Back to Note Basics with Smitty | Real Estate Notes Show

Episode: Note Investing : Back to Note Basics with "Smitty" Dave's Goals and Plans: - Listed over 50 seconds on available asset list - Still seeing a ton of new assets coming through and tracking what's new versus recurring - Recently worked through numbers on a commercial deal with 10% interest rate where seller was asking over UPB, determined it didn't work out based on IRR analysis Nathan's Goals and Plans: - Putting in bids on new notes hopefully today or early next week - Has some performing assets and just worked out a modification to add more performers - Selling performing assets to his own fund to generate immediate income Key Recommendations: - Have a mentor or partner guide you through your first note purchase rather than going in alone - Break down automatic processes and explain them in detail to newer investors to bridge knowledge gaps - Use checkbook control in self-directed IRAs for note funding flexibility - When reviewing collateral files, specifically look for assignments, liens, and contracts Topics Discussed: - Assignment and lien chain matching requirements and exceptions - MERS skipping impact on assignment-lien chain requirements - Knowledge gap between experienced and new note investors - Note Expo conference attendance - Commercial vs residential note deals - Note valuation and IRR analysis methodology Guest Insights: - Smitty started in real estate in 2007, restarted investing in 2016 with rentals, transitioned to notes in 2019 after learning about carry backs at local REIA meetup - First note was a first performing CFD funded through self-directed IRA with checkbook control - Chose notes over rental properties to avoid landlord responsibilities like repairs and contractor management - Everything seemed easy when hearing surface-level conversations but proved difficult in execution - didn't know what to look for in collateral file review you we went to our uh local bari meetup and uh don rickerbaum was there okay and that was in 2019 i think or i'm sorry about 2019 and then she was talking notes and i i was clueless i had no idea what she was talking about she's talking about carry backs you know all this stuff and you know they were talking about partials and i had no idea but the thing that intrigued me she was like you can collect money like a bank you know those big buildings yeah and that that one thing stuck in my head so after that man i was youtube scouring about you know notes and all this other stuff and that's when i ran upon desi joined his group and that was december of 2019 and i turned around and bought my note uh two months later february what kind of note was it first second performing first it was the first uh cfd and yeah first uh performance efd and that was my first one and it's funny because you know things were so rushed because i at the same time i was buying the notes i was attending my first note expo that was out of california yeah so he's like hey do you have the money and i'm funding it through my my quest ira and uh so once we were all ready to do it he was like well i need you to send the money he's like i can't i need to call question do it he said well i thought you had checkbook control i'm like what is that and so i am scrambling and you know finally we got the whole deal done and everything but it's just like i kind of just jumped in right even though even though he was there but the terms and the things they were saying you know it was kind of like i people i'm i can remember running around trying to find masks because they you know you need to start wearing a mask and no masks were around and everybody buying up hand sanitizers and things like that that was it was kind of a crazy time yeah and that made it that made it really tough especially just the timing of it was not great as far as the networking goes and then it's really hard yeah know we we do our best to try to help people network from afar but uh man it's really not the same thing without those guys i knew i wanted to to get into it i will reach out to people hey i'm i'm smitty i'm new i need your help or you know i don't have a problem with reaching out to people and telling who i am and you know what i do because i want to get involved and i want to know and to get in the space so you know yeah that's exactly what you need to do because yeah if if it's not done for you then make it happen right and you find the space may be difficult to get in one jury in the circle small you kind of everybody knows each other right yeah so when you're going through the process of bidding on assets how did that shift from what you first did to pick up that first house and make an offer to now how have you adjusted how you made offers um comfortable you know somebody like i made my first offer and i'm shivering and do you the way you come up with your bid amount has that changed over time yeah and it's and it's changing still because i'm learning more um from the first time i bid it uh on my second note um you i realized that i kind of overbid it now that i go back and look at it and it's fine you know um because just still jumped in anyway but i still had them there to kind of hold me and then started from there yeah it's nice to to have that somebody that can tell you the steps and how it works and all those kinds of things and you were saying that uh you bought another one through desi that they used to be one of mine yes yeah so i bought another one through him actually partnered with somebody on that one and we we bought one of those and going through that process right now that's funny you know it's small world yeah it is so when you first got started what were some of the things that maybe it seemed easy to anyone talking about the business but when you're going through it was extremely difficult or you felt lost um hey pretty much everything because you know when you when you get into it you know it's you hear surface conversations about a certain thing they're like so you need to review the collateral file so okay yeah i know i need to review the clatter file but what are the things that you need to be looking for in the club which is not generally kind of detailed in every step of what you need to do you need to be looking for assignments you need to be looking for lounges is it a contract for me um when did the contract need originate determine if it's going to be a you know if it's non-paying if it's going to be a forfeiture or foreclosure sure those are the things that i had no idea no it's like about to know and then i'll start learning later yeah there's a lot of when we go through it it's like you know does the p9 match what's on the tape right does the maturity date match if it doesn't was it mistaken was it mine yeah yeah right true period you know i'm going into the servicing notes to see if they've called them if they haven't called them you know hey can you call this guy um you know one of my servicers uh the taxes was due so i'm checking on my taxes um here's a here's a good one so one of my assets the borrower got insurance so they sent the information to the servicer so the services says oh they've got insurance so i pull up the policy and guess what it's renters insurance it's not regular insurance so that's one of the things you have to make sure that you go in and just you know just check those things and not leave everything up to the service to do so i had to contact them and say hey this is you know sending back this is renters insurance it's not homeowners insurance so that's a lot of things you know checking on my taxes making sure that and then even with um you know like some of the cfds that i have just going in randomly checking calling the city you say hey is there any liens on the property you know so just things like that and another another one of the things that i picked up is that if i have a a um an asset that i can't like really go check on if somebody i know that's in that city i'll call them up and say hey can you run by there or if i'm in that city i'll run by there just to put some eyes on it yeah that's one of the things we stress upon right we rebuilt our due diligence portal will be coming out and you'll be able to find agent but i also think that you know we have our facebook group directory leading on other investors right we don't need to always call an agent to find out information about property if i'm gonna if they're the property of backyard or smitty i can call up and say hey listen what i think the value is can you try buy it hey everyone dave putz here from jkp holdings alongside me as always mr nathan turner good afternoon how are you doing very well thanks how about you good man things have been rock and roll i think we've been um progressing along the way this january is kind of coming down we're i'm starting to get some snow we're expecting about six inches here guys we're not actually gonna get any of that we had uh maybe an inch or two last night so i instead of shaving this morning i went out to the hill um i still got the beard going uh yeah we're all who's listening help me out let's root for the niners to lose the niners lose they get to shave so um help me out there a little bit football gods so i've had an interesting week um as those who didn't know we actually just listed about a little over 50 seconds on our our available asset list so if you don't have access yet let us know and we'll get you on there um but we're sharing off camera something i did not maybe just didn't realize or just didn't run into something with assignments and lounge is actually not needing to match uh it was really interesting because i always had the assumption that assignments had to always match your launch chain and just something i'm running into and as you go through the business you learn things like this um it was weird because i always thought that if a and b and assignment changes there that the lines had to be a to b as well what we're finding out and they were saying because of mers skipping a lot it wasn't required it was interesting oh that is interesting it's not nothing i've come across before but uh yeah it's good to know you know that it happens where you you're missing uh i've actually gone digging for missing the lounges because because i assumed you know i guess i thought that i had to have everything in order yeah so i know that things were rocking wrong for you um you're going to be attending note expo this year um which will be coming up inside our portal we have all the different upcoming face you know note investing conferences coming up so if you're interested in seeing what's available coming up take a load of portal and you'll see everything there and along with all resources everything else and if you miss any of this remember you can go back to facebook or youtube whatever or a podcast so for me you know what we've been looking at is still assets are coming through we're still seeing a ton of new assets come through and we're tracking it like you do is seeing what's new what's what's something that's reoccurred have you been seeing a lot of new or repeat assets from your end uh some of both but uh but for sure i've seen some new stuff come up and uh that's always good i'm actually gonna be putting in some bids here hopefully today we'll see how much how much work i can get done uh if not today then early next week so looking forward to just getting some new stuff it's always fun to buy some new notes and new challenges new experiences new sellers always different new sellers for you yeah we've come across a couple people that just either in the space or in some kind of space arena um maybe the commercial we bought a couple commercial yeah i had a new seller you and i worked on some numbers on this where they're asking for over over upb and i'm thinking how on earth is that worth it and so we went through and looked at it it's not no it's like a day yeah so for those wondering like it was a 10 interest rate right and the seller 101 102 and we're trying to figure out what the angles there is we try to run some numbers um not basically yield but based on irr and it didn't work out it was very odd it's not terrible but it's not good enough for me yeah so yeah maybe for somebody else so we're selling a couple assets right now um are you selling assets right now are you kind of holding steady i'm hanging on i've i've got some performers i'm actually adding i just worked out a modification yesterday adding some more performers and everything that i've got performing i'm actually selling to myself to my fund so that's i think that doesn't count as self dealing i think but i know i i can just uh i can sell it back into my own fund and have some immediate income so that's fun yeah it's interesting because we've come across by doing what we're doing now we've come across a lot of newer investors selling assets but also buying them yeah um and i think a lot of our struggles the connection between us everyone talks about connecting main street to you know wall street but a lot of times being you've come across with even newer investors is the disconnect between what we know and what they know and we think we're covering everything and we skip over things unfortunately yeah we don't know the and a lot of times it's not on purpose it's not something we try doing we try being wide open yeah we just don't realize yeah or i just i oh yeah you got to do that too i guess i need to say that a lot because it's it's become an automatic thing and so to to stop and think and to break it down you know sometimes i forget that yeah i do that all the time but it's so automatic that i don't actually consider it a step yeah or we don't explain it enough right you know saying to your servicer and i'm like well that's easy like you just send me a service or and maybe that stuff is something we don't realize right yeah yeah with that said make that nice transition yeah welcome on the program smitty welcome sweetie i appreciate you joining us on this friday cold afternoon we're at i'm sure it's a little chilly where you're as well welcome yeah well thank you thank you for having me yeah it's 19 degrees here i mean it was sunny outside and i'm looking outside thinking i was going to go out but no anything under 35 degrees i try to stay on the inside i finally went to the hill this morning because it was warm enough it's only five degrees fahrenheit to me that's warm enough it's been really cold minus five minus ten fahrenheit like it's been cold enough that it keeps me inside instead of outside but anyway so smitty you're i wanna i hate to say you're a new investor because you're not right you have experience but you've just transitioned to notes a couple years ago so you get some of the things that we're talking about of you know for those new investors out there the connection from buying you know getting into notes hearing all the hoopla all the hype about stuff and actually going through the process is scary the first one is nerve-wracking when we're talking about no escrow and and oh yeah you just send your money and eventually you get paperwork and all those kind of things yeah it's it's scary it's it's scary you know it wasn't so much scary when i bought my first note uh because i kind of i partnered with my mentor uh when i first started out i started with desi uh in his aci group so we're a great guy we did our first partnership so i felt comfortable uh versus you know i know some people that are ready to buy notes and they're just ready to do it without having someone there yeah so one of my first suggestion is always to have someone to partner with to step you through that first note because it's a lot of stuff to to know when you're doing it yeah yeah definitely and it's interesting 10 years ago there wasn't really anybody but at the same time pricing was such that you could make all kinds of mistakes and you'd still be okay these days not so much yeah yeah back then we buy things at 40 cents 35 cents today we're 65 plus so yeah you can be halfway in the wrong on the value it doesn't really matter so sweet let's back up a little bit right i know you're an ex wall street stock broker you know billionaire and you walk in this with a financial mind and you just slid into it right what's your background so one of the one of the things that i said not to say that i was a billionaire but you you let the cat out of the bag um i actually have a background in the telecommunications industry i've been uh i started that in the early 90s uh started out putting car phones in the car motorolas and things like that so still still actually am doing that you know on my w-2 space so i do still have a full-time job working in the cell phone industry but i've also started my investing career back in i won't i don't even don't even want to say it but i started in 2007.

that's what i started so lo and behold when i first bought my first property i swear you know we're trying to know my dad let's go yeah yeah and and you know you always say if i hadn't known what i know now then you know i probably would have been like super rich but when i got into it you know that failure i'm like man i want to do this i'm upside down in this house and you know i just got rid of it and i kind of gave up i started back in 2016 and bought a couple of rental properties and what kind of led me to notes is that uh i i didn't want to be the landlord person so me and me and the misses we've got some properties we still have property um but you know she's sending me out to fix the toilet talk with the top of them you know getting contractors all other stuff and i want to do that so so due diligence wise was there any struggles you had with the due diligence process besides cloud file um setting up your servicer um arranging for bpos trusting value outside your market um those kind of things did you struggle with any of those or even connect with an attorney they could review the collateral fault if you chose to yeah so not really uh those areas i didn't struggle with on my first one like i said uh with desi he really helped me but on my second one uh because i did it on my own um yeah just um trying to figure out who to you know to get into the network of people to know where to go that was one of the biggest things so you know struggling with trying to find the right person or talking to someone and you know getting the referrals and actually kind of getting in the network for people to assist you you know that was kind of one of the things too yeah when did you buy your second one when was that uh the second one probably came a couple of months later i think i bought that one from equity uh first funding i think i can't remember the guy's name so like early 2020 yeah it was it was probably a couple of months after i bought the first one because that's cfd as well or uh that one was a cfd as well okay yeah and that that was that you know that's tough timing because right as you need that network because right when everything shut down and yeah that network and it's crazy because enough i forgot to mention that when we were at the note expo that's when everything in 2020 was really kicking off in california so you know i was learning so now what i'm trying to do is really hone in and do more research do more calculations and not just buy a note just to buy a note to really calculate what my yield's going to be calculate tomorrow was going to be go through that file to make sure that you know looking at the the history to make sure i'm doing the right thing right bitty giving the collateral files to an attorney to having to look through to make sure everything is good that you know so when i do buy it you know i'm not spending any extra money for whatever reason so that's that's one of the things and i'm still working on that you know trying to be a better bidder um on my assets to make sure and then also to make sure and we all know we all don't know uh because you know notes can go from performing and not performing but to really focus in on and do more research on the borrower to look at the history because you know my first notes i bought you know i'm not really looking i just want to pass some notes but now i'm more strategic in my purchase depending on what my exit strategies are and i think you kind of mentioned it there but you know your exit strategy can change over time yeah and you think well at the beginning maybe i want this and then as you go you say actually i like this better and you know this is better for me because of whatever you know these different reasons and yeah it can shift you know it's interesting you say that because a lot of people in our our weekly investment community they're building their own calculator and i i stress the importance of building your own because you need to know because you're going to have to change every time i'm still adapting mine right pricing charge changes your status limitation changes your licensing changes things change over time and calculation is made just based on what your action strategy is like okay i want to gear more towards this so i adjust this that's this unless you know how your calculator works you can't function right get if you gave me yours i bid off of it i wouldn't work because if i have to adjust something i don't know how to so we stress people build your own i get the fact that you may not know what are some of the things in your calculations that you didn't have in the beginning that you have now that people who may be starting out really need to have in there um one of the things is doing calculations on because like when i first bought my first notes you know i didn't think about foreclosing costs servicing fees yeah uh potential liens you know you know stuff like that you know i just yeah bought the note to be honest you know just just bossing up but now as i you know grown and like said i've got desi i'm in um jasmine's group with naps so she really honed in on as far as uh calculating all of that information uh to add into when purchased an asset and what to look for so those are some of the things that i've developed over time with the help of you know some of these great people in this space yeah did i say that because you know what we realized recently and we were we were calculating a little differently than we did six months ago is that different states have different amounts that go towards your legal balance right some states allow your attorney fees some states don't so you know another wrinkle in that calculation that says listen here's my attorney fees and remember everyone your attorney fees and their legal costs are foreclosures right the fannie mae schedule is one number your court auction and your you know publication fees is another number they're two different brackets in some states you can put them both in and add to your legal balance and legal balance where you can click at the auction some states you can't use your your your your attorney fees so you have to make sure you separate them and add them when needed so yeah and that's that's something that going through the processes that i've gone through this year even though we're short into the year that i've found out what you can and can't charge for the ones that i'm going through yeah even even i made a fairly drastic change just a couple of years ago where when i first started reinstatements or sorry uh like a payoff was it's not gonna happen so i didn't even have it as part of my calculations and it wasn't until a couple of years ago when all of a sudden we were seeing equity uh equity notes where they just they didn't exist at the beginning great points i actually had to add that in as an extra column we were so starting equity was very rare right everything's underwater you didn't worry about the fact that that happens so yeah that's a huge one reinstatements possible yeah yeah restatements payoffs and um along with payoffs it's kind of the same bucket but uh selling at auction selling at a foreclosure auction essentially that's a payoff so again that that kind of stuff didn't really happen a few years back and now it's much more common so it's now it's part of the calculations because you can't guarantee the equities that come in your pocket if it sells at auction right right when you're when you're looking at assets now this happened i think more than they do it's now maybe i'm just not tuned in to it there's a lot of people out there that swear that they have a list available for sale and they get sent it to you and they are direct to the seller when you first get in the space that sounds really attractive because you don't know any better i'm sure you've seen this what do you do and how do you handle those kind of people who come up with these i'm direct the seller i used me a pof or poi or whatever and i'll get you these assets how do you handle them i i ask questions and i learn this is one of the things i learned along you know very very early into the career of starting is to um you know just dig and ask questions hey uh who are you buying from are you or do you do you have them in your portfolio you know are you pulling them in your portfolio or are you brokering it you know that's that's one of the things to know um and because i've had people send me things and you know after they send them to you and they say they have this and this and you start asking them questions okay well can you get me some pay history or can you so i just kind of go through a series of questions to see you know where they're at uh i generally when people reach out to me and say i've got notes and i'm direct to the seller i kind of shy away from them just because for one i'm still new and for two there are certain people that like you guys and you know like dave's that's that sends stuff that i know where it's coming from but i'm so for me personally as a novice i'm not ready to go out and do that just yet so i've got a good source of notes that are coming to me from people that i know and trust even if i don't know them i've heard their names in the industry and i get their information so that's enough for me right now i just had someone last night say hey i'm trying to close on a 300 000 deal you know you got to yeah yep and you know i just asked a couple questions i'm like hey i'm not interested you know and you're you know you're trying to close next week on a 300 000 deal and you're you know you're needing a partner so you know just stuff like that sure absolutely and you know what those people are out there right you know it was warm people who are raising capital to be careful doing that because sec violations like that yeah there's people out there and i get it and what i always say to people who are looking at broker you know learn the space and send me one note out of the tape don't send me the whole tape right do your homework and say listen add value to it i'll pay you more for you doing that then you're one percent right if you give me all the numbers and say here's bpo here's only i ran numbers i don't have the money for it boom here you go i'll pay you a couple grand for the deal yeah because you add value to it no know what you're selling yes instead of just forwarding on information yeah yeah and i've worked with some good brokers and i've i've had others approach me that i you know we could spot pretty easily that they didn't know what they were doing and i've brokered notes myself yeah so it's it's there's nothing necessarily wrong with it but just do it right and then and and disclose that you're brokering and if you are that's fine as long as you know you're doing it correctly and you know what you're talking about and things like that then okay that's fine right yeah i'm in the process of doing that as well um once we left the uh node expo last year i met up a couple of people and you know i was trying to you know broker a couple so i got some good contacts nothing came through but you know i've started it good awesome so you got your first note you do your due diligence you bid what you bid right um how was it for you to wire money to someone you didn't know and what did you decide to do with the claro file would you send it to do you send it yourself yeah so each so at each note that i purchased thus far kane has come from reputable people that have been referred so i haven't bought anything outside of that that kind of goes like i said with my novice and i'm sticking and honing in on the people that i know i haven't done that like my second note uh i was referred to uh by somebody hey this is a great guy and it ended up being a great guy you know so um i haven't gone outside of that realm yet just purchased from people i don't know and i think for me still that i want to know who i'm purchasing from i want to get to know the seller i want to do some background research on um because you know if you're in a suit with one property yeah i mean they could attach to the other ones yeah for me right now i'm sticking with that and if i do run into any new sellers i'll be doing my research before i deploy any any type of capital i want to know who i'm buying from yeah excellent that's good so you got into you're starting your i guess your first foreclosure it sucks all right it's not it's not fun unless you're going for the property right how did you feel were you i hate to use the word compassion right where you like because compassion sometimes makes you stall right i'll give another mom yeah where you feel like you want to help them out you want to keep them going and maybe if i just give them this much more time and they'll come around everything will be okay all right yeah so the first one it started last year and actually it it didn't start too good from the beginning because you know we wanted to see if we could could help help the person yeah so you know we sent out you know a package to get his information and when the packet came back you know it wasn't filled out it was a bunch of n a's on it i mean it was it was nothing anything relevant you know no information no no financial information i mean nothing so i think we must have lost him yeah i lost him for now i hit it back yeah so at that point i'm like we you know they weren't trying to help themselves so we also even after that you know we tried to give them you know links to any type of government funding gave a link to here call this place and you know do this and um so they weren't trying to help themselves yeah so that process that part really wasn't too hard for me as far as being compassion now now what we have been is because it's in the winter months is that we were we were saying okay you know we need to you know we don't want to do anything around the holidays you know new year's christmas thing let's just pick this up in the new year and go from there so you know there some people have you know told me that to you know make sure that you understand that people live there right you know people live in these homes and there's families in these homes uh but on the flip side of course it's a business and you have to you know help us you know and if you're not providing the correct information are you using stall tactics or you're you know not being truthful then you know yeah exactly and that's you know i personally i i believe that most people are good and they want to do what's right um and i've been lied to you know and i've had people try to do all kinds of crazy stuff um and they might get away with it for a little while but in the end you know it is what it is i'm really sorry if that means that you're gonna be out of a house and have nowhere to go yeah but you know i at the same time the principle is i cannot let you live there for free like that just doesn't work i'm sorry that's not realistic yeah the biggest thing that i'm i'm going through even with a couple of these notes is like people just they just ghost you they don't even call you back or you know talk to you you know you you want to contact them to see what's going on uh but you got to have some type of communication yeah exactly and that communication is so key and you it we're talking if we're talking we can try to work something out but if you're not returning the calls you know you want back that makes it difficult yeah so so that's all right welcome back yes so we'll continue the conversation i'll get the facebook live feed later but so smith one of the questions i had for you was how do you start back in the space now what do you recommend to someone who's brand new walking in the space listening and all that stuff is it youtube is it facebook groups is it local meetups how do you recommend everyone kind of jumping in uh i recommend youtube um you guys have an excellent channel to get started there's a lot of people that's out there that that you know just what is the note you know starting from there i've got a youtube channel you know that goes through some basic stuff so the biggest thing is just starting out looking at youtube i mean and this stuff is free there's podcasts that are out there that's free so there's a lot of free information to go out there and just start getting into it like i have a couple of people that i work with that are new um because i i always said that i i want somebody to go on this journey with me so if if i'm learning you're learning at the same time so i kind of have like two mentees right now that you know we just talk and you know i kind of tell them what i'm going through and they tell me what they're doing um nothing big but you know just to start and so just get involved with somebody that's that's doing it and also youtube get out there and get the information i tell people uh that want to get started here are some things that you should do i'll send them a list of things that you should do now if you do those things then i know that you're serious about doing it but if you can't go and look at youtube you can't listen to podcasts you can't do that then it's not for you yeah there's some work here to put up front right you have to put that work up front to make sure that you are serious because i'm sure you've seen it we've been to so many people who want to get in the space and when it gets started yeah that's not for me it's like we're spending time and energy to help you but if if you're not serious i get some people may not be serious and they don't know again it's not their fault but at the same time i get it yeah this is a real business and you got to treat it like a real business okay exactly that's attention and it's a good gauger for me so anybody that comes to me because i've had you know people come to me and say they want to do it and i just give them these these steps i have it documented steps a template that i just send to people and say here do this good yeah that's cool actually just last week this week last week i i finally put up a youtube channel so all right there you go earnest investing youtube channel check it out subscribe get your name right so you probably see a lot of people with this out there youtube for those people are not aware you can't get your own brand name unless you get 100 subscribers so everyone wants to get their name right so go to everyone's channel go to smitty's go to nathan and just subscribe um and also make sure that what we're learning is that little bell thing notifies you if a new video gets posted like when this gets posted if you get the bell so make sure you bail all of us and all that good stuff right bella that's it your phrase so for for new investors it seems like they don't know where to start and like you just said just start and i think sometimes it's the they can't get the wheel going and they just sit back too much and sometimes just exploring and as i'm sure you know it's not always that other investors are wrong it just doesn't fit you right they may say listen smitty's smart i just don't like the way he does it or how he presents it i like the way nathan does it doesn't make you wrong but the inside is different the experience is different too that maybe date there's more years but you have a different experience because of x y and z right me and nathan never went through any kind of formal training right we didn't we just did buyers see your pants for 11 years now 12 years now and guarantee you part of the stuff that i think that these groups that are out there give is the networking it bonds you with a group of people and that's what we didn't have we got started but yes depending on others leaning on others to know more is key in the space oh man because you're gonna find posting questions answering questions man and the space i mean you guys are just i mean just so willing to assist that's the thing that i like is that you throw questions out or you you know i shut you know i shot an email to nathan the other day and i'm asking him some stuff he sends me the information so guys like you guys and you know other people in the industry are so helpful and that's one of the things that i like and that's kind of reason why i kind of started you know what i'm doing is you know and i'm not charging people you know like the two people that i'm you know working with i'm not charging them so i just bring them the information as i get it now when i maybe when i grow to have like a huge group like you guys followings that maybe yes but right now it's not about you know monetary stuff it's just about helping you know so you mentioned before some of the things we jump over when you're managing the note for the first time what are some things that you're doing now that you maybe didn't realize that isn't out there some things when you first get your first no in your pocket now you have it are you doing anything that maybe a new investor says i didn't know to what to do and you learned oh this isn't really talked about a lot yes um one of the things is that your servicer is your servicer but sometimes you have to service the service so you have to make sure that your servicers doing what you want them to do are doing what they're you know supposed to do so that's one of the things when i bought my first note i just let things go you know and you know whatever but now making sure the servicer um if they're paying the taxes if it's if it's escrow um you know if they've contacted the borrower if the borrower's late past you know their their their this connection network is huge because it allows you to really branch out nationwide to someone who knows exactly what you're looking for and can give you information yeah and just drive by video pictures whatever and they can give you the information that you're looking for without blindly ordering a bpo and hoping and praying that person cares and that's one of the things that i do in the groups that i'm in i'll let people know hey i'm in kansas city you know um if you have you know any assets in missouri and then kansas is neighboring you know if it's in within a specific amount you know radius i'll go out and drive by there and just snap some photos for you you know just to you know because i'm here boots on the ground we're hopeful that our portal will actually right now it just does the agents right but eventually as it grows we're hoping to have the service that anyone who's in that portal can network with each other and say listen i have a property this year this area can i reach out to anyone else in this network that's in those cities and reach out to them blindly and say listen to you and the service i guarantee you you email any of us and we have a property back here we'll drive by give you values because we will give it back to you we just expect you to give it back to us and that's what happens yeah now people buying jersey no one's buying canada but if they were we'd help out right absolutely any time hey question on that uh renter's insurance one is that on a on a mortgage or a cfd it was on cmd actually renters insurance is okay yeah well but it doesn't protect the asset for me no you're right they may not be eligible to get homeowners insurance because they don't own a home correct they don't indeed in their name but what so with that one in for in particular um that would be a different story we can probably talk about that one offline yeah with a cfd technically you can charge the borrower for the insurance you can escrow it right you can ask them for it but technically you are the owner of the property so right right yeah different scenarios so they got the insurance they can only get so cool yeah we'll talk offline about that yeah um hey remind everyone this will be on youtube so i probably follow the glitch we're mobile hotspotting right now um because the snowstorm before we got it is shutting things down smitty we see at conferences and you stand out because of your personality and your presence is awesome um for those new investors who are out there conferences are scary they're they're just overwhelming they're outsider walking into a crowd of people there's 12 people around shaking hands and saying hi to each other how do you encourage them do you encourage them to go to these conferences and how what what do you what's your advice to them who's saying i can't go to them i don't know anyone yes that's that's a great question because believe it or not i'm it's i'm a little weird like i don't like going to a room and just say hey you know i'm spinning and i used to didn't be like that but my goal is my business so you have to think of it as that you know get out of your shell if you're trying to be successful in your business if you're trying to make relationships with people if you're looking for opm you know things like that so um i'm the kind of guy that walking used to be kind of guy walking to a room i would make friends but not really put myself out there about a product like hey look at notes so that's that was one of the things that i had to really change even with doing youtube videos and things like that i just had to make up my mind that that's what i want to do so it matters it's like yeah it's like buying your first note you know jump in and just do it i encourage people to go to the conferences you know to meet people relationships and there's some great information that that um that they have so i've got a cool one real quick i've got a cool kind of axiom that goes along with that it goes decisions determine destiny yeah that's it just decide and do what what do you want to do yeah and when you walk into the room there it it's a lot of people you don't know and that same mentality you had by walking except buying a ticket and going down should be the same mentality you have when you walk into the room walk in and shake hands get out there right we're down in no exponents me grab this take a picture right boom it happens it's just processing and getting out there networking but walk into a conversation get into a circle right we always encourage people get in there shake hands because you can contribute i promise you you'll find something to contribute experience your knowledge whatever it looks like yeah and that was the whole reason of the of the green jacket yeah was to stand out you know i wish i could do it right there i wish i was better graphic cards could throw a picture up there but not good like that but that was the idea of the green jacket when i went to go buy the green jacket my wife's like what are you doing [Laughter] you're ready to make a statement yo i wanted to stand out and and it worked you know i made some some great contacts made some great friends uh found a couple people that are interested in you know doing business so yeah when i first started going to conferences like i mean same as everybody else i don't want to talk to anybody i'm shy and you know you know it's weird and scary and all that stuff and so i would actually go in thinking okay so my goal for this conference is to come home with whatever was 30 business cards or 50 business cards or whatever and like that was the goal so so it was something that i could track and measure we talked about goals last time something i could track and measure so that i could say okay day one i got 30.

okay pretty good so i'm gonna talk to 20 more people that's all i got to do 20 more people yeah just make it happen now that was my goal to uh my goal was coming walking away with the opm partner that was that was my goal yeah yeah and i still do that by the way every time i go to a conference i i've got specific goals and my wife actually she drops me off at the airport and says all right what's the goal again and i'll say the goal is this and this and this all right yeah seen a few days so there's a couple of conferences coming up soon um i'm not sure if you're attending any of them or all of them um are you will you beat a new conference call there's a dme coming up shortly um there's a pitbull there's a imn are you will you be attending 80s and working out i'm i'm not going to the dme i've got another engagement but um possibly we'd be going to the uh paper stores okay cool yeah all good conferences all for different reasons really but all the conferences yeah we're just talking to conferences offline delays are down that every conference has their niche what they do well with right um and some conferences a little bit above where people are at when they're beginners and they'll be overwhelmed and some conferences are right up that alley for beginners right it really dials in um but not saying you can't go to a higher level one and get content you will um but it's just a different mentality different structure of people yeah i would say the good thing about even if even if they are higher than you is because most of the time when you pay for the conference they give you live recordings so you can always go back and look at that information even if it's over your head then you can go back and look at it and you know because you always have that reference yeah good point what is from your experience at the conferences what's been your favorite part of the conference for those who are timid about going meeting the people it all comes back to it right me i mean really is it's meeting the people you know the content is great the information is great that's going but for me i like the uh meeting the people that's in the industry it's such a small industry but then when you get there you know those people around you know you get good information and i i just love meeting the people in the space all right good to know that that's a great great conclusion to this this this story because it's weird we say it over and over again and we hope that people absorb it but hearing from sophomore it's only been doing for a few years now that that resonates right getting involved asking questions in the facebook group attending conferences and paying your local ria you never know what's going to happen there um again we have our facebook directory which you can find someone who may be local to you that you can just chop shop with have coffee with just hey let's talk notes you never know who's in your backyard follow what nathan ask interesting so so you you haven't been in very long and you come from a different background but perform what you've learned and observed so far uh what's your take on on the node industry going forward are we are we looking at more notes coming down the pipe or are we are we all dreaming that that's gonna happen or what's what's your thinking well i i see i mean just you know from from what i see that the pricing is tightening you know it's like you know i hear you guys talk about how you used to buy stuff 40 cents on the dollar dollar and i think that is shrinking you know uh because for one what i'm saying is there's a lot of people that come into the space and they just buy for whatever reason uh and not really and it kind of inflates the price for for other folks so i'm seeing that um i'm still seeing inventory come across um but i guess for me i would like to get into a better space to where i'm seeing more than just the states that i'm seeing you know the ohios and you know the missouris and the georgia's i'm wanting to try to move into a different space or i'm getting a little better quality notes so that's my that's my goal for this year is to try to get you know either some commercial stuff or certain certain you know different areas very cool very cool that's good i it's gonna be a good year if you're looking for commercial i think that's a good this is gonna be a good year for that as well cool well before i lose i think all the internet now i think uh the snowstorm getting closer and closer uh where he lets me disconnect from the public you can catch smitty you can go on his website tommy what's your website for everyone who watches uh notestarter.com cool also have youtube channel if you go and you know google uh note starter it'll pop up on youtube as well awesome please check him out take a look at his content the guy's been cool he's been a lot of fun um if you're going to get no confidence look for the green jacket i'm sure he'll start wearing him more a wife actually and just a reminder guys make sure you root for the the niners to lose this weekend i gotta shave his beard off help me out um other than that take a look at the video on youtube we'll have a stream there as well i'll be on the facebook group and everything else enjoy everyone have a great weekend and we'll go uh go enjoy the snow tomorrow hopefully you bet thanks everybody thank you available coming up take a load of portal and you'll see everything there and along with all resources everything else and if you miss any of this remember you can go back to facebook or youtube whatever or a podcast so for me you know what we've been looking at is still assets are coming through we're still seeing a ton of new assets come through and we're tracking it like you do is seeing what's new what's what's something that's reoccurred have you been seeing a lot of new or repeat assets from your end uh some of both but uh but for sure i've seen some new stuff come up and uh that's always good i'm actually gonna be putting in some bids here hopefully today we'll see how much how much work i can get done uh if not today then early next week so looking forward to just getting some new stuff it's always fun to buy some new notes and new challenges new experiences new sellers always different new sellers for you yeah we've come across a couple people that just either in the space or in some kind of space arena um maybe the commercial we bought a couple commercial yeah i had a new seller you and i worked on some numbers on this where they're asking for over over upb and i'm thinking how on earth is that worth it and so we went through and looked at it it's not no it's like a day yeah so for those wondering like it was a 10 interest rate right and the seller 101 102 and we're trying to figure out what the angles there is we try to run some numbers um not basically yield but based on irr and it didn't work out it was very odd it's not terrible but it's not good enough for me yeah so yeah maybe for somebody else so we're selling a couple assets right now um are you selling assets right now are you kind of holding steady i'm hanging on i've i've got some performers i'm actually adding i just worked out a modification yesterday adding some more performers and everything that i've got performing i'm actually selling to myself to my fund so that's i think that doesn't count as self dealing i think but i know i i can just uh i can sell it back into my own fund and have some immediate income so that's fun yeah it's interesting because we've come across by doing what we're doing now we've come across a lot of newer investors selling assets but also buying them yeah um and i think a lot of our struggles the connection between us everyone talks about connecting main street to you know wall street but a lot of times being you've come across with even newer investors is the disconnect between what we know and what they know and we think we're covering everything and we skip over things unfortunately yeah we don't know the and a lot of times it's not on purpose it's not something we try doing we try being wide open yeah we just don't realize yeah or i just i oh yeah you got to do that too i guess i need to say that a lot because it's it's become an automatic thing and so to to stop and think and to break it down you know sometimes i forget that yeah i do that all the time but it's so automatic that i don't actually consider it a step yeah or we don't explain it enough right you know saying to your servicer and i'm like well that's easy like you just send me a service or and maybe that stuff is something we don't realize right yeah yeah with that said make that nice transition yeah welcome on the program smitty welcome sweetie i appreciate you joining us on this friday cold afternoon we're at i'm sure it's a little chilly where you're as well welcome yeah well thank you thank you for having me yeah it's 19 degrees here i mean it was sunny outside and i'm looking outside thinking i was going to go out but no anything under 35 degrees i try to stay on the inside i finally went to the hill this morning because it was warm enough it's only five degrees fahrenheit to me that's warm enough it's been really cold minus five minus ten fahrenheit like it's been cold enough that it keeps me inside instead of outside but anyway so smitty you're i wanna i hate to say you're a new investor because you're not right you have experience but you've just transitioned to notes a couple years ago so you get some of the things that we're talking about of you know for those new investors out there the connection from buying you know getting into notes hearing all the hoopla all the hype about stuff and actually going through the process is scary the first one is nerve-wracking when we're talking about no escrow and and oh yeah you just send your money and eventually you get paperwork and all those kind of things yeah it's it's scary it's it's scary you know it wasn't so much scary when i bought my first note uh because i kind of i partnered with my mentor uh when i first started out i started with desi uh in his aci group so we're a great guy we did our first partnership so i felt comfortable uh versus you know i know some people that are ready to buy notes and they're just ready to do it without having someone there yeah so one of my first suggestion is always to have someone to partner with to step you through that first note because it's a lot of stuff to to know when you're doing it yeah yeah definitely and it's interesting 10 years ago there wasn't really anybody but at the same time pricing was such that you could make all kinds of mistakes and you'd still be okay these days not so much yeah yeah back then we buy things at 40 cents 35 cents today we're 65 plus so yeah you can be halfway in the wrong on the value it doesn't really matter so sweet let's back up a little bit right i know you're an ex wall street stock broker you know billionaire and you walk in this with a financial mind and you just slid into it right what's your background so one of the one of the things that i said not to say that i was a billionaire but you you let the cat out of the bag um i actually have a background in the telecommunications industry i've been uh i started that in the early 90s uh started out putting car phones in the car motorolas and things like that so still still actually am doing that you know on my w-2 space so i do still have a full-time job working in the cell phone industry but i've also started my investing career back in i won't i don't even don't even want to say it but i started in 2007.

that's what i started so lo and behold when i first bought my first property i swear you know we're trying to know my dad let's go yeah yeah and and you know you always say if i hadn't known what i know now then you know i probably would have been like super rich but when i got into it you know that failure i'm like man i want to do this i'm upside down in this house and you know i just got rid of it and i kind of gave up i started back in 2016 and bought a couple of rental properties and what kind of led me to notes is that uh i i didn't want to be the landlord person so me and me and the misses we've got some properties we still have property um but you know she's sending me out to fix the toilet talk with the top of them you know getting contractors all other stuff and i want to do that so we went to our uh local bari meetup and uh don rickerbaum was there okay and that was in 2019 i think or i'm sorry about 2019 and then she was talking notes and i i was clueless i had no idea what she was talking about she's talking about carry backs you know all this stuff and you know they were talking about partials and i had no idea but the thing that intrigued me she was like you can collect money like a bank you know those big buildings yeah and that that one thing stuck in my head so after that man i was youtube scouring about you know notes and all this other stuff and that's when i ran upon desi joined his group and that was december of 2019 and i turned around and bought my note uh two months later february what kind of note was it first second performing first it was the first uh cfd and yeah first uh performance efd and that was my first one and it's funny because you know things were so rushed because i at the same time i was buying the notes i was attending my first note expo that was out of california yeah so he's like hey do you have the money and i'm funding it through my my quest ira and uh so once we were all ready to do it he was like well i need you to send the money he's like i can't i need to call question do it he said well i thought you had checkbook control i'm like what is that and so i am scrambling and you know finally we got the whole deal done and everything but it's just like i kind of just jumped in right even though even though he was there but the terms and the things they were saying you know it was kind of like i just still jumped in anyway but i still had them there to kind of hold me and then started from there yeah it's nice to to have that somebody that can tell you the steps and how it works and all those kinds of things and you were saying that uh you bought another one through desi that they used to be one of mine yes yeah so i bought another one through him actually partnered with somebody on that one and we we bought one of those and going through that process right now that's funny you know it's small world yeah it is so when you first got started what were some of the things that maybe it seemed easy to anyone talking about the business but when you're going through it was extremely difficult or you felt lost um hey pretty much everything because you know when you when you get into it you know it's you hear surface conversations about a certain thing they're like so you need to review the collateral file so okay yeah i know i need to review the clatter file but what are the things that you need to be looking for in the club which is not generally kind of detailed in every step of what you need to do you need to be looking for assignments you need to be looking for lounges is it a contract for me um when did the contract need originate determine if it's going to be a you know if it's non-paying if it's going to be a forfeiture or foreclosure sure those are the things that i had no idea no it's like about to know and then i'll start learning later yeah there's a lot of when we go through it it's like you know does the p9 match what's on the tape right does the maturity date match if it doesn't was it mistaken was it mine yeah yeah right true so due diligence wise was there any struggles you had with the due diligence process besides cloud file um setting up your servicer um arranging for bpos trusting value outside your market um those kind of things did you struggle with any of those or even connect with an attorney they could review the collateral fault if you chose to yeah so not really uh those areas i didn't struggle with on my first one like i said uh with desi he really helped me but on my second one uh because i did it on my own um yeah just um trying to figure out who to you know to get into the network of people to know where to go that was one of the biggest things so you know struggling with trying to find the right person or talking to someone and you know getting the referrals and actually kind of getting in the network for people to assist you you know that was kind of one of the things too yeah when did you buy your second one when was that uh the second one probably came a couple of months later i think i bought that one from equity uh first funding i think i can't remember the guy's name so like early 2020 yeah it was it was probably a couple of months after i bought the first one because that's cfd as well or uh that one was a cfd as well okay yeah and that that was that you know that's tough timing because right as you need that network because right when everything shut down and yeah that network and it's crazy because enough i forgot to mention that when we were at the note expo that's when everything in 2020 was really kicking off in california so people i'm i can remember running around trying to find masks because they you know you need to start wearing a mask and no masks were around and everybody buying up hand sanitizers and things like that that was it was kind of a crazy time yeah and that made it that made it really tough especially just the timing of it was not great as far as the networking goes and then it's really hard yeah know we we do our best to try to help people network from afar but uh man it's really not the same thing without those guys i knew i wanted to to get into it i will reach out to people hey i'm i'm smitty i'm new i need your help or you know i don't have a problem with reaching out to people and telling who i am and you know what i do because i want to get involved and i want to know and to get in the space so you know yeah that's exactly what you need to do because yeah if if it's not done for you then make it happen right and you find the space may be difficult to get in one jury in the circle small you kind of everybody knows each other right yeah so when you're going through the process of bidding on assets how did that shift from what you first did to pick up that first house and make an offer to now how have you adjusted how you made offers um comfortable you know somebody like i made my first offer and i'm shivering and do you the way you come up with your bid amount has that changed over time yeah and it's and it's changing still because i'm learning more um from the first time i bid it uh on my second note um you i realized that i kind of overbid it now that i go back and look at it and it's fine you know um because you know i was learning so now what i'm trying to do is really hone in and do more research do more calculations and not just buy a note just to buy a note to really calculate what my yield's going to be calculate tomorrow was going to be go through that file to make sure that you know looking at the the history to make sure i'm doing the right thing right bitty giving the collateral files to an attorney to having to look through to make sure everything is good that you know so when i do buy it you know i'm not spending any extra money for whatever reason so that's that's one of the things and i'm still working on that you know trying to be a better bidder um on my assets to make sure and then also to make sure and we all know we all don't know uh because you know notes can go from performing and not performing but to really focus in on and do more research on the borrower to look at the history because you know my first notes i bought you know i'm not really looking i just want to pass some notes but now i'm more strategic in my purchase depending on what my exit strategies are and i think you kind of mentioned it there but you know your exit strategy can change over time yeah and you think well at the beginning maybe i want this and then as you go you say actually i like this better and you know this is better for me because of whatever you know these different reasons and yeah it can shift you know it's interesting you say that because a lot of people in our our weekly investment community they're building their own calculator and i i stress the importance of building your own because you need to know because you're going to have to change every time i'm still adapting mine right pricing charge changes your status limitation changes your licensing changes things change over time and calculation is made just based on what your action strategy is like okay i want to gear more towards this so i adjust this that's this unless you know how your calculator works you can't function right get if you gave me yours i bid off of it i wouldn't work because if i have to adjust something i don't know how to so we stress people build your own i get the fact that you may not know what are some of the things in your calculations that you didn't have in the beginning that you have now that people who may be starting out really need to have in there um one of the things is doing calculations on because like when i first bought my first notes you know i didn't think about foreclosing costs servicing fees yeah uh potential liens you know you know stuff like that you know i just yeah bought the note to be honest you know just just bossing up but now as i you know grown and like said i've got desi i'm in um jasmine's group with naps so she really honed in on as far as uh calculating all of that information uh to add into when purchased an asset and what to look for so those are some of the things that i've developed over time with the help of you know some of these great people in this space yeah did i say that because you know what we realized recently and we were we were calculating a little differently than we did six months ago is that different states have different amounts that go towards your legal balance right some states allow your attorney fees some states don't so you know another wrinkle in that calculation that says listen here's my attorney fees and remember everyone your attorney fees and their legal costs are foreclosures right the fannie mae schedule is one number your court auction and your you know publication fees is another number they're two different brackets in some states you can put them both in and add to your legal balance and legal balance where you can click at the auction some states you can't use your your your your attorney fees so you have to make sure you separate them and add them when needed so yeah and that's that's something that going through the processes that i've gone through this year even though we're short into the year that i've found out what you can and can't charge for the ones that i'm going through yeah even even i made a fairly drastic change just a couple of years ago where when i first started reinstatements or sorry uh like a payoff was it's not gonna happen so i didn't even have it as part of my calculations and it wasn't until a couple of years ago when all of a sudden we were seeing equity uh equity notes where they just they didn't exist at the beginning great points i actually had to add that in as an extra column we were so starting equity was very rare right everything's underwater you didn't worry about the fact that that happens so yeah that's a huge one reinstatements possible yeah yeah restatements payoffs and um along with payoffs it's kind of the same bucket but uh selling at auction selling at a foreclosure auction essentially that's a payoff so again that that kind of stuff didn't really happen a few years back and now it's much more common so it's now it's part of the calculations because you can't guarantee the equities that come in your pocket if it sells at auction right right when you're when you're looking at assets now this happened i think more than they do it's now maybe i'm just not tuned in to it there's a lot of people out there that swear that they have a list available for sale and they get sent it to you and they are direct to the seller when you first get in the space that sounds really attractive because you don't know any better i'm sure you've seen this what do you do and how do you handle those kind of people who come up with these i'm direct the seller i used me a pof or poi or whatever and i'll get you these assets how do you handle them i i ask questions and i learn this is one of the things i learned along you know very very early into the career of starting is to um you know just dig and ask questions hey uh who are you buying from are you or do you do you have them in your portfolio you know are you pulling them in your portfolio or are you brokering it you know that's that's one of the things to know um and because i've had people send me things and you know after they send them to you and they say they have this and this and you start asking them questions okay well can you get me some pay history or can you so i just kind of go through a series of questions to see you know where they're at uh i generally when people reach out to me and say i've got notes and i'm direct to the seller i kind of shy away from them just because for one i'm still new and for two there are certain people that like you guys and you know like dave's that's that sends stuff that i know where it's coming from but i'm so for me personally as a novice i'm not ready to go out and do that just yet so i've got a good source of notes that are coming to me from people that i know and trust even if i don't know them i've heard their names in the industry and i get their information so that's enough for me right now i just had someone last night say hey i'm trying to close on a 300 000 deal you know you got to yeah yep and you know i just asked a couple questions i'm like hey i'm not interested you know and you're you know you're trying to close next week on a 300 000 deal and you're you know you're needing a partner so you know just stuff like that sure absolutely and you know what those people are out there right you know it was warm people who are raising capital to be careful doing that because sec violations like that yeah there's people out there and i get it and what i always say to people who are looking at broker you know learn the space and send me one note out of the tape don't send me the whole tape right do your homework and say listen add value to it i'll pay you more for you doing that then you're one percent right if you give me all the numbers and say here's bpo here's only i ran numbers i don't have the money for it boom here you go i'll pay you a couple grand for the deal yeah because you add value to it no know what you're selling yes instead of just forwarding on information yeah yeah and i've worked with some good brokers and i've i've had others approach me that i you know we could spot pretty easily that they didn't know what they were doing and i've brokered notes myself yeah so it's it's there's nothing necessarily wrong with it but just do it right and then and and disclose that you're brokering and if you are that's fine as long as you know you're doing it correctly and you know what you're talking about and things like that then okay that's fine right yeah i'm in the process of doing that as well um once we left the uh node expo last year i met up a couple of people and you know i was trying to you know broker a couple so i got some good contacts nothing came through but you know i've started it good awesome so you got your first note you do your due diligence you bid what you bid right um how was it for you to wire money to someone you didn't know and what did you decide to do with the claro file would you send it to do you send it yourself yeah so each so at each note that i purchased thus far kane has come from reputable people that have been referred so i haven't bought anything outside of that that kind of goes like i said with my novice and i'm sticking and honing in on the people that i know i haven't done that like my second note uh i was referred to uh by somebody hey this is a great guy and it ended up being a great guy you know so um i haven't gone outside of that realm yet just purchased from people i don't know and i think for me still that i want to know who i'm purchasing from i want to get to know the seller i want to do some background research on um because you know if you're in a suit with one property yeah i mean they could attach to the other ones yeah for me right now i'm sticking with that and if i do run into any new sellers i'll be doing my research before i deploy any any type of capital i want to know who i'm buying from yeah excellent that's good so you got into you're starting your i guess your first foreclosure it sucks all right it's not it's not fun unless you're going for the property right how did you feel were you i hate to use the word compassion right where you like because compassion sometimes makes you stall right i'll give another mom yeah where you feel like you want to help them out you want to keep them going and maybe if i just give them this much more time and they'll come around everything will be okay all right yeah so the first one it started last year and actually it it didn't start too good from the beginning because you know we wanted to see if we could could help help the person yeah so you know we sent out you know a package to get his information and when the packet came back you know it wasn't filled out it was a bunch of n a's on it i mean it was it was nothing anything relevant you know no information no no financial information i mean nothing so i think we must have lost him yeah i lost him for now i hit it back yeah so at that point i'm like we you know they weren't trying to help themselves so we also even after that you know we tried to give them you know links to any type of government funding gave a link to here call this place and you know do this and um so they weren't trying to help themselves yeah so that process that part really wasn't too hard for me as far as being compassion now now what we have been is because it's in the winter months is that we were we were saying okay you know we need to you know we don't want to do anything around the holidays you know new year's christmas thing let's just pick this up in the new year and go from there so you know there some people have you know told me that to you know make sure that you understand that people live there right you know people live in these homes and there's families in these homes uh but on the flip side of course it's a business and you have to you know help us you know and if you're not providing the correct information are you using stall tactics or you're you know not being truthful then you know yeah exactly and that's you know i personally i i believe that most people are good and they want to do what's right um and i've been lied to you know and i've had people try to do all kinds of crazy stuff um and they might get away with it for a little while but in the end you know it is what it is i'm really sorry if that means that you're gonna be out of a house and have nowhere to go yeah but you know i at the same time the principle is i cannot let you live there for free like that just doesn't work i'm sorry that's not realistic yeah the biggest thing that i'm i'm going through even with a couple of these notes is like people just they just ghost you they don't even call you back or you know talk to you you know you you want to contact them to see what's going on uh but you got to have some type of communication yeah exactly and that communication is so key and you it we're talking if we're talking we can try to work something out but if you're not returning the calls you know you want back that makes it difficult yeah so so that's all right welcome back yes so we'll continue the conversation i'll get the facebook live feed later but so smith one of the questions i had for you was how do you start back in the space now what do you recommend to someone who's brand new walking in the space listening and all that stuff is it youtube is it facebook groups is it local meetups how do you recommend everyone kind of jumping in uh i recommend youtube um you guys have an excellent channel to get started there's a lot of people that's out there that that you know just what is the note you know starting from there i've got a youtube channel you know that goes through some basic stuff so the biggest thing is just starting out looking at youtube i mean and this stuff is free there's podcasts that are out there that's free so there's a lot of free information to go out there and just start getting into it like i have a couple of people that i work with that are new um because i i always said that i i want somebody to go on this journey with me so if if i'm learning you're learning at the same time so i kind of have like two mentees right now that you know we just talk and you know i kind of tell them what i'm going through and they tell me what they're doing um nothing big but you know just to start and so just get involved with somebody that's that's doing it and also youtube get out there and get the information i tell people uh that want to get started here are some things that you should do i'll send them a list of things that you should do now if you do those things then i know that you're serious about doing it but if you can't go and look at youtube you can't listen to podcasts you can't do that then it's not for you yeah there's some work here to put up front right you have to put that work up front to make sure that you are serious because i'm sure you've seen it we've been to so many people who want to get in the space and when it gets started yeah that's not for me it's like we're spending time and energy to help you but if if you're not serious i get some people may not be serious and they don't know again it's not their fault but at the same time i get it yeah this is a real business and you got to treat it like a real business okay exactly that's attention and it's a good gauger for me so anybody that comes to me because i've had you know people come to me and say they want to do it and i just give them these these steps i have it documented steps a template that i just send to people and say here do this good yeah that's cool actually just last week this week last week i i finally put up a youtube channel so all right there you go earnest investing youtube channel check it out subscribe get your name right so you probably see a lot of people with this out there youtube for those people are not aware you can't get your own brand name unless you get 100 subscribers so everyone wants to get their name right so go to everyone's channel go to smitty's go to nathan and just subscribe um and also make sure that what we're learning is that little bell thing notifies you if a new video gets posted like when this gets posted if you get the bell so make sure you bail all of us and all that good stuff right bella that's it your phrase so for for new investors it seems like they don't know where to start and like you just said just start and i think sometimes it's the they can't get the wheel going and they just sit back too much and sometimes just exploring and as i'm sure you know it's not always that other investors are wrong it just doesn't fit you right they may say listen smitty's smart i just don't like the way he does it or how he presents it i like the way nathan does it doesn't make you wrong but the inside is different the experience is different too that maybe date there's more years but you have a different experience because of x y and z right me and nathan never went through any kind of formal training right we didn't we just did buyers see your pants for 11 years now 12 years now and guarantee you part of the stuff that i think that these groups that are out there give is the networking it bonds you with a group of people and that's what we didn't have we got started but yes depending on others leaning on others to know more is key in the space oh man because you're gonna find posting questions answering questions man and the space i mean you guys are just i mean just so willing to assist that's the thing that i like is that you throw questions out or you you know i shut you know i shot an email to nathan the other day and i'm asking him some stuff he sends me the information so guys like you guys and you know other people in the industry are so helpful and that's one of the things that i like and that's kind of reason why i kind of started you know what i'm doing is you know and i'm not charging people you know like the two people that i'm you know working with i'm not charging them so i just bring them the information as i get it now when i maybe when i grow to have like a huge group like you guys followings that maybe yes but right now it's not about you know monetary stuff it's just about helping you know so you mentioned before some of the things we jump over when you're managing the note for the first time what are some things that you're doing now that you maybe didn't realize that isn't out there some things when you first get your first no in your pocket now you have it are you doing anything that maybe a new investor says i didn't know to what to do and you learned oh this isn't really talked about a lot yes um one of the things is that your servicer is your servicer but sometimes you have to service the service so you have to make sure that your servicers doing what you want them to do are doing what they're you know supposed to do so that's one of the things when i bought my first note i just let things go you know and you know whatever but now making sure the servicer um if they're paying the taxes if it's if it's escrow um you know if they've contacted the borrower if the borrower's late past you know their their their period you know i'm going into the servicing notes to see if they've called them if they haven't called them you know hey can you call this guy um you know one of my servicers uh the taxes was due so i'm checking on my taxes um here's a here's a good one so one of my assets the borrower got insurance so they sent the information to the servicer so the services says oh they've got insurance so i pull up the policy and guess what it's renters insurance it's not regular insurance so that's one of the things you have to make sure that you go in and just you know just check those things and not leave everything up to the service to do so i had to contact them and say hey this is you know sending back this is renters insurance it's not homeowners insurance so that's a lot of things you know checking on my taxes making sure that and then even with um you know like some of the cfds that i have just going in randomly checking calling the city you say hey is there any liens on the property you know so just things like that and another another one of the things that i picked up is that if i have a a um an asset that i can't like really go check on if somebody i know that's in that city i'll call them up and say hey can you run by there or if i'm in that city i'll run by there just to put some eyes on it yeah that's one of the things we stress upon right we rebuilt our due diligence portal will be coming out and you'll be able to find agent but i also think that you know we have our facebook group directory leading on other investors right we don't need to always call an agent to find out information about property if i'm gonna if they're the property of backyard or smitty i can call up and say hey listen what i think the value is can you try buy it this connection network is huge because it allows you to really branch out nationwide to someone who knows exactly what you're looking for and can give you information yeah and just drive by video pictures whatever and they can give you the information that you're looking for without blindly ordering a bpo and hoping and praying that person cares and that's one of the things that i do in the groups that i'm in i'll let people know hey i'm in kansas city you know um if you have you know any assets in missouri and then kansas is neighboring you know if it's in within a specific amount you know radius i'll go out and drive by there and just snap some photos for you you know just to you know because i'm here boots on the ground we're hopeful that our portal will actually right now it just does the agents right but eventually as it grows we're hoping to have the service that anyone who's in that portal can network with each other and say listen i have a property this year this area can i reach out to anyone else in this network that's in those cities and reach out to them blindly and say listen to you and the service i guarantee you you email any of us and we have a property back here we'll drive by give you values because we will give it back to you we just expect you to give it back to us and that's what happens yeah now people buying jersey no one's buying canada but if they were we'd help out right absolutely any time hey question on that uh renter's insurance one is that on a on a mortgage or a cfd it was on cmd actually renters insurance is okay yeah well but it doesn't protect the asset for me no you're right they may not be eligible to get homeowners insurance because they don't own a home correct they don't indeed in their name but what so with that one in for in particular um that would be a different story we can probably talk about that one offline yeah with a cfd technically you can charge the borrower for the insurance you can escrow it right you can ask them for it but technically you are the owner of the property so right right yeah different scenarios so they got the insurance they can only get so cool yeah we'll talk offline about that yeah um hey remind everyone this will be on youtube so i probably follow the glitch we're mobile hotspotting right now um because the snowstorm before we got it is shutting things down smitty we see at conferences and you stand out because of your personality and your presence is awesome um for those new investors who are out there conferences are scary they're they're just overwhelming they're outsider walking into a crowd of people there's 12 people around shaking hands and saying hi to each other how do you encourage them do you encourage them to go to these conferences and how what what do you what's your advice to them who's saying i can't go to them i don't know anyone yes that's that's a great question because believe it or not i'm it's i'm a little weird like i don't like going to a room and just say hey you know i'm spinning and i used to didn't be like that but my goal is my business so you have to think of it as that you know get out of your shell if you're trying to be successful in your business if you're trying to make relationships with people if you're looking for opm you know things like that so um i'm the kind of guy that walking used to be kind of guy walking to a room i would make friends but not really put myself out there about a product like hey look at notes so that's that was one of the things that i had to really change even with doing youtube videos and things like that i just had to make up my mind that that's what i want to do so it matters it's like yeah it's like buying your first note you know jump in and just do it i encourage people to go to the conferences you know to meet people relationships and there's some great information that that um that they have so i've got a cool one real quick i've got a cool kind of axiom that goes along with that it goes decisions determine destiny yeah that's it just decide and do what what do you want to do yeah and when you walk into the room there it it's a lot of people you don't know and that same mentality you had by walking except buying a ticket and going down should be the same mentality you have when you walk into the room walk in and shake hands get out there right we're down in no exponents me grab this take a picture right boom it happens it's just processing and getting out there networking but walk into a conversation get into a circle right we always encourage people get in there shake hands because you can contribute i promise you you'll find something to contribute experience your knowledge whatever it looks like yeah and that was the whole reason of the of the green jacket yeah was to stand out you know i wish i could do it right there i wish i was better graphic cards could throw a picture up there but not good like that but that was the idea of the green jacket when i went to go buy the green jacket my wife's like what are you doing [Laughter] you're ready to make a statement yo i wanted to stand out and and it worked you know i made some some great contacts made some great friends uh found a couple people that are interested in you know doing business so yeah when i first started going to conferences like i mean same as everybody else i don't want to talk to anybody i'm shy and you know you know it's weird and scary and all that stuff and so i would actually go in thinking okay so my goal for this conference is to come home with whatever was 30 business cards or 50 business cards or whatever and like that was the goal so so it was something that i could track and measure we talked about goals last time something i could track and measure so that i could say okay day one i got 30.

okay pretty good so i'm gonna talk to 20 more people that's all i got to do 20 more people yeah just make it happen now that was my goal to uh my goal was coming walking away with the opm partner that was that was my goal yeah yeah and i still do that by the way every time i go to a conference i i've got specific goals and my wife actually she drops me off at the airport and says all right what's the goal again and i'll say the goal is this and this and this all right yeah seen a few days so there's a couple of conferences coming up soon um i'm not sure if you're attending any of them or all of them um are you will you beat a new conference call there's a dme coming up shortly um there's a pitbull there's a imn are you will you be attending 80s and working out i'm i'm not going to the dme i've got another engagement but um possibly we'd be going to the uh paper stores okay cool yeah all good conferences all for different reasons really but all the conferences yeah we're just talking to conferences offline delays are down that every conference has their niche what they do well with right um and some conferences a little bit above where people are at when they're beginners and they'll be overwhelmed and some conferences are right up that alley for beginners right it really dials in um but not saying you can't go to a higher level one and get content you will um but it's just a different mentality different structure of people yeah i would say the good thing about even if even if they are higher than you is because most of the time when you pay for the conference they give you live recordings so you can always go back and look at that information even if it's over your head then you can go back and look at it and you know because you always have that reference yeah good point what is from your experience at the conferences what's been your favorite part of the conference for those who are timid about going meeting the people it all comes back to it right me i mean really is it's meeting the people you know the content is great the information is great that's going but for me i like the uh meeting the people that's in the industry it's such a small industry but then when you get there you know those people around you know you get good information and i i just love meeting the people in the space all right good to know that that's a great great conclusion to this this this story because it's weird we say it over and over again and we hope that people absorb it but hearing from sophomore it's only been doing for a few years now that that resonates right getting involved asking questions in the facebook group attending conferences and paying your local ria you never know what's going to happen there um again we have our facebook directory which you can find someone who may be local to you that you can just chop shop with have coffee with just hey let's talk notes you never know who's in your backyard follow what nathan ask interesting so so you you haven't been in very long and you come from a different background but perform what you've learned and observed so far uh what's your take on on the node industry going forward are we are we looking at more notes coming down the pipe or are we are we all dreaming that that's gonna happen or what's what's your thinking well i i see i mean just you know from from what i see that the pricing is tightening you know it's like you know i hear you guys talk about how you used to buy stuff 40 cents on the dollar dollar and i think that is shrinking you know uh because for one what i'm saying is there's a lot of people that come into the space and they just buy for whatever reason uh and not really and it kind of inflates the price for for other folks so i'm seeing that um i'm still seeing inventory come across um but i guess for me i would like to get into a better space to where i'm seeing more than just the states that i'm seeing you know the ohios and you know the missouris and the georgia's i'm wanting to try to move into a different space or i'm getting a little better quality notes so that's my that's my goal for this year is to try to get you know either some commercial stuff or certain certain you know different areas very cool very cool that's good i it's gonna be a good year if you're looking for commercial i think that's a good this is gonna be a good year for that as well cool well before i lose i think all the internet now i think uh the snowstorm getting closer and closer uh where he lets me disconnect from the public you can catch smitty you can go on his website tommy what's your website for everyone who watches uh notestarter.com cool also have youtube channel if you go and you know google uh note starter it'll pop up on youtube as well awesome please check him out take a look at his content the guy's been cool he's been a lot of fun um if you're going to get no confidence look for the green jacket i'm sure he'll start wearing him more a wife actually and just a reminder guys make sure you root for the the niners to lose this weekend i gotta shave his beard off help me out um other than that take a look at the video on youtube we'll have a stream there as well i'll be on the facebook group and everything else enjoy everyone have a great weekend and we'll go uh go enjoy the snow tomorrow hopefully you bet thanks everybody thank you you hey everyone dave putz here from jkp holdings alongside me as always mr nathan turner good afternoon how are you doing very well thanks how about you good man things have been rock and roll i think we've been um progressing along the way this january is kind of coming down we're i'm starting to get some snow we're expecting about six inches here guys we're not actually gonna get any of that we had uh maybe an inch or two last night so i instead of shaving this morning i went out to the hill um i still got the beard going uh yeah we're all who's listening help me out let's root for the niners to lose the niners lose they get to shave so um help me out there a little bit football gods so i've had an interesting week um as those who didn't know we actually just listed about a little over 50 seconds on our our available asset list so if you don't have access yet let us know and we'll get you on there um but we're sharing off camera something i did not maybe just didn't realize or just didn't run into something with assignments and lounge is actually not needing to match uh it was really interesting because i always had the assumption that assignments had to always match your launch chain and just something i'm running into and as you go through the business you learn things like this um it was weird because i always thought that if a and b and assignment changes there that the lines had to be a to b as well what we're finding out and they were saying because of mers skipping a lot it wasn't required it was interesting oh that is interesting it's not nothing i've come across before but uh yeah it's good to know you know that it happens where you you're missing uh i've actually gone digging for missing the lounges because because i assumed you know i guess i thought that i had to have everything in order yeah so i know that things were rocking wrong for you um you're going to be attending note expo this year um which will be coming up inside our portal we have all the different upcoming face you know note investing conferences coming up so if you're interested in seeing what's available coming up take a load of portal and you'll see everything there and along with all resources everything else and if you miss any of this remember you can go back to facebook or youtube whatever or a podcast so for me you know what we've been looking at is still assets are coming through we're still seeing a ton of new assets come through and we're tracking it like you do is seeing what's new what's what's something that's reoccurred have you been seeing a lot of new or repeat assets from your end uh some of both but uh but for sure i've seen some new stuff come up and uh that's always good i'm actually gonna be putting in some bids here hopefully today we'll see how much how much work i can get done uh if not today then early next week so looking forward to just getting some new stuff it's always fun to buy some new notes and new challenges new experiences new sellers always different new sellers for you yeah we've come across a couple people that just either in the space or in some kind of space arena um maybe the commercial we bought a couple commercial yeah i had a new seller you and i worked on some numbers on this where they're asking for over over upb and i'm thinking how on earth is that worth it and so we went through and looked at it it's not no it's like a day yeah so for those wondering like it was a 10 interest rate right and the seller 101 102 and we're trying to figure out what the angles there is we try to run some numbers um not basically yield but based on irr and it didn't work out it was very odd it's not terrible but it's not good enough for me yeah so yeah maybe for somebody else so we're selling a couple assets right now um are you selling assets right now are you kind of holding steady i'm hanging on i've i've got some performers i'm actually adding i just worked out a modification yesterday adding some more performers and everything that i've got performing i'm actually selling to myself to my fund so that's i think that doesn't count as self dealing i think but i know i i can just uh i can sell it back into my own fund and have some immediate income so that's fun yeah it's interesting because we've come across by doing what we're doing now we've come across a lot of newer investors selling assets but also buying them yeah um and i think a lot of our struggles the connection between us everyone talks about connecting main street to you know wall street but a lot of times being you've come across with even newer investors is the disconnect between what we know and what they know and we think we're covering everything and we skip over things unfortunately yeah we don't know the and a lot of times it's not on purpose it's not something we try doing we try being wide open yeah we just don't realize yeah or i just i oh yeah you got to do that too i guess i need to say that a lot because it's it's become an automatic thing and so to to stop and think and to break it down you know sometimes i forget that yeah i do that all the time but it's so automatic that i don't actually consider it a step yeah or we don't explain it enough right you know saying to your servicer and i'm like well that's easy like you just send me a service or and maybe that stuff is something we don't realize right yeah yeah with that said make that nice transition yeah welcome on the program smitty welcome sweetie i appreciate you joining us on this friday cold afternoon we're at i'm sure it's a little chilly where you're as well welcome yeah well thank you thank you for having me yeah it's 19 degrees here i mean it was sunny outside and i'm looking outside thinking i was going to go out but no anything under 35 degrees i try to stay on the inside i finally went to the hill this morning because it was warm enough it's only five degrees fahrenheit to me that's warm enough it's been really cold minus five minus ten fahrenheit like it's been cold enough that it keeps me inside instead of outside but anyway so smitty you're i wanna i hate to say you're a new investor because you're not right you have experience but you've just transitioned to notes a couple years ago so you get some of the things that we're talking about of you know for those new investors out there the connection from buying you know getting into notes hearing all the hoopla all the hype about stuff and actually going through the process is scary the first one is nerve-wracking when we're talking about no escrow and and oh yeah you just send your money and eventually you get paperwork and all those kind of things yeah it's it's scary it's it's scary you know it wasn't so much scary when i bought my first note uh because i kind of i partnered with my mentor uh when i first started out i started with desi uh in his aci group so we're a great guy we did our first partnership so i felt comfortable uh versus you know i know some people that are ready to buy notes and they're just ready to do it without having someone there yeah so one of my first suggestion is always to have someone to partner with to step you through that first note because it's a lot of stuff to to know when you're doing it yeah yeah definitely and it's interesting 10 years ago there wasn't really anybody but at the same time pricing was such that you could make all kinds of mistakes and you'd still be okay these days not so much yeah yeah back then we buy things at 40 cents 35 cents today we're 65 plus so yeah you can be halfway in the wrong on the value it doesn't really matter so sweet let's back up a little bit right i know you're an ex wall street stock broker you know billionaire and you walk in this with a financial mind and you just slid into it right what's your background so one of the one of the things that i said not to say that i was a billionaire but you you let the cat out of the bag um i actually have a background in the telecommunications industry i've been uh i started that in the early 90s uh started out putting car phones in the car motorolas and things like that so still still actually am doing that you know on my w-2 space so i do still have a full-time job working in the cell phone industry but i've also started my investing career back in i won't i don't even don't even want to say it but i started in 2007.

that's what i started so lo and behold when i first bought my first property i swear you know we're trying to know my dad let's go yeah yeah and and you know you always say if i hadn't known what i know now then you know i probably would have been like super rich but when i got into it you know that failure i'm like man i want to do this i'm upside down in this house and you know i just got rid of it and i kind of gave up i started back in 2016 and bought a couple of rental properties and what kind of led me to notes is that uh i i didn't want to be the landlord person so me and me and the misses we've got some properties we still have property um but you know she's sending me out to fix the toilet talk with the top of them you know getting contractors all other stuff and i want to do that so we went to our uh local bari meetup and uh don rickerbaum was there okay and that was in 2019 i think or i'm sorry about 2019 and then she was talking notes and i i was clueless i had no idea what she was talking about she's talking about carry backs you know all this stuff and you know they were talking about partials and i had no idea but the thing that intrigued me she was like you can collect money like a bank you know those big buildings yeah and that that one thing stuck in my head so after that man i was youtube scouring about you know notes and all this other stuff and that's when i ran upon desi joined his group and that was december of 2019 and i turned around and bought my note uh two months later february what kind of note was it first second performing first it was the first uh cfd and yeah first uh performance efd and that was my first one and it's funny because you know things were so rushed because i at the same time i was buying the notes i was attending my first note expo that was out of california yeah so he's like hey do you have the money and i'm funding it through my my quest ira and uh so once we were all ready to do it he was like well i need you to send the money he's like i can't i need to call question do it he said well i thought you had checkbook control i'm like what is that and so i am scrambling and you know finally we got the whole deal done and everything but it's just like i kind of just jumped in right even though even though he was there but the terms and the things they were saying you know it was kind of like i just still jumped in anyway but i still had them there to kind of hold me and then started from there yeah it's nice to to have that somebody that can tell you the steps and how it works and all those kinds of things and you were saying that uh you bought another one through desi that they used to be one of mine yes yeah so i bought another one through him actually partnered with somebody on that one and we we bought one of those and going through that process right now that's funny you know it's small world yeah it is so when you first got started what were some of the things that maybe it seemed easy to anyone talking about the business but when you're going through it was extremely difficult or you felt lost um hey pretty much everything because you know when you when you get into it you know it's you hear surface conversations about a certain thing they're like so you need to review the collateral file so okay yeah i know i need to review the clatter file but what are the things that you need to be looking for in the club which is not generally kind of detailed in every step of what you need to do you need to be looking for assignments you need to be looking for lounges is it a contract for me um when did the contract need originate determine if it's going to be a you know if it's non-paying if it's going to be a forfeiture or foreclosure sure those are the things that i had no idea no it's like about to know and then i'll start learning later yeah there's a lot of when we go through it it's like you know does the p9 match what's on the tape right does the maturity date match if it doesn't was it mistaken was it mine yeah yeah right true so due diligence wise was there any struggles you had with the due diligence process besides cloud file um setting up your servicer um arranging for bpos trusting value outside your market um those kind of things did you struggle with any of those or even connect with an attorney they could review the collateral fault if you chose to yeah so not really uh those areas i didn't struggle with on my first one like i said uh with desi he really helped me but on my second one uh because i did it on my own um yeah just um trying to figure out who to you know to get into the network of people to know where to go that was one of the biggest things so you know struggling with trying to find the right person or talking to someone and you know getting the referrals and actually kind of getting in the network for people to assist you you know that was kind of one of the things too yeah when did you buy your second one when was that uh the second one probably came a couple of months later i think i bought that one from equity uh first funding i think i can't remember the guy's name so like early 2020 yeah it was it was probably a couple of months after i bought the first one because that's cfd as well or uh that one was a cfd as well okay yeah and that that was that you know that's tough timing because right as you need that network because right when everything shut down and yeah that network and it's crazy because enough i forgot to mention that when we were at the note expo that's when everything in 2020 was really kicking off in california so people i'm i can remember running around trying to find masks because they you know you need to start wearing a mask and no masks were around and everybody buying up hand sanitizers and things like that that was it was kind of a crazy time yeah and that made it that made it really tough especially just the timing of it was not great as far as the networking goes and then it's really hard yeah know we we do our best to try to help people network from afar but uh man it's really not the same thing without those guys i knew i wanted to to get into it i will reach out to people hey i'm i'm smitty i'm new i need your help or you know i don't have a problem with reaching out to people and telling who i am and you know what i do because i want to get involved and i want to know and to get in the space so you know yeah that's exactly what you need to do because yeah if if it's not done for you then make it happen right and you find the space may be difficult to get in one jury in the circle small you kind of everybody knows each other right yeah so when you're going through the process of bidding on assets how did that shift from what you first did to pick up that first house and make an offer to now how have you adjusted how you made offers um comfortable you know somebody like i made my first offer and i'm shivering and do you the way you come up with your bid amount has that changed over time yeah and it's and it's changing still because i'm learning more um from the first time i bid it uh on my second note um you i realized that i kind of overbid it now that i go back and look at it and it's fine you know um because you know i was learning so now what i'm trying to do is really hone in and do more research do more calculations and not just buy a note just to buy a note to really calculate what my yield's going to be calculate tomorrow was going to be go through that file to make sure that you know looking at the the history to make sure i'm doing the right thing right bitty giving the collateral files to an attorney to having to look through to make sure everything is good that you know so when i do buy it you know i'm not spending any extra money for whatever reason so that's that's one of the things and i'm still working on that you know trying to be a better bidder um on my assets to make sure and then also to make sure and we all know we all don't know uh because you know notes can go from performing and not performing but to really focus in on and do more research on the borrower to look at the history because you know my first notes i bought you know i'm not really looking i just want to pass some notes but now i'm more strategic in my purchase depending on what my exit strategies are and i think you kind of mentioned it there but you know your exit strategy can change over time yeah and you think well at the beginning maybe i want this and then as you go you say actually i like this better and you know this is better for me because of whatever you know these different reasons and yeah it can shift you know it's interesting you say that because a lot of people in our our weekly investment community they're building their own calculator and i i stress the importance of building your own because you need to know because you're going to have to change every time i'm still adapting mine right pricing charge changes your status limitation changes your licensing changes things change over time and calculation is made just based on what your action strategy is like okay i want to gear more towards this so i adjust this that's this unless you know how your calculator works you can't function right get if you gave me yours i bid off of it i wouldn't work because if i have to adjust something i don't know how to so we stress people build your own i get the fact that you may not know what are some of the things in your calculations that you didn't have in the beginning that you have now that people who may be starting out really need to have in there um one of the things is doing calculations on because like when i first bought my first notes you know i didn't think about foreclosing costs servicing fees yeah uh potential liens you know you know stuff like that you know i just yeah bought the note to be honest you know just just bossing up but now as i you know grown and like said i've got desi i'm in um jasmine's group with naps so she really honed in on as far as uh calculating all of that information uh to add into when purchased an asset and what to look for so those are some of the things that i've developed over time with the help of you know some of these great people in this space yeah did i say that because you know what we realized recently and we were we were calculating a little differently than we did six months ago is that different states have different amounts that go towards your legal balance right some states allow your attorney fees some states don't so you know another wrinkle in that calculation that says listen here's my attorney fees and remember everyone your attorney fees and their legal costs are foreclosures right the fannie mae schedule is one number your court auction and your you know publication fees is another number they're two different brackets in some states you can put them both in and add to your legal balance and legal balance where you can click at the auction some states you can't use your your your your attorney fees so you have to make sure you separate them and add them when needed so yeah and that's that's something that going through the processes that i've gone through this year even though we're short into the year that i've found out what you can and can't charge for the ones that i'm going through yeah even even i made a fairly drastic change just a couple of years ago where when i first started reinstatements or sorry uh like a payoff was it's not gonna happen so i didn't even have it as part of my calculations and it wasn't until a couple of years ago when all of a sudden we were seeing equity uh equity notes where they just they didn't exist at the beginning great points i actually had to add that in as an extra column we were so starting equity was very rare right everything's underwater you didn't worry about the fact that that happens so yeah that's a huge one reinstatements possible yeah yeah restatements payoffs and um along with payoffs it's kind of the same bucket but uh selling at auction selling at a foreclosure auction essentially that's a payoff so again that that kind of stuff didn't really happen a few years back and now it's much more common so it's now it's part of the calculations because you can't guarantee the equities that come in your pocket if it sells at auction right right when you're when you're looking at assets now this happened i think more than they do it's now maybe i'm just not tuned in to it there's a lot of people out there that swear that they have a list available for sale and they get sent it to you and they are direct to the seller when you first get in the space that sounds really attractive because you don't know any better i'm sure you've seen this what do you do and how do you handle those kind of people who come up with these i'm direct the seller i used me a pof or poi or whatever and i'll get you these assets how do you handle them i i ask questions and i learn this is one of the things i learned along you know very very early into the career of starting is to um you know just dig and ask questions hey uh who are you buying from are you or do you do you have them in your portfolio you know are you pulling them in your portfolio or are you brokering it you know that's that's one of the things to know um and because i've had people send me things and you know after they send them to you and they say they have this and this and you start asking them questions okay well can you get me some pay history or can you so i just kind of go through a series of questions to see you know where they're at uh i generally when people reach out to me and say i've got notes and i'm direct to the seller i kind of shy away from them just because for one i'm still new and for two there are certain people that like you guys and you know like dave's that's that sends stuff that i know where it's coming from but i'm so for me personally as a novice i'm not ready to go out and do that just yet so i've got a good source of notes that are coming to me from people that i know and trust even if i don't know them i've heard their names in the industry and i get their information so that's enough for me right now i just had someone last night say hey i'm trying to close on a 300 000 deal you know you got to yeah yep and you know i just asked a couple questions i'm like hey i'm not interested you know and you're you know you're trying to close next week on a 300 000 deal and you're you know you're needing a partner so you know just stuff like that sure absolutely and you know what those people are out there right you know it was warm people who are raising capital to be careful doing that because sec violations like that yeah there's people out there and i get it and what i always say to people who are looking at broker you know learn the space and send me one note out of the tape don't send me the whole tape right do your homework and say listen add value to it i'll pay you more for you doing that then you're one percent right if you give me all the numbers and say here's bpo here's only i ran numbers i don't have the money for it boom here you go i'll pay you a couple grand for the deal yeah because you add value to it no know what you're selling yes instead of just forwarding on information yeah yeah and i've worked with some good brokers and i've i've had others approach me that i you know we could spot pretty easily that they didn't know what they were doing and i've brokered notes myself yeah so it's it's there's nothing necessarily wrong with it but just do it right and then and and disclose that you're brokering and if you are that's fine as long as you know you're doing it correctly and you know what you're talking about and things like that then okay that's fine right yeah i'm in the process of doing that as well um once we left the uh node expo last year i met up a couple of people and you know i was trying to you know broker a couple so i got some good contacts nothing came through but you know i've started it good awesome so you got your first note you do your due diligence you bid what you bid right um how was it for you to wire money to someone you didn't know and what did you decide to do with the claro file would you send it to do you send it yourself yeah so each so at each note that i purchased thus far kane has come from reputable people that have been referred so i haven't bought anything outside of that that kind of goes like i said with my novice and i'm sticking and honing in on the people that i know i haven't done that like my second note uh i was referred to uh by somebody hey this is a great guy and it ended up being a great guy you know so um i haven't gone outside of that realm yet just purchased from people i don't know and i think for me still that i want to know who i'm purchasing from i want to get to know the seller i want to do some background research on um because you know if you're in a suit with one property yeah i mean they could attach to the other ones yeah for me right now i'm sticking with that and if i do run into any new sellers i'll be doing my research before i deploy any any type of capital i want to know who i'm buying from yeah excellent that's good so you got into you're starting your i guess your first foreclosure it sucks all right it's not it's not fun unless you're going for the property right how did you feel were you i hate to use the word compassion right where you like because compassion sometimes makes you stall right i'll give another mom yeah where you feel like you want to help them out you want to keep them going and maybe if i just give them this much more time and they'll come around everything will be okay all right yeah so the first one it started last year and actually it it didn't start too good from the beginning because you know we wanted to see if we could could help help the person yeah so you know we sent out you know a package to get his information and when the packet came back you know it wasn't filled out it was a bunch of n a's on it i mean it was it was nothing anything relevant you know no information no no financial information i mean nothing so i think we must have lost him yeah i lost him for now i hit it back yeah so at that point i'm like we you know they weren't trying to help themselves so we also even after that you know we tried to give them you know links to any type of government funding gave a link to here call this place and you know do this and um so they weren't trying to help themselves yeah so that process that part really wasn't too hard for me as far as being compassion now now what we have been is because it's in the winter months is that we were we were saying okay you know we need to you know we don't want to do anything around the holidays you know new year's christmas thing let's just pick this up in the new year and go from there so you know there some people have you know told me that to you know make sure that you understand that people live there right you know people live in these homes and there's families in these homes uh but on the flip side of course it's a business and you have to you know help us you know and if you're not providing the correct information are you using stall tactics or you're you know not being truthful then you know yeah exactly and that's you know i personally i i believe that most people are good and they want to do what's right um and i've been lied to you know and i've had people try to do all kinds of crazy stuff um and they might get away with it for a little while but in the end you know it is what it is i'm really sorry if that means that you're gonna be out of a house and have nowhere to go yeah but you know i at the same time the principle is i cannot let you live there for free like that just doesn't work i'm sorry that's not realistic yeah the biggest thing that i'm i'm going through even with a couple of these notes is like people just they just ghost you they don't even call you back or you know talk to you you know you you want to contact them to see what's going on uh but you got to have some type of communication yeah exactly and that communication is so key and you it we're talking if we're talking we can try to work something out but if you're not returning the calls you know you want back that makes it difficult yeah so so that's all right welcome back yes so we'll continue the conversation i'll get the facebook live feed later but so smith one of the questions i had for you was how do you start back in the space now what do you recommend to someone who's brand new walking in the space listening and all that stuff is it youtube is it facebook groups is it local meetups how do you recommend everyone kind of jumping in uh i recommend youtube um you guys have an excellent channel to get started there's a lot of people that's out there that that you know just what is the note you know starting from there i've got a youtube channel you know that goes through some basic stuff so the biggest thing is just starting out looking at youtube i mean and this stuff is free there's podcasts that are out there that's free so there's a lot of free information to go out there and just start getting into it like i have a couple of people that i work with that are new um because i i always said that i i want somebody to go on this journey with me so if if i'm learning you're learning at the same time so i kind of have like two mentees right now that you know we just talk and you know i kind of tell them w....