to make a um a space where all my customers can be out there you know have kind of a one-on-one conversation with the not holder and not worry about just being inundate the no holder being inundated by a bunch of other uh uh broker is right on top of them makes sense so do you uh do you do any kind of coaching for like how to write a marketing piece or things like that you know I'll talk to people and kind of go through different points on what's important what I think is important you know I'll look at their piece sure uh but I I don't really coach per se I don't have any training I don't have any um I don't charge for my time or anything um but you know I'll I'll look at your piece and maybe critique it say okay hey you know your font needs to be larger needs to be in San Shar needs to be written at you know this kind of level you're you need to have more benefits need to have some Headliners you know that kind of stuff because that all plays into how how much response you get right two quick questions have you um have you ever seen anyone do it and I always saw about on a private call in a wedding envelope kind of get them to open it and the second one is do you guys track on your database if it's the first or second lean we only pull first okay the way our our logic and um criteria goes so yeah we stop pulling seconds 15 you don't have to filter say I only want first lean yeah so everything is a first lean okay okay uh there'll be some wraps in there but um but we're all we don't pull any straight seconds for sure okay they're all uh all they're all first leans and then as far as wending envelopes that might be um yeah I'm not going to give away I don't give away anything my customers have uh told told me about their mailing list and sometimes I'll you know obviously see them sometimes I'll just say there's a lot wide range of opportunity with Direct Mail yeah you know um there'll be everything from very much handwritten things to very automated and everything in between and and you just got to find your voice what you're comfortable with what works for you uh you know there's like 36 different sales per buying personalities out there and you're not going to get everybody to respond to your marketing piece you know whether you're direct mail or or website so you got to find your your voice and and what appeals to your audience and what you can kind of build rapport with and uh and build your business on that because you know not every note holder is going to want to see the same marketing piece or website or whatever yeah it's amazing because I think you know a lot of note buyers want a strategy of how to do it right we want that quick easy clean spreadsheet but we've heard from friends of ours who've done this for two three years on one asset and like worked it and worked it good Lord they get a killer deal at the end of it but a lot of handholding and from what we hear also is that some of these collateral files are not clean right these aren't are picture perfect you know recordings that are easy to read because sometimes they're just kind of you know backyard kind of written up documents they're not super clean which makes it more difficult yeah that's one of the struggles we have with it what was from your stories you've heard what are some of the longest times it took from getting a hold of someone to actually scoring that asset as there been stories of years of experience of waiting for that that bar to the seller to finally sell there are um you know a lot of note holders will when once a person calls a a good marketer will make sure they have that contact name and if it doesn't go through they'll call them again in three months or six months whatever they p comfortable with and you I've had stories where people will um you know maybe take four years from the initial contact to the when they finally sell their note so you know it pays to follow up and to uh you know work your your leads especially the ones that have come in live and you built rapport with because uh those are going to most likely uh that's a lot different 48 hour turnarounds bidden 48 hours kind of thing that's a whole lot different yeah yeah you know I I I'm pulling this stat out of my head I don't remember where I heard it but roughly one and three no holders who do express interest they reply to a mailer or a website end up selling their note eventually maybe not at that point okay but um you know maybe two to three years down the road and you that it's an old stat but it probably still holds true I would tell anyone who has marketed before for you know real estate properties and wholesale and that if you want to take this up and you're really good at marketing this is your Niche you could take this up buy this from Scott and broker to any one of us we would P pay that finer fee for you so if you're a marketer G I don't have the capital to buy these things but I have experience doing wholesaling for Real Estate this is a great opportunity for you guys to get a hold of the list Mark of the you know whatever the the note buyers want Mark of the crazy there are some key count in this country that all of us will buy and you target it and you get a hold of it all of us will pay your broker fit yeah no question and we would be happy to do so yep well Scott it's been awesome Frid afternoon been with you um wealth of knowledge wealth of experience um for those who want to get a hold of Scott there's a b link inside the chat and it's also on the YouTube channel as well um feel free to reach out to Scott fill a form out and you'll get everything uh all Scott's information website and all stuff and I encourage you guys go out and buy buy if you're not going to do much buy let's see what it looks like buy 500 buy a couple here just to start learning about the stuff and just see what it looks like and see what's available it can't hurt and they're not expensive SC what would you say if you're going to buy a th lists what would you say a thousand list would be a lot it's right now it's 20 cents a record for a th000 so it' be $200 I mean for 200 bucks a th000 leads yeah if you get one deal it pays for yeah it does a second yeah very interesting take it away yeah so Scot you've been around a little while you've seen a few things and you've seen the market change this way and that so what are you what's your prognostication what do you see coming down the road uh with seller finance or otherwise what do you see coming up I think you'll still stay strong I think um yeah I'm not going I have friends on the left and the right so I don't want to go okay we're either going to be great or not great probably you know in the middle of the road I think uh maybe a little less regulation will certainly help us and uh create more notes um you know I think it won't um wouldn't hurt to have a interest rates Maybe Pi up a little bit because we are interest rate sensitive in our industry M the um but overall I I think we're going to stay a strong robust industry you know 90,000 records of transactions a year you it's probably something that we can build on um or maybe uh build on a little bit slowly every year but it's not going to like jump up and all of a sudden L interest rates just go crazy yeah was that a lot lower they five years ago has that been a significant jump at all or gradual moving up the 89,000 yeah we've had been as low as like 74,000 um and as up well back way back when we were 140,000 or so a year you remember what year that was that's a crazy number that was I I'll get my my books out yeah we were a lot higher um at one point back when I started one in seven mortgage transactions was a seller carry back wowow this was 94 95 I would never have guessed that that's crazy yeah um what do you think next year looks like you think it' be around 990,000 from your experience you think it's going to bump up without being political right you think that's an increase because of we know I'm not pro or con either side but do you think regulation reduced do you think there'll be increased number number of their Finance notes created I think so the you know the corporate entities the the rehabbers the developers will certainly see a definite benefit and then it's about educating the mom and pop U not holders uh that this is available because I think maybe part of our problem is uh seller financing fell out of favor with the Realtors promoting it and so you know a lot of the newer rors just have no idea um you know at least the ones in my area that I I talk to it's like you can't sell our finance that what what is that that doesn't make any sense where you know people 30 year real 30 years ago knew that was always an option for uh for them to as an exit strategy and to get the property sold well Scott you're wealth of knowledge man it's I've seen your name million times it's always good to with you and uh I encourage everyone just go out there and buy I mean for 20 cents guys buy a list and start marketing if you Market it one time and miss out for 200 bucks if you get one lead it pays for itself so I encourage you guys fill the bitly link out make sure you get all the information go on Scott's site let's let's put some deals into Scott's website before end of the weekend make a purchase get some stuff going and God it's been a pleasure talking with you is you know a wealth of awesome the fact you're doing this that the big companies do is a poor job and you actually take pride and making sure these lists are clean organized and the best you can in a market that's almost impossible to record and get all these records because they're never written cleanly they're not in uniform is pro props to you that's amazing well thank you I appreciate it speaking with you guys and uh yeah best of the best of luck yeah all right we're disconnect from the live feed Scott Holland for a few minutes everyone else me and Nathan will be back uh think the 20th December for our year wrap up we have a few big announcements coming up with that as well we'll see you guys soon take care everyone thanks everybody.