Seller Finance 2021 Annual Report Released! | Real Estate Notes Show

Episode: Tracy Z - Seller Finance 2021 Annual Report Released! Full Video ‪@NoteInvesting‬ Dave's Goals and Plans: - Tested positive for COVID on Saturday and was unable to work over the weekend - Did not submit any offers this week due to upcoming travel plans - Prefers seller finance deals over rental properties - Launched a new partials calculator spreadsheet tool for investors Nathan's Goals and Plans: - Just purchased a reverse mortgage note in Anderson, Indiana for $55,000 - Property expected to sell at auction with estimated value between $150,000-$180,000 and payoff balance of $90,000 - Sending wire transfer for new note purchase - Notes are currently highly priced compared to historical levels Key Recommendations: - Jump on the due diligence portal to run free property addresses and provide feedback on new partials calculator - Consider reverse mortgage notes as viable investment opportunities despite initial hesitation - Watch previous video discussion about BPOs (Broker Price Opinions) for better understanding - Seek deals outside of major institutional players who are less sophisticated in pricing - Apply seller financing knowledge regardless of geographic location - strategy works nationwide Topics Discussed: - 2021 Seller Finance Annual Report findings and surprising growth - Reverse mortgage note investing and foreclosure processes - Rising note prices in current market - Regional differences in seller financing popularity - New partials calculator tool for insurance partials and returns analysis - Difference between performing and non-performing notes - Unrecorded vs recorded contract for deeds Guest Insights: - Tracy has 20+ years experience in seller financed notes starting from 1988 - Background includes title, closings, escrow servicing, and institutional note buying - 2021 saw unexpected growth in seller financing despite cheap bank financing available - Over 30,000 recorded first position seller financed notes exist in county records - Actual numbers likely higher when including unrecorded contracts for deeds and notes under $30,000 - Seller financing is highly regional - common in Ohio, Indiana, Michigan (land contracts) but rare in Northeast - Started tracking seller finance data in 2009 with Advanced Seller Data Services everyone dave puts here from jkp holdings alongside me as always mr nathan turner good day good day how are you yeah i'm doing a whole lot better um i'm sure last week my voice was a little bit crazy um frustratingly crazy but it is what it is so i as some people know i ended up testing positive on saturday with this cobic stuff um i ended up watching tv for most of the weekend just kind of couldn't get out of bed so emails piled up yeah you got that good idea it's all good it's all good um we've seen some some movement uh on some assets recently that changing things um courts are sure to open back up for us which is good yeah trustees are starting to respond to things um little things are starting to work out which is what we look for in that trickling starting to process um we i didn't submit any offers this week because i'll be going away for the next couple days um so i kind of held off on that stuff so studios isn't going to be crazy good good how about you guys what's going on over there uh actually that reminds me i got to send out a wire today on a new one that i just purchased so yeah it's a good one out in um anderson indiana and paid 55 for it uh house is worth i was surprised when i got the bpo back and and we've had this discussion about bpos go watch that video but uh i was surprised the value was better than i expected um i thought maybe 150 the realtor there says 180 maybe maybe not but uh unpaid balance payoff balance is about 90 000 so this little very likely sell at auction uh and that's still a great profit for me i'm very happy with that so i'm assuming it's unoccupied unoccupied yeah this is this is we we touched on this i think last time uh this is a reverse mortgage where a lot of people are are weary about those and i i get it but i like them yeah i like them i'm just not sure about them but that's my problem i think right um i just don't know if i trust what i trust yeah so we'll see we'll see how it goes right um so those who don't know reverse mortgage is basically the person's dead right they took out a reverse mortgage they passed away obviously not paying the bill no more um and typically it's a simple you're going to foreclose on installation so yeah it's there's really not very much of an option uh it's it's a foreclosure play and and that's fine and if the numbers work great and in this case i think the numbers are very favorable so i'm happy with this one um i did post on our website our facebook group and stuff we came out with a partials calculator for those who are insurance partials um not only does it do partials but it also calculates if you're looking for like what my return would be or what how many payments or it's similar to the hp calculators um but it's a spreadsheet format and for me the visual look of it is easier so you can go on to it i want to post all we ask you to do is jump on our due diligence portal run a free address just we're just trying to get some feedback on here and with that we'll sing over a spreadsheet you plug in some numbers it has schedule a b and c uh i did tag on our guest today she actually uh did note but she helped me out figure out some of the stuff um so for those who love calculators definitely jump on the hp calculators if you're more of a visual learner reach out and we'll get you hooked up with that um just run a few assets to our due diligence portal or finario agent local to a property or whatnot so yeah nathan what we're finding now is notes are highly priced they're just extremely high yeah compared to what we used to yeah there's deals that need to be had and banks and some of that are just as biscay as we are right yes there are people out there that are not as this gay as we are that actually for one reason another create a note yeah yeah it happens all the time it's funny when i first got started in notes being from canada i thought i'd invented seller financing i thought this is a great idea man nobody has ever done this and started selling properties on terms that that's how we termed it back then didn't even know it was called notes had no idea it was called tele financing i had no job the godfather was selling financing so but it's it's very common um people will do that they'll have a whatever an income property a lot of people see it as a good option uh as instead of renting and i agree personally i i prefer a seller finance deal than i do a rental and and there's pros and cons but that's for another story perhaps yeah it's interesting because seller financing for some investors they get into to trustees and they go sell france to begin and they have no clue about the other side of it and they have other investors who come in from our side of it and don't have a clue about the self-financing world yeah um certain states it's much easier to do in or higher demand in right yeah so it's but what people don't realize there is a lot of education to buying these assets versus get a list go with it and and make offers right what i was fascinated by and we definitely reach out is with everything being so hot in the market and loans being flying around if someone asked me three weeks ago what do you think that the report was for seller financing last year i'd probably tell you down i couldn't see possibly yeah so i'll find something up because judy it's a need situation where i can't i don't i don't allowed to the house isn't valued high enough houses were extremely high in value right so i was quite amazed to hear that the seller financing world was this popular in 2021 than ever before i i was established by that what's your thoughts so i agree because you know we're just coming out of like late 2020 or sorry going into right before and even the beginning of covid we're talking about like uh interest rates were down at the floor and everyone was getting refinanced everybody was getting refinanced so so what's the incentive then like why would anybody do a seller finance deal when bank financing was so cheap yeah however the numbers say different so this would be interesting to go through this today and see so i'm gonna bring on our special yes and welcome tracy to our uh friday live special all right um tracy welcome thank you for joining us on a gorgeous friday afternoon hopefully it's gorgeous down near you yeah it absolutely is thanks for having me awesome so tracy before we get into all the nitty-gritties like that so for those who don't know you can you give a little background who you are how did you get into notes how long you've been doing it and what you do before notes i come from a rural area and i worked for an attorney that did title that did closings that did escrow servicing and that was my background and then i moved to the big city which was spokane washington and i went to work for a company that bought seller financed nodes and that was in 1988 and they'd already been doing that for since the 40s and 50s they would buy seller finance paper at a discount and so i deplied what i knew to that and i worked in that institutional land as i call it for about 10 years and they bought notes seller finance notes all over the united states and they bought them at a discount and then after about 10 years of that i i decided i wanted to venture out on my own because i was buying real estate we weren't allowed to buy notes when we worked there because it was considered a conflict of interest understandably so we could buy and sell real estate we could use solar financing for our own properties but not to buy notes and i quickly realized i did not want to be a landlord i wanted to be a lean lord and so when i left there then i started referring some notes still to that company i used to work for and then buying some as i had funds available and buying them in a self-direct retirement account because i rolled over my 401k into self-directed retirement accounts so for the last 20 years my husband and i that's what we've been doing as well as we share blogs and information and we love the stats so i've always been on the seller financing side it was when you talked about people coming from the buying the non-performing note side that was new to me after the 08 crash right that was a little bit different in the market than what we all survived on before and so the seller financing world just you know it kind of ebbs and flows depending on what's going on in the conventional lending in the real estate market which we're here to talk about today you're on mute dave for those who don't know who tracy is the the website she has has been around for a long time wealth not her husband is just as good right so definitely check out the known investor.com website and all the information it's amazing how people get into space by the way they do it right um and most commonly i think is i don't want to be a landlord i don't want to own this property um or you did own it and you're like i don't want to do it landlord again which i fell into um so it's interesting that we all come from that same kind of mindset but i think that a lot of what you are talking today is based on where you live right we're up in new jersey we don't get a lot of seller financing as much as you guys do where you guys are located that's very true it happens to be very reasonable regional the great thing is it's just like buying notes buying seller finance notes you don't have to be in the location so you can take this information and apply it no matter where you live yeah yeah that's awesome and i agree it is very regional like like you say dave in northeastern united states is very very rare uh ohio indiana michigan all the time land contracts they're called out there and that's what i got started in and it just depends on where you are in the country so tracy you know what what i thought was really cool was your ability to understand this stuff um and really kind of um bring the light what this all means so i just want to give you one second well i think the first place to start is what is seller financing you guys in the intro talked about is where somebody owns a piece of property they're on deed they they own it their fee simple title and they sell it to someone and they allow that buyer to make payments to them instead of going out and getting a bank loan now these stats are first position seller financed over 30 000 that are of record so these are things that you can pull from the county courthouse so it might be a deed of trust and mortgage it might or a deed of trust might be a mortgage it might be a recorded contract for deed but it doesn't record uh account for unrecorded contract for deed so if you think about seconds and unrecorded contract for deeds and things under 30 000 the numbers could even be bigger but this is kind of what we consider to be the most sellable in the secondary market yep i'm just interested in adjusting my screen real quick guys i probably for those of watson lives uh i didn't actually have it set up for a presentation on my uh streaming thing so i'm just gonna move things over here hopefully everyone can see it okay and uh we'll go from there so it's interesting you say that tracy sorry dave one sec just you say like the ones that have been recorded the ones on record so when i first started we were doing these land contracts in ohio at the time i don't think that you were required to record them so we didn't and and that was strategic because we said well if it's not on record then we don't have to go through the whole process uh with the courts and everything and so it was very much on purpose so i believe that there are going to be quite a few more than than whatever the numbers are that you have i would agree in certain regions yeah yeah yeah now are you guys able to see my screen now yes so tracy how long have you been looking at these reports for how many years have you kind of run numbers i think 2009 is when i started working with advanced seller data services to get the data so we've been adding to it every year um so i work closely with scott arpan at advanced seller data services and he pulls the raw data because he has the ability he uh to pull from the county courthouse records and then i give him some guidelines and he comes up with some great things too because he's been in the business a long time and then he gives us the data and then we put it into a report awesome cool so let's let's rock and roll here right all right let's see we got well in 2021 there was 27.3 billion with a b dollar volume of seller carry notes that meet those parameters that we talked about what's a seller carry note that's a big number in one year in 2021.

so these come out usually march to april we get them uh just because it takes that long there's some counties that have trailing records uh and so what was interesting was that it was a 15.9 increase in dollar volume now that in itself might not be too surprising because everything's going up in value right every property has seen appreciation so you might say well the seller financing just stayed the same the dollar volume might have just gone up but what was surprising to me as it was to you in this hot real estate market the number of seller finance deals went up by seven percent so not only was a dollar volume increase there was a count increase so you might be surprised and will unravel this a little bit but so even in these hot markets where people are offering cash over asking no contingencies money is cheap there is still an increase in seller financing and these are newly originated in 2021 yes wow january through december of 2021.

you know we should actually a pop quiz how many money was generated by seller plans i don't know if anyone would ever guess billion dollars no we should have top business i don't think anyone would ever cast that number yeah that'd be a fun poll wouldn't it before yeah before the reason i would say if i would take a guess i don't know like i would have said maybe a billion maybe yeah yeah i'm thinking like just about that number i can't i could see over you know 750 billion i would say yeah i think i would say around if i didn't look at it billion to 2 billion if that i remember the first time we started adding them all up i'm like i'm getting it out like oh my calculator's numbers don't go out that far i'm like i got to do this like my brain was having troubles wrapping around the billion right oh my lord so it's really interesting when you take a look this chart shows it by count over time so you'd asked seller financing usage we started tracking it this way since about 2009 and we'll come back to this later and along with some mortgage availability but you can just see that by count this is by dollar volume we did by count just so you can get a general feel there was a lot of seller financing in 2013 14 15 2012 that was all after that subprime mortgage meltdown and so we know that credit was really tight and it's hard to get loans and seller financing really moved in and took the place and then as the real estate markets picked up and the conventional banking got more back in line with what they used to do then we saw seller financing numbers go down as we would expect but you know they kind of bumped along and then they bumped back up in 2021.

interesting so this number here just kind of shows the last five years so i pulled out the last five years and you can just see them broken down by residential commercial land and there's there's category of unknown meaning that the county didn't make it easily identifiable when they pulled the records what the property type was so we just stuck it in an unknown bucket fortunately in 2021 that bucket got a lot less a lot smaller so when you add up the last five years of volume there's over 123 billion in the past five years now why do i think that's important because i market the seller financing notes and sometimes i'll buy a note for somebody who's had it for seven eight nine ten years but on average we don't market back too much past five years because we see a lot of refinancing or people selling properties and you know a lot of times they'll have already the nodal paid off or they've sold the note so to me this is kind of like the availability in the seller finance market so you know the number gets even bigger right when you add it all up so if you look at residential that made up about 53 of that number in uh last year and and count it made up about 61 and then of course there's some commercial that's seller finance that was about 26 of the dollar count 16 of the just the count and then land uh that's a big one as well so it made up 14 of the dollar and then we had that little bit of unknown category that i mentioned and i think it's safe to say that it's probably a similar makeup as the other category so that's kind of how it all shook out um when you look at residential commercial land those three main categories does anything surprise you guys there or yeah you know i don't think i actually thought too much about commercial prop being self-financed but i guess it's probably a lot because you figure someone getting into space is willing to sell in a retiring kind of thing i would think that probably before anything else i see residential more as like hey my parents passed away or something happened and i got this property i want to sell it and sell financing some way of doing it um yeah so it could be any kind of property type right you know seller financing happens because there's a need that's not met by conventional financing so either the property maybe was having troubles qualifying or the person was having troubles qualifying and that could be because of down payment or credit or a lot of self-employed people have troubles uh without getting having w-2 income so there's all kinds of reasons there are some category and we'll get into it later of people who do this professionally they on purpose create seller finance notes so we kind of divide it up between the mom and pop like you said somebody who maybe didn't necessarily want to but they did or the professional seller that does that so then these are are these just like contracts for deed or is this like a private mortgage so this would be any type of mortgage deed to trust or contract for deed where the seller sold the property gave a deed and immediately took back a lien instrument so there wouldn't be private loans like where sometimes you'll see an ira loan privately or you'll see the private lender to a hard money lender it wouldn't include those it would only include where somebody was on title as the owner gave a deed and then immediately took back a purchase money deed a trust or purchase money mortgage or they did a contract for need where they haven't done the deed yet so any of those types okay but not not private lenders for that's right not private lenders okay they had to be on the property as the owner at the same time the note was created to qualify for the stats so this might surprise most people it always surprises me but the average loan to value for the seller finance deal this was discalculated in the states where they disclosed the sales price there are some states that don't do that in the in the public records but the average down payment was 23 because the average loan to value is 77 so what a nice big down payment everybody thinks seller financing is zero down there's certainly some of those but it's not all of them and the average balance was 269 201 that was a huge increase from 2020 and we have a couple of ideas why that might have been uh that was one of the numbers that surprised us the most but uh the down payment it's always you know between 20 to 25 down payment on the residential side yeah yeah and you know i just i just did one of those myself like the one i just told you i just got listed for sale right now it was 20 down payment which was more than i was actually asking for i was asking for 10 and they had it for heaven's sakes i'll take it absolutely uh we find that anything less than 10 increases the chance of default in the future substantially agreed yeah yeah so so some quick questions people have cindy asked a question um is residential seller financing um due to uh a byproduct of covet of like lost jobs do you think so there's always a certain amount of seller financing as the graph showed so it kind of goes up and down depending on the restriction of credit and at the end we're going to look at the mortgage availability index that's published by the mba and you'll see that they are tightening their lending criteria which we think is what contributed to this and they did start tightening their lending criteria when coveted hit um so that's a really great observation that's about when you see it drop huge uh and so yes i i do think it's because the banks started tightening up their criteria on down payment minimum credit score and some other things with income proof of income and now we're going to see as we'll look in our predictions but interest rates are going up right so fewer people are going to qualify because their payment is going to go up so we'll talk a little bit about that too so with commercial we see that was about an average of 71 percent loan to value the average size uh note size was 495 266 and then for land uh the average note size is 233 000 and they had a 70 average loan to value so almost a 30 down payment on land which makes sense it's a riskier you know as the risk goes up people know usually to get a more of a down payment so commercial land would be considered riskier known investments than residential so this is one of my favorite charts where in the world do they do seller financing so every year since we've been tracking it texas and we do this by count so it's not skewed by the dollar amounts of what properties cost in areas but texas is normally the top producing so they produced about 23 percent uh california and florida usually switch back and forth between second and third people are always surprised they actually do sell our financing california but they do florida where i'm currently reside number three let's see number four was north carolina this time arizona five six was georgia seven was washington uh eight was new york nine believe it or not a lot of it's upstate you're not new york and nine was tennessee and ten was oregon and then all states have a little bit of seller financing so on our website that you mentioned uh earlier noteinvestor.com if you want to see all 50 states you can download the report but these 10 states have made up almost 70 percent of the volume wow holy goodness yeah so if you're looking to try to sell financing focus on these statements right that's the whole point this is that these estates are hitting hard i mean taxes has always been number one in my book of where to look for south african students i'm even surprised by florida um yeah that's true because contracts for needs don't fly so they'll all be mortgages interesting yeah it tends to be in florida a lot of land mobile and land okay uh this wouldn't include any mobile onlys in parks because they're not considered real estate so they don't qualify for what we pull on these numbers so uh yeah so those don't but mobile and land would be in there when the land and the mobile were sold so yeah texas is always the big state you know we often talk about why is that and you know i think a lot of it just comes with what people are familiar with uh you know when you see other people doing it they they do it themselves it becomes more normal it becomes more obvious there are also certain states that tend to have a bigger demographic that has troubles qualifying for conventional financing so we see a lot of seller financing with the people like itin buyers uh people maybe who get paid cash and that sort of thing and so sometimes that is part of it too people come from other countries whether legally or not so uh that that plays into it as well you do you track how much commercial versus residential or are there states where there's more often commercial properties sorry for instance residential you know we can break that down we haven't done that to that degree i mean when we pull the number the the list ourselves to market to them then we get that detailed like we'll decide whether we want to just pull a list of residential or just mobile home and land or just commercial because we tend to market to them a little bit differently uh but that would be a that may be a great addition at least for these top three or four states right yeah because you know uh cody made a comment that he finds in oregon that most of the cell phones are actually seller carry seconds yeah now interesting these numbers don't include the seller carry seconds if it was a wrap where the seller remained responsible for the first they're included in this but if it was a true second like 80 10 10 where maybe they got a 80 bank loan a 10 down payment at 10 second from the seller these numbers don't include those so though it's those would be additional wow yeah truly yeah so i always like to break down the note creators into mom and pop somebody who creates one note in a 12 month period and somebody who creates two or more so 84 of that volume was created by mom and pop sellers who only did one note in 12 months and the other 16 of the volume was created by somebody who did two or more in that 12 month period yeah and then we go just a little bit further and we say out of that 16 that created two or more we see about nine percent of the whole so half of that 16 almost created two to three notes and the rest were created by somebody who did four more notes so those are really professional so seven percent of the whole 100 percent were created by people did four more notes and we look at that a lot because of dodd-frank right when dodd-frank hit they said if you did seller financing one in 12 months you met a certain exemption if you did and three or under you met another exemption and then over four you didn't need an exemption so you've got to be time to track that because we kind of like to see what happened with that and there it we didn't have as many professional sellers there for a while right after dodd-frank and then they kind of picked back up once they figured out how to do it so what i we're doing into some sort of finance stuff and pulling data and what i found to be extremely frustrating is that a lot of times you pull this data down and the names of the county records are incorrect meaning you know bank of america is not one we want to care about but you may see it as instead of bank of america it may say b and a k because it's mis scanned in there are you guys able to do a good job of filtering out these inaccurate bank of america where it's boa a and then it's the same entity but it's just screwed up in the in the processing yeah we feel scott does a really good job of that because uh they they had to be uh owner on the deed first so they had to give the deed and take back financing at the same time and not have that kind of a name now on these uh professional sellers they still have to own the property but sometimes they do have entity names they might be a trust or an llc but normally the one off mom and pops are just uh individual names as so but the the reason that the filter works is because they had to own the property and sell it and immediately take back the financing that's how that filter works so we know it really was a seller carry it was an installment cell under the irs code for an installment cell right awesome yeah so next up we've got what do we think is going to happen in 2020 well what do you think your interest rates are doing we all know that right yep up they go so so the question real quick was that you know are you are licensed required to create notes it's a broad general question i know we had a uh we had back i guess last august we had a debt license company come on and talk about buying debt but to create these notes are licensed required well i'm not an attorney and i don't play one on tv i will uh share with you that the biggest concern most people have on creating a seller finance note is whether it has to be dodd-frank compliant so we back up what's dodd-frank so dodd-frank came in to protect consumers from what they considered was predatory lending people charging unfair prices and interest rates and setting them up to fail in their repayment of their loan giving them a loan they couldn't even afford so when they did all of that they did include some seller financing but not all seller financing so first of all they said uh if you're selling to an investor not an owner that's going to occupy the property doesn't doesn't it's not included so that's the first thing when we all saw dodd-frank kit we're like oh we'll just do investor deals but you know quickly that inventory dried up so we're like okay we got to get got to figure this out so then so then they said um and i'm just paraphrasing this it's not to substitute for your own legal counsel but i'm just sort of paraphrasing then it said that you could do one in 12 months and be exempt if you were an individual if you did sell to an owner that was also going to live in the property okay and then they said you could do three or less if you were an entity and the owner lived in the property as long as you didn't do certain things it had to amortize it had to do this had to do that and they had to have the ability to repay so the ability to repay means that the people can afford to make the payment so that they make enough money to make the payment and so most people now if they are doing this professionally they're going to have the buyer fill out a credit application and verify their income and see how much of bills they have compared to what they make and do a a debt to income ratio and so this if you're doing a lot of seller financing more than one in 12 months i to buyers that are living the property we always suggest you go to somebody like calltheunderwriter.com they'll charge less than 500 dollars to help so if you are interested in doing that me and nathan actually interviewed them a few months back a few months back it's not expensive to do it's not it's extremely easy you can charge the borrower for all the costs yes it's like 200 bucks to get started it totaled less than 500 bucks it's a great way to put yourself out there and make sure you're holding yourself accountable because the ability to repay is so vague let the professionals who work on this on a daily basis who run to hurdles tell you what the situation is and it's really easy guys so definitely rewind go to youtube or whatever facebook group whatever or linkedin and just take a look at it so yes call the underwriter nationwide service there are a few other ones i think our portal has other resources but cold and rare is the most common one we'll work with they work in a lot of almost all the states whereas the other ones tend to be regional there's tons of them in texas obviously so much seller financing so yeah that that is a that's what we recommend if you're doing more than one in 12 months shoot i recommend it if you're only doing one in 12 months just because you'll have the safety of mine to know that that buyer borrower can qualify plus they'll have the ability to pull a credit report so you can see what kind of credit history they have paying their other bills and they'll send out all the necessary disclosures and they package it up and they make it look all pretty just almost like a bank loan except you get to make the decision on whether you feel that person is qualified to to buy or borrow against the property and and so that you get to decide the debt to income ratios and the other reason we suggest it is because if you ever go to resell your note on the secondary market it looks more like a traditional transaction it will qualify for better pricing if you ever go to resell it so it's to me it's a no-brainer even if you know what you're doing you've done it for 30 years like me i still want to use a professional because i want them to package it all up and like you said you got that third-party validation of whether it meant that ability to repay so it now has a simple solution so yeah i mean we transact seller finance notes you just got to make sure you're following the the most and then there's some states have their own version of the safe act so i would be remiss not at least mentioning that as well that is similar to usually something in dodd-frank so know that in your state as well if you're going to be a repeat seller financing and then there's a point where you do enough of them then you might be considered truth and lending under tilla that you might need a actual mortgage loan originator license but most of us do less than that or make sure we do less in any one entity to be sure that if you get that big you're you're going to know that you need to do it and that you know you're going to avoid it if you choose to right um but yeah so i think i think we did a good job all together answering that right without legal advice okay all right so what's happening in 2022 well interest rates are on the rise when interest rates go up payments go up when payments go up less people qualify it's harder to get financed right now uh it just is i just saw read a big article on how arms are coming back because people can't afford the payment without an arm and so it's like oh oh eight i feel like oh wait all over but okay so there's inflation there's uncertainty uh people don't know what's going on with the war and things like that uh so we believe um and the only piece that's keeping all of this afloat i think is supply and demand so we keep seeing property values go up because there's so much demand and so little supply and a lot of markets have less than one month of supply and they say it's six months or more right to be an even market so that's what's keeping everything going right now in my opinion but even if prices keep going up just by fact that it's harder to get traditional financing is the reason that i think we're seeing an increase in seller financing so this is from the mortgage bankers association at mba.org this is conventional lending they track what they call the mortgage credit availability index and you can see that uh it was very prevalent when when that number is high when that graph is high money is really easy to get from the banks to buy home and when the numbers down uh below that a hundred basically it's harder and i drew a green line across where we are right now compared to where we were in the past so you can see in about 2020 when covid hit the banks pulled back and they started making it harder to get a loan to buy a house and we see every time the interest rates pop up the mortgage availability also pops down and so we predict that mortgage availability as interest rates will rise will continue to go down and as mortgages from banks are less available then seller financing usually comes in and takes up the slack and picks up the difference and so right now we are tracking about the same kind of mortgage availability as we were in 2014 for reference wow interesting yeah so i did one more thing a lot last chart i promise uh because we could geek down these numbers forever absolutely uh i laid them side by side just because i want people to think that when mortgage availability is low seller financing is high and when mortgage availability is high seller financing gets lower so i predict i don't have a crystal ball but i predict that like last year predicted we'd see the same or less in seller financing in 2021 here we saw more right now i think the signs are clear that we will see more because of the interest rates um going up predominantly and and like you said the only thing keeping everything afloat here is the supply yeah it's not going to last forever yeah so i am putting in the link for the mba inside the chats for everyone so you can look at that so you can look at these chat charts yourself and kind of get an idea where um you know you think there are in comparison you can see it month after month where it's at um understand that you know the nba is a big big place right they do a lot of data they do a lot of stuff um and they also host web uh conferences as well we actually have our the nba conferences on our portal and if you want to attend them they're a higher level of information right they're not the basic knowledge take a look at this stuff the biggest charts are what she's showing here as well as charts where it deals with like the income right and that's another chart to look at is how is income compared to house values and then if anyone watch big short you'll see that that's part of the movie is what is the how much people are making compared to what house values are we're now past the threshold again like we were back in 0.60708 that's indication to us and we're not sure exactly what's going to break we're not sure what's going to put that door but when you walk around like they did back when we did back then and say it just doesn't make sense we know something's coming around the corner yeah when the average median income can't afford the average median house that's when your market's out of whack yeah yeah yeah that would be another great chart to pull up next is if anybody wants to see the status they're welcome to download the report at nodeinvestor.com forward slash stats or you can just go to our home page it's there on our homepage and uh it's it's free to download that um so we i love doing the stats you can there's a lot of valuable information there if you're a marketer or if you're somebody creating seller finance we talk about on our website how to create a seller finance note if you wanted to resell it for top dollar what are the best terms and rates and borrower credit and that sort of thing because uh you know i'll look at a note and there's some notes i can pay 50 cents on the dollar for and some i can pay 95 cents on the dollar for and that all has to do with how they were created and you know the buyer's credit and how many months of seasoning but i'm talking a brand new note there's that much difference just based on how it was created yeah absolutely so cindy said thank you that uh you freddie rockstars of course oh thanks um you know one of the conferences there's been a lot of confidence of course lately i didn't go to the nba one and the dme one um but i wanted to see are you be going to paper source at all um are you gonna be going conferences moving forward that people can also see you as well there yeah yeah well we did imn and dme we're not making it to paper source i'm sorry it's a great conference it's good uh we i know there's a uh realty iq has got an online conference coming up i'll be speaking at uh and then i will be we definitely go out to quest expo in houston that's a great conference it talks about a lot of investing in notes and real estate through your self-directed retirement account we always go out to note expo as well and then fred and i host our virtual online convention every year cash flow expo i know you guys have spoke thank you and we also do wise women expo so those are the ones we've got coming up right now uh there's a lot of conferences this year because everybody was making up for it after our portal no conferences we have a whole list of them if you're curious about what's coming up feel free to jump on the portal uh no conferences i'll do a quick share so you guys can see what what i'm talking about but it's the idea of getting involved being active right um so as you can see here we actually have a lot of stuff on here already and you can obviously see what's going on and see what's happening what's coming up get involved ask questions if you're not familiar with it ask us hey listen if anyone got in this conference has anyone looked at this conference and it's a good way to kind of get involved you can see the dates coming up you can see where they're going to be the link ray forum right and i'm trying to add them as we come along um me and nathan will be speaking a paper source uh that's coming up just literally in less than a month so definitely jump in and ask questions if you see a conference coming up that we don't have on here let us know about it too right so tracy with all this information you know it looks very attractive for seller financing right this idea of getting a hold of these billions of dollars of notes seems easy is it that easy it's hard to market to them so i tell people i like if you like that market you have to approach it two ways you i can either associate with someone who's out there marketing for that paper and you can buy it on that secondary level or you can get in there and market direct to them i think it just depends on how much time and energy you want to put towards it so the other way is that you could be a seller financier yourself you could buy a property with the intent of just turning around and selling it on seller financing and rapid and make a difference on the spread so you create your own notes or maybe you want to market just to those multi-sellers that's a different approach where you just want to reach out to the people who are doing a lot of these notes and just be their source to replenish their capital you could either lend against them you could buy a partial maybe you could buy the whole note so you kind of have to decide where you want to play in that because going after that mom and pop who just created one it's a time intensive uh venture because you've either you've got to do direct mail or google ads or seo or outbound marketing uh you can you have to realize that not all of them want to sell and some of them want to sell but they need curative work done to their documentation because it's next to you know a napkin on a diner clothes close to that uh some of them won't like the price and won't sell so some of them you have to nurture for one or two years so it goes from the beginning of getting the data which isn't easy to do right to gain the data and try and get a hold of these people like reaching out to bank same idea then if you get a hold of them you have to educate them understand time value right um you know i love your talk about the fact that due to 50 50 25 25 seems so much more easier to teach than that than time value but the whole process and then when you get them to agree to our price you have to cure the the cladophile because it can be all over the place i don't know it's not for the faint of heart i will say you get better profits absolutely the returns are ridiculous yeah you get paid for that effort yeah so if anyone has any questions tracy's been around for a long time check out our little website this will be replayed on youtube and facebook group and our of the podcast as well um it's amazing this information and and being aware of it right this 23 billion dollars created last year and you figure it's a hundred and whatever uh you know 20 123 billion last five years this is the market that's available out and ready to go and a majority of it is a one owner one creator note which means that those people are not the big bulk sellers that they're probably more up to selling than these bigger banks who are looking to say listen i don't want to sell or whatever reason these are mom and pops for some unknown reason they want to sell property and there's lots of reasons because the buyer or the property didn't qualify that's most likely it yeah especially in texas there's some people out there who can't get loans or the fact that they don't want to create a loan for a low-value property it's hard yeah yeah where are we gonna say nathan sorry i was just gonna say there's and and for this notes the note holders there's lots of reasons they want to sell um you know it could be as simple as wait i can get a chunk of money right now okay you know and and that can be used for anything whatever they've got kids going to college uh they want to go on vacation they're doing renovations on their own home i mean you choose you know there's there are tons of different reasons they want to get into crypto yeah yeah yeah they or they they know the person too well and it's it's awesome that's a lot of times so and one last thing is that when your experience buying seller financing do you have more success buying a partial from these people or buy the whole thing i know that's a big conversation piece i try to buy a partial on every deal that some of them will only sell they'll say if i'm going to sell i'm only going to sell it all because i want the peace of mind so i always offer a full and a partial and i always explain to him why the partial's a better deal because they're selling the most valuable payments and how much they're going to get back at the end and they can always sell some more payments later so i try but some of them only sell because in their mind the discounts worth it if they can just be rid of the problem so you have to go with what serves their needs and desires the most but i always give them the option because partial is better for all of us not just me but for them too yeah that's true yeah that's awesome well guys feel free to reach out to tracy and you know and ask questions and curiosity stuff like that because it's a big deal to sell our finance world it's different from the bank originated you know institutional loans out there fannie and freddie loans it's a new world new market it's awesome um so i hope that you guys learned some valuable stuff the data here is attractive to most of us um and it's really cool that's fascinating thanks so much thank you so much i appreciate you having me on thanks for all you guys do it's a great group and i appreciate your time absolutely thanks everyone everyone dave puts here from jkp holdings alongside me as always mr nathan turner good day good day how are you yeah i'm doing a whole lot better um i'm sure last week my voice was a little bit crazy um frustratingly crazy but it is what it is so i as some people know i ended up testing positive on saturday with this cobic stuff um i ended up watching tv for most of the weekend just kind of couldn't get out of bed so emails piled up yeah you got that good idea it's all good it's all good um we've seen some some movement uh on some assets recently that changing things um courts are sure to open back up for us which is good yeah trustees are starting to respond to things um little things are starting to work out which is what we look for in that trickling starting to process um we i didn't submit any offers this week because i'll be going away for the next couple days um so i kind of held off on that stuff so studios isn't going to be crazy good good how about you guys what's going on over there uh actually that reminds me i got to send out a wire today on a new one that i just purchased so yeah it's a good one out in um anderson indiana and paid 55 for it uh house is worth i was surprised when i got the bpo back and and we've had this discussion about bpos go watch that video but uh i was surprised the value was better than i expected um i thought maybe 150 the realtor there says 180 maybe maybe not but uh unpaid balance payoff balance is about 90 000 so this little very likely sell at auction uh and that's still a great profit for me i'm very happy with that so i'm assuming it's unoccupied unoccupied yeah this is this is we we touched on this i think last time uh this is a reverse mortgage where a lot of people are are weary about those and i i get it but i like them yeah i like them i'm just not sure about them but that's my problem i think right um i just don't know if i trust what i trust yeah so we'll see we'll see how it goes right um so those who don't know reverse mortgage is basically the person's dead right they took out a reverse mortgage they passed away obviously not paying the bill no more um and typically it's a simple you're going to foreclose on installation so yeah it's there's really not very much of an option uh it's it's a foreclosure play and and that's fine and if the numbers work great and in this case i think the numbers are very favorable so i'm happy with this one um i did post on our website our facebook group and stuff we came out with a partials calculator for those who are insurance partials um not only does it do partials but it also calculates if you're looking for like what my return would be or what how many payments or it's similar to the hp calculators um but it's a spreadsheet format and for me the visual look of it is easier so you can go on to it i want to post all we ask you to do is jump on our due diligence portal run a free address just we're just trying to get some feedback on here and with that we'll sing over a spreadsheet you plug in some numbers it has schedule a b and c uh i did tag on our guest today she actually uh did note but she helped me out figure out some of the stuff um so for those who love calculators definitely jump on the hp calculators if you're more of a visual learner reach out and we'll get you hooked up with that um just run a few assets to our due diligence portal or finario agent local to a property or whatnot so yeah nathan what we're finding now is notes are highly priced they're just extremely high yeah compared to what we used to yeah there's deals that need to be had and banks and some of that are just as biscay as we are right yes there are people out there that are not as this gay as we are that actually for one reason another create a note yeah yeah it happens all the time it's funny when i first got started in notes being from canada i thought i'd invented seller financing i thought this is a great idea man nobody has ever done this and started selling properties on terms that that's how we termed it back then didn't even know it was called notes had no idea it was called tele financing i had no job the godfather was selling financing so but it's it's very common um people will do that they'll have a whatever an income property a lot of people see it as a good option uh as instead of renting and i agree personally i i prefer a seller finance deal than i do a rental and and there's pros and cons but that's for another story perhaps yeah it's interesting because seller financing for some investors they get into to trustees and they go sell france to begin and they have no clue about the other side of it and they have other investors who come in from our side of it and don't have a clue about the self-financing world yeah um certain states it's much easier to do in or higher demand in right yeah so it's but what people don't realize there is a lot of education to buying these assets versus get a list go with it and and make offers right what i was fascinated by and we definitely reach out is with everything being so hot in the market and loans being flying around if someone asked me three weeks ago what do you think that the report was for seller financing last year i'd probably tell you down i couldn't see possibly yeah so i'll find something up because judy it's a need situation where i can't i don't i don't allowed to the house isn't valued high enough houses were extremely high in value right so i was quite amazed to hear that the seller financing world was this popular in 2021 than ever before i i was established by that what's your thoughts so i agree because you know we're just coming out of like late 2020 or sorry going into right before and even the beginning of covid we're talking about like uh interest rates were down at the floor and everyone was getting refinanced everybody was getting refinanced so so what's the incentive then like why would anybody do a seller finance deal when bank financing was so cheap yeah however the numbers say different so this would be interesting to go through this today and see so i'm gonna bring on our special yes and welcome tracy to our uh friday live special all right um tracy welcome thank you for joining us on a gorgeous friday afternoon hopefully it's gorgeous down near you yeah it absolutely is thanks for having me awesome so tracy before we get into all the nitty-gritties like that so for those who don't know you can you give a little background who you are how did you get into notes how long you've been doing it and what you do before notes i come from a rural area and i worked for an attorney that did title that did closings that did escrow servicing and that was my background and then i moved to the big city which was spokane washington and i went to work for a company that bought seller financed nodes and that was in 1988 and they'd already been doing that for since the 40s and 50s they would buy seller finance paper at a discount and so i deplied what i knew to that and i worked in that institutional land as i call it for about 10 years and they bought notes seller finance notes all over the united states and they bought them at a discount and then after about 10 years of that i i decided i wanted to venture out on my own because i was buying real estate we weren't allowed to buy notes when we worked there because it was considered a conflict of interest understandably so we could buy and sell real estate we could use solar financing for our own properties but not to buy notes and i quickly realized i did not want to be a landlord i wanted to be a lean lord and so when i left there then i started referring some notes still to that company i used to work for and then buying some as i had funds available and buying them in a self-direct retirement account because i rolled over my 401k into self-directed retirement accounts so for the last 20 years my husband and i that's what we've been doing as well as we share blogs and information and we love the stats so i've always been on the seller financing side it was when you talked about people coming from the buying the non-performing note side that was new to me after the 08 crash right that was a little bit different in the market than what we all survived on before and so the seller financing world just you know it kind of ebbs and flows depending on what's going on in the conventional lending in the real estate market which we're here to talk about today you're on mute dave for those who don't know who tracy is the the website she has has been around for a long time wealth not her husband is just as good right so definitely check out the known investor.com website and all the information it's amazing how people get into space by the way they do it right um and most commonly i think is i don't want to be a landlord i don't want to own this property um or you did own it and you're like i don't want to do it landlord again which i fell into um so it's interesting that we all come from that same kind of mindset but i think that a lot of what you are talking today is based on where you live right we're up in new jersey we don't get a lot of seller financing as much as you guys do where you guys are located that's very true it happens to be very reasonable regional the great thing is it's just like buying notes buying seller finance notes you don't have to be in the location so you can take this information and apply it no matter where you live yeah yeah that's awesome and i agree it is very regional like like you say dave in northeastern united states is very very rare uh ohio indiana michigan all the time land contracts they're called out there and that's what i got started in and it just depends on where you are in the country so tracy you know what what i thought was really cool was your ability to understand this stuff um and really kind of um bring the light what this all means so i just want to give you one second well i think the first place to start is what is seller financing you guys in the intro talked about is where somebody owns a piece of property they're on deed they they own it their fee simple title and they sell it to someone and they allow that buyer to make payments to them instead of going out and getting a bank loan now these stats are first position seller financed over 30 000 that are of record so these are things that you can pull from the county courthouse so it might be a deed of trust and mortgage it might or a deed of trust might be a mortgage it might be a recorded contract for deed but it doesn't record uh account for unrecorded contract for deed so if you think about seconds and unrecorded contract for deeds and things under 30 000 the numbers could even be bigger but this is kind of what we consider to be the most sellable in the secondary market yep i'm just interested in adjusting my screen real quick guys i probably for those of watson lives uh i didn't actually have it set up for a presentation on my uh streaming thing so i'm just gonna move things over here hopefully everyone can see it okay and uh we'll go from there so it's interesting you say that tracy sorry dave one sec just you say like the ones that have been recorded the ones on record so when i first started we were doing these land contracts in ohio at the time i don't think that you were required to record them so we didn't and and that was strategic because we said well if it's not on record then we don't have to go through the whole process uh with the courts and everything and so it was very much on purpose so i believe that there are going to be quite a few more than than whatever the numbers are that you have i would agree in certain regions yeah yeah yeah now are you guys able to see my screen now yes so tracy how long have you been looking at these reports for how many years have you kind of run numbers i think 2009 is when i started working with advanced seller data services to get the data so we've been adding to it every year um so i work closely with scott arpan at advanced seller data services and he pulls the raw data because he has the ability he uh to pull from the county courthouse records and then i give him some guidelines and he comes up with some great things too because he's been in the business a long time and then he gives us the data and then we put it into a report awesome cool so let's let's rock and roll here right all right let's see we got well in 2021 there was 27.3 billion with a b dollar volume of seller carry notes that meet those parameters that we talked about what's a seller carry note that's a big number in one year in 2021.

so these come out usually march to april we get them uh just because it takes that long there's some counties that have trailing records uh and so what was interesting was that it was a 15.9 increase in dollar volume now that in itself might not be too surprising because everything's going up in value right every property has seen appreciation so you might say well the seller financing just stayed the same the dollar volume might have just gone up but what was surprising to me as it was to you in this hot real estate market the number of seller finance deals went up by seven percent so not only was a dollar volume increase there was a count increase so you might be surprised and will unravel this a little bit but so even in these hot markets where people are offering cash over asking no contingencies money is cheap there is still an increase in seller financing and these are newly originated in 2021 yes wow january through december of 2021.

you know we should actually a pop quiz how many money was generated by seller plans i don't know if anyone would ever guess billion dollars no we should have top business i don't think anyone would ever cast that number yeah that'd be a fun poll wouldn't it before yeah before the reason i would say if i would take a guess i don't know like i would have said maybe a billion maybe yeah yeah i'm thinking like just about that number i can't i could see over you know 750 billion i would say yeah i think i would say around if i didn't look at it billion to 2 billion if that i remember the first time we started adding them all up i'm like i'm getting it out like oh my calculator's numbers don't go out that far i'm like i got to do this like my brain was having troubles wrapping around the billion right oh my lord so it's really interesting when you take a look this chart shows it by count over time so you'd asked seller financing usage we started tracking it this way since about 2009 and we'll come back to this later and along with some mortgage availability but you can just see that by count this is by dollar volume we did by count just so you can get a general feel there was a lot of seller financing in 2013 14 15 2012 that was all after that subprime mortgage meltdown and so we know that credit was really tight and it's hard to get loans and seller financing really moved in and took the place and then as the real estate markets picked up and the conventional banking got more back in line with what they used to do then we saw seller financing numbers go down as we would expect but you know they kind of bumped along and then they bumped back up in 2021.

interesting so this number here just kind of shows the last five years so i pulled out the last five years and you can just see them broken down by residential commercial land and there's there's category of unknown meaning that the county didn't make it easily identifiable when they pulled the records what the property type was so we just stuck it in an unknown bucket fortunately in 2021 that bucket got a lot less a lot smaller so when you add up the last five years of volume there's over 123 billion in the past five years now why do i think that's important because i market the seller financing notes and sometimes i'll buy a note for somebody who's had it for seven eight nine ten years but on average we don't market back too much past five years because we see a lot of refinancing or people selling properties and you know a lot of times they'll have already the nodal paid off or they've sold the note so to me this is kind of like the availability in the seller finance market so you know the number gets even bigger right when you add it all up so if you look at residential that made up about 53 of that number in uh last year and and count it made up about 61 and then of course there's some commercial that's seller finance that was about 26 of the dollar count 16 of the just the count and then land uh that's a big one as well so it made up 14 of the dollar and then we had that little bit of unknown category that i mentioned and i think it's safe to say that it's probably a similar makeup as the other category so that's kind of how it all shook out um when you look at residential commercial land those three main categories does anything surprise you guys there or yeah you know i don't think i actually thought too much about commercial prop being self-financed but i guess it's probably a lot because you figure someone getting into space is willing to sell in a retiring kind of thing i would think that probably before anything else i see residential more as like hey my parents passed away or something happened and i got this property i want to sell it and sell financing some way of doing it um yeah so it could be any kind of property type right you know seller financing happens because there's a need that's not met by conventional financing so either the property maybe was having troubles qualifying or the person was having troubles qualifying and that could be because of down payment or credit or a lot of self-employed people have troubles uh without getting having w-2 income so there's all kinds of reasons there are some category and we'll get into it later of people who do this professionally they on purpose create seller finance notes so we kind of divide it up between the mom and pop like you said somebody who maybe didn't necessarily want to but they did or the professional seller that does that so then these are are these just like contracts for deed or is this like a private mortgage so this would be any type of mortgage deed to trust or contract for deed where the seller sold the property gave a deed and immediately took back a lien instrument so there wouldn't be private loans like where sometimes you'll see an ira loan privately or you'll see the private lender to a hard money lender it wouldn't include those it would only include where somebody was on title as the owner gave a deed and then immediately took back a purchase money deed a trust or purchase money mortgage or they did a contract for need where they haven't done the deed yet so any of those types okay but not not private lenders for that's right not private lenders okay they had to be on the property as the owner at the same time the note was created to qualify for the stats so this might surprise most people it always surprises me but the average loan to value for the seller finance deal this was discalculated in the states where they disclosed the sales price there are some states that don't do that in the in the public records but the average down payment was 23 because the average loan to value is 77 so what a nice big down payment everybody thinks seller financing is zero down there's certainly some of those but it's not all of them and the average balance was 269 201 that was a huge increase from 2020 and we have a couple of ideas why that might have been uh that was one of the numbers that surprised us the most but uh the down payment it's always you know between 20 to 25 down payment on the residential side yeah yeah and you know i just i just did one of those myself like the one i just told you i just got listed for sale right now it was 20 down payment which was more than i was actually asking for i was asking for 10 and they had it for heaven's sakes i'll take it absolutely uh we find that anything less than 10 increases the chance of default in the future substantially agreed yeah yeah so so some quick questions people have cindy asked a question um is residential seller financing um due to uh a byproduct of covet of like lost jobs do you think so there's always a certain amount of seller financing as the graph showed so it kind of goes up and down depending on the restriction of credit and at the end we're going to look at the mortgage availability index that's published by the mba and you'll see that they are tightening their lending criteria which we think is what contributed to this and they did start tightening their lending criteria when coveted hit um so that's a really great observation that's about when you see it drop huge uh and so yes i i do think it's because the banks started tightening up their criteria on down payment minimum credit score and some other things with income proof of income and now we're going to see as we'll look in our predictions but interest rates are going up right so fewer people are going to qualify because their payment is going to go up so we'll talk a little bit about that too so with commercial we see that was about an average of 71 percent loan to value the average size uh note size was 495 266 and then for land uh the average note size is 233 000 and they had a 70 average loan to value so almost a 30 down payment on land which makes sense it's a riskier you know as the risk goes up people know usually to get a more of a down payment so commercial land would be considered riskier known investments than residential so this is one of my favorite charts where in the world do they do seller financing so every year since we've been tracking it texas and we do this by count so it's not skewed by the dollar amounts of what properties cost in areas but texas is normally the top producing so they produced about 23 percent uh california and florida usually switch back and forth between second and third people are always surprised they actually do sell our financing california but they do florida where i'm currently reside number three let's see number four was north carolina this time arizona five six was georgia seven was washington uh eight was new york nine believe it or not a lot of it's upstate you're not new york and nine was tennessee and ten was oregon and then all states have a little bit of seller financing so on our website that you mentioned uh earlier noteinvestor.com if you want to see all 50 states you can download the report but these 10 states have made up almost 70 percent of the volume wow holy goodness yeah so if you're looking to try to sell financing focus on these statements right that's the whole point this is that these estates are hitting hard i mean taxes has always been number one in my book of where to look for south african students i'm even surprised by florida um yeah that's true because contracts for needs don't fly so they'll all be mortgages interesting yeah it tends to be in florida a lot of land mobile and land okay uh this wouldn't include any mobile onlys in parks because they're not considered real estate so they don't qualify for what we pull on these numbers so uh yeah so those don't but mobile and land would be in there when the land and the mobile were sold so yeah texas is always the big state you know we often talk about why is that and you know i think a lot of it just comes with what people are familiar with uh you know when you see other people doing it they they do it themselves it becomes more normal it becomes more obvious there are also certain states that tend to have a bigger demographic that has troubles qualifying for conventional financing so we see a lot of seller financing with the people like itin buyers uh people maybe who get paid cash and that sort of thing and so sometimes that is part of it too people come from other countries whether legally or not so uh that that plays into it as well you do you track how much commercial versus residential or are there states where there's more often commercial properties sorry for instance residential you know we can break that down we haven't done that to that degree i mean when we pull the number the the list ourselves to market to them then we get that detailed like we'll decide whether we want to just pull a list of residential or just mobile home and land or just commercial because we tend to market to them a little bit differently uh but that would be a that may be a great addition at least for these top three or four states right yeah because you know uh cody made a comment that he finds in oregon that most of the cell phones are actually seller carry seconds yeah now interest....