How to Buy Weird Seller Finance Notes | Real Estate Notes Show

Episode: Weird Note Investing Deals Dave's Goals and Plans: - Attended a conference to learn about a different avenue of note investing outside their institutional world - Randomly met Nathan at the conference through networking - Planning to run a webinar on Sunday night about finding seller finance deals and skipping brokers - Bought a $9,000 UPB note for $2,000 that generates $450/month in payments - Bought multiple low-balance notes ($500 each, $3,000 UPB) maturing in 1.5 years generating $300-400/month Nathan's Goals and Plans: - Acquiring seller finance notes through a contact from Texas who sources mom and pop seller finance deals - Taking on non-performing or near-performing seller finance notes from individual investors - Bought a deal where borrowers were 4-5 months behind, called them on it, and got paid up front with bonus - Bought notes from investors trying to exit the note business due to legal complexity and servicer headaches - Willing to continue acquiring seller finance notes if they're clean enough and numbers are good Key Recommendations: - Network and talk to everybody - deals don't have to come from traditional institutional lenders - Contact seller finance note holders multiple times (3-4 times) to explain why you're buying at a discount - Use direct marketing methods like postcards to reach seller finance note holders - Question why deals are being offered below market before purchasing to identify red flags or opportunities - Target investors trying to exit the note business - they often accept lower prices for quick exits Topics Discussed: - Challenges with seller finance note documentation and pay histories - Servicer complications with non-standard seller finance paperwork - Mom and pop investor relationships vs institutional lending relationships - Low-balance note acquisition and cash flow returns - Finding deals through networking and conferences vs traditional brokers - Weird payment schedules and collateral arrangements in seller finance deals Guest Insights: - Gabe has successfully marketed seller finance note lists and is hitting home runs buying third mortgages that get paid off quickly - Friend on upcoming webinar will discuss how to find and contact seller finance note holders and skip brokers Episode: Weird Note Investing Deals Guest: Nathan Turner Summary: Dave Putz and Nathan Turner discuss the unique challenges and opportunities of acquiring seller finance notes from mom and pop investors, including documentation issues and servicer complications.

Main Topics: Seller finance note investing, Non-performing note acquisition, Mom and pop seller finance deals, Pay history and documentation challenges, Servicer difficulties with informal notes, Finding and marketing note deals Key Takeaways: Seller finance notes offer alternative deal flow but come with messy paperwork and irregular payment tracking | Standard servicers often reject seller finance deals due to poor documentation and informal payment histories | Personal relationships between original sellers and borrowers complicate note transitions and collection efforts | Four to five months of missed payments in seller finance notes can be resolved through direct borrower outreach and payment catch-up | Direct outreach and marketing to note holders is an effective strategy for building deal flow Keywords: seller finance notes, non-performing notes, mom and pop deals, pay history, servicer, note investing, deal acquisition, Texas notes or just make sure it gets moved to the other group as well it should be posting automatically but okay hey everyone dave putz here from jkp holdings alongside me nathan turner how you doing man how's the week treating you really good really good so so this week's been a kind of a weird week um we'll open with uh an odd situation we weren't sure if we'd talk about it but i think it would be interesting to talk about a little bit um we go to this conference yesterday um and it was something we wanted to learn about and i think that it was very interesting to learn about it because it's a different avenue of note investing that we're not used to um and something we want to explore and learn about uh a lab is over ahead and a lot of it was stuff that is different from our institutional world um i think that with that we found common understanding that it's something that we should learn about but it's such a big sector it's probably like jumping into our world at one time yeah yeah there was that was a lot of high level talk that i understood part of it but really not a whole lot so yeah that was interesting yeah did you do the the network or yeah you did we talked yeah so so it was weird we for those who weren't there whatever you had a chance to kind of randomly meet people yeah um when you randomly meet people they pick based on your interests well i picked investor because i was curious what other investors out there hoping i'd run into somebody that i can learn from a little bit and just connect with well oddly enough i run into nate in the middle of the thing going oh crap like hey what's up so it was quite interesting but anyone who's was part of that um or curious about that please feel free to you know jump in and ask some questions and a lot of stuff so nathan we want to talk today about ways you've acquired deals that are just not unique you've got a table assets or a list of assets that a seller sold that just were just not normal it was something different that this deal just happened and the way that deal came about happened so give a situation that a deal came up what was the situation where a deal came across your table and a little more detail about it and like what went on to make it weird so this is actually turned into a fairly consistent uh deal flow for me uh where i'm trying to remember how we met in the first place it might have been at a conference and uh ran across this girl and from middle of texas somewhere and she's telling me how they sell they sell notes and so we got kind of talking about it and of course i'm interested because i would like to buy more yeah so their whole deal is they buy seller finance notes just in texas okay so they're they're they're mom and pop seller finance stuff like nothing institutional nothing professional at all uh and then they'll they'll come across ones that are um deals that are you know becoming non-performing or whatever and then they'll pitch them over to me and i'll pick up some of those but they're it's it's a little odd because because they're seller finance deals sometimes the paperwork is a little screwy what does screwy mean what define what you mean by that well like for example um i've actually been pretty impressed with the pay histories that i've gotten okay uh but at best their their you know somebody's spreadsheet where they just they put it on a random spreadsheet so like no software anything tracking anything like that but they're keeping track of how many times people have paid so that that's okay but actually it's not good enough that i can get it with a regular servicer a regular servicer doesn't want to handle those so i end up having to that's a huge difficulty yeah that's a huge thing because i think we're going to talk about this weekend at um one of our we're gonna do a webinar this this whole weekend uh on sunday night talking about that particular topic that celebrates the world that you can get into but the difficulty of seller finance is traumatic because they're not the clean cut deals that we're used to no no and they're a little bit funky so far the paperwork that i've gotten has actually been decent you know nothing written on the back of a napkin or anything it's actual real documents made up by real attorneys uh deeds of trust because it's texas um but the pay history has been the thing that's been just a little bit screwy and good enough that i feel comfortable taking it on but uh certainly not standard yeah so that's been fun you know music collateral is okay part but yeah i think that the pay history and the data on it is difficult it is and then the other thing that's a little bit kind of weird is this was you know a seller finance thing so it was uh you know joe blow and his wife sold a property to that they owned to somebody else and now they wanted to cash out for whatever reason okay um but because of that because it's just mom and pop you know property owner who's selling a property they've got a different kind of a relationship with the borrowers you know not not an institutional relationship but very much a personal relationship and which doesn't bother me at all but again it can be a little bit uh kind of weird walking into that kind of a situation where i'm trying to pick up on this personal relationship that they had and now i'm the new guy coming in and what the hell are you yeah yeah yeah and don't you bought a deal from them that was a killer like you know that just was just ridiculous and do you think that you s did they did they give it away for a reason or what's the what's your thought process there yeah it really i've had a couple that have gone really well i had one where we ended up taking back property and sold it and it was worth more than than what it was reported as so great that worked out well then i had actually a couple uh more just that i bought last year where the performance they weren't actually that far behind they're only like four or five months behind which in our world like as we know four or five months yeah like all right sounds good to me that's not three years yeah so uh the one um i kind of called him on it and said so here's the situation you're four months behind or whatever it was and and so okay they just paid up their ears awesome so wow i got a nice bump up front and then they're back to paying regular no problem and and were their servicer not doing their job or what did they not reach out to the borrower you think well that's kind of the trick is it's not with a servicer it's with a mom and pop investor so you know maybe they let it slide whatever whatever but it just over time it kind of adds up and may it wasn't even necessarily consecutive missed payments it was they missed one this year and then two more that year and another couple that other year and they made up a couple of those but in the overall they're still four or five months behind and you know summer finance notes as much as they're really the wild west like oh yeah they do things that are just completely different from all of our understanding and sometimes the collateral papers just the way that they set up the schedules off you know um every third week every you know it's just weird right so yeah um someone i want to learn about um which will run the webinar is speaking about not only buying it but like what are the how do you find the new deals right so the webinar running sunday night is all about finding the deals like how can you be skip the broker and market these companies uh we know a friend of ours who's gonna be on the webinar uh gabe he's done a ton of these things where he's marketing buying lists marking selling it and then getting a hold of the seller and he's shared with us he's got to contact him three or four times and explain them why am i buying me a discount yeah um and he's sending out postcards right yeah yeah i think he's like eighteen thousand he'll be talking amazing but the home runs he's hitting is ridiculous we get the stories and i'm like oh yeah like you bought the third yeah five thirds and gets paid off right i'm happy for him but at the same time i'm just a little jealous yeah so gabe if you listen man we're coming for you now um so you know i think you're right those kind of paper is definitely weird right it's nothing typical not to you know what we've gone into for us the weird paper i've run into is the investor who's trying to get out okay we've had a lot of those kind of investors who they come to us but like hey listen i don't want to shop this i'm giving to you you give me the price and you'll walk away with the deal from right um which feels kind of awkward because i can like take advantage of them but yeah i don't want to yeah um but it came down it was a deal one deal was in pennsylvania where it's like i don't want it the update is like nine grand like i don't want that deal and it was like some seconds on there i really wasn't interested in and you know that person just wanted to get out they wanted to get out of space they were getting into different investment strategy and they didn't like it it liked the legal part of it and just the headaches and dealing with bankruptcy stuff and dealing with a servicer they were trying to self-service and it just didn't work out well yeah so you know we came across this deal i kind of questioned why and then flatline i said listen that's the case we're going to go ahead and buy it so i gave them a couple pricing and they said let's do it those deals have tremendously been rewarding we bought that i think we bought the 9000 upb for two grand and the payments are like 450 a month i mean it's just whatever it was ridiculous yeah holy crap you know um couple forbearance agreements and whatnot but i think for us it was you know we buying more loans from investors who are trying to get out for whatever reason yeah um and i understand that that's what they're looking to do yeah so are you going to be getting into more seller finance stuff uh not necessarily um if it comes up and if if it's clean enough it doesn't have to be perfect but if it looks good enough and the numbers are good sure i you know i did the same kind of thing last year i bought a couple of notes for 500 bucks each yeah they're low low balance they're only like three thousand dollars uh but they're maturity in like a year and a half so i'm like sure so i mean the return is ridiculous but it's uh 300 400 a month that's a problem with a lot of these small deals because they're not a 200 000 institutional loan typically smaller loans unless it's a barrage of properties and they combine into one new um have you ever been in a situation where you bought a loan from somebody like at a conference like hey i got this loan on myself have you done that had that been successful for you uh i think i have trying to remember which one it is i got my other lists past deals going back here i have i'm trying to remember which deals they were i don't remember them being you know ultra stellar but not bad either yeah so you know they're they worked out as well as any other deal i bought a deal of somebody similar that they had a partner and they had to get out because it's been a while the partner to get paid off and they're jv into the deal um and again it was a situation where i heard them actually talking to another investor and then another investor was like well let me look at numbers and i luckily had my phone on me through my calculator i'm like here's what i'm gonna probably pay you yeah and within three four minutes you're like let's do it like let's make it happen yeah um didn't turn out to be the greatest deal but it was a scenario and a lot of people ask how do i get deals how do you find deal you don't have to buy it from the traditional institutional lender that everyone knows about yeah just talking and networking talk talk talk talk to everybody yeah you never know who has a single deal or ten deals or that a hundred need to get out of or rid of even hedge funds with you know old assets that have you've seen before go approach them and throw a number to them obviously they didn't sell for a reason and and you'll get this line where you go talk to someone and they're like oh we don't have anything right now but we'll send you something sure they will so call them back send them an email whatever get in contact with them six months from now whatever it is and say hey do you have anything available because yeah it's not top of mind i do the same thing people are like oh i send me a deal yeah if i think about it sure but yeah remind me and i'll i'll see what i've got available we've had so many investors say hey when you get a deal in maryland let me know listen we have thousands of people we talked to yeah i'm not going to remember that one person so yeah i'm about bother if you email me every other month or so and hey you got anything new and sure yeah yes no so yeah stay on top of your investor friends is a big thing in their space yeah um and i know that you know without getting too much into it you're gonna be going ramping up and buying more inventory soon with the fund you're coming out with so if investors are looking for that passively it's another avenue to go where you may not be able to buy an asset but if you can connect with somebody that can buy assets you know for you you can be a passive investor don't close that door because it allows you to collect a great return with somebody without having to be on the hook to run it yourself yeah exactly well yeah just throwing it out there for those who are interested in the passive way of investing yeah um so has a deal ever gone sideways where it went weird or you didn't know what to do in that scenario here's the thing when you buy a note it's not like buying a property when you buy a property it's there it's vacant you know it's got bricks and mortar sticks whatever it is yeah that's easy but what we're doing is we're buying a note where there's a person involved and people are weird and they will be the most bizarre things where like that's why wouldn't you do that like this is the most logical thing you could do but but they don't uh for whatever reason uh because they're attached to it because it's a family home because i don't know what but they get attached to it and i you know it would make way more sense for them just to move out of this house but they're determined to keep it okay that's great but you understand what that means and we just kind of have that frank conversation okay if you can afford it great but if you can't i'm here to help some other way or if we can make some kind of modification on the loan sometimes we can sometimes we can't but yeah we had a deal where we couldn't and you felt guilty like and you know bars are enlisted this but we've been in a space where you're like my husband's disabled lost his job i can't afford it i have a tenant who destroyed the house yeah help me yeah and i can't yeah you know i just pleaded they don't file bk just to belong here because and it's like oh and another lien was on it and it was just it was a nightmare yeah we've also had borrowers who kind of were renting the house out and hadn't collected a rent payment in like four or five months and we did a door knock and attendant's like yeah i can't send my payment so i bought my landlord yeah it's like oh my god so we've sent the door knocker out and landlords on the couch looked like she slumped over like she's whatever she was sleeping because she worked overnight and the door knocker knocked called the police on on the lady for a while and it was just like what are you doing please she came into her pissed off but hey she called us the next day and like what's going on and we ended up getting uh we ended up getting uh i think we uh that was a dean lewis region and she just didn't want the property more didn't want to be a landlord anymore we kept the tenant tenant was paying like 800 bucks a month i paid crap like 10 grand for the note it was sweet after a year we sold it like 68 grand whatever it was and it was a slam dunk situation but that was early on right yeah um i know wade had a weird story that when a piece of a plane landed inside the house i think he shared that story there's so many like you said besides the brick and mortar we have people yeah people are never ever able to be normal we're not normal people no and they're they're caught up in the situation whatever else and it just gets tricky yeah not always you know obviously but there are certainly those situations where you just go really that's what you want to do okay yeah and i think you know for us it's that we go into with the thought process that we're going to solve a problem and we're going to get this extra strategy and i've learned to throw that out the window because anything's possible yeah yeah i'll go in with a certain mindset of like okay this is what i think is going to happen or this you know the most likely scenario or this would be my ideal scenario and sometimes it works you know often it does but then other times you get the borrower coming back and they say well no i want to do this instead and really okay yeah you say so i've argued with sellers about performing loans and why buying them all based on the fact that they're going to perform forever right um i i don't understand why it's hard to understand because a loan performed but that was once not performing how it's impossible for that loan to stop performing again right um and they've tried to convince me of it and i kind of shake my head and say listen like guys this happened before yeah so why should i assume it's continuing to perform i don't know if you price your loans out oh way but i don't price out performers strictly based on yield yeah no i i'm more when when it's a performing loan i'm on the seller end okay so and i i try to be as upfront as i possibly can and say so this is the history i bought it as a non-performer they got reperforming they've been performing for however many months it's been here's the pay history that you know they paid late in the month but like say the the payment date is the first uh and i'm you know wide open here it is they paid on the 29th but they paid in that month so technically they're on time but you know yeah it is what it is so take it for what it's worth i guarantee nothing i i wish i could say that i believe these guys are going to pay forever but i have no idea and i've heard investors say listen if they get behind you as a lender should be straight on platform and cut and they force me catch up and i used to want to believe that process that if you're a bad lender that if you let borrowers kind of flake out but you have to be flexible these aren't perfect loans yeah for reasons yeah um and the fact that we can be flexible is one of our huge advantages as investors individual investors yeah yeah and i mean i'm sure you've had it where all of a sudden they go dark uh and then you'd catch up with them a month later oh yeah i was in the hospital yeah oh yeah and the other and then they get they cut catch right back up yeah a lot of the time but you know that's why so okay that's fine yeah and we've had those who are like real estate investors or real estate brokers who are bought you know they're dependent on cash flows from the job and they don't get paid every every other week like most people right every three months and they catch up one of the best one is like a tax refund yeah here comes april boom here comes four grand like okay yeah yeah i've got one that's paying me five grand this week got their taxes back so okay oh so you know these these are all deals weird not because always the paper is weird but the borrower is weird um have has a have you ever got a deal because it was weird because of a something you caught a wrong valuation a wrong property yeah those are the best where i i had a chunk i think it was last year that i bought them 2020.

i'd have to go back and look but there's a chunk of them where the tape just for sake of conversation so i i received the tape in whatever it was may uh but the tape was dated something like february so the last date paid was like january or february and they were being marketed as non-performing and i look at the pastry was on there i'm like there's no way these are all you know non-performing the tape date is back in february so i bought it sure enough they're all performing yes oh because he had probably that formula there saying if it's more than 30 days mark could not perform it yeah it was just old data that they were working with there was nothing wrong with the loan they just gave me old data so i'm going by the data they give me and that that works wow that's one i hadn't pulled off here that's great yeah i had like five or six in that in that little pool that i bought that uh worked out really well so yes oh and there's times where values are way off right that's the most common one so if you're listening and you know don't always trust the seller's value that you know compare typically they're higher well you can get those slam dunks where they're lower um we won't name names but we know investors who've bought deals and they sold where the value was much higher we had one personally yeah new jersey was just marketed for 50 grand value and probably worth the horn80 you know we talked about last week but i think that the weird tape situations is good too because we've gotten and i was terrible at school with this word definitions of like the asset like not on tape format but the last sale date less and it's like this doesn't fit in a pretty thing right but the dates didn't match up so we kind of analyzed and looked at it and go whoa what and they mis-typed it in or whatever it was really okay um and we've had sellers say listen take the last paid date as your pay to date and i'm like that's not right and because we asked that question we actually got new information which showed different information okay and it would show the fact that we were not overpaying because the date was so new we lost the deal but because most people are using the wrong pay to date probably and check it out it was interesting so let's finish up with what you've been doing lately what have you been working on what any deals are going on right now that you're struggling with or whatever you're going on i've got i've got some of these funky deals i've got i've got one in maine oh man i'll never buy in maine again holy crow we're able to pull it out of our butts here to get it done but maine if you didn't know i didn't maine has a rule where if you're going to take this to a foreclosure there has to be a representative in person from every chain everybody who owned that note over the history of the time so i this was traded something like five or six times uh so they're going to have to have a representative from every one of those companies uh present at the foreclosure which you know a couple of them don't even exist anymore anyway i found a lawyer that knew the work around and so we got that done but that took a little thank god to get that wow i remember somebody had mentioned that to me before it may have been matt kelly about that and i didn't realize at the time and i'm like holy god like that could be a nightmare yeah yeah um and there are some attorneys out there that really kind of i mentioned the one i don't recall who it was but yeah holy god yeah so that was that took months i i you know calling around to different attorneys just trying to take the case and they all quoted me the same thing and then finally i said what do you know anybody who can take this and he's like oh i tried my buddy brett whatever and so i call him and he's like oh yeah totally here's how you do it we get an assignment to go straight to you so we skip all that and i'm like oh that's brilliant that's awesome that's awesome i mean i think that you know those are the kind of things that people don't realize what's going on yeah and it's frustrating because i just you sit there and say listen this is something odd yeah but it's not talked about at all um but we avoided the same reason that it's just too much of a headache now if you can take advantage of that situation and have the angle yeah great so maybe i will because now i know the rule in maine so i can check it out beforehand i don't know other than that i still just buying selling doing our thing getting ready for my fund here get putting all the pieces together for that so that's exciting yeah now are you are you been how is the i know we thought before about the whole situation um but how are you doing with buying lately things have been kind of a weird scenario we're getting a lot of assets but sales aren't what they used to be so it's hard to adjust quote-unquote to what we're used to it hasn't been bad i just got a couple of a couple of tapes earlier this month and then i got one more here just the other day there's only like four loans on there uh that just the seller knows what i'm looking for and so he sent those to me okay which actually now that i look at them i haven't looked at them that close but i just peeked at it they're not bad just quick looking at the numbers that looks pretty decent um so yeah i mean i there's less if i look back to a year ago uh i keep a separate spreadsheet every month with all the tapes that i receive in that month in that calendar month so if i look back from a year ago or you know 18 months ago i think for sure i'm getting less tapes than i did back then okay but i've got enough you know solid sellers that i just talked to him last week and said so how is inventory looking at am i okay to keep going here and he's like oh yeah no problem no problem so yeah and i think yeah i think what most people and i think we talked about this last week is fannie and freddie just started selling off a few years ago like the inventory they had in 0708 did isn't even kidding us yet no so combine the covid yeah um but there are more bigger players but the inventory fannie free like i said just start selling i think 2015 or whatever it was yeah they didn't sell off their assets and they sell to the big guys first and then you know the big guys will yep trickle down trickle down and they'll kick around the things that they want maybe they are deciding what they want and what they're going to sell off and that takes a little while to get around to our level so yeah we're dealing with bk issues prolonged trying to decide if i'm going to justify motion relief because they can't keep down the curb just kind of weird dealing with that um we're dealing with um we're coming out with a uh we have a beginner video series already out but we're moving into the fact that making a collaborative community one two and we post more about that but we're finding out is that you know the inventory has shifted um and relationships are now more important than ever um and we're seeing a lot of deals uh pricing is not as great as ever was you have to be a little more creative with things which we've adjusted to but i think that for us you know our angle now is to look at seller finance as another way to acquire assets um just a lower pricing yeah just to get in a better situation our yield number so we're not dropping our bid because of the numbers so have you know we've been dropping our return requirements a little bit just to adapt to the new sector because if if not we're going to start losing we're not going to buy as much as we used to right at all but we want to reduce from buying what we're buying now which is not a lot to buy a little bit more still being careful are you making the same adjustments yeah same kind of thing uh you know if you're trying to get the same returns you were in 2012 you're gonna be disappointed so just realize that it's a little different i still think we're going to see a bunch of more inventory coming on on the market so if you're set up for it and you're ready then great um yeah keep going doing what we're doing and i'll link with this i know most people ask is what do you buy performing loans at what yield you're buying at and i often can't give that answer um there's so many moving parts to simplify that answer is hard what do you typically give as an answer if you have one i mean we can range from eight to 13 on a first yeah there's quite a range there um and it depends on you know location is part of it yep hey history is part of it uh you know collateral documentation is part of it um there are payments left yeah number of payments left all those things factor in what's the interest rate already on there yep all those things factor in um but if i was to give a number um when i'm selling my performing stuff usually it's between 10 to maybe 14 15 at best sure uh if it's a really hairy note maybe they'll they'll get a better return on that but in tip of the ones i've modified i'm going to give a little bit higher just for the fact that that can fall apart at any time you know um for us i think they were in the same boat as you you know that 10 to 14 and those who are not sure why we say pay history matters and how many payments are left is because if there's six months of payments or a year payments buying it i need a return for that period of time that makes sense i'm not gonna buy a a year payments and get an eight percent return it makes no sense at all right that money's tied up and eight percent i'm gonna need a higher return yeah yeah so i think right now we're looking to we're buying performers more than we're buying non-performers um for two reasons we're getting more opportunity to buy them and the pricing right um buying number 49 was difficult um timelines are just skewing right now and license they're changing the timelines has been an issue this at the beginning i mean it takes a little while to catch up so there are several counties that still haven't opened up their their court systems um but they're yeah i've got you know a good half dozen maybe a few more that are just waiting on covid or wait for the the county to open up and reset a new date so that's it's a pain and it's certainly slowing down that and reduces the return on investment for the investor which is all not great overall it'll be fine but it's just eating into that rate of return but can't be helped unfortunately no no and you know the question of when this will end um you know i'm even if people say well you're the new memorandum come coming out and we're gonna have you know it's gonna be till july right now it can kick down the curb again like i don't even i'm projecting out that we're not going to end this i'm like that's what it feels like that's a possibility new strains whatever whatever uh i don't know fingers crossed i'd be happy to be done by summertime but yep i think that's optimistic yeah i mean we're still locked down jersey here so it's a little different but um i know all the parts of the country are opening up so yeah but so well it'd be great to get in person meeting conferences and stuff like that so that's what leslie said nathan are you planning to attend any conferences next year or this year for that matter well i'd love to my biggest hiccup is is the border i'm up in canada and they keep closing like the border closure keeps getting bumped 30 days every month so now we're into february and we'll see in february i anticipate they'll keep it closed for another month at least so that's that's my biggest hangout uh otherwise i'm sure i could travel safely i'm not really too worried about it but yeah we'll see well we're hoping so too uh we just like i said we attended the non-qm yesterday yeah um it wasn't the same um handing out business cards just talking and getting together is a big part of that but i think that i know dme mentioned they're good running something um i'm sure the other ones are going to be doing it um and then i don't know if you're part of the cashflow expo that's coming out that one's going to be a virtual one as well in february right that's your conference i think it's coming up in two weeks yeah ran by tracy and fred yeah so we're getting used to the whole online way to doing it um but those kind of events are hard to do so it is i i i think really and truly i think this is a temporary thing uh it's gone on longer than anybody wants it to but yeah it'll end it'll be fine we'll get back to i like it in normal all right nathan well man our pleasure man it's been pleasure talking to you we'll catch up again next week let's kick it off and uh if anyone had any questions feel free to reach out nathan or myself um if everyone's interested in the in the uh fun he's coming out with just feel free to reach out to him as well yeah all right guys thanks a lot thank you or just make sure it gets moved to the other group as well it should be posting automatically but okay hey everyone dave putz here from jkp holdings alongside me nathan turner how you doing man how's the week treating you really good really good so so this week's been a kind of a weird week um we'll open with uh an odd situation we weren't sure if we'd talk about it but i think it would be interesting to talk about a little bit um we go to this conference yesterday um and it was something we wanted to learn about and i think that it was very interesting to learn about it because it's a different avenue of note investing that we're not used to um and something we want to explore and learn about uh a lab is over ahead and a lot of it was stuff that is different from our institutional world um i think that with that we found common understanding that it's something that we should learn about but it's such a big sector it's probably like jumping into our world at one time yeah yeah there was that was a lot of high level talk that i understood part of it but really not a whole lot so yeah that was interesting yeah did you do the the network or yeah you did we talked yeah so so it was weird we for those who weren't there whatever you had a chance to kind of randomly meet people yeah um when you randomly meet people they pick based on your interests well i picked investor because i was curious what other investors out there hoping i'd run into somebody that i can learn from a little bit and just connect with well oddly enough i run into nate in the middle of the thing going oh crap like hey what's up so it was quite interesting but anyone who's was part of that um or curious about that please feel free to you know jump in and ask some questions and a lot of stuff so nathan we want to talk today about ways you've acquired deals that are just not unique you've got a table assets or a list of assets that a seller sold that just were just not normal it was something different that this deal just happened and the way that deal came about happened so give a situation that a deal came up what was the situation where a deal came across your table and a little more detail about it and like what went on to make it weird so this is actually turned into a fairly consistent uh deal flow for me uh where i'm trying to remember how we met in the first place it might have been at a conference and uh ran across this girl and from middle of texas somewhere and she's telling me how they sell they sell notes and so we got kind of talking about it and of course i'm interested because i would like to buy more yeah so their whole deal is they buy seller finance notes just in texas okay so they're they're they're mom and pop seller finance stuff like nothing institutional nothing professional at all uh and then they'll they'll come across ones that are um deals that are you know becoming non-performing or whatever and then they'll pitch them over to me and i'll pick up some of those but they're it's it's a little odd because because they're seller finance deals sometimes the paperwork is a little screwy what does screwy mean what define what you mean by that well like for example um i've actually been pretty impressed with the pay histories that i've gotten okay uh but at best their their you know somebody's spreadsheet where they just they put it on a random spreadsheet so like no software anything tracking anything like that but they're keeping track of how many times people have paid so that that's okay but actually it's not good enough that i can get it with a regular servicer a regular servicer doesn't want to handle those so i end up having to that's a huge difficulty yeah that's a huge thing because i think we're going to talk about this weekend at um one of our we're gonna do a webinar this this whole weekend uh on sunday night talking about that particular topic that celebrates the world that you can get into but the difficulty of seller finance is traumatic because they're not the clean cut deals that we're used to no no and they're a little bit funky so far the paperwork that i've gotten has actually been decent you know nothing written on the back of a napkin or anything it's actual real documents made up by real attorneys uh deeds of trust because it's texas um but the pay history has been the thing that's been just a little bit screwy and good enough that i feel comfortable taking it on but uh certainly not standard yeah so that's been fun you know music collateral is okay part but yeah i think that the pay history and the data on it is difficult it is and then the other thing that's a little bit kind of weird is this was you know a seller finance thing so it was uh you know joe blow and his wife sold a property to that they owned to somebody else and now they wanted to cash out for whatever reason okay um but because of that because it's just mom and pop you know property owner who's selling a property they've got a different kind of a relationship with the borrowers you know not not an institutional relationship but very much a personal relationship and which doesn't bother me at all but again it can be a little bit uh kind of weird walking into that kind of a situation where i'm trying to pick up on this personal relationship that they had and now i'm the new guy coming in and what the hell are you yeah yeah yeah and don't you bought a deal from them that was a killer like you know that just was just ridiculous and do you think that you s did they did they give it away for a reason or what's the what's your thought process there yeah it really i've had a couple that have gone really well i had one where we ended up taking back property and sold it and it was worth more than than what it was reported as so great that worked out well then i had actually a couple uh more just that i bought last year where the performance they weren't actually that far behind they're only like four or five months behind which in our world like as we know four or five months yeah like all right sounds good to me that's not three years yeah so uh the one um i kind of called him on it and said so here's the situation you're four months behind or whatever it was and and so okay they just paid up their ears awesome so wow i got a nice bump up front and then they're back to paying regular no problem and and were their servicer not doing their job or what did they not reach out to the borrower you think well that's kind of the trick is it's not with a servicer it's with a mom and pop investor so you know maybe they let it slide whatever whatever but it just over time it kind of adds up and may it wasn't even necessarily consecutive missed payments it was they missed one this year and then two more that year and another couple that other year and they made up a couple of those but in the overall they're still four or five months behind and you know summer finance notes as much as they're really the wild west like oh yeah they do things that are just completely different from all of our understanding and sometimes the collateral papers just the way that they set up the schedules off you know um every third week every you know it's just weird right so yeah um someone i want to learn about um which will run the webinar is speaking about not only buying it but like what are the how do you find the new deals right so the webinar running sunday night is all about finding the deals like how can you be skip the broker and market these companies uh we know a friend of ours who's gonna be on the webinar uh gabe he's done a ton of these things where he's marketing buying lists marking selling it and then getting a hold of the seller and he's shared with us he's got to contact him three or four times and explain them why am i buying me a discount yeah um and he's sending out postcards right yeah yeah i think he's like eighteen thousand he'll be talking amazing but the home runs he's hitting is ridiculous we get the stories and i'm like oh yeah like you bought the third yeah five thirds and gets paid off right i'm happy for him but at the same time i'm just a little jealous yeah so gabe if you listen man we're coming for you now um so you know i think you're right those kind of paper is definitely weird right it's nothing typical not to you know what we've gone into for us the weird paper i've run into is the investor who's trying to get out okay we've had a lot of those kind of investors who they come to us but like hey listen i don't want to shop this i'm giving to you you give me the price and you'll walk away with the deal from right um which feels kind of awkward because i can like take advantage of them but yeah i don't want to yeah um but it came down it was a deal one deal was in pennsylvania where it's like i don't want it the update is like nine grand like i don't want that deal and it was like some seconds on there i really wasn't interested in and you know that person just wanted to get out they wanted to get out of space they were getting into different investment strategy and they didn't like it it liked the legal part of it and just the headaches and dealing with bankruptcy stuff and dealing with a servicer they were trying to self-service and it just didn't work out well yeah so you know we came across this deal i kind of questioned why and then flatline i said listen that's the case we're going to go ahead and buy it so i gave them a couple pricing and they said let's do it those deals have tremendously been rewarding we bought that i think we bought the 9000 upb for two grand and the payments are like 450 a month i mean it's just whatever it was ridiculous yeah holy crap you know um couple forbearance agreements and whatnot but i think for us it was you know we buying more loans from investors who are trying to get out for whatever reason yeah um and i understand that that's what they're looking to do yeah so are you going to be getting into more seller finance stuff uh not necessarily um if it comes up and if if it's clean enough it doesn't have to be perfect but if it looks good enough and the numbers are good sure i you know i did the same kind of thing last year i bought a couple of notes for 500 bucks each yeah they're low low balance they're only like three thousand dollars uh but they're maturity in like a year and a half so i'm like sure so i mean the return is ridiculous but it's uh 300 400 a month that's a problem with a lot of these small deals because they're not a 200 000 institutional loan typically smaller loans unless it's a barrage of properties and they combine into one new um have you ever been in a situation where you bought a loan from somebody like at a conference like hey i got this loan on myself have you done that had that been successful for you uh i think i have trying to remember which one it is i got my other lists past deals going back here i have i'm trying to remember which deals they were i don't remember them being you know ultra stellar but not bad either yeah so you know they're they worked out as well as any other deal i bought a deal of somebody similar that they had a partner and they had to get out because it's been a while the partner to get paid off and they're jv into the deal um and again it was a situation where i heard them actually talking to another investor and then another investor was like well let me look at numbers and i luckily had my phone on me through my calculator i'm like here's what i'm gonna probably pay you yeah and within three four minutes you're like let's do it like let's make it happen yeah um didn't turn out to be the greatest deal but it was a scenario and a lot of people ask how do i get deals how do you find deal you don't have to buy it from the traditional institutional lender that everyone knows about yeah just talking and networking talk talk talk talk to everybody yeah you never know who has a single deal or ten deals or that a hundred need to get out of or rid of even hedge funds with you know old assets that have you've seen before go approach them and throw a number to them obviously they didn't sell for a reason and and you'll get this line where you go talk to someone and they're like oh we don't have anything right now but we'll send you something sure they will so call them back send them an email whatever get in contact with them six months from now whatever it is and say hey do you have anything available because yeah it's not top of mind i do the same thing people are like oh i send me a deal yeah if i think about it sure but yeah remind me and i'll i'll see what i've got available we've had so many investors say hey when you get a deal in maryland let me know listen we have thousands of people we talked to yeah i'm not going to remember that one person so yeah i'm about bother if you email me every other month or so and hey you got anything new and sure yeah yes no so yeah stay on top of your investor friends is a big thing in their space yeah um and i know that you know without getting too much into it you're gonna be going ramping up and buying more inventory soon with the fund you're coming out with so if investors are looking for that passively it's another avenue to go where you may not be able to buy an asset but if you can connect with somebody that can buy assets you know for you you can be a passive investor don't close that door because it allows you to collect a great return with somebody without having to be on the hook to run it yourself yeah exactly well yeah just throwing it out there for those who are interested in the passive way of investing yeah um so has a deal ever gone sideways where it went weird or you didn't know what to do in that scenario here's the thing when you buy a note it's not like buying a property when you buy a property it's there it's vacant you know it's got bricks and mortar sticks whatever it is yeah that's easy but what we're doing is we're buying a note where there's a person involved and people are weird and they will be the most bizarre things where like that's why wouldn't you do that like this is the most logical thing you could do but but they don't uh for whatever reason uh because they're attached to it because it's a family home because i don't know what but they get attached to it and i you know it would make way more sense for them just to move out of this house but they're determined to keep it okay that's great but you understand what that means and we just kind of have that frank conversation okay if you can afford it great but if you can't i'm here to help some other way or if we can make some kind of modification on the loan sometimes we can sometimes we can't but yeah we had a deal where we couldn't and you felt guilty like and you know bars are enlisted this but we've been in a space where you're like my husband's disabled lost his job i can't afford it i have a tenant who destroyed the house yeah help me yeah and i can't yeah you know i just pleaded they don't file bk just to belong here because and it's like oh and another lien was on it and it was just it was a nightmare yeah we've also had borrowers who kind of were renting the house out and hadn't collected a rent payment in like four or five months and we did a door knock and attendant's like yeah i can't send my payment so i bought my landlord yeah it's like oh my god so we've sent the door knocker out and landlords on the couch looked like she slumped over like she's whatever she was sleeping because she worked overnight and the door knocker knocked called the police on on the lady for a while and it was just like what are you doing please she came into her pissed off but hey she called us the next day and like what's going on and we ended up getting uh we ended up getting uh i think we uh that was a dean lewis region and she just didn't want the property more didn't want to be a landlord anymore we kept the tenant tenant was paying like 800 bucks a month i paid crap like 10 grand for the note it was sweet after a year we sold it like 68 grand whatever it was and it was a slam dunk situation but that was early on right yeah um i know wade had a weird story that when a piece of a plane landed inside the house i think he shared that story there's so many like you said besides the brick and mortar we have people yeah people are never ever able to be normal we're not normal people no and they're they're caught up in the situation whatever else and it just gets tricky yeah not always you know obviously but there are certainly those situations where you just go really that's what you want to do okay yeah and i think you know for us it's that we go into with the thought process that we're going to solve a problem and we're going to get this extra strategy and i've learned to throw that out the window because anything's possible yeah yeah i'll go in with a certain mindset of like okay this is what i think is going to happen or this you know the most likely scenario or this would be my ideal scenario and sometimes it works you know often it does but then other times you get the borrower coming back and they say well no i want to do this instead and really okay yeah you say so i've argued with sellers about performing loans and why buying them all based on the fact that they're going to perform forever right um i i don't understand why it's hard to understand because a loan performed but that was once not performing how it's impossible for that loan to stop performing again right um and they've tried to convince me of it and i kind of shake my head and say listen like guys this happened before yeah so why should i assume it's continuing to perform i don't know if you price your loans out oh way but i don't price out performers strictly based on yield yeah no i i'm more when when it's a performing loan i'm on the seller end okay so and i i try to be as upfront as i possibly can and say so this is the history i bought it as a non-performer they got reperforming they've been performing for however many months it's been here's the pay history that you know they paid late in the month but like say the the payment date is the first uh and i'm you know wide open here it is they paid on the 29th but they paid in that month so technically they're on time but you know yeah it is what it is so take it for what it's worth i guarantee nothing i i wish i could say that i believe these guys are going to pay forever but i have no idea and i've heard investors say listen if they get behind you as a lender should be straight on platform and cut and they force me catch up and i used to want to believe that process that if you're a bad lender that if you let borrowers kind of flake out but you have to be flexible these aren't perfect loans yeah for reasons yeah um and the fact that we can be flexible is one of our huge advantages as investors individual investors yeah yeah and i mean i'm sure you've had it where all of a sudden they go dark uh and then you'd catch up with them a month later oh yeah i was in the hospital yeah oh yeah and the other and then they get they cut catch right back up yeah a lot of the time but you know that's why so okay that's fine yeah and we've had those who are like real estate investors or real estate brokers who are bought you know they're dependent on cash flows from the job and they don't get paid every every other week like most people right every three months and they catch up one of the best one is like a tax refund yeah here comes april boom here comes four grand like okay yeah yeah i've got one that's paying me five grand this week got their taxes back so okay oh so you know these these are all deals weird not because always the paper is weird but the borrower is weird um have has a have you ever got a deal because it was weird because of a something you caught a wrong valuation a wrong property yeah those are the best where i i had a chunk i think it was last year that i bought them 2020.

i'd have to go back and look but there's a chunk of them where the tape just for sake of conversation so i i received the tape in whatever it was may uh but the tape was dated something like february so the last date paid was like january or february and they were being marketed as non-performing and i look at the pastry was on there i'm like there's no way these are all you know non-performing the tape date is back in february so i bought it sure enough they're all performing yes oh because he had probably that formula there saying if it's more than 30 days mark could not perform it yeah it was just old data that they were working with there was nothing wrong with the loan they just gave me old data so i'm going by the data they give me and that that works wow that's one i hadn't pulled off here that's great yeah i had like five or six in that in that little pool that i bought that uh worked out really well so yes oh and there's times where values are way off right that's the most common one so if you're listening and you know don't always trust the seller's value that you know compare typically they're higher well you can get those slam dunks where they're lower um we won't name names but we know investors who've bought deals and they sold where the value was much higher we had one personally yeah new jersey was just marketed for 50 grand value and probably worth the horn80 you know we talked about last week but i think that the weird tape situations is good too because we've gotten and i was terrible at school with this word definitions of like the asset like not on tape format but the last sale date less and it's like this doesn't fit in a pretty thing right but the dates didn't match up so we kind of analyzed and looked at it and go whoa what and they mis-typed it in or whatever it was really okay um and we've had sellers say listen take the last paid date as your pay to date and i'm like that's not right and because we asked that question we actually got new information which showed different information okay and it would show the fact that we were not overpaying because the date was so new we lost the deal but because most people are using the wrong pay to date probably and check it out it was interesting so let's finish up with what you've been doing lately what have you been working on what any deals are going on right now that you're struggling with or whatever you're going on i've got i've got some of these funky deals i've got i've got one in maine oh man i'll never buy in maine again holy crow we're able to pull it out of our butts here to get it done but maine if you didn't know i didn't maine has a rule where if you're going to take this to a foreclosure there has to be a representative in person from every chain everybody who owned that note over the history of the time so i this was traded something like five or six times uh so they're going to have to have a representative from every one of those companies uh present at the foreclosure which you know a couple of them don't even exist anymore anyway i found a lawyer that knew the work around and so we got that done but that took a little thank god to get that wow i remember somebody had mentioned that to me before it may have been matt kelly about that and i didn't realize at the time and i'm like holy god like that could be a nightmare yeah yeah um and there are some attorneys out there that really kind of i mentioned the one i don't recall who it was but yeah holy god yeah so that was that took months i i you know calling around to different attorneys just trying to take the case and they all quoted me the same thing and then finally i said what do you know anybody who can take this and he's like oh i tried my buddy brett whatever and so i call him and he's like oh yeah totally here's how you do it we get an assignment to go straight to you so we skip all that and i'm like oh that's brilliant that's awesome that's awesome i mean i think that you know those are the kind of things that people don't realize what's going on yeah and it's frustrating because i just you sit there and say listen this is something odd yeah but it's not talked about at all um but we avoided the same reason that it's just too much of a headache now if you can take advantage of that situation and have the angle yeah great so maybe i will because now i know the rule in maine so i can check it out beforehand i don't know other than that i still just buying selling doing our thing getting ready for my fund here get putting all the pieces together for that so that's exciting yeah now are you are you been how is the i know we thought before about the whole situation um but how are you doing with buying lately things have been kind of a weird scenario we're getting a lot of assets but sales aren't what they used to be so it's hard to adjust quote-unquote to what we're used to it hasn't been bad i just got a couple of a couple of tapes earlier this month and then i got one more here just the other day there's only like four loans on there uh that just the seller knows what i'm looking for and so he sent those to me okay which actually now that i look at them i haven't looked at them that close but i just peeked at it they're not bad just quick looking at the numbers that looks pretty decent um so yeah i mean i there's less if i look back to a year ago uh i keep a separate spreadsheet every month with all the tapes that i receive in that month in that calendar month so if i look back from a year ago or you know 18 months ago i think for sure i'm getting less tapes than i did back then okay but i've got enough you know solid sellers that i just talked to him last week and said so how is inventory looking at am i okay to keep going here and he's like oh yeah no problem no problem so yeah and i think yeah i think what most people and i think we talked about this last week is fannie and freddie just started selling off a few years ago like the inventory they had in 0708 did isn't even kidding us yet no so combine the covid yeah um but there are more bigger players but the inventory fannie free like i said just start selling i think 2015 or whatever it was yeah they didn't sell off their assets and they sell to the big guys first and then you know the big guys will yep trickle down trickle down and they'll kick around the things that they want maybe they are deciding what they want and what they're going to sell off and that takes a little while to get around to our level so yeah we're dealing with bk issues prolonged trying to decide if i'm going to justify motion relief because they can't keep down the curb just kind of weird dealing with that um we're dealing with um we're coming out with a uh we have a beginner video series already out but we're moving into the fact that making a collaborative community one two and we post more about that but we're finding out is that you know the inventory has shifted um and relationships are now more important than ever um and we're seeing a lot of deals uh pricing is not as great as ever was you have to be a little more creative with things which we've adjusted to but i think that for us you know our angle now is to look at seller finance as another way to acquire assets um just a lower pricing yeah just to get in a better situation our yield number so we're not dropping our bid because of the numbers so have you know we've been dropping our return requirements a little bit just to adapt to the new sector because if if not we're going to start losing we're not going to buy as much as we used to right at all but we want to reduce from buying what we're buying now which is not a lot to buy a little bit more still being careful are you making the same adjustments yeah same kind of thing uh you know if you're trying to get the same returns you were in 2012 you're gonna be disappointed so just realize that it's a little different i still think we're going to see a bunch of more inventory coming on on the market so if you're set up for it and you're ready then great um yeah keep going doing what we're doing and i'll link with this i know most people ask is what do you buy performing loans at what yield you're buying at and i often can't give that answer um there's so many moving parts to simplify that answer is hard what do you typically give as an answer if you have one i mean we can range from eight to 13 on a first yeah there's quite a range there um and it depends on you know location is part of it yep hey history is part of it uh you know collateral documentation is part of it um there....