Due Diligence Checklist for Note Investing | Real Estate Notes Show

hear some more success stories that we have a steel solid early enough in the bag so thank you again guys we'll talk soon [Applause] applies and what it applies to so without getting to legally into that what's your click input about statue limitations and you've heard or concerns you have with it well while we're talking about Florida another terrible situation in Florida they started calculating the statute of limitations from the maturity date so we were essentially uncollectible long alone because the maturity date was outside of five years so the situations like that there's really nothing you can do but for the most part the the clock starts ticking either the borrower's last payment date or other data default so if you have those figures from the bank if you have a charge off dates or the last payment dates you can kind of run a quick formula in Excel to give you a quick flag whether or not it's in stat or out of status so if your Google statute of limitations by state you can see a little matrix of promissory notes and see each state how many years after the date of default or the last payment date that statute of limitations is triggered so then if you create a little excel grid and you this might be getting a little bit too technical it's not legalese but it's Excel vlookup Google deed lookup because it's an incredible tool when you're analyzing loans and you can essentially create a matrix of every state and every statute of limitations of mouth and then you can extrapolate your final end date based on your little grid using the vlookup formula email me about it I'll give you the whole tutorial Kathy would ask the question to be most states call off the written contract statute for state majority states like no does I think there was one out there it is not going for a written contract but uh you know we can definitely look more into that with any more questions so yeah on this page we have on this is our Facebook business page all kinds of videos we've done before recordings Shantae for Madison Gemini PRP and the tiny word Pro title and last month we had the Q&A with five a new investors [Music] this is our YouTube page has same videos play if anyone need to go different spot he's on here and then here's our meetup group that we also have let me show next our absolute guest will be speaking to us tonight we have Liz she runs a company called tape decks which we'll get into the course a little more where Rob from fix notes he used to run us mr ah and then we also have Chad and Claudia now and granite who's been around forever so what I'm going to do now this is okay you get a woman from all don't know who I am I run it meet up in New Jersey but I've been in distressed notes for close to seven years now with that I've been I've been doing chameleons for different firms different funds I've also fund I'm personally for since 2012 I guess now I run my own little thing and Cardinal that stuff we buy notes together with other ventures but by the money and I do that in the comfort of my own home with that we want to talk a little about this chat how is brother webinar on the Bombers a chat button for old guests to actually ask questions there's also a hand raising part of that as well um and from there we you can ask questions so what I'm going to ask is that if anyone has a question or whatever you put in there and guess if you do don't need to see yourself on this video if you don't want to you can bring the chat window up and have a partially covered picture of yourself and be able to file the chat warm as well I'm also trying on the chat here with allowing everyone here to kind of watch this going on our big screen just the idea we have a large picture screen we're not coming on to everyone in the room what's going on so we have your wave in the background as you get going here so now you hope a I fix the issue or edit your having also wanted to talk about we have a book prophet favorite prophets um it's really good beginner book that excuse you two notes why notes is actually better investment in Fricker mordor barrios a live detail which I haven't seen before but Josh thank you very much write us up and answer a lot of beginner questions um with everyone on this uh weather tonight you have opportunities including myself for JV opportunities and also contact them for help you want to buy a note for assistance on different questions and whatnot those who are not familiar with notes I'm gonna actually turn up like it's me I myself um the stress mortgages is basically the debt behind owning a mortgage once that goes defaulted we can buy in the secondary market and buy the opportunity to make an investment in different fashions I won't get diving too much in that let me guess you know that we have multi watch strategies that we use already and enjoy so if there any ditional questions feel free to put in the chat window and we'll answer as we go I'm going to go ahead and allow sorry with live issues out to everybody ready yes I did also put this up to you can also look at it here the email address and whatnot so I have not seen that Claudia so I'll have to get a copy of that from you guys hope you hear the girlie let me know make sure you're I mean you're a hater sorry no we give these out as like little giveaways at the conference's school I'll save you a couple days thank you sub I will go from there I'm a sort of live issues yourself live um kind of brief over who you are what you do and the business that you can offer our participants absolutely thank you for having me tonight and hello to everyone that's watching her there I'm varied I just got my wine to for I saw people in the background I was like well that if they're having one I'm having one so if you see me take a sip for - please no judgments it's late here so I'm Liz Brimmer Smith and I have been investing in mortgage notes for close to five years now and I just like Dave I purchased non-performing firstly mortgages for myself for our company I am a privately funded company or we are privately funded company so we work with investors on jb opportunities or as a private lending in sweden i'm very similar to how you probably heard him discuss about who years ago we kind of felt and our own business we hadn't achieve more into it - dude you lookin so it just like a talking bad echo dave is it like bad echo know about we're not an echo at all I can I can you okay ridiculous echo good let me give me one second maybe abscissas I'm in a trance I headphones and maybe at all oh what's that you may have too many a participant with their bike on any one second okay it's better okay um so about you know putting mom custody hold more water right your neck go still okay so yeah so about two years ago we've had a knee out of our own business so we decided to come up with like a total outsourcing program for your preliminary due diligence and we now have a cup any questions text where you can simply upload one accent and I've had 100 assets to be researching my virtual assistant and they do the whole preliminary due diligence process from start to finish so that is me in a nutshell all right on the leg Rob go ahead and go for it sure and I did see it comment if you mute your mic we might have less of an echo all right I guess it's muted hi guys I'm Rob Haifa thanks for having me tonight date for setting this all up so I sergeant in this business about six years ago 2011 with US mortgage resolution and I was the first employee right out of college and since I've always been interested in real estate and I do own about four intial units now I'm going to contracts close on the triplex I'm very excited about but those who are natural fit and obviously notes are superior to rental properties and a number of ways as we'll get into here on but notes were a natural fit so I've done everything in the office from auditing collateral files to recording the satisfactions I ran the whole due diligence desk at us tomorrow pretty much my whole time there and analyzed and actually purchase well over 3,000 loans so Illinois probably analyzed posted 10,000 assets not acquiring all of them but the total real estate value I calculated a couple weeks ago it turned out to be about a billion dollars of real estate what I really love about the distressed debt business is the fact that you can quickly scale this numbers up when you're reviewing loans you know these are discounted investments and since you're buying it's such a reduced amount to the principal balance you can really analyze quite amount of that very quickly so January 2017 I started my own company fix six notes as a brokerage and a distressed debt consultancy and I can give you one piece of advice in my encrypt five minutes here is to just get started analyzing loans right away you don't know what you don't know until you actually do something about it so I will point you to my website a quick picture fix note stock on slash inventory you can start reviewing loans for sale right away I may be happy to talk to you about specific reasons why loans are priced a certain way or a different you know bankruptcy legal or borrower correspondence type of questions with specific case studies in mind that are actually available for sale now so that's fixed let's calm flesh inventory thanks five days they're chatting Lydia all right how you doing out there everyone Chaz Glen Claudia newcomer we're based out of Orange County California so for all of our East Coast folks good to see we've been working with we've been working with data cuts for a while five six years now right Dave so it's good it's good to know that to see your growth I mean look you now have a room fill the people that are looking to learn more about what we're all doing as a business and granted strategic investments we've been around now for a little little under seven years in terms of buying and selling first lien NPL what we call non-performing loans and our piell's reaper forming loans directly for major institutions now we're starting to buy directly from for major banks sorry GSEs HUD fannie freddie so we buy what we kind of coined as kind of created a bridge between Wall Street and guys like you who are Main Street investors who are looking to figure out what this note game is all about and I think wanting for us and have helped us separate ourselves a little the diligence information around each deal because we understand that it's still real estate you're still buying and selling real estate now you're just buying the instrument that security instrument that's still tied to that property so for us we try and kind of differentiate ourselves a little bit from other sellers and buyers out there because we rep what we're going to be talking about today right Dave which is due diligence information around each file we want you guys to see what today's market values are we want you to see what's on title what taxes delinquent if any are owed we want you to see all this information so you see what we see so that when we come to discuss and negotiate price point we're talking about the same same deal and we're on the same playing field to be able to make a transaction happen so today we purchase a little over eight thousand of these single-family residence first lien deals so we have a decent mountain experience and kind of buying these these instruments since 2007 so I got into the space in 2006 I was a little bit before this this big crash and and movies out there that are called the big short that we're all becoming to kind of understand and and how it we all kind of this whole issue came about it's funny enough that Wall Street is now creating a new loan programs out there called non-qm stands for non qualified mortgage so I'm like oh there we go again they're going to start this whole process all over again which is okay so everybody in this room there's more runway coming after you in terms of more bad bad loans to purchase so in a nutshell we're a buyer and seller we sell one-off properties individually and we also sell bulk so people are looking to do five loans 10 loans 50 loans we sell that much granted strategic calm is us if you want to learn some more information about us but we'll get into that as we could go in your day good guys appreciate I wanted to get into you guys a little bit about your first second space on your experience up what dive right into it Oh most of people on the call in the room are familiar what note and gusting is I have an understanding that let's get into the fact of what is a quick due diligence checklist of things you're looking for when you're buying a note at our different levels from Liz's level or child level what are you looking for what kind of checklist general checklist would you say you have be looking for Liz go ahead so since I'm a smaller institutional buyer like them Robert and Chazz that mentioned they're buying in large large amounts so our due diligence while we're looking for a lot of the same things it might look different in certain stages maybe the service or the companies that we're using or whatever it may be so for me I'm pretty much going to be looking in the preliminary stage I'm going to be looking at the actual asset I want to make sure that the asset just really enough the underlying collateral if I take this property back right I want to know all about the property isn't in good condition what's the value is it occupied unoccupied so those are going to be like this I would say the biggest things I'm looking for is evaluating the actual asset from there I'm going to be looking at the things that might be attached to property liens or judgments I'm also going to be looking for things like possible delinquent tax to this Chas mentioned that's going to be important because it's going to affect the total cost I have invested into the property and I also want to look for things about the borrower so if it is occupied armed as a borrower have a second mortgage that's again going to ultimately affect the outcome of my exit strategy and I also want to know about their bankruptcy status because bankruptcy has a big role in doing notes so those are like the big things I'm looking for upfront that's kind of what you do in your preliminary stage and then if I do buy a property let's say from Chas and I have it under contract then I'm going to be verifying all that stuff in the formal due diligence stage two stages you go through ones everything you can find a friend for free as much as possible and the second thing is kind of like verifying everything actually paying for your lien searches or paying for calling the county and making sure that the taxes are actually accurate online sometimes it's not available online for some accurate so that's what I'm looking for it's kinda like my checklist awesome Rob what would you say your building checklist is at your level when you're buying seconds because it's a little different than first phase what's your checklist you're looking for I would second liens your number one report that you're going to look for is the credit report because the biggest driver of price when you're buying a second lien assuming you have secured junior lien is the value in the status of the senior position one so when you pull a credit report ideally you're going to have a pay string showing the borrower's payments on that senior position loan plus a balance and the payment amount and you can use those figures to start calculating your equity and you can even back into some exit strategies if you know the value of that teaming mortgage payment then assuming that you foreclose from the junior position you know the threshold that you have for me per month to start you know paying that loan if you acquired with the property and I do want to add something to what Liz said because her checklist was excellent but her idea of pulling a lot of free and inexpensive resources in the front end is exactly how we do it at the higher level and then you'll send a letter of intent so here our seller talked about an LOI it means an indicative bid subject to further due diligence so you pull all the free research you can you look on Zillow and you prese you look at the public records if you can on and then you make that indicative offer you pull the actual title report you have a realtor go to the property you you know do the in-depth research and if all of it matches your preliminary research that you've done then you've already agreed with the seller based on that letter of intent to close at your addictive price point so at a high level when we're buying in bulk we take some tricks sometimes and like I said with second liens when we're using a credit report to check out the equity we're also using ABMS and different types of Cheaper valuation methods to learn a very quick review of the entire portfolio then digging a little deeper into because in title when necessary so I think Chas could speak to that in higher level as well all right Josh GAD let us know what your due diligence necklace is at the level where you're buying mass amounts of one time yeah you know I think Liz bring Liz and Rob that you know for everyone in the room you know we've been we've been working with them and transacting with them for years with Liz I think what's what she's gotten really good at is is kind of finding her own niche and kind of finding what works for her and her company and I think what she understands is we supply all of our due diligence information to you guys but we absolutely ask you to verify it we're not ever saying that this is this is right and true and correct but we are trying to give you some sort of kind of an indicator as to where to start from so that's initially what that is you normally propose to support because most sellers institutional sellers don't give us all the information and we supply to downstream individual investors like yourself but in terms of an overall collective so I don't get you guys all kind of stuck in the minutiae of all this business because you know because we purchased hundreds sometimes thousands at a time and I've got a staff of six people right so where as Claudia Peter Hagen um you know we do have vendors that are national vendors that can run our values for us that can have local boots on the ground and I'll tell you guys have your own valuation process because BPOs can only take you so far and can only show you so much and at the end of the day the O and B P o is opinion so it's kind of about somebody's local presence and what they feel the properties were so that's kind of what we have our own modeling and our own kind of system that we grant to kind of understand what we feel properties in Gary Indiana or or sicker ville New Jersey or Riverside California you know so it's you know we try to understand the market from that perspective but we are vendors that we work with on the valuation side of 50 to 65 thousand agents that are local on the country that's awesome we sort of value though with with the value itself Liz - Chaz - Rob how are you for value are you proving that you are you trusting BPOs or are you calling local agents I mean it's really hard it's really hard not to call a local presence and to kind of figure out you know locally what that person thinks of actually driving by that property once valuations yeah but we also have we also have third-party companies that also keep our BPL vendors honest right that have no affiliation with our BPO vendors that we pay a separate fee to reconcile and and and kind of keep making sure that the address is matched the appraisal pictures match the comps are with inside of one mile it's very hard when you start looking at rural properties to stay inside a one-mile but that at least kind of gives us kind of a basis as to how we're trying to keep our vendors it's on as possible but but you're right Dave you know for us because we have our own modeling that we back into when we look at our modeling up against what our BPO vendors have provided dusts our valuations up against what the VPS are showing us have ran about a four point two percent variance between our value up against the BPO value so we're okay there in terms of where we feel value is I don't think you'll ever be as certain as we want it to be but what we try but what do you what do you think'll is and Rob and Tara how you guys kind of roll up your sleeves on that on that factor I started to add one thing about echoing linkle agents versus you know going through a BPO service what I found especially when you already own a loan but you can use this strategy when you're under you know another why already the seller has committed the loan to you then I think you can do this perfectly honestly but you go to your realtor you call local realtor and you say in exchange we're listing assuming that I do take this property to foreclosure I really like some boots on the ground to give me an idea of what the property is worth what the condition is let me know if you see a car in the driveway if you think it's occupied and you know take a look at the windows the doors make sure it's the carry just let me know what's going on and most of the time I say 75 to 80% of the time the realtor is going to really be hungry for that listing and give you basically an entire video for free in exchange for that listing assuming you either go with a quick claim deed we foreclose on the property and you have to list it after the fact so that's not really scalable when you're buying a thousand ones of your time in those scenarios are going to go with the BPO vendor and you're going to make sure that that vendor outputs to Excel so you can crunch all those numbers at once but on the one-off or maybe even alone in that house alone trade that's given you some trouble you call up a local realtor and we'll be happy to help you and it's always nice to have you know contact winkle to that area ready - thanks Rob with what your two cents on that the whole angle um I think they both make great points I especially like Roberts point of view can use a realtor I mean that's going to be your website your information find someone who is doing deals actually selling properties within that disco or in that area like you said rural properties you kind of add a look there sometimes but you're going to get they know the market because the problem I have with cpos is a lot of time it's not always a realtor who's experienced in that area we pulled a property and University Park which is about 45 minutes from Chicago but the BPO we ordered was a realtor who works and lives in Chicago while they're able to pull comps it doesn't mean that they actually know the local market and that can cause problems maybe like if they it's a specific pocket within that neighborhood while there's comps within the mile radius that look legit your street has like for gangbusters on it you know that the realtor can provide information that BPOs can't but if you are doing bulk it is very tedious to have to contact all these realtor is you're going to do the BPO route so that is the case I would just suggest trying to pull to BPOs to compare I know it is more costly and time intensive for you to kind of get those out there and crunch the numbers but at least it can give you two valuations rather than just relying on one which could be totally bonkers of a value I've had BPO if they're just crazy crazy off so you just kind of have to trust into your own due diligence there and if you can get a realtor do it I have to add definitely Realtors tell you a lot you got real peek in the window if it's vacant let you know what the entire inside looks like and sometimes they're able to runs it to a neighbor and gives you information you would never have known that local hand oftentimes if I get on Zillow I'll find an asset next to her and booth sold I'm a calling on Aging to find out what that house sold for and what happened or find an agent who possibly that the house of listed before speak to the previous agent tell you a little bit more about it so awesome I want to get into collateral files when we receive these collateral files and these assets at different levels what are you doing with the collateral files how are you Liam are you personal revealing them what are you doing from put them I'll go ahead Liz I'll let you start off hmm so since I again since I'm going to smaller-scale going to the collateral files I actually have the availability of the time to do that you know how much larger-scale to have to go through all that collateral if you have your own person assigned set task it can be quite tedious and also every state in every county has different requirements so unless you're like super well-versed in all of the areas you might miss something that's important in that state so my best suggestion is if you're new to this or even if you just don't feel super confident in a new state or whatever it may be talk to a local attorney or a company that can actually review this electronic collateral file or the actual hard collateral files for you so we've outsourced our entire collateral file management to a third party company they handle all the assignment recordings if there's any issues they're the ones who rectify the issues so I don't have to actually manage any of that um and for the like preliminary portion when I'm going through it online I said it typically to my attorney to review and I choose my attorney because they're more knowledgeable in that specific state versus the company handles the collateral you know just looking over they might miss something because they're not thinking about Ohio having a weird rule in that state or something like that so that's what I do for my platter all thanks Rob what do you do when you're getting seconds are you reviewing collateral yourself or you sing it out are you the attorney exodia nature angle we with us mortgage resolution we review all of our collateral in house we have a collateral manager it takes all of the loans and basically creates a simple checklist the note the mortgage the assignment and mia lodge if you know you're a beginner in this a note is transferred by your a lodge which is not recorded at the county and the mortgage is transferred by the assignment mortgage in the assignment are both recorded at the county so when you send that LOI that I mentioned my letter of intent one of your big contingencies is complete enforceable collateral with a full chain of title ending with your entity so right off the bat you're you're covering your bases if the seller doesn't have those documents you're off the hook you don't have to close a deal furthermore your loan sale agreement is been going to have representations and warranties as to the same but know that the mortgage is designed with the image the complete collateral files intact most contracts will have a repurchase window of 30 to 60 days if the seller isn't able to put that collateral file together for you in that time line but if you really want to be safe you can call a local attorney like Lestat and have them work as escrow agent for you so essentially you send your money to them you have the seller send their collateral files to them and since they're experts in you know the geography they'll review all the collateral files and only release them when they've confirmed that everything is in order so they act as a third party to transfer me the cash in the notes but I would say getting started to definitely try to review a collateral fire file yourself because a same point or another you're going to want to be used to the documents that you're looking at the different names of a note a mortgage or security instrument what all of these things actually are but then once you scale it's definitely a good idea to batch that task to a company like Richmond Monroe or a local attorney or you can just hire a collateral management I want to just dump it real quick Oh who's storing your collateral files once you purchase them we have fire safe filing cabinets in our office so they're in our in our office which we found for selling loans to be super effective because we're able to quickly look at the file make sure we have everything in order without having that you know third person between us and an actual document but is it work you do have those fires say filing cabinets that have a lock and key because this paper is worth millions of dollars and it's it's strange when you think about it that way but you got to keep your collateral safe make sure it's also waterproof as well I just gave myself in a situation I almost got bad wristlet before we go to Claudia lists do you also keep your stuff locally do you keep latest odn with attorney what's your angle we use a custodian also but we do have a fire safe filing cabinet in house ways gosh I want to say thousand pounds it's heavy and very very expensive so it's not an easy thing to purchase and to have but we had it for the pure control of having Richmond Monroe review all the files and then what we'll have them do is after they reviewed everything send us the reporting but we'll go ahead and keep the houses in internal so that we can release them pretty quickly but I did want to go back to it what Robert said about reviewing the collateral and and having our buyers you know kind of know what to do is familiar self with the collateral links that we send you guys to view the files start getting familiar with a note a title estimated HUDs good base estimates applications anything in the folder that's going to help you figure out what this person is that you're buying because you're buying a person along with their property but you know in that case we also put it on our MLP a that we reppin warrant that you'll be able to have perfect chain of assignments it may take us a couple of weeks to get something that might have been done as an error but we rep and warrant that for you know the beginning of your whole process of getting that loan into your name that it's coming from in it and it's going to you and we'll give you everything prior to that as far as assignments and chains and it's warranted on our contract so as wonderful spring master I'd like to I said I'm sorry Diane they we've done we've bought loans from them before and we just recently purchased a loan that the assignment from the seller to grant it I just had just a small error but they were able to execute the assignment from grant to us and I mean the second the collateral was received and we realized that happened they reached out to authority to say hey this is an error we're working on it you know the second we get it will forward it with the collateral package so just like they said they can't fix it most things are a rectifiable even if there is an issue than the chain of title but you want to know that I'm going forward because it's going to take time and it's going to if you're outsourcing it to find it and rectify it it's going to take cost money so like they said definitely know what you're looking at when you're going through electronically because most the time it's hopefully the same thing electronically as it is in the hardcopy and yeah if you're doing all scale to actually have your own fire space is going to be so expensive those things are like a minimum twelve hundred dollars and go up from there and unless you have also a place to store it it's it for me that was like outsource or spent a lot of money on a fire safe I'm going to use for like thirty files very good yes I have the same way I stick myself with if the attorney will do it for me I'll let them hold on to it well actually head over to extol Ian's full charge I see Bob I mentioned one company doing 10 hours a year I go $1 a month with Richmond or I also know the servicer Sounion to do 20 hours a year um Orion is extension month there you go 25 cents a month with that uh I don't want to get too deep into it what's your input on bankruptcy files how do you handle it just a brief overview we don't want to add too much into bankruptcy but what is your feeling of that bankruptcy situation I guess the floor is open conjunct in bankruptcy is actually a great opportunity to get a lot more information about your board if you pull of a voluntary petition which is public record on pacer P P AC er public access to court electronic records you'll be able to review the whole history and docket of that bankruptcy proceeding so starting with a voluntary petition which gives you income and expenses and assets and their intention with those assets whether they want to keep them or surrender the property in question you'll get an estimate on the senior lien balance you'll get an estimate on the property value so it's actually a pretty good opportunity to really review all of that information before you buy now I will always go with an expert to get a final opinion I'm actually I own a note personally in a bankruptcy chapter thirteen we're going through the adversary proceeding so sometimes when you get into the minutiae of this you need that expert opinion to really take it home but to get started you can definitely review pacer yourself and a lot of it is in plain English some of it you really do need to get accustomed to and I'll give you one more - one thing you really want to look for is a motion for relief from stay if the senior league if you're buying a junior and the senior lien has filed a motion for relief the stay essentially is a pause on the foreclosure so nobody can foreclose once a bankruptcy has been filed and that's really why borrowers file bankruptcy is to stop anybody from taking in property but once the banker the bankruptcy has stopped the foreclosure it can be started again with a motion for relief from sight so then you look on the order for the motion and you see if the court has allowed the senior lien or another lien holder to move forward with a foreclosure so that's one thing there's so much more I'm not an expert by any means so I would definitely recommend speaking with a local attorney on the bankruptcy account thanks Rob well let's try to pull your finger in when you're buying large amounts are you even looking at bankruptcy paster stuff are you kind of breathing over it what's your example I would say in 2010 11 and 12 the way bankruptcy was viewed has absolutely changed the way it is viewed in 2017 I felt that the market was still kind of facing a recession and lenders were still facing people that were strategically defaulting on their mortgage coupled with filing bankruptcy just to prolong the filing of the foreclosure so bankruptcy back then was used as a shell where I feel that more more often than not todays bankruptcy is actually used for us we love them and here's why we love them is because like Rob said it's almost like on especially on a 13 I'm not getting a fully underwritten loan mod dot where I know your brother your cousin your sister I know where everybody's at what they make what you don't make I like knowing all that stuff when I'm buying the note buying a loan so so for me I'd like to know the forensics of what's going on where they're working how long they've been working because if I can get them back to the bank because we do buy a lot of non-performing notes that do not have cash flow coming in on them I can buy a note that I can get cash flowing I do want to know the employment history you need income and the ability to pay again if we gave you the option to stay so with sevens I also like sevens because it kind of lets me know their intention right thirteen says hey I want to stay and pay just work with me seven says look I just don't have the money I'm ready to go so I also I like them either way because at least I know how the kind of a direct exit of how I'm going to get out of that deal if it's a seven and if it's a thirteen at least I know if I can get them back to paying what it's going to take to get them back paying and knowing what their net income is if I try and qualify them for a modification and if they stop paying you get the motion for release so you get in you get the courts already understanding they're not you know they can't pay any more and you know get the foreclosure kind of rapidly you know start moving just the face on BK I'm looking at the same thing they are it's definitely brush over in your due diligence like it's or know as much about your borrower as possible so if you can find out that they're in bankruptcy either or 7 or 13 that's great but what I found with my experience the PDK is a lot of times I'm not buying the loans that are in decay they become super free loans as I'm working them out typically the week before we go to foreclosure sale so that's pretty common is this is a stalling tactic and understandably someone's to keep their home they're going to try everything they can to keep their home but I would say if if it's occupied by the borrower and there's possibly even been just a slight amount of assistance or you still think they have a lot of emotional I put in the home it's pretty likely it will go to bankruptcy which is right before the foreclosure sale so don't be surprised by that and like they said you need to know about the automatic stay or list of stay in order to know how to proceed in the future the other thing the last thing I guess I would say this bankruptcy also takes time regardless of chapter 7 or chapter 13 just know that you just added at least a few months if it's chapter 13 and they do pay you've added a substantial amount of time on to your workout so it will change your total like when you're expecting your payoff or the possible outcomes so just be prepared for everything if your numbers don't work with every scenario I might be including them paying on a BK then it's not a good deal because as always it is always an option awesome foreclosure documents are you diving into foreclosure dockets or you own them are you looking at them a means are you calling local attorneys to understand what's going on when you're dissin levels where are you at what's all about what's your what's your angle on with seconds with foreclosure Dawkins how deep are you getting into proposed dockets when you buy in a second we're buying in bulk reviewing every foreclosure docket gets a little bit tedious and to the point where is prohibitively expensive and really especially time consuming to get a bid in at a good you know before a deadline you're not going to be able to review every single document so what we'll typically do is order a trade will price the trade before really digging in we'll put our ballpark you know pricing matrix across the whole entire portfolio and then we'll sort that portfolio by our most expensive loans or at least expensive one and when we start looking in that sense we can quickly you know the 8020 rule you want to put as much you know as little men of effort for the most amount of result so you look at those more expensive outfits and when necessary you can look at public record see the lose pendants has been filed and you can dig in especially with the bankruptcy and see so much more so to tell you the truth if you're buying in bulk it's it's going to be you know quite an undertaking but as a one-off I would certainly recommend getting as much information as possible from the seller or from third party sources about the status and progress of when you see in foreclosure quality what do you guys deal with foreclosure dockets are you pulling the county records are you speaking to attorneys well that's what I was going to tell you we are you buying for me unfortunately we don't have that flexibility to be able to go and and individually call every attorney that fits that's taking the case right now so we kind of take the you know the the sellers comments and we kind of go on that and we're fortunate enough that we buy in bulk that it doesn't affect us that much to not have to dig in but as a seller of loans to one-off buyers and full level buyers we have no problem of you guys digging into the file calling the attorney that's something that I know a lot of people a lot of sellers I hope no one from Condor is on here but I know what Condor they don't let you do anything as far as calling the actual attorney obviously it can never call the borrower until you own that loan and your servicer whoever you're lighting business person is can call them but until then you know as far as going deep into foreclosure you're more than welcome on any of our files that we send you to ask us where the foreclosures your status is at that point and we can pull something from either lens star some some kind of system where we can send you guys that data information or we'll give you the freedom to go and reach up to that attorney so that you feel more comfortable purchasing the opposite from us that's Liz what are you what's your feeling about for court dockets you call in local attorneys are you discovering information are you are you able to find foreclosure information online for some of the newer investors so again every county is different you know I try and just like I said use public records as much as possible a lot of times they will have if at least the list pendants and files you know that it's in motion that there will be some type of purchase journey that you could eventually reach out to to find out what's going on if it's not available already on the public record but now I'm not exactly going to foreclose your docket I'm just trying to find out what it's available in public records if it's available at all sometimes I thought available and if I buy alone and I find out it has been in foreclosure and you know I can take backup great that's a bonus but if you can't find that information just prepare yourself accordingly and know that you might be the one taking the cost and the China crisis sure all right two more of my own questions and we'll open up to Chad as well as group here really for Rob credit reports firstly southern typically pull credit boards Ivan yelled at that I start doing it it gives us great information it is not part of my due diligence checklist tell us a little about where do you you know you run them what do you look for on them and where do you get them from so yeah we're on to order credit through Trans Union so I do you know help investors when necessary if you own an asset where you have authorization from the seller we do have permissible use as an investor to order credit reports on so I do access order credit and you can definitely talk to me about helping out there um well yeah we'll pull credit on every single second lien because it is so important not only do you get public records and employment information and previous addresses but you get every single debt that they had I mean medical debts and credit card debts and on what you can kind of start to do as you look through these trade lines you know each loan a car loan or a credit card or medical debt is a trade line on this report if you kind of get a sense of who this bar aware is you can see what kind of car they drive if they have a car loan you can see if they're living above their means or if they're you know having difficulty making ends meet and you can start to you know develop that that qualitative information while you're gaining the quantitative you know the senior in balance the past due amount the pay string see how consistent they are and even just a simple thing as a pastry so based ring is ideally twelve ones because the one means that that borrower was current on their senior lien a two is thirty days late at three is sixty days late so on and so forth if you see old ones and then it turns to a 2 and then a 3 and then of course you know that some of them took place three four months ago that set that bar on a you know a downward course so little things like that simple string of numbers can start to give you an idea of what questions you're going to ask the borrower when you get in touch with them and what kind of situation you might have to be prepared to help and results so I agreed if credit reports maybe something you'd like to start doing in first position as well but it's so much more important in second in fact it's imperative so I was definitely relieved Lizza you pull the site up cut reports at all didn't a car do you guys for credit board no no we're not are you mostly heard it many conferences in on seconds it is crucial to full credit but but we will but we will date because women for grant is going to begin to retain a lot more cash flowing loans that we can use a refinance as our as our take out right now there's been some pretty cool creative programs that the FHA has come out with one of them being FHA 203 ninety days only worth of the payments coming in and before the new lender will take you or us out of the investor at a hundred cents one hundred pair so imagine you buy a non-performing loan fifty-five cents and you get that borrower to Reaper form we begin to pay again you only need that borrower to pay for three months and you can use a new FHA refinance to take out get out paid out under sets beats and axes for us so in the future we are going to begin folding and credit so we can kind of see how our borrowers can qualify for that that refinance program so right now no yeah no thank you company - and I was going to add to that that I don't pull it when I'm doing my due diligence but eventually like they said if they're qualifying for potential program like we've done on hardest hit fund and just FHA Refinance for some of our borrowers that have been paying for refinance out you're going to pull credit at that point so I would suggest if you think they might qualify for it or you're getting close to a penny string that you can utilize those services or those programs that you work with someone who is able to pull that credit because I'm sure Robert and you might speak to this but you have to become an approved like vendor with us use companies that are able to pull credit they actually have to come to your home they have to inspect the office make sure you have a lock around your door that you have a filing cabinet crawl your files so there's things you have to do to qualify for the just even to be able to pull the credit in the first place so unless just something that's like imperative to your company which if you're on a small scale I don't think it really would be something you know green it and Robert obviously would have that that any heat but coming from someone who's fine you know six to ten months a month or a quarter it's I don't think it's that much I'm going to say though you are I agree I'm last thing I'm up the questions are what due diligence what was your biggest you diligence miss now you always your best your best you diligence five on a deal so give me a deal that either one of them pick one of them what do deals you use that with a great find or you miss in it you learn your lesson or if you want to Beach really quick and so the biggest myths I talked about this in the conference in January in New Jersey we bought a vacant lot in organ there was about 11 acres and $300,000 senior physician loan that we purchased secured by the property going in we thought it was all good and we were going to you know have a pretty great payoff of around 50% it's the bare minimum we would retail for 150,000 and that's how we priced the outside we buy the loan we start doing a little bit more research and turns out the Department of Environmental Quality had released phase 1 on the property several years prior so because we didn't catch that small piece of due diligence we were left with the property that had groundwater contamination and cadmium in the soil and it just it apparently had been on like a auto scrapyard for a short time and the rubber tires and the oil tanks just completely destroyed the property it turned out we did well on the deal we were able to flip it to a developer in the area who was comfortable with the environmental quality issues and so that one did work out but you never know sometimes and you don't know what you don't know so even just googling the property address you'll probably find something that you might have otherwise missed and now on the other side of a windfall is a situation where the seller thinks they have an unsecured loan so we bought a loan from from PNC Bank and they had a price tag on secured everything that they had led them to believe that the senior lien or a tax lien had foreclosed take entitled to the property and our junior lien that we wanted to purchase was no longer secured to that physical real estate turned out it was secured and we were able to sell a loan purchase for 1,200 bucks for $70,000 so that's one benefit of buying in bulk and buying on your own terms because you can kind of build in some arbitrage occasionally when the sellers information you might be able to to gather more accurate or more up-to-date information that allows you to make a bit of a spread or a huge spread if you get lucky is that's far from typical most of the time Liz was you're either one or if you wanna get both real quick yeah I fell our granite examples at all or not not hey um so that would suck oh that's one low with granite whoa no so one of them the best one that we had that was um I guess a little positive light was the seller her awful BPO they had super inaccurate they thought it was worth like fifty eight thousand and from my research I knew bare minimum like copper ripped out totally trashed it could sell for ninety so I bid pretty aggressively on it alone because I knew confidently it was worth that and ended up selling three months later because also it was in foreclosure but it stops because of a BK and I would be able to pick right back up it took like not even 30 days to go to foreclosure sale so it ended up being like a lot of positive lights there and we ended up selling for one hundred twenty-six thousand and we bought the loan for 38 so it was ended up being a killer killer particular deal because I knew the seller had the wrong BPO my due diligence um yeah great job live great job you know so the negative one they would okay so this just actually recently happen we kind of just rectified our text while we were doing this that everything's clearing up but um we bought a loan in Georgia that when we pulled the Oni it said the taxes were paid and I did not call to verify with the county which was a big no-no and now I know that but the I bought on October 31st and November first it went to tax detail yeah just today just today so luckily in Georgia there is a redemption period of one year so I'm okay and the taxi buyer actually contacted us and wanted to negotiate they want to buy it from us so we don't have to finish the foreclosure there's going to buy it outright we're going to get rid of the debt and they're gonna you know we don't have to worry about taking title or anything so it's going to end up returning out okay it's not the sweetest deal in the world and it was like for scary little came to light but oh the county egg Claudia your level what do dee-licious thing did you guys either hit a home run with you found or you missed you learned a lesson well because we buy in bulk huge bulk we have a lot more mrs.

and the Misses you know unfortunately can be anything from the Oh any remark that Liz said is that a lot of those Oni companies they are an owner an encumbrance they're not you know fully terms yeah so they there's a tendency of them pulling enough taxes and taxes are paid well they don't know who paid him so we actually had a property that showed that taxes were paid in full and little did we know that they had hired a company this is a Texas loan which is a big state for everybody to buy there were five years of taxes that were paid by an outside third-party five years of a total of maybe sixty eight thousand dollars the house was worth maybe about a hundred and fifty thousand so we've had you know we've had to actually buy that back because our downstream buyer caught it so we bought that back from them and pretty much handed the property taxes over to the people that had bought it there was no way to redeem it and actually make any money on it we also had a property where a Rhode Island property we bought teaching for Leah Street we actually found out that two to six Leah Street was the real property we had bought the picture of teaching for was gorgeous but teaches six Leah street was a lot so we bought the lot we did not buy the actual land and property so we've had several things like that and are missing I think we had a really those are your misses those are your Lillard that's us so just yeah I'm at that those are our home London no no no no we actually I was going to say one of our bad ones with we had a bad ppl but Liz I hope that wasn't the one that you made out of wheat I believe you we've got videos where where they've come in really low and our downstream buyer ended up flipping them selling them for a hundred thousand dollars more than they bought it from us those to us really aren't losses because at the same time yes was that buyer just got he got more money to come back and buy some us so there's always the whole cumin is that a tricky creepy quietly yeah absolutely uh before we actually open it I want to actually let Liz and Rob kind of quickly share what your business is and what you can offer the you know investors out here of due diligence Liz only you described hate that I want the power of it can do when you're trying to figure out we want to buy it or not so especially if you're going to be starting a small I I mean kind of talking more about my past I am still a full-time teacher I teach kindergarten this is my last year actually I'm done 14 days what I was counting so I will be leaving teaching at the end of these 14 days and we're going to be traveling full time for notes now so we can we have an RV we're going to traveling a lot of these whole time but my point here was that when I was starting a note I was doing this by myself and working my job full-time and it's just a lot like you're going to start getting tapes you're going to start getting grant tapes and other you know possibly do a second to Robert wherever may be from and you have to go through this as fast as possible so you can actually get the bids that are works while within the tape or get your bids at an aggressive price so if you're working or you come home from a long day of work the last thing you want to do is to the actual twelve o'clock at night doing tapes so being able to actually outsource that is crucial so I have the system if you go to taped XCOM you literally upload your tape we provide you with everything that you would need to make your bid as quickly as possible this is only the preliminary stage but what we do is we actually look at Google Maps around the appraiser to verify the property's condition so we actually insert a picture of the property into your tape you can see what it looks like we verify if there's a delinquent taxes online remember everything is available online if it's available we provide for you we actually check and paste there for the bankruptcy we look if there's linked in judgments in public records we actually give you our current market value based on three comps and we provide you with those comps into the spreadsheet as well so you actually get your value you get the condition you get the crime rate you're going to get the borrower's name if it's available online which it should be that you're so you're going to get everything you pretty much need in a spreadsheet and we can return this to you in 24 hours if necessary or if it's a larger full 50 assets or more we do require a 48 to 72 hours of turnaround time and it's pretty much paid for asset so you can submit one asset to us or you can submit um 50 so just the other night I came home on Tuesday I was exhausted and I got a new tape and I really wanted to go through it but it was like already 9 o'clock and that's the last thing I want to do when I wake up at 5 in the morning to go teach my girls so I just submitted it to my virtual assistants with like on tape sex I did the whole process and I have my completed tape and I've already scrubbed it down to the three assets to making my bits on and I've submitted my bids and I didn't have to do any work so um I I utilize our other service but I think it's great for their investors too and Liz Winger pulling those comps are you pulling them from a good public site and how do you assign which comps are pulling yeah so that's a great question because constantly but you remember one thing you're looking at is your value so if if you don't have your circle is maybe less so if you don't know what your values at you're could be supplying a severely poor asset so we've trained our virtual assistants we have one VA who saw her sole job is to find cuz CMV she's really good at it but she has been trained to find it based on the current condition so she takes into factors like the bedroom and bathroom size the square footage she actually looks at the exterior photo if it looks like a piece of crap house that have broken windows and the neighborhood's a piece of crap she's finding comps that are comparable to that she's not going to find something that's renovated so she really knows how to actually find things that are truly comparable and they do use public sites but we really try not to use um like appraisal or the Zillow estimate she actually finds sold properties within six months if it's rule you're going to have some challenges you might have to go around with that out of a like mile radius or you may have to go back 12 months but our most the time we can find you three comps that are actually similar and then we just give you the value with an average value of those three comps awesome Rob with your business six notes can you describe a little bit which is a little bit different from what Liz does share what's a six notes does well certainly so I'm I'm more on the backhand side so who is there's a lot of the preliminary due diligence and research with virtual assistants very quickly and and in bulk what I do is a very fine to look at the loan and turn your collateral file which as you know it's got now post-its and notes all over it and then a sacrifice that's probably in whatever order the seller you know decided it was in when I do is I standardized them into one of these with color-coded sections for all of your different crucial data points and then these sections are essentially summary pages which then house all of your collateral documents that are related to that section and so assets vitals is going to be your go to mortgage your signing the launch due diligence management and legal and bankruptcy and then there's no contact logs and everything so this product is the best use case that I found for it is when you're selling a tree performing loans so say you buy a non-performing loan for franchising Claudia and you work it out and that borrower is paying now but you want to sell it we want to buy some more loans want to you know put your capital back to work what I can do for you is turn your unorganized collateral file into a retail experience for a buyer so maybe has no idea what a node even is but when they read through these you know the summary sections they can see here's the property here's the borrower here's what's you know the death is secured by these you know assets you're able to flip that loans and say a self-directed IRA client who has capital just sitting there they want to put it to work or work you to any note buyer who is looking for passive returns so that's what I do on the due diligence side from the most part those six notes is a consultancy that can be flexible to what you need as an investor my biggest client is the company I started out in this business with US mortgage resolution so now I do their bulk due diligence which by the way is I'm definitely going to talk about save text cuz it's a I'm tired of all of the you know the minutia is due diligence but then on the other side I also run a brokerage so like I mentioned in the beginning of this call these notes comm slash inventory I have the masks data which means you're not going to get the borrower names or the property addresses until you sign a nondisclosure agreement but you'll get all of the summary information on a number of loans have about forty second liens for sale right now so I help sellers I'm basically similar to which has and including are doing the credit bringing liquidity to the market so if you have loans that you need to sell or you're one of islands I helped through my network and experienced I don't facilitate those transactions and then of course I'm still working with US mortgage resolution so I'm offering those ones for sale as well and they have primarily senior liens so be happy that it's talking about their juniors or seniors I arrived so I'm going to dive into the bottom line question before I open up here one of the first question came up from was from Bob Leckie yes about the fact that there's little more than 300 billion in distress debt on the books to be sold on the secondary market a ttom data shows about nine hundred ninety thousand extremely delinquent chasman Claudia what's your take on that which is a chat window if you want to look at the chat window right there yeah looks funky does Bob may have a little bit of yeah I was living so that's all I'm sure is listed know the word realtor in terms of delicious cattle are down human you need to but in remember they planted in this business nation music oh yeah I mean I really think though that if the majority of the market truly knew how much available inventory was still out there I think it would scare quite a lot of us to know really how much delinquent paper still left to kind of get through knowing that we've been kind of coming up on the 10-year mark since the crisis last hit us um we're still in the trillions so when I see when I see nine hundred million or three hundred and thirty billion I would say that's probably between two lenders and I would know that at least another seven to ten major lenders own the bulk of the majority of the product I mean fake Fendi and Freddie and HUD combined which owned one out of every two mortgages in our country and they are on a 10-year liquidation pace that started in 2011 so they're four four five five years six years in but they've kind of taken a halt now since the new Trump administration is taking over they have been done and conducted a sales since since the new regimes kind of taken take and run so HUD still hasn't made a sale here yet in 2017 so I would say we still had it was so funny I got pressed this question in January when I got into the space of how long do you really think this window is still available um and in 2007 I we I was told three years and in 2010 I was told another three years so you know here we are in 2017 I would be foolish to tell you another three years I still think it's quite quite a little quite a while and and if you use that non-qm product I've been telling you that they're creating again which is stated in stated assets no income verified assets and you're going down as well as 510 vicos you're giving people new loans you're giving your barber his half a million dollar house that he can't afford here we are all over again so I still think that if you guys are look you know liz has brought a lot of loans from us so was so is Rob we've worked with Rob Joe down to this guy we you know we all work with each other and to know that we're still all here years and years later still growth on this thing look I think if you if you're coming into the space I think there's a lot of new things that most of you are learning that can keep you on the sidelines and won't let you get into the playing field but I'll tell you just look at your first deal make your first purchase make sure it's a it's obviously do your due diligence which is kind of what we're centered around and talking about tonight but in should once you kind of double-checked and cross-checked using tape decks and using other measures in terms of value title and tax to verify that you got a good deal make it happen because I guaranteed this will be the last new venture that you'll stay away from this will be something that could become a new career I mean take Liz for example you know full-time teacher that's now becoming a full-time investor and I mean as we were talking in January on when that was going to happen and now that you have a timeline it's like that's exciting to see now I know I hope that you and I are doing a lot more deals together a lot more time to roll up your sleeve and we enjoy this we enjoy getting new investors well they're in New Jersey like you guys are listening to to come onto the playing field to work with us and then us do deals and deals together four or five years from now that's that's the goal we want to make sure we keep you safe for us we built this company on repeat clients but you only makes get me to clients when clients go out there and make money they go out there and they spin their wheels and they don't make no money to pick up and come back set simple so yeah and don't be scared to like dig into our due diligence and play around and then maybe even call us a month later and say hey what did that loan end up selling for I've had buyers do that before they'll pull the trigger cause they're just curious to know that that that did eyes did I make a bad decision by not buying it you know did I found out find out that that lumps and two-step selling in an REO within three months that guy bought a low for 20 grand and sold it for 60 and made 40,000 in two months you've got to just dig in and start looking that's really how you're going to find out how this whole business works Oh yeah middle ear you're all you're muted Jason I bought it I'll click in with junior liens from Abed how can you look up junior liens when you're buying her first and judgments during your your doozy Odin stage without purchase up the oh we need report can you look at things up in the county reports well you'll see public records on your credit report so if you are speaking specifically to give your liens when you pull that credit you'll see a section called public records where you will get some information on judgments or tax liens or other scenarios that that may affect you but the end of the day the ome is really going to be your your best bet to get all the information and the actual documents so the thing about a credit report it's just the credit report the data from the bureau you're not getting the mortgage documents and the lieutenant's documents but when you were titled from I'll give a shout out to Alex Gaddafi at pro title USA and we use them all the time don't give you all of the documents that are included in that report so you can actually you know trust the automated data that they provide and they also put it all in Excel so when you're reviewing a mass data tape you can get all that information back on your tape but then you can also verify that information by looking through the actual independent the actual you know warranty deed from from the seller to the year borrower right as part of your due diligence but to answer the rest Patti's question about how much to spend on your diligence profile senior liens are definitely to be a lot more expensive because you're pulling VPO in title pretty much every time with junior liens you can get away with less than $100 and due diligence per loan in fact I think you know if you're just ballooning credit that's going to be less than ten bucks you can get away with with starting with discredit and then internet values online automated valuations and that'll be a really great start for about ten dollars alone but like I said Massino means 200 bucks alone is inexpensive to get title taxes BPO and everything you need to do remember and I think want to jump in there and so literally add all this stuff can be found online as well you just look at the quark records every county has it you can find all the kind of recordings most of time that we find online so that could be one way to get free information but not always accurate nor is always how do you pay or you to five sometimes there's all kinds of paid sites out there what not cell list your being would add to that buying free information online I'd say if it's online and you know I don't know if you guys know this website but net are online any t are online calm you can literally search by city and state or by zip code and they'll apply to the county and then it provides you with all of the county's website so the public records the tax appraiser if there's a city and county tax will tell you that but I like to utilize that website because it tells me right away if there's no information online you you know for the county or maybe you need a subscription so it'll just tell you that right at print you know you don't have to waste your time but that's my only to Shem summer into the note knowing your exit strategy you should certain you're exactly what's going to happen but to at least forecast what you expect to happen is really the only way to price alone if it's a reaper forming loan you're going to price your current yield and you know whatever you pay has to fit your model when you're buying a non performer you have to see all of your potential exit strategies if you're going to go the path of least resistance then just get a discounted payoff with the borrower we got to see what that discounted payoff number might look like based on the equity what would make sense to the borrower but then on the other side if you're going to be getting into a payment plan you have to be comfortable with the amount that you'd accept in that payment plan by looking at local rent comps and then deducting if you're buying second deducting value of the sim your lien taxes and everything so that you can understand how much is left over that would still fall into you know a general market range for that geography there's I mean take it yet I'm going to pass it past this one on you guys keep I think you said that you can is I mean you can go in and with some and intention but you have to be prepared for all exit strategies like kind of like I touched on earlier there's always a chance that they're going to pay again there's always a chance to make fight the foreclosure or if you just need to know that in all exit strategy that's going to work so I run my numbers for my car I purchase it based on the cost if I have to foreclose so that I have the highest expenses possible and know that my yield still works and then from there I also make sense like you said for the yield as if they were paying now so I wear my numbers in both scenarios and make sure they work if they work you buy it but I would very rarely does my intention and my exit strategy end up being what really happens so just you have to know you're going to be flexible with your notes all right what did she was from Christine fuller was the salt collateral uh complete that is sent to you after you make the bid is accepted or is it often missing things and you have to wait until the funding to get the physical collateral no I can answer oh go ahead okay I was going to tell you things have changed a lot in the last couple of months people wanted to start seeing the collateral up front if you have a custodian and they want to they're willing to sign what is known as a Bailey letter we're willing to send that original collateral on the terms that they have the original collateral they're responsible for that collateral and it can be reviewed you know manually we also do have reporting from our custodians that we can send you guys letting you know what's in the file scam copies of the files if you guys want to actually see what we own you could do that too but you cannot we do not deliver an original collateral until that wire is received internally you know what I don't want it I they want to add to us which he's asking me that it's missing something with Chronicle II you know well she's what should she do latronnik file showing something missing here right so the doctor after she's purchased it I believe is prior to it if Christine you can add to it are you saying that before you buy you see something missing what do you do because if it's missing something I let them so I know previously and I won't buy it until I know it's all right and it'll be what they sing at the same time really if they're missing just aid like an original note or obviously assignments that's pretty much the only thing that they're they can really come back and say is missing missing but we'll do everything in our power to find something if it happens to be you know the head or the 10:03 little small documents that were in the origination dots a lot of times the origination dots don't they don't they're not completed completely in the file when we buy them so we can't pass that on if I can't find it I can't find it but but we'll do everything in our power to locate those those missing dots for you after purchase is this a sheet metal and there are there are workarounds we actually had a trade with the bank with US mortgage resolution we bought a couple hundred assets and there was five file boxes that were coming to our office and only four showed up so we literally lost an entire file box full of collateral and the bank didn't share it with FedEx so I tried to make a claim for two million dollars and they said we'll give you ten bucks so that didn't work um but we were able to recreate any collateral files and we have a good relationship with your with your seller you can have affidavit of this sign for a long note you can have the assignment chain reconstructed and because the mortgage is a recorded document you have the original copy on record with the county so in the very worst case scenario that you do lewis loans you lose that physical file the mean is still in existence you just have to be creative to put it back together again and we did missed this one question from Critias about pricing by asset not performing first performing I would say yes six months would be considered performing but I would go further than that and say even three months could be considered performing if the borrower is on an ACH plan and they're making consistent payments and there's equity you really have to you have a good feel about a deal that the borrower is going to keep paying or not but then again to be absolutely say you would have a CD engine loan of six to twelve months to make sure the changes in you said ACH for those are not familiar what ACH mean what isn't Clearing House I think is what it stands for but essentially it's just an automated withdrawal from their bank every month so that they're consistent and there's no you know misstatements most the questions here being answered they were looking good long stood out no it's not it's not a negative if there's a missing note however I'm actually dealing with the situation in Florida right now where because of the fact that we have a lawsuit affidavit we've done in the original note we have to fly down to Florida to the court period fortunately I don't have to do it one of the partners at USM R is going to make the trip but so I kind of maybe take back what is that maybe who want to price it a little Agricole I would like to add to that q Robert especially with Florida that's likely you mentioned in Florida that we've ran into the problem in the past where if it's a lost no affidavit in the borrower fight the foreclosure if you have a borrower friendly judge they technically could say that you purchased a loss no affidavit you didn't actually purchased the note so you kind of have to be careful I would definitely adjust my price if there was a loss no acqua David or a lost mortgage affidavit in a judicial state and a non-judicial state able to give as much to worry about but judicial states like foreclosure like Florida excuse me I would definitely adjust sorry any meaning to cut you off it was just such a good point just going off from where the chat was do you have an attorney review the statue notations as part of the due diligence to make sure that note is valid I think ah documentation is something thrown around a lot but really does not affect us because you'll be amazed how far out statue limitations in the room before I start close it up no all right I chose in Claudia once you guys would like let us know I sense you guys are still standing alone I'm still seeing a few guys a little bit about what you guys put out how much you decide to put out and I guess always a big question is what kind of pricing now re expecting the next year sell so with that said right now guys we're currently a cut the rule and of course leaves on our kind of our second larger fund of this year where we're going to be raised in quite a bit of capital kind of kind of attack some deals that we've recently been seen on from some GSEs Fannie Freddie and HUD so we're going to be very active on the buy side over the next few months but we're going to be just as active on the sell side so I would say on the sale side we'll be putting out north of 100 loans monthly over the next through the rest of the year the rest of the year and we're doing right now we're kind of averaging between one to two offerings a month we're kind of trying to average to will at least be doing one a month so at least you guys are seeing consistent new portfolio's from us we've been very active on our purchases number ly the part of this year we're going to continue that over the next 60 90 days but I guess in terms of what we're going to be showing on historically with granted because we've done north of 7,000 of these acquisitions we haven't done a lot of cash flowing loans that we showed out because a lot of the stuff that we purchased was not performing a lot of the investors at the time that we're working with us love the non-performing asset but we what we've seen is we begin to see a lot more demand for cash flow and a lot more demand for yield so in a lot of guys which I always ask the new time investors that are coming in is what's your goal are you looking to grow your capital or are you looking for cash flow and yield and that will let me know at least what I can begin to show you but in terms of what we're going to begin showing it's going to be kind of a bifurcation between non-performing loans and rhe performing loans they'll be located nationally I would say the average VPO average valueless couldn't fall between 75,000 and 125,000 sure there's going to be outliers both higher value stuff and lower valued stuff to allow you guys as a newer time investor to come and still be able to acquire your first deal we are seeing discounts off of the market value as great as 50 even sometimes 60% off of market value kind of gives you a little bit of an indication as to where pricing is going to be but look I think for us we're trying to go higher up the food chain in terms of our sources so we're trying to buy higher up from from larger banks and larger lenders that are originating this paper that are sitting on some defaulted loans that they need to get rid of we are that outlet for those banks so it's free to get signed up with us it's it's free to always ping her and I in terms of texts calls emails we're always available for you on but granted strategic comm is a very easy way to sign our NDA start seeing our monthly pooling offerings and get a get you guys on off the sidelines and into the plane build with us awesome so I would definitely ask Chaz or Claudia to add your email addresses or your way to get your tapes online in the chat window I'm also Rob do you have any last points to your company where you can find you that what kind of pricing your your due diligence cost is um yeah sure so the due diligence thing that I think I can talk you know offline about I mean it's two to four hundred dollars for a complete review of your file but what I'm more excited about is brokering assets and adding this liquidity to the market so once again six notes on such inventory definitely check that out and we can talk about you know not just actually closing a deal but getting you up to speed on the due diligence process because I can send you the drop box with all the collateral documents and you can start looking at notes looking at mortgages and getting yourself familiar with the process all right awesome liz and i bonaparte yourself i know you're always looking for funding partners pulling more deals in we're seeing a lot of inventory recently as well as your company uh it's easy for doing best to come in there plug the information in and get everything out they need for it to make a decision so if you're interested you do diligence services again my I put my website already in tilling soil at it again taped XCOM but again like you mentioned I I do invest for our own portfolio using private money so if you have anything in your on rail you're wanting to put juice or in gain a savings account we're always looking for new funding partners and we are actively purchasing new GL systems for closing on six alone so we're we're definitely always looking for more so I'll put my contact info in here wonderful and with we run this meetup twice every second Wednesday of the month at the same time we cover different topics we're always looking for new topic ideas next month we're looking at doing attorneys or custodian we're always it for feedback also as you can see before you can go check out the Facebook page I have I also a Facebook group on that we all comment on and talk about things they make suggestions on that question attorneys also we're also looking into creating a series where we'll be allowing investors of all different sizes shapes and dollar amounts to come take a look at myself and two other active investors run through a tape that we receive obviously and EAS and need to be received and also understanding of what we're looking at you'll be able to watch over our shoulder as we go through things and see what we see at the same time I'll understand how we're thinking in different ways because we all look at deals differently so stay tuned for that if you are in Jeanette please let me know and we will always thing for that final parts we want to get into I'm going to launch a poll real quick and if you have any additional questions just let me know all right hopeful as well we thank you very much guys joining us and I appreciate it and we look for speaking you soon thanks I'm good thank you thank you oh I feel so loosen participants here a letter once a minute all right so thank you very much guys coming out to the Meetup rmally definitely open any kind of question you have to me directly we are always raising money we actually have a bunch deals in Linda pocket right now that we're looking to fund and then work money we can actually buy more deals we are seeing a lot of inventory point first base is something I primarily look at MJ and motels here are in second base so if you orange in learning icon as well are more than welcome talked to these guys and an experienced it also to each other if you have funds you want to try diving in it together go for it we're here to help more information we get the more deals we get the more information we can share each other experiences so armed with there's any additional questions feel free stay afterwards and go from there let's make some deals happen let's get some deals in books and buy a next month I hope to and I second that natural online with awesome resources and job yeah yeah just texted with a chat window if anyone needs help with that I know the other question was about the two or three be who lives on the edge Lucy get some the ad oh you muted I live you can't hear you okay okay um the one of this was really about the two or three be is a floor or are Bob was asking better value or what they're willing to give money on I believe it's 50 but I think it's also call em baby just to know it is like about 50 meters will do it I just keeping you both have a little bit later I think it just depends on bump off lays I got to back okay there you go I was just telling me I told this I saw the sign language oh okay hopefully wants uh one second to get Claudia back here so I want to get the next question out here arm and I'm gonna actually go to the room for a few minutes Ethan there's any other questions we have curly that's easy written down if you want to ask about in the room here the question was do you go.