Podcast – Distressed Pro

Note Business Training and Mentorship with Mike Ruscica Please note that the program and pricing that Mike and I discuss in this interview has changed. Please contact Mike with the form below for more information. I’ve known Mike since about 2009 and he has proven to be one of the most knowledgeable and trustworthy players in the notes space whom I’ve met. If you’re looking for someone to roll up their sleeves and help guide you through getting started in the note bustiness enter your name and email below and have a free introductory call. Looking to Learn the Note Business with Solid Training and a Hands-On Mentor? Name First Last Email PhoneThis field is for validation purposes and should be left unchanged. jQuery(document).bind('gform_post_render', function(event, formId, currentPage){if(formId == 129) {} } );jQuery(document).bind('gform_post_conditional_logic', function(event, formId, fields, isInit){} ); jQuery(document).ready(function(){jQuery(document).trigger('gform_post_render', [129, 1]) } ); https://www.distressedpro.com/mr-mentorship/feed/ 5 noBrecht Palomboreal,estate,reo,foreclosu

In this episode of the Distressedpro.com Professional Podcast series, Bill Mencarow will teach you how to get started with note investing for retirement and long term wealth building. Bill is an experienced note investor and in this interview, he talks about how you can approach note investing to maximize your returns for your retirement. Transcript: Brecht Palombo: Welcome back everybody to another episode in the DistressedPro Professional Podcast Series. Today, I’m very happy to have Bill Mencarow. Brecht Palombo: On the podcast, he is, as far as I know, the authority on notes and note investing. When I first started … Geeze Bill, how long have you been in business with Paper Source? Bill Mencarow: Paper Source was started in July of 1987. Brecht Palombo: Wow. Bill Mencarow: Yeah I had just left Capitol Hill at that point, I was working as a congressional staff in the U.S. House of Representatives for quite a few years and realized that you get old in that job real fast and I had done everything I wanted to do on the Hill. And so I was kind of between jobs, didn’t know what I wanted to do and so I had been investing in, I bought a piece of, a single family house when I worked on the Hill, as an investment. And I had all sorts of trouble with tenants. I didn’t know how to be a landlord at all and didn’t have very deep pockets. So I started reading all I could and going to seminars on landlording and I met people there who invested in notes. And this was all new to me, so that’s how I got started in the early ’80s. And then when I, going back there for a minute, when I left Capitol Hill, I thought, well there’s no newsletter on notes. A lot on real estate but nothing about notes. So I started that with my wife Allison, out of our guest bedroom and it kind of took off. I thought it would just be a temporary thing, just to have some fun with and try to figure out what I was going to do when I grew up. And it just took off from there. Now we have a monthly publication, we’ve published every month since 1987. It’s about a 14-page publication on notes. It covers all aspects of it, new laws, court decisions, legal things going on, how to negotiate, what to do, how to find the notes, all those kind of things. And we have an annual convention. The first one that was ever started for the note industry and that’s at the end of April every year in Las Vegas. And we sponsor another seminar, a small boutique kind of a seminar on notes each year. In fact, we have one coming up in June in San Antonio, Texas. Tom Henderson, who is a very well known, very well respected note teacher, is going to be teaching a two-day class for us. So if people are interested in that, that’s at papersourceseminars.com and we can talk about that later if you want. Brecht Palombo: Great. Well so when I first even learned that an individual could purchase a note, which is probably 11 or 12 years ago now, and I set out to learn a little something about it, your site was one of the first things that I found and I immediately subscribed to your newsletter. In fact, kept a three ringed binder with all the back issues so I could go back in there and read through them because it really is… You know the panel of experts that you have there and the fact that it reliably comes out every month and always has good information and it really sets a bar, I think, for note investor information. You really provide a lot and it’s very very reasonably priced. It’s 100-something bucks a year, maybe, or something like that for your- Bill Mencarow: I wish it was that much. It’s $79. Brecht Palombo: $79 a year. A steal at any price. It is excellent. So, I thank you for providing that and it was really one of the first places where I, like I said, where I started to learn anything about notes. Having come from the real estate side and of course, my initial experience with notes was mostly foreclosing on them and cleaning them up. And so that’s not what we’re going to talk about today though. I think what I’d love to hear today is, as somebody who’s been investing in notes and has been in this industry for as long as you have as really a pioneer in it and an authority, I’d be interested just to talk with you a little bit about how my audience can get started with note investing. Because the way a lot of folks find us, sometimes they find us because they are, they’ve already been introduced to notes and they’ve heard something about nonperforming notes and now they want to pursue that. But sometimes what happens, in fact probably the majority, are out there looking for real estate. They’re looking for rental real estate. They’re looking for discounted property and this sort of thing and then along the way, they discover that there’s this thing called notes that’s kind of like real estate and you still get payments but for a lot of folks it seems abstract, like even hard for them to get their heads around. And so as an experienced note investor, I’d love to talk a little bit about how to do this in sort of a long-term disciplined way and create wealth and even retirement from that. Because I think that’s probably the goal for most folks who end up finding this as a cash flow opportunity and want to learn more about it. So I’d love it if you could sort of take us inside that. Bill Mencarow: I’ll be happy to. Let me preface it by saying I took my two day introduction to notes course and boiled it down into eight email lessons, fairly lengthy, and I offer them for free on our website because I want people to go into this with their eyes open. I talk about the good and the bad, what can go wrong, how to protect yourself, and that kind of thing. And I just want people to take that before they do anything else and really make a decision as to whether this is for them. It’s not for everybody. So that’s available at papersourceonline.com. Okay, that’s a preface. Okay then so we’ll start with the basics. We’re talking about seller financing when we talk about notes. A note is an IOU. And the note owner becomes the bank, and I’ll give you an example. Let’s take a Mr. Smith sold his house, and the seller financed, and let’s keep it real simple and with low figures, $10,000 note that’s secured by the house and let’s say it’s the first lien. Obviously, it’s going to be more than that, but let’s just play with the numbers because I have memorized the $10,000. It’s advertised for 10 years, so the buyer of the house Mr. Jones will pay Mr. Smith, the seller of the house, a monthly payment just like he would to the bank, only in this case the house seller becomes the bank. That comes out to $132 a month for the next 120 months at whatever interest rate that is. So Mr. Smith is rocking along getting the $132 a month from his house buyer. His note is secured by the house. And you can come along and offer him cash for that note, a lump sum of cash, so you could offer $8,000 for it. Now he might say. “Well, why should I take $2,000 less?” And you say, “Well because Mr. Smith, I’m buying your risk. There are no guarantees what’s going to happen in the next 10 years with Mr. Jones’ life, that he’ll make his payments on time, or I might have to work to get them if he defaults. I’ll have to go through the expense of a foreclosure, the time, and the headaches, which could take months or, depending on the state, could take years,” as you know Brecht. So when you say Mr. Smith, the owner of the note, once foreclosures completed, how much damage will been done to the house. It’s not uncommon for people to damage houses when they’re foreclosed on. So if you were Mr. Smith and you needed some money because people sell notes for only two reasons, they either need money or they have a problem they want to get out of. So if you’re Mr. Smith and you have a problem you want to get out of, you’re afraid that he’s not going to pay or you need the cash right now for whatever reason. Would you rather have $8,000 now or would you rather hope that Mr. Jones sends his $132 every month for the next 10 years and have to deal with the consequences if he doesn’t? So that’s what we’re talking about and you become the bank whether you’re the seller of the property that holds the note, or whether you’re the note investor that buys the note. When you end up with the note, you become the bank, you have a lien on the property. You have to make sure you have enough equity and there’s a number of places, number of things you have to do to make sure that you have due diligence, your proper due diligence. I call it the three Ps, the payer, the property, and the paperwork and you have to do your due diligence on all three. But if you’re well secured, somebody wants in, I wish it was me originally. But somebody I’d like to credit them if I knew who they were. You should only invest in a deal, like a note deal, if you hope that they won’t pay you because you’d get so much equity in the property, it would be a great payday for you if they stopped paying. So that’s basically what note investing is all about in a nutshell. There’s a lot more to it, there’s due diligence on the payer, on the property, on the work, then you’ve got a good investment. But that’s the basics of it. Do you want me to go into any more of that, I’ll be happy to do that? Brecht Palombo: Well I guess I’d like to talk a little bit about if today’s chat is sort of an intro to note investing and I’m somebody who… A lot of the folks I hear from, they have some retirement funds but it’s not quite where they want it to be. A lot of them took a pretty good hit in the last crisis, and maybe it hasn’t recovered. Maybe they’re gun shy, they didn’t get the run up like they would’ve liked to over the last 10 years with the S&P and all that. So now they’re discovering this and so I guess, could we talk about how they would get started? If you’re just at a cold start today. Bill Mencarow: In investing in notes? Brecht Palombo: Yeah. Bill Mencarow: Well, I don’t want to sound self-serving, but I think that somebody ought to take my free e-course. Brecht Palombo: Yeah for sure. I have taken your free email course. Actually, when I first signed up, and cause you’ve had it out there for a long time, it’s been available. Bill Mencarow: That’s right. I do revise it. A couple times a year I go through every word and revise it but that- Brecht Palombo: Oh that’s good. Bill Mencarow: That’s one way to get started. Brecht Palombo: Yep. Bill Mencarow: Another way to get started is to… There’s a couple of good seminars out there, about how to get started in notes. And if somebody wants to email me, because I don’t know, this podcast, once it’s on the internet, it’ll be around forever and so I… But if somebody email me I’ll be glad to tell you my current recommendations for a course. Brecht Palombo: Okay. Bill Mencarow: If you can find a book on the used market called Invest in Debt, by Jimmy Napier, and if you can overlook the way it’s written, it’s got tremendous information in it. I’m sure you’ve read it. Correct? Brecht Palombo: Actually I haven’t read that one, but I’ll look for it. Bill Mencarow: Oh, well Jimmy has a very folksy style, but it had a great influence on me in understanding how discounted cash flows work and how to figure out yields and things like that. So it’s called Invest in Debt, by Jimmy Napier. Brecht Palombo: Most of the folks you’re talking to today, are they investing with retirement funds, or are they investing with extra capital, or how are they approaching that? Bill Mencarow: Actually there are several different approaches. Your own capital, after-tax capital, you can certainly use your IRA to buy notes, and I can go into that in a little more detail in a minute. You can also if you don’t have the cash, you can broker notes. Brecht Palombo: Okay. Bill Mencarow: You don’t need a license in almost… There are a couple of states where you need a license, California being one. You need a real estate brokers license, but in every other state you don’t need to be licensed to be a note broker. It’s different from a mortgage broker. A mortgage broker originates home loans or property loans. A note broker finds notes and gets an investor for them and takes a commission. Brecht Palombo: Right. Bill Mencarow: We also teach that on our website, papersourceonline.com, so if you don’t have the funds that’s a great way to do it, and again I go more into that in my free e-course. If you want to talk about the retirement aspect of it, I think notes are a very powerful tool to have in your retirement plan. A lot of people put money in notes and real estate in their retirement plan. Let me go back to our example. So our little $10,000, Mr. Jones, Mr. Smith example. Brecht Palombo: Sure. Bill Mencarow: Let’s say you bought that note and you paid $8,000 to receive $132 a month for the next 10 years, 120 months. So what is your yield on that? Expressed another way, what kind of interest are you getting on your $8,000. Well if you plug that into a financial calculator, you get %15.63, which is a pretty darn good deal for a well secured first mortgage. But, let’s take it a step further. You contact a note investment firm. There are about, I don’t know how many. We have a directory of them. I think there’s probably 30 or 40 around the country. They’re small companies or mid sized companies, a couple of them are banks, that are in the business full time, investing in notes. So you contact one of those firms and you ask them, “I’ve got this note that pays $132 a month, how many payments of $132 a month would you buy for $8,000?” Now, if the firm is currently investing at, let’s say, %9.6 for that kind of note. The answer is, to get that kind of return, for them, on $8,000, they have to receive 83 payments of $132. Okay? So you assign them… You know, do the paperwork. You assign them the next 83 payments. The firm pays you $8,000. Mr. Jones then, mails his payment to them, the note payer. Now he mails it to this firm. Now what’s your out-of-pocket cost for that transaction? Nothing, right? You paid $8,000 for the note, you got $8,000 for the note from the investment company. At the end of the 83rd month, the firm has received all the payments that they contracted to buy, so they’re out of the picture. Remember, the note had 120 payments on it. Mr. Jones has agreed to make 120 payments. So who gets the remaining 37 payments? You do, and you have nothing invested in that. Brecht Palombo: Yeah. Bill Mencarow: So, don’t try to put that in your calculator, it’s going to break. Brecht Palombo: So there’s a real delayed gratification strategy there, but the IRR is incalculable. It’s so high. Bill Mencarow: Exactly. Exactly. Well, what you can do, is once the investment firm pays your $8,000, go out and find another deal, another note. Another $8,000 deal. Brecht Palombo: Well maybe we should talk about that for just a minute because I spend a lot of time talking about working with institutional sellers and navigating your way through your special assets departments, and your secondary marketing and all that. But what you’re talking about here with Mr. Jones and Mr. Smith is a whole other avenue. Maybe you could… I know it’s not something we can touch on in the next six or eight minutes, or complete in the next six or eight minutes, but maybe we can just touch on finding these kinds of deals that you’re talking about. Bill Mencarow: Sure. There are a lot of ways to find them. One of my favorite ways is to join and attend real estate investment groups. In person preferably, but if you don’t have any in your area, like my little town of Kerrville, Texas, as I’ve mentioned to you Brecht, our town is so small, we don’t have a town drunk, we all have to take turns. So we don’t have any real estate group here, but larger towns do. There’s also online groups. Let people know that you buy notes, that you’re interested in buying notes. I have cards printed up, flyers printed up. If the people that run the group are amenable to you putting out flyers. You can network with… If you start thinking about, well who comes in contact with real estate notes? Real estate agents. Brecht Palombo: Right. Bill Mencarow: When they have clients who do seller financing. Who else? Accountants, title company people. Brecht Palombo: Yep. Bill Mencarow: Real estate attorneys. So if you start thinking in those terms, so who should I be networking, who do I need to tell that I buy notes? And you’ll start thinking of more and more people like that. Brecht Palombo: Yeah. Bill Mencarow: Also, look at the MLS, Zillow, look for property sellers who are offering owner financing, or if you could see a deal where you could talk to somebody about seller financing their property. I like the networking part of it. You can advertise, you can direct mail, which is very expensive and your return is very small decimal percentages on direct mail. I don’t necessarily recommend that. There are people who do it very successfully but they’re real experts at it. There are courses that teach you direct mail. I wouldn’t just try it myself, see if it will work. So those are some of the ways to find notes, again in my e-course we talk about that. Speaking of courses, I did want to point out that we’re having out annual boutique seminar, coming up in San Antonio, Texas, on June 21 and 22, and it’s Tom Henderson who is very well known in the note business. He’s been doing notes for much longer than I have, and he is called the note professor, and Tom’s course is called The Complete Live Course on Acquiring Wealth with Seller Financing and Notes. You go to papersourceseminars.com and you can check it out. See what Tom’s going to teach. One thing he’s going to teach is how to get %18 yield safely and he’s been doing it for years. The course is $695, it’s two days, Friday and Saturday, June 21, 22, but we have a coupon code for your audience. Brecht Palombo: Wonderful. Bill Mencarow: If anyone goes to papersourceseminars.com and signs up for Tom’s course they’ll get $100 off if they use the coupon code “distressedpro”. Brecht Palombo: I appreciate that. Thank you for doing that. Bill Mencarow: Oh, absolutely happy to do that. Brecht Palombo: We’ll make sure we get this out in time so folks can get there. So I guess we’re coming up on time here, but if you could just touch on, you know there’s a lot of things happening out there right now. I’m not expecting you to have a crystal ball, but the future of note investing, is this something you think that is going to be available to investors for a while? Is this something that’s a sustainable thing that people can get involved in today and they’ll have it. It’ll be something they can do for the next decade? Or what do you see happening in Bill Mencarow: Well I think… No doubt. I mean I’ve seen different cycles. You know, sometimes it’s better than other times. You know, we just touched on it. Don’t necessarily think about single-family houses. Sometimes with low-interest rates, an environment which we’ve had for a long time, we don’t have as many seller finance notes available, but that’s only true with single-family houses. If you look at other types of real estate transactions, farmland, commercial property transactions, businesses. Sales of businesses are almost always seller finances and there are buyers for business notes, and we can put you in touch with those buyers if you want to be a broker for those buyers. Or if you want to learn how to invest in other kinds of collateral that’s secured by notes, or rather notes secured by other types of collateral. We can teach you about that. So yeah, there’s a tremendous thing. A tremendous opportunity. I will say, I know we’ve only got a minute or two. Let’s go back to the $10,000 note if we could. I said you buy it for $8,000, you sell some of the payments for $8,000, then you get the back end of these payments, or the last, whatever, 37 payments. Yeah 37 payments of 120 a month. Well what if you had bought that note and you Roth IRA? I was thinking about this not too long ago, and I contacted two CPAs, mine and he contacted another to make sure he was right. I said, “Wouldn’t your Roth keep those back end payments that cost you nothing? Wouldn’t the distributions be tax-free?” And they both said, “That’s correct.” Those distributions would be tax-free to you. If you held them outside your Roth, you have to pay tax on those payments. But inside the Roth, when you take them as a distribution, they come out as tax-free. So can you imagine stuffing your Roth IRA with a bunch of those notes and having those back ends start flowing in and you take the distributions tax free? Brecht Palombo: Yup. Yeah. That’s exciting stuff, and that is the kind of stuff that folks learn at this seminar that you’ve got coming up? Bill Mencarow: Yes sir. Yep. Brecht Palombo: Wonderful. Bill Mencarow: June 21 and 22 in San Antonio. Just go to papersourceseminars.com. Papersourceseminars.com and you can read all about it and be sure to use the coupon code distressed pro and get $100 off the already low price. This is not like $10,000 seminar, this is like $700, the price is going to go to $795, still, it’s a bargain, but you’ll still get $100 off even then. Brecht Palombo: Wow. Really appreciate that. That is a bargain. So if you’re listening to this, you’re interested in investing in notes, you should go to papersourceseminars.com and get involved in this June… June 21st is it? Bill Mencarow: That’s correct. 21st to the 22nd. Brecht Palombo: June 21st. Bill Mencarow: In San Antonio. Brecht Palombo: And learn how to do it, and we’re going to save you 100 bucks when you use the code distressed pro, already a steal, at $695. Bill, I really appreciate you coming on here. I appreciate all the work that you do there and all the information that you put out. It’s one of the first things I recommend to folks, is your website and your newsletter when folks are just starting to dip there toe in here and trying to figure out what they should do. It’s a wealth of information in the note business. Bill Mencarow: Well Brecht, it’s been an honor and I appreciate you guys. Distressedpro.com is a tremendous resource and I hope people take advantage of everything you offer because I think it’s just a great service to investors. It really is. So congratulations to you for that as well. Brecht Palombo: Thank you very much for that. So that’s it. Thanks for being here. Everybody go to papersourceseminars.com if you want to get involved in that June 21st, 2019 seminar, and use the code distressed pro to get 100 bucks off. https://www.distressedpro.com/mencarow/feed/ 1 noBrecht Palombor

What do I do next? That is the question that a lot of new note investors ask themselves somewhere along the process of completing their first project. Well, Brett Burky, co-founder of Paperstac, is on our podcast today to show you how Paperstac will not only improve your current working model but they will also save you hundreds of hours of back and forth with agents and lawyers as you close the deal. On today’s podcast Brett will be talking to us about the origins of Paperstac, how he got into the business of mortgage notes and how Paperstac can help accelerate your buying and selling process. Paperstac is a hassle-free marketplace that helps you efficiently buy and sell notes online. They have created an easy to follow step-by-step system that will guide you through each phase of the transaction. Paperstac Demo Updated demo! Register Now for a Free Paperstac Account Transcript: Brecht Palombo: My name is Brecht Palombo and welcome back to another episode in the distressedpro.com professional podcast series. Today I’m really happy to have Brett Burky on. Brett is a co-founder, and he’s in charge of business development at Paperstac, which is a new note trading platform and so I wanted to have him on here to share with us where this platform is going and how you can use it in your business. With that, Brett, thank you so much for agreeing to be here today. Brett Burky: Well thank you for having me, appreciate it. Brecht Palombo: So I’m hoping what we can do today is dive into Paperstac. I forget how I found you, but do you guys have just one of the most gorgeous, modern sites in this whole space. I really think it looks great. I know that you’ve been working really hard to grow it over the last … How long have you been working on it? Brett Burky: Well first off I’m blushing because that’s a great compliment, appreciate that very much. Well, see it’s been in … The origin started in 2014. Really just running into my business partner, current business partner, Rick at the grocery store, but we launched officially in 2017. We tried something where we outsourced it, and that just did not go right. We scrapped the entire thing.That was, you know, tens of thousands of dollars down the drain. We’re doing it where it was outsourced we’re always talking across the world, so I was up, at like, the weirdest hours, and, once we had it launched we’re like this is not what we want this is not what … We rebranded everything. And that’s when Paperstac was born, in really 2015, June 2015. Brecht Palombo: Cool. So tell me a little bit about how you arrived at building this company and this platform. Brett Burky: Sure, so, my business partners Rick and TJ, they’ve been in real estate for over 15 years. They started as wholesalers, and they worked that world for a long time and then, they started to see the market change. This is back in 2012, when things were getting a little tougher to do and somebody came to them with the opportunity of purchasing a mortgage note. And they didn’t really know much about mortgage notes, they heard about. But they got such a great deal they bought it for eight-thousand, and I think they sold it for thirty-thousand, within like two weeks. Brecht Palombo: That’s not that bad, I’ll take that. Brett Burky: That’s a pretty good return. So they did that for a little bit and, they were really just playing the route of real estate investor, where they would take it and get the real estate back and try to either, you know, like flip it or turn it into a rental. They were having success with it because they found this little area where other people hadn’t found. And they went and formally got educated and then really dove deep into it, and that’s what they pivoted into. And so at that point, they realized they had one … A couple major scares where somethings were, just like it’s very wild west for them, in terms of they had wired a large sum of money and they didn’t know if, they didn’t hear from the guy and they were getting pretty worried. And they were doing other things where they, they just didn’t know the process as well. They just thought this is a great investment class I wish there was a better way to do this. And there are other platforms out there, and they were doing it on there and they really liked it but they’re like, we can do something a little bit different and use a little more, focus more on the technology and see what we can create there. Register Now for a Free Paperstac Account Brecht Palombo: That really does sum up a lot of folks first run experience with notes because it is the wild west out there. It’s not like residential investments where … That’s a very defined process. How the homes change hands, and what happens along the way, and who can sell them, and you can’t, and who gets compensated for it, and all that. Not so, in notes, and so I’ve heard more than a few stories of folks ending up in a place where they run in headlong without really vetting their sellers, or they end up in a place where they’ve wired off some money and they’re wondering what happens next. And that can be a scary place to be depending on how big that wire is, right? Brett Burky: Yeah, that wire was in the hundreds of thousands and it was family and friends money. So they were pretty scared because this is family and friends and their … They said it was like two weeks of just sleepless nights. Brecht Palombo: Yeah, totally. Brett Burky: The guy had said, “I’ll put it in Box”, and they thought he meant Dropbox and … No, but there’s a company called Box.com and everything was just really screwed up and the deal ended up working out fine but it was just a process where they were just like, “Oh my gosh that was scary”. And then they did other things where they didn’t know they had to have different types of insurance, like force-placed insurance, and other things where they’re like, “Well I wish I would’ve known that”, some of these other things where like I wish there was a process that just walks you through it. And so, that was where I came in. I just ran into them at the grocery store ironically. And I’ve been a technology… Brecht Palombo: Really? Brett Burky: Yeah. Well, we had been friends in college. And so, I was just at the grocery store and Rick was there, and I saw him … I also knew he was in real estate and we had done some … I was going to do some work for him previously when he was a wholesaler doing like SCO’s, marketing, stuff like that, he’s like, “Why don’t you come in and see what we’ve got? See if you can maybe consult for us or do something”, and I was like oh okay cool. So I went over to their office, then I heard about the opportunity and what they were trying to do, and I said, “Well okay I’m going to go back and kind of research this market”. And I went back and I was like, oh my gosh, this is huge. There’s a whole … There’s a problem here that needs solving. And I was like, this is what I’ve been looking for. I’d really been trying to find something where it wasn’t consulting work, I was getting tired of doing stuff like that because it’s always just like a round robin, you get one client … And especially in marketing, you make them successful and then you work yourself out of a job. Brecht Palombo: Totally. Brett Burky: So I was like, I need to fix this somehow. So when I came back the next day, I said look, I don’t want to consult, I want in. I was like, I want to be your partners and so they said, “okay”, and so then from there, we started doing some stuff. And then it was later that we got a developer that was … He’s just a ninja, he’s just really good. Because we try to have a couple people … We went to go try to pitch different developers at investment startup conferences and stuff like that … startup meetups, not conferences. But, we just couldn’t find the right guy. We interviewed a bunch of people and you just want to make the team mesh. It’s got to be a tight knit. And so it was like … Rick’s like, “This guy named Mike, he designed a website for us back in 2009”, and I was like let me see it. So I looked at it, I was like, this guy’s using … this is 2009? I understand a lot of code, the different type of code that he was using at that time, I was like, this is very forward for 2009. A lot of jQuery, we’re not going to go that route, but it was good. So I was like, wow this guy is really good. So then I reached out to him and basically the story goes, is I guess I … My enthusiasm sold him on the opportunity and we’ve just been knee deep in it ever since. We’re just been at that point. We didn’t realize how big this is. So there’s one thing where you have it where you list the properties. The listings can be done, but the whole process from everything from negotiations to signing all the documents, having an online notary pop up on your screen, closing, sending the collateral files, wiring money, doing it all digitally where you can do it from pretty much your phone? It’s a big thing. And so it’s one of those funny things where friends would always say, “Are you still working on that? Is it not done yet?”, and I’m like yeah it’s not exactly just an ecommerce store. People don’t just go there and click one button and buy a note, it’s a lengthy process, it’s a put it into a system, it’s just a … Some of those ideas of how do you do it to a way where it’s not tedious. The whole goal was for us to not give people more work. This has to be something that it’s not … People are already doing business the way they do business and what we need to do is make it easier or it’s not an option. Why would they do it on Paperstac if they can do it just as well in a different manner? So the goal had to be that it has to be ten times better, ten times faster, and ten times safer, than what’s going on. So that’s what we’ve been shooting for and that’s been our goal the entire time. So far we’ve done pretty good with it. It’s sort of being launched in September, we went to an event out on your side of the country, out at IMN, which is out in … I think the island was Dana Point. It was really, really … Dana Point is gorgeous. So that was what we officially launched and then we started having transactions, I think that was last September. So October things started to go and then had a couple more November, things sort of slowed down for December. We’ve since then just had tons of feedback. So tons of people saying, “Wow, this is great. I love it. I wish it did this”. So it’s one of those things where we really listen. So it’s like, okay it needs to be able to take pools, people need to be able to use their own documents, just all these features and to the point where I actually went to our data base and I called people on the phone, sent them personal emails, come complain to me, what would you like to see? And so we have meetings and we’ll run those things and see which of the most common things that people want. And so, we’re calling version one, which is going to be out next month, is everything that was asked for so far and a bit more. So, that’s where we’re currently at. Register Now for a Free Paperstac Account Brecht Palombo: So tell me a little bit about who your target customer is with this. Is it hedge funds? Are you targeting banks? Are you looking at private investors? Who’s using your platform? Or who do you intend to have use your platform? Brett Burky: That’s a good question. I mean, currently what we’ve had is we decided that we needed to focus on the current note investors. But there’s a lot of people that we’ve seen going to different conferences where people … They might have been in the industry for a little bit of time and they just haven’t pulled the trigger on anything. And we were kind of like, what’s holding you back? What is it, if the note meets your buying criteria, what is it? So we’re trying to get to the regular everyday note investor that is managing these things, maybe they just have a small fund and there’s just ten, fifteen assets, to people that are managing hundreds of them. Our main goal is to focus on the current note investor and provide a solution for them. Brecht Palombo: As opposed to expiring you mean? Brett Burky: Yeah. The second weight would be more like … So real estate investors seeing this as an option but just not knowing how to go through the process. Later when I demo the thing you’ll see it’s basically … We’ve had people, not to say my parents couldn’t buy a note, but it’s just the process makes it so simple that pretty much someone that’s not familiar with it, just go through the steps. If you just check the steps and you do everything right, you’re not going to get hung up on something where you accidentally do something wrong.The problems where people … There’s things that go, “Well what happens then? What happens then?” you don’t have to guess. It’s just like, just go to the next step. So we’re starting with the current note investors and that’s where we wanted to get the best feedback cause we’re basically dogfooding this product because Rick and TJ are active investors with a multi-million dollar fund, and so when we say, “Hey what about this?” they say, “Well it should be done this way. It would make it a lot easier”, okay. So we do it that way instead. And then with other note investors like, “I really wish it did this”, so if we make it good for the people that are currently in the trenches daily, the other people that would come in, which would be the second wave, would be more real estate investors, maybe … We call them stock market refugees, people that are sitting on the side-lines kind of scared of the markets, looking for a safe investment with a good yield, maybe like an RPO. This might be a better avenue for them and if we make it safe and easy for them, then we’re hoping that there’s a likelihood that they’d say, “I can do this. I can do this with this software, it seems easy enough to do”. Brecht Palombo: So it sounds like the big difference for you guys and what you’re focusing on is kind of two-fold, and correct me if I’m wrong but, for one thing, sounds like you’re talking about really having it be pretty comprehensive in terms of how you manage the transaction, right? Did I get that right? Or would you agree? Brett Burky: Yeah. Yeah, we’re trying to cover all the bases. So there’s things like right now when you get people to the end of the transaction, it’s like, “Would you like us to record the mortgage for you? Or do you want a mortgage recording done?” oh yeah, I do. So it’s just another thing they can click and then we do it. So it’s things that people might not have done. Did you know you need … who are you servicing with? I don’t know, who am I supposed to service with? Well, there’s options out there. We’re not going to tell you who to service with cause there’s a lot of great ones and we don’t want to be biased to any of them, but to say you need it with a servicer is probably pretty important. Kind of hard to do it by yourself. So people sometimes think that the newer people might not know … Maybe forced-placed insurance, hazard insurance, stuff like that they probably want to get they just … Those are the things we’re trying to do. And some of the things in the system are going to be automated for people and sometimes, currently, it just kind of … We have an internal chat where we’re kind of watching … Not watching, but at the end of the transaction, you can see, okay this has been sent. This has been done. So then a lot of the times I’ll reach out to the buyer, is there anything else we can help you with to make this easy for you? And if they have questions at that point like, well what’s the next best step? Well here’s some suggestions. We can’t give investment advice because that’s not what we are but we can say, look, most people will service their note. That’s important. And most people will get this,this, this, and this. So we don’t provide those services, we just want to make sure that they have a happy service with Paperstac and realize that, oh wow, they’re actually trying to help me once this is even done. Brecht Palombo: Yeah, so tell me about the seller side because a lot of folks who are using our platform are out there digging up deals, you know that’s really what our software is all about, and all our training is being able to go out there and actually find the deals. What’re your rules or who makes a good seller customer or client for you? Brett Burky: Well anybody who’s managing their portfolio that’s a seller that has notes they want to get rid of we are doing an integration into servicers, so usually we want to be able to get the most up to date information. So just any seller that’s … We also say, or at least Rick and TJ always say there’s a for sale sign always in the front yard. So if people want to sell their assets and they want to put it on something where they can manage it, that’s what it’s for. We see a lot of synergies with you guys here where they can find them through your software Distress Pro and then be able to, maybe if they find one, maybe turn an R into RPL, or if they want to get rid of it as a non performing, they can put it on the Paperstac. So we’re trying to make that process really simple cause right now it can be difficult. There’s a lot of fields that you need to fill in. There’s all the different things, and ONE’s and DPO’s that you want to provide so that a buyer can actually see that. You know, we always try to tell the sellers to provide as much that you’re really willing to provide without providing any sensitive data to just anybody. But a lot of times when they’re in the negotiation stage, we usually say, “Hey, if you have updated BPO’s it’d be nice to maybe share it with your buyer so they can at least see”. Those are the type of sellers … A lot of the sellers we’ve worked with so far have been people that, honestly have been personal relationships, because we’re trying to really grass root it where … We want to eventually scale to where we can take on a lot of people, but we want to make sure in the beginning we have the right people so that the reputation stays pure. And so a lot of these people have been met at different conferences, phone calls, private Facebook groups where we know that these people are active. We know that they’re not somebody that’s going to come on and, not anything against most brokers, but some people can do some bad stuff and waste people’s time and we’re trying to not have that happen because that would really reflect badly on us cause then they can say, “Oh well it’s just filled with a bunch of brokers”, well that’s not what we want. Brecht Palombo: You’re much nicer about that than I am. Business is full of the joker broker, I mean it’s an inexcusable sort of thing where they’re … Maybe they know a guy who knows a guy, who knows a gal, who knows the seller, who had the tape a year or two ago. I’ve had friends who’ve had their own notes in this business shopped back to them where someone who knows a guy … But then comes the, “Hey you want to buy these?”, no I’m selling those notes, you idiot. So it’s definitely … and I think part of that comes with the territory of it being the wild west. I mean, on the one hand, that’s one of the reasons why it can be so profitable is that it is the wild west and so we don’t have all that stuff that we have to deal with when we’re talking about single-family residences, or whatever. But on the other hand it does make for a bunch of chumps out there who don’t have any product and that’s the last thing you want to do is get folks involved with going down the road of due diligence only to discover that they’re not really talking to anyone whose authorized to sell the thing.Yeah, so that’s definitely a huge problem in this industry and I like to see that you guys are taking a stand on that. Brett Burky: Yeah we try to address that the best way we know how cause Rick and TJ have a lot of their assets on the platform. We have other sales on there too, but we’ll get a lot of bids and we’re doing a lot of things in the new system to where you’re going to have a rating score. So it’s going to be a rating score where sellers can say things that say, “Hey this person wasted my time”, or something like that. We’re starting to see people christmas-treeing the site, putting up 50 bids within 30 minutes, which is not feasible. How would you know without doing any … Bring up the due diligence to know that this is the right asset for you. We’re putting those things into place because we want to make it so that Both sides are very important. Building a platform is extremely hard. This is the hardest marketing thing I’ve ever tried to do. I’ve done a lot of other stuff and building a platform, I didn’t know what I was getting into cause you have two different markets. You have the buyers and you have the sellers and you’ve got to make sure you cater to both. But it’s kind of the chicken and egg because if you don’t have one you don’t have the other so. Right now my focus is a lot on sellers because we want to make sure that it works for them cause their time is valuable … You know so is buyers, we value their time as well. But we want to make sure that if a seller’s willing to put their assets on there the bids that their getting are not wasting their time bids, bids that are just not realistic and they’re bids that don’t get held up in what we’ve seen, I’ve got to check my legal department. What legal department? And then we’re like, you’re shopping this around aren’t you? So you got it for this and now you’re checking with your legal department? That’s a first. So different things like that and then the new system we have it where sellers can basically have a private community where they don’t want to accept you if you haven’t met these criteria. You can’t get in. So we’re trying to do some things where it’ll basically be exclusive. It’ll be exclusive in that it’ll answer some questions … We have a list that we’re trying to whittle down, it’ll basically make it so that these people are people that you’d like to do business with. And it’s not saying that you don’t know this guy, that you might see him at every conference, the reason why you’re using Paperstac is that the transaction process is a lot faster. So it’s more of an efficiency tool at that point and not a platform for finding new buyers. It’s more this is an efficient way of doing it, and I can fly through these things a lot faster, selling pools, whatever. So that’s what we’re trying to do. Register Now for a Free Paperstac Account And we also are … There are some really good brokers that … There’s both. We’ve met some people that do the right thing. They’re right next to the principal, something like that, the principal’s just … He’s too busy. And he knows the brokers will hustle for him, and we know that they put in work. So in the new system we have it where they can set up the deal. So it’s like a … They spin it up, they basically make this little community, and they can put their fees in between, and they bring the buyer, they bring the seller, and they make sure they don’t get cut out of the deal, and we build it for them so that … We want to kind of make it for all, cause we go to these conferences, and we’ll meet some, and we want to be inclusive. So we were trying to figure out the best way to include everybody and not exclude everybody but make everyone happy. And I’ll tell you what man, it’s a math problem. But it’s a fun one, and we’re really close to solving it in the way that we see will work. And it’s coming next month. Brecht Palombo: Well that’s cool. So, I’ve got a couple of things that I … And I don’t want to blindside you here, but I see if you go right to your site, you’re very transparent about your pricing. Pay $250 plus a half a percent of the sale price when you close a deal. Is that something you’re taking forward with … In your new version? Brett Burky: We’re changing the pricing because it’s kind of confusing. People are like, $250 plus a half a percent, it makes you think, and some people are like, “I thought it was 5%”, no, no, no, it’s not 5%. So really the $250 is a lot of the hard costs, so there’s a lot of hard costs that we put into it such as, we pay for your third-party auditing … So we have a third-party auditor that will view the collateral and make sure that it is what the seller says it is, we pay for first class shipping labels back and forth, we pay for the notarization process, and then we have the upkeep of staff. So, that really wraps in … That $250 is basically just a wash. It’s basically just to cover the cost to get the transaction done. And so at that point it’s … We’ve gone back and forth but I think it’s 1%. So it’s … Gosh, don’t quote me on that because we just recently changed that in the last meeting. But it has to be something that … And that’s one thing that we’ve been going back and forth on too because we have some assets that are lower priced, and it’s like, well is it 1% if the assets $1000? What do you do with this when you have some guys selling a million dollar asset, okay well is it 1%? So there’s a lot of things that were trying to take into effect. Especially, also too, if a broker puts together a deal, and they’re taking, whatever points or something like that, where they’re making 1%, now they’re adding … So that’s still in the works. We’re trying to make it so that it’s … Really our goal is to make sure that you’re getting the value and the price is justified cause we don’t want people to say, “Well I love it but it’s expensive”, because that’s the last thing that we want. We want people are like, “This is saving me hours of time, it’s worth the price”. So we’re getting rid of the $250 and we’re just going to throw it into one thing so that it’s easier to understand cause it has been something people have just … If you go to the web server right now, actually I shut down my chrome so nothing popped up, but if you hit that little thing in the corner, that’s my face, and I get that question quite often. And so, as well we got to nip that in the bud. Brecht Palombo: Well I’ll tell ya, in this business I’ve made anything from 10% to as low as three-quarters of a point in terms of commissions, depending on the size of the deal usually. So 10% down in a couple hundred thousand dollar type deal and then 3/4’s of a point on like, ten to twenty plus million dollar kind of transactions and so I don’t know how that translates to what you’re doing here, especially … That’s like a full-service sort of a thing. But it makes sense that you’ll sort out your commissions or your fees or whatever as you go forward and you start seeing what kind of deals are going through there. I guess what I was going to ask you here, where I was going to blindside you additionally was, have you got a deal that you can offer our listeners? Brett Burky: Oh yeah. We’ve got a … Yeah, I’ve got ten deals that we just got all the ONE’s and BPO’s back from. We’ve got a mixed bag, so I don’t currently have a … I’m waiting from … So what we’re trying to do is write the story for each deal because we found that it sells better that way. If people can’t see … What’s the exit on this? We had it where … We had over a hundred assets on the site at one time and we found people just wouldn’t … It’s almost too much. It’s almost too much where they’re like, “Well I don’t know which one”, and it was … If they didn’t know what they were looking for because of the way it’s listed, it’s in like a … You see, they’re all listed right there, it’s not in a spreadsheet format so it’s hard to run your calculations on everything, which is also changing in the new one where you’ll be able to see it like a … You can run your calculations on whatever your exit strategy is. A lot easier but, we had to start putting these assets out and just like, ten at a time, mixed bag, some non-performers, some re-performers, different states, different strategies, and then write the stories, and then put them out by email so that people can say, “That’s the one I want”. But yes we do. All that long-winded to say I have ten and after we finish here I can get the story and I can send it over, and they’re all great. A lot of them are … They’re all Midwest, Ohio, Illinois, Indiana, Michigan, those areas. But they’re some of the best ones that we think that would sell the fastest. Brecht Palombo: Well here’s what I’d love to do it, it’s one thing for you and I to get on here and sort of talk about this whole other thing, if people can’t see it. What I’d invite people to do now, and what I’d love to do with you is we’ll jump off here and get on recording a quick demo that people can find for this episode. It’s going to be at distressedpro.com/paperstac so just drop the ‘K’ and otherwise just like you would expect it. So distressedpro.com/paperstac and over there what we’re going to have is a demo, a little walk through where we’re going to show you the site and some of the features behind it, and maybe, of course depending on when you see this, any of the deals that are on there may or may not still be available, probably not, but there’ll be other deals there for ya. So I’d encourage you to do that go to distresspro.com/paperstac. P-A-P-E-R-S-T-A-C, and there you’re going to be able to see a full demo, and you’ll be able to get a transcript to the show, and Brett, does that sound good to you? Brett Burky: That sounds awesome. That’s great. Brecht Palombo: Well cool, I appreciate you coming on here. Folks if you’re driving you just want to remember one thing, you can go to paperstac.com and check this out. Again, P-A-P-E-R-S-T-A-C.com. Today I’ve been speaking with Brett Burky and if you come on over to distresspro.com/paperstac we’re going to show you a demo so you can see exactly how this thing works. So thanks so much for listening to another episode of distresspro.com professional podcast series. Thanks Brett. Brett Burky: Thank you. Register Now for a Free Paperstac Account https://www.distressedpro.com/paperstac/feed/ 1 noBrecht Palomboreal,estate,reo,foreclosures,distressed,note,buying,non,perform

Raising capital for your next note investment can be hard, that’s why on this episode, we have Paige Panzarello to teach us how she finds funding for herself and her clients. Check Out the Cashflow Chick’s Online Training Podcast Audio: Brecht Palombo: In today’s episode of the Distressed Pro Professional Podcast Series, I speak with Paige Panzarello. Boy, that’s a lot of Ps I just had in that whole sentence, about raising money, about raising capital. Paige has raised a lot of money and she’s been through the whole cycle. Started back early in the late ’90s and so has been in real estate and in notes for over 20 years, Went through the global financial and housing crisis here in the US. She emerged with a very big healthy business, and in this episode today, she walks us through a lot of the considerations, including some tactics and strategy for raising money. Brecht Palombo: We go deep in on that, I hope this is going to be really helpful for you. I think you’re going to learn a lot and just pay attention to what we talk about in here, because if you are thinking about getting out there, doing the work to find the deals, and you’re going to be raising some money. Then this episode is for you. All right, so enjoy and here’s Paige. Brecht Palombo: Welcome everybody to another episode of the Distressed Pro Professional Podcast Series. Today I’m very happy to have Paige Panzarello here from CashflowChick.com. Paige is going to talk to us about raising money. Who reached out to me over there, somebody reached out to me a little while back, and its taken us a while to connect, but I’m really happy that we did. Paige I understand you raised a lot of money. Is that right? Paige Panzarello: I have, I have. Yeah, I’ve been really fortunate Brecht because I have over my career as a real estate investor, but specifically in the last, you know, since I got into the note space. I’ve been very blessed that I’ve been able to raise quite a bit of capital. Brecht Palombo: Yeah, cool. Tell me a little bit about your trajectory as a investor. What brought you here today, and if you could just walk us through. I know a lot of times, people here this and they think, “Oh, well she was able to do this, because she had this sort of benefit that nobody else that. You know, that’s why she’s special and I can’t do it. That’s going to be my excuse.” If you could just take is from what your beginnings, so that people understand how you’re here today. Paige Panzarello: Absolutely. Okay, I’m not special, I can tell you that. In that, I didn’t have any … I started my real estate investing career over 20 years ago. And kind of by virtue, by default. I was thrown into the deep end of the pool by knowing nothing about real estate investing. My grandmother past away and she had a very large estate. She had some commercial property, she had some townhome units. We had a sewer treatment plant, and then we had some land. Paige Panzarello: Of course I was quite young, and I went off to Arizona ’cause that’s where a portion of the estate was. The townhomes, the sewer treatment plant and the land. The estate was about four million in debt. I actually started my real estate investing career in the hole. If I can do it, anybody can do it, no excuses. Paige Panzarello: I literally knew nothing. I very quickly realized, that because I’m a very helpful person, I love to help people, that’s one of my passions. I realized very quickly that I was not a good property manager, because I have a really big heart and everybody has a story. I put property management in place, and then I really started surrounding myself with people that had the answers that I sought. I was able to kind of parlay all of that, within three years we turned the properties around. I got us out of the whole, we were back in the black in three years which was great. Paige Panzarello: Yep, we sold the sewer treatment plant, we leveraged. And then we started selling the townhome units. I realized that I really want to build on the land, and my family really wanted no part of that. I ended up buying the corporation, and I started my own construction company knowing nothing about construction. This is the late ’90s, early 2000’s, and we started expanding and growing. I brought in a qualifying party, we grew in three years to 36 employees. We were building everything, we held all of our licenses except HBAC and roofing. And we didn’t hold those because the insurance was too high. Paige Panzarello: But you know, we were rocking and rolling, we were really building. As you know Brecht, that was you know, the ramp up to 2005, 2006 and then 2007 happened. The crash, you know, I was looking at it and then I saw it coming. But I was very fortunate in that I thought to myself, well this isn’t going to happen to me because I’m only encumbered about 10%. I was wrong, it happened right on top of my head, and it took me down because the people that owned me money didn’t pay me. Paige Panzarello: I was very fortunate that I had a lot of assets, I had a lot of liquidity. I had big commercial and construction equipment that I was able to fire sale. But at the end of the day, you know, at the end of three years, I ended up walking away from Arizona, having paid everybody what I owed them, but I lost $20 million. That has a tendency to change you as an investor and shape you. Brecht Palombo: It does. Yeah, yeah, no, I’m forever changed. My perspective on investment and everything is forever changed from that same period. And I know a lot of the folks here feel the same way. Paige Panzarello: A lot of people, a lot of people. And because of that you know, I walked away from real estate for a little while. But when I came back in, I came back in in the direction of the note space. You know, I was doing some fixing and flipping, I was doing wholesaling, ’cause I had to rebuild, right? But all the while I was educating myself on notes and I was starting to invest in notes. Paige Panzarello: I love the fact that there is so much control. I invest in first position, non-performing primarily. And so, that gives me a lot of ways to mitigate risk and a lot of control over my own investments and over my own destiny and profit margins. I have never looked back, and I just I love it, and I love that I get to help borrowers, you know, my goal is to try and keep them in their home, to get them to re-perform. But I get to not only help borrowers, but I also get to help my investors. There are investors back from 20 years ago that are still investing with me today. Brecht Palombo: Wow, that’s great. Paige Panzarello: Yeah, I mean, because I did what I said I was going to do, so I’m very fortunate of that. And then word of mouth of course spreads. You know, and that’s part of- Brecht Palombo: It’s funny how, or not funny but, what you just said there, it seems more and more rare but it is like the most crucial thing in this business. Because you are kind of your representation aren’t you?Paige Panzarello: Yes.Brecht Palombo: I mean, and if you don’t have that, you really don’t have anything at all.PaigePanzarello: Anything, exactly.Brecht Palombo: It’s so critical.Paige Panzarello: It is, it is critical. And you know, sometimes it’s not always … You know, there’s not always lemonade, we have to sometimes take the lemons and make lemonade, right? It’s not always unicorns and rainbows, there are things that happen because life happens to people every single day. And as long as you’re honest and forthcoming about it. You know, that’s something that I really pride myself on, but I’m human too, you know? I fall down and skin my knees sometimes too, and as long as I can own up to it and be honest about it, and not try to pull the wool over somebody’s eyes. You know, that’s just so important in this business, and your reputation absolutely is everything. Brecht Palombo: Yeah, yeah. Maybe you could walk us through, talk a little bit about … We went through the crash, we had this terrible experience. Is it terrible? I guess if I was going to be really Zen about it, it wouldn’t be terrible, it would just be an experience that we learned from. And then from then to here, you’ve raised a lot of money. What did you do?Walk us through that a little bit. What I’d love for our folks to come away from this video, this call today, is that they have some idea about how they would begin and some confidence that the things that you do in order to raise money like that aren’t you know, magical things, they’re like actual you know, these are real like strategies that you can accomplish in order to do it. Paige Panzarello: Absolutely, absolutely. Okay, so first of all, you need to educate yourself. That’s the first thing. And you have to have integrity and responsibility because when you’re dealing with raising capital from other people to use them for investments, not only to benefit them but to benefit yourself as well, that’s a huge responsibility. You have to walk into it with a knowledge base. You don’t have to know everything, but you do have to have a fairly firm grasp of the direction of where the investment is going, right? You don’t want to fake it till you make it, because you know, you hear that a lot in real estate investing, “Fake it until you make it.” I don’t subscribe to that school of thought. This is other people’s money and you have to take it very seriously, there’s no faking it. Paige Panzarello: Educate yourself to the point that you’re feeling somewhat comfortable. Surround yourself with other people that are going to help you along the way, those are crucial elements.Brecht Palombo: When you talk about educating yourself. Let’s just put a little bit a finer point on that. Are there specific things that you feel like before you’re going to go out and start talking to people about their money that you really need to have down? Paige Panzarello: Yeah, I think you need to know the risk factors. You know, you need to know how you can mitigate risk for people. You need to know the general strategy of the investment. For notes, for instance, you know, because that’s our business. There’s a lot of front end loaded due diligence. And if you haven’t educated yourself to know what those due diligence steps are, you’re really putting other people’s money in harm’s way. Paige Panzarello: If you can at least educate yourself to the point that you understand what those main due diligence steps are that you need to take. And then have your loss mitigation team and other teams behind you, that they can take the ball and run with it after you buy the asset, then you’re going to be in good shape. Brecht Palombo: Yeah, okay. Take us forward from there then.Paige Panzarello: Yeah, so after your education and taking this very seriously. It really is just there’s no magic wand secret, right. There are two things that everybody wants in real estate investing. The two biggest things are deals, which Brecht you can help with, and then money, right? Money, when you’re seeking to raise capital, the most important thing is that you need to remember this is not about you, it really isn’t. It’s about the person that you’re talking with. What are their needs? And it’s your job to really ask questions to find out what they need. And honestly not everybody is going to be a fit for you, and that’s okay. Paige Panzarello: You’re not asking for money, you’re seeking to help somebody to better their life and better their retirement, and you benefit from it as well. If you go into it thinking along those lines, as opposed to, “Oh, I’m asking for money.” Because most people freeze when they think, “Oh, I’m asking for money.” You’re really not, you have an opportunity that you’re working that you can bring people along with you that’s going to benefit them as well, so that kind of takes the pressure off. Paige Panzarello: And if it’s not a good fit, if they’re looking to make chunks of cash, and you’re investing in performing assets you know, where you just have monthly cash flow. That’s not a good fit. The job is yours to find out what their need is, and then see if it’s a good fit. Paige Panzarello: It also requires you opening your mouth, literally. Most people when they get into the real estate investing sphere of any medium, buy and hold, fix and flip notes, any of it, they get very tight-lipped about what they’re doing. Because they don’t want to feel like they’re going to be judged or you know, listen to the naysayers. But if you don’t open your mouth and tell people what you’re doing, money is literally not going to fall out of the sky and into your lap, you need to tell people what you’re doing. Paige Panzarello: You know, again, surround yourself with people that are in your team and leverage their experience and their expertise. I actually have a funny story, Brecht, that I kind of would like to share. This is literally opening my mouth and opening my mouth, both figuratively and literally. Paige Panzarello: A couple of years ago I went to a real estate conference. And I’m a dentist daughter, by the way, my father was a dentist, and I had a little pain in my tooth, right. I knew what it was, and I got back home and I made an appointment with the endodontist, he’s the guy that does the root canals, right? I went to his office, and I sat in the chair and I explained I said. He said, “Well why have you waited so long.” I said, “Oh, I was at a real estate convention.” And he says, “Oh, you’re a realtor.” And I said, “No, I’m an investor.” And he says, “Oh, is there a difference?” So I explained that. Paige Panzarello: And he said, “Oh my gosh. I really had been thinking, you know, after I’m planning to retire in a couple of years from doing what I’m doing now, being an endodontist.” And he says, “I was thinking about going into real estate, and I was going to start studying for you know, to become a realtor.” And I said, “Well, what are your goals, what are you looking to accomplish?” And he told me, “Well, I’d like to take the money that I’ve earned and leveraged it to create some passive income.” And I said, “Well, your realtor license is going to allow you to sell houses for people, is that what you’re looking to do?” And he says, “No.” Paige Panzarello: I explained what I did and he said, “Oh my gosh, that’s really interesting.” I said, “Well, you know, would it make sense.” This is very key by the way, you need to kind of ask permission, “Would it make sense for us to have lunch or coffee and kind of discuss some options for you?” And he said that would be great, so we did. About two weeks later we had lunch, and it ended up that he had a million dollars to you know, invest. You know, in my circle of friends we kind of call it the million dollar root canal, right? Brecht Palombo: Yeah, got the right side of it, that’s for sure.Paige Panzarello: Exactly. I literally opened my mouth and opened my mouth.Brecht Palombo: Yeah. Tell me a little bit about how that begins. Did you start off with like a PPM in pooling funds, or did you start off doing JVs? If someone’s thinking about their … You know, maybe they’ve got some due diligence, maybe they went through your training and they understand that part, what’s the next thing for them to do? Paige Panzarello: Yeah, I think it really just depends on what their goals are. I don’t suggest going directly into a PPM because setting up PPMs can be quite costly.Brecht Palombo: Oh, maybe we should tell people what a PPM is. Sometimes I do that, you know, we just say things there and I don’t.Paige Panzarello: Sorry, yes, Private Placement Memorandum, it is for a fund. And there are different types of funds, so if you’re looking to invest with somebody who’s doing a fund. Then you know, figure out what kind of fund it is and all … I mean, there’s a huge stack of papers of disclosures that you get when you sign up to invest through a PPM, through a fund. But you know, those can be quite costly to set up, and I certainly, you know, if your goal is to be a hedge fund then certainly you know, go that route. Paige Panzarello: But when you’re first starting out in note investing, I strongly urge people that want to do this, that you know, they start with their own money and maybe a joint venture. And then they surround themselves with other people that are in the know. Right, because the practice is always when you’re actually doing it, the action behind it, that’s where you learn and that’s where you grow. Paige Panzarello: You know, do a few of those first, and then you know, with joint ventures, with people that are experienced. You might not get as much return initially, but the value of the experience you’re going to gain is exponentially more valuable than the actual ROI that you’re going to get back in terms of dollars, right? Paige Panzarello: And then you know, go into you know, perhaps continue that way for a long time or go into a PPM. Or decide you know what, “Hey I don’t want to do this myself, but I do love the medium.” Meaning, you know, I love the ways you could mitigate risk, I love helping people, I love making money doing it, but I don’t want to do the day to day stuff. Invest with other note investors, there are so many different options. Definitely you know, start out small and don’t try and bite off more than you can chew. Brecht Palombo: Can you talk a little bit about what a structure might look like for somebody who is just going to work with their dentist to you know, to buy a couple of notes. You know, without putting together a PPM and all that. What would just a JV, like a basic JV structure look like for you? Paige Panzarello: Yeah, our basic JV structure, you know, we’ve grown considerably. But our basic JV structure, when we started out, it really didn’t change from that point, is our funding partner. We call them our JV funding partner, so the person that came in, to partner with us, brought the funds. And we put in the sweat equity and they were able to leverage our team. You know, they did participate, because you really need to know your SEC regulations, you can’t just JV with anybody. They need to be a part of your sphere of influence, you need to have a relationship with them, otherwise, you’re selling security. You need to be really, really, careful with that. Paige Panzarello: But you know, as long as you get to know the person, and I like to call it marriage. You know, because when you talk about people and emotions and money, it’s very much like a marriage, so date first before you get married.Brecht Palombo: Good advice.Paige Panzarello: Yeah, our funding partners will bring the funds, we put in the sweat equity. They do participate on a weekly basis, sometimes a monthly basis. They do help us to make decisions. You know, we include them in decisions. But they bring the funds, we bring the sweat equity. When we exit a note, 100% of the funds, the original principal amount goes back to them, and then the profit is split between us 50/50. Paige Panzarello: If we get a note to re-perform, then 100% of the principal portion of the payment goes to the JV partner toward the original principal amount that gets reduced. And then the interest is split between us 50/50. It works out well for everybody. Brecht Palombo: Yeah, and so do you put together a special entity for that kind of a thing? Are they one-off LLCs? Is that what that looks like?Paige Panzarello: I actually operate through a Delaware Statutory Trust, which functions very much like a series LLC. I always encourage any investor that I’m speaking with to invest under an entity. There are certain protections that are afforded, there are certain deductions that are allowed. Because when you’re investing in notes, it’s largely the income that you get a straight income. Very rarely are we subject to capital gains, but sometimes we are. Again, I’m not a tax professional, so you know, take everything I’m saying with a grain of salt. Brecht Palombo: Yeah, we’re definitely not providing legal or tax advice today. That’s for sure.Paige Panzarello: Exactly, exactly. Nor am I a lawyer. Definitely, seek the advice of your professionals. But I always encourage people to have to invest through an LLC, it protects them in a number of ways. Paige Panzarello: Agreed.Brecht Palombo: If somebody’s listening to this, maybe they’re starting to get a little bit of a … You know a couple of ideas, somebody they can talk to, you know, some of the folks who they know. What are some of the other ways that you find the investors out there who you’re working with? Other than in the dentist chair. Paige Panzarello: Sure, exactly. Well, you know, honestly Brecht, there’s money all around there. There are so many people that are out there that have 401Ks, they have IRAs. Self-directed IRAs are huge. I mean, anybody that’s in a self-directed IRA, they’re looking to earn and generate higher returns. And they’re just looking for the vehicle to do that, so that’s a great way. PaigePanzarello: But you know, of course, you want to talk to realtors, you want to go to REO meetings and talk to those people. You want to go to everywhere. I mean, when I was doing fixing and flipping, because here in California, we’re not allowed to … We have to have reusable grocery bags, right? What were my bags? What did they say? It said, “We buy houses.” And I can’t tell you how many referrals I got from the checker. You know, they took my card because they saw my bag. Brecht Palombo: That’s fantastic.Paige Panzarello: Yeah, I mean, it’s literally everywhere. Accountants, attorneys, gosh, medical conventions, that’s another one, go and work the lobby. You’re not a doctor, that’s fine, but doctor’s are there at medical conventions. I have been known to go in and you know, have a drink at the bar, or have lunch in the lunch room. It’s a great place, get creative, but it’s everywhere. Brecht Palombo: Yeah, for sure. Well, I think we’re coming up on time here. Is there anything else we want to talk about before we sign off here, any last tips you want to leave for folks as they think about raising money and getting into notes? Paige Panzarello: You know, again, I like to challenge people, everybody’s got their why, you know. You hear about, “What’s your why?” That’s a very personal thing. I like to challenge people, what is your what? What I mean by that is, what do you need right now? And your what will change as you grow as an investor. But you know, if you need chunks of cash right now, you know, maybe choose a vehicle that’s not a long term play, meaning buy and hold properties, rentals is not your vehicle if you need chunks of cash. Paige Panzarello: The converse is true, you know, if you need monthly cash flow, don’t go into fixing and flipping. If you need a little of both, then maybe do look at notes, because you can create both chunks and streams of monthly cash flow in the same investment vehicle which is great. But you need to define who you are as an investor first, and then educate yourself and kind of stick with it. Paige Panzarello: As you know Brecht I do teach a workshop. It’s called Building Wealth With Notes. It’s a three day hands-on intensive. If you’re interested in learning how to invest in notes, that might be a great place for you to start. There are others out there that do the same. I just highly encourage you to educate yourself and then proceed with integrity, and really take that responsibility very, very seriously. Brecht Palombo: I agree with you. The idea of … I think another way to say what you said there is to begin with the end in mind. Which I think you know, a lot of folks, they might get hot on something, or you know, find something you know, looks sexy to them or whatever. But is it going to be a vehicle to get you where you’re going? And you don’t know unless you know where you’re going. Paige Panzarello: Exactly, exactly. If you don’t have a road map to get there, then you’re going to be in trouble, and especially with other people’s money. It’s just dangerous, don’t do it. Brecht Palombo: Yeah. Tell us how folks can reach and reach out to you if they want to learn more about how you do this?Paige Panzarello: Yeah, absolutely. You can reach out to me and schedule a call. If you go to cashflowchick.com. There’s a little tab there that you can book a call with me if you’re interested. If you’re interested in the workshop, you can go to buildingwealthwithnotes.com.I have one coming up here in Orange County in a couple of months. Yeah, but just reach out, or you can reach out, direct message me through Instagram @thecashflowchick. Any of those vehicles you can get in touch with me. Brecht Palombo: Okay, awesome. Thank you Paige, thanks so much for coming on.Paige Panzarello: Thank you.Brecht Palombo: I really appreciate it, those are great tips and hope that everybody really takes a lot away from this, so thank you for that.Paige Panzarello: Thank you so much for having me, Brecht I appreciate it.Brecht Palombo: My pleasure. https://www.distressedpro.com/panzarello/feed/ 1 noBrecht Palombo

Junior mortgage notes or second's can be a cheap way to source notes in the current frothy market if you use the right buying criteria. On today's podcast episode, Sándor Lau shares his strategy for buying junior liens and a few tips on what to avoid when looking at second's

Due Diligence is the second most time-consuming part of the note investment business (right after finding them). Scrubbing tapes and verifying mortgage details can take many hours to complete and add days to your investment process. On today’s podcast you will find out how to successfully automate that entire process Sorry, this offer is now closed. Podcast Audio: https://s3.amazonaws.com/dp-site-files/audio/Note+Investing+Club.mp3 Transcript: Brecht Palombo: Welcome back everybody to another episode in the Distressed Pro Professional Interview series. Today I have Liz Brumer-Smith and if you’ll just give me a moment, I’m going to get her profile right here. She’s the principal at Seasoned Funding, LLC, a privately funded real estate investment and note buying company, who specializes in finding first lien, residential, non-performing notes for the company’s portfolio. They purchase one-offs and small and mid size pools nationwide with preference in Midwest, Southeast, and Florida. Liz, you’ve been doing this for how many years? Liz Brumer-Smith: We’re going to seven years pretty soon. Brecht Palombo: Wow. Going on to seven years, and over that time, Liz has developed some systems for her business, like any good entrepreneur should. And today she’s going to share one of those with us. In fact, she teaches more about this, and we’ll talk about that in a little bit, but she’s going to share with us how to automate your due diligence. And I don’t want to hold everything up here. I’m going to ask you, Liz, if you would just go ahead and let’s dive into it. I’m really looking forward to this. We hear a lot about folks who are looking for due diligence information. It’s one of the things they think, “Well, geez. If I … ” We really focus on helping people find the notes, but a lot of people get nervous and say, “Well, after I find it, then what?” And, hopefully, this right here will help to answer that for them. I’m really looking forward to it. Liz Brumer-Smith: Yes. Thank you so much for having me. I’m excited to be here and to be able to share the systems I’ve created for my business and hopefully be able to help other note investors improve their systems, especially in regards to due diligence. Brecht Palombo: Cool. Liz Brumer-Smith: I’m going to share my screen with you guys, and this presentation will be available. We’re gonna have lots of information that I’m going over. As you’re watching or listening to this, please make sure to take note, and at the end, I will also give you more resources for a place you can get more information about this entire process. Brecht Palombo: Cool. Liz Brumer-Smith: Great. Okay. Today I am going to be talking about automating your due diligence. I have two companies that weren’t quite mentioned in the intro, and that’s because we were going to introduce them here. Note Investing Club and tapetechs.com are both of my due diligence support systems, or the programs that help you and other note investors with their due diligence. I’ll be talking about the difference between the two, but just so you understand what those two companies are, they are companies for due diligence. Liz Brumer-Smith: This is me, Liz Brumer-Smith. I am the owner of Note Investing Club, Tape Techs, and I obviously am a note investor myself. I purchase non-performing notes and have purchased them for about six years, almost seven years now, and like he mentioned before, like Brecht mentioned before, we do purchase nationwide. Liz Brumer-Smith: I am a full time note investor. I was previously a kindergarten teacher. If a little of my old teaching habits come out in today’s presentation, forgive me, but hopefully it’ll actually be an advantage, making this easy to digest and understand as I move forward. I do now also teach how to invest in non-performing notes. We offer an online program with two fellow note investors, Kimberly Banks Fawcett and Chase Thompson, at Note Investing Academy. Let’s get started with due diligence. Brecht Palombo: Let me just say … Let me jump in here for one minute, Liz, and just say that I’m going to go ahead, I’m going to put my side on mute so we don’t have any background noise. I want to bring up … Liz, is it okay that we mention that you’re traveling the country full time? Liz Brumer-Smith: Oh, of course. Brecht Palombo: I think this is something that we should just bring up here because a lot of times, people start thinking about the note business. I get a lot of questions like, “Can I do this from anywhere? Can I do this from home? What if I don’t have any experience?”, and that sort of thing, and one of the things I think is so attractive about the note business is that you can do it, like you’re doing it, from anywhere in the world, as long as you have a phone, a computer, and an internet connection. As someone who traveled full time for more than a year, I can say that the rewards of having the kind of business where you can be wherever you want to be at any time is really something special. Tell us a little bit … Where are you today? Liz Brumer-Smith: Okay. Today I’m in Bainbridge. I’ll do a little spiel and build it up. Brecht Palombo: Okay. Liz Brumer-Smith: Okay, okay. Something that’s noted here is actually that I am a note investor and I have all these companies, but I actually live on a RV full time. I’m able to invest in mortgage notes throughout the nation, no matter where I am on my RV, and my business is running for me as long as I have an internet connection and a phone connection. Currently right now, I’m actually in Bainbridge Island, which is just a small, calm, beautiful island across from Seattle, and yesterday I took the day off from doing notes and went into the city, and today I closed on a new deal all from my couch in my RV. If you’re interested in note investing, or maybe you want to travel, this is a business that you can totally do from wherever you are. It is definitely attainable and achievable. Brecht Palombo: Yeah. Cool. Well, thanks for sharing that with us. Now, for the impatient folks who want to get right down to business, I suppose we should do that and talk about due diligence. Liz Brumer-Smith: Yes, yes. We will. Brecht Palombo: I’m going to put my microphone on mute here so I don’t mess anything up. Liz Brumer-Smith: Okay. Sounds great. Brecht Palombo: Alright. Liz Brumer-Smith: Also, just to kinda add to why we’re talking about due diligence is whether they started traveling, or as I actually had a full time job beforehand, I got really tired of doing due diligence myself. It was a really time consuming aspect of my new business, and if I was at work, or maybe I was an example, yesterday in Seattle, and I got a tape and I needed to go through it. If I wasn’t physically the one doing it, it wasn’t getting done. Liz Brumer-Smith: As I go through due diligence, I just want you to keep in mind that you can choose to do this yourself a hundred percent, but the reason I created a system for this in the first place is because it is time consuming. It is extremely important for your business, and time is of the essence. If you could have someone else do it for you and do it well, there’s no reason you should have to do it yourself. Liz Brumer-Smith: I’m sure you guys know what due diligence is. It’s not just a note investing term. Due diligence is done for businesses across the world in all different fields. It just means that you’re actually taking a really fine toothed comb and looking through whatever it is you’re purchasing, whether it be a not, a first lien or second lien. Maybe you’re investing in a company. Whatever it may be, you should be completing your due diligence, and doing a very careful audit investigation of the asset itself just to make sure this is a good investment for you. Liz Brumer-Smith: There’s actually two types of due diligence with notes. You have preliminary due diligence, which is the beginning phase where you’re actually going through a tape or looking through an asset and gathering all the information that you can to tell you what to bid. Then there’s the second stage of due diligence which is called your formal due diligence, and that’s actually after your bid has been accepted and you’re going to be purchasing a loan, and that’s when you shell out a lot more money, possibly for an O&E, have a realtor go by or pull a BPO. You do much more of the hardcore investigation of the asset itself; verify what you found in the preliminary phase. Liz Brumer-Smith: Unfortunately, there’s lots of systems for the formal due diligence stage, but not so much for the preliminary stage. What I’m gonna be talking about today is what goes into preliminary due diligence, that first process that you go through when you get a tape or an asset. Liz Brumer-Smith: The most important, I think personally, the most important thing is the condition of the property, and that’s because you’re buying, technically, the paper behind the asset. But if the asset’s not quality, or in a condition that’s worth purchasing, then why are you even looking at the note? Verifying the property condition is important, and you’re going to have someone go by and take a picture, or do PBO if you get it accepted. But in the initial stage, you don’t really wanna pay anyone to have to go out there. That would be a lot of money shelled out for a lot of notes not being accepted. It’s not sustainable. Liz Brumer-Smith: We gather the property condition as best as we can with the information available to us, and that is Google Street View. I know that sounds ridiculous, because a lot of times Google Street View can be very outdated, but it does give you good information. This examples is actually a picture from about, just now, about two years to go. Overall, the property looks like it’s in rather good condition. It’s that brick home right in the center. The roof doesn’t look bad. The lawn’s clearly being more or less maintained. At least the yard is mowed, which for some properties is not the case. So I can tell that someone is likely living in the property. I do notice it’s two years old, but at least it’s worthwhile for me to continue forward. Now if I looked at a Google image and it was a complete wreck, why would I continue moving forward? Because, if two years ago it was a complete wreck, it’s probably gonna be in even worse condition now. That’s why we like Google Street View. If it’s available, this is 100 percent the way that we like to gather our initial property condition assessment. Liz Brumer-Smith: The next thing we look at is the crime or the neighborhood, and this includes, actually, demographics for the zip code or the county. I wanna make sure it’s in a neighborhood, or an area, that is growing or potentially already thriving. We wanna make sure that there is motivation for people to live there, there is jobs and businesses that are growing and employment opportunities. If that’s not met, then we probably wouldn’t be looking into the asset further, but there’s a few websites you can use for this. The one we really like to use is actually Trulia. Liz Brumer-Smith: They have a heat map, or a crime map, that if you go to your asset that you’re looking at, it will actually tell you the type of crimes that are in the area. Now, a lot of the time the heat map will actually show you the total. It’s red if it’s a really high crime. It’s green if it’s low crime, but what they’re actually analyzing is the amount of crime reported with that heat map. While the heat map or the colors is great, it doesn’t actually give you what you’re looking for. What you really want to see is the type of crime. Liz Brumer-Smith: So you can see to the left where it actually tells you the different types of crime. I’m looking for really high, intense crimes like murder or rape or drug use or robbery with a weapon. So things like that tell me it’s a higher crime area, even though it may be green. So when you do use Trulia, just know to always look not just at the colors but at the actual crimes, and you’re gonna determine what crime neighborhood you’re comfortable with. That’s different for everyone. If it’s a really high crime like murders happening like everyday, I’m probably not buying in that neighborhood, but that’s totally your choice. Liz Brumer-Smith: The next thing you wanna look at is the actual asset itself. If you like the property, you like the neighborhood, you’re moving forward to find out more information, and you’re gonna wanna find the actual property card, or property appraiser’s information for this. You don’t wanna just go off of Zillow or Trulia, because a lot of the time, that information is incorrect. Liz Brumer-Smith: So you’re gonna actually verify the bedroom and bathrooms of the property. You wanna see the build type. That means if it’s wood frame, brick, whatever it may be, the square footage and the year built. We like to gather this information, cause for us personally, there’re some assets if it’s under 1000 square feet, unless it’s in the neighborhood I know that it’ll sell like hotcakes cause I know that market well, we typically don’t buy anything under 1000 square feet. It’s a personal preference. It’s a personal choice, but this information helps us move forward in if we want that asset or not. Liz Brumer-Smith: Next you’re gonna wanna find the current market value, and this is, I’d say, as equally as important as the property condition if not just the very second most important thing, is making sure that your value is on point, and you’re looking for the current market value not the after repair value, or the ARV, which a lot of people talk about. You want now, and it’s hard to estimate right now, because one you can’t get inside the property, and two, you don’t exactly have the most updated picture of the property. Whenever we value our properties, we typically assume the worst, and if we get inside, if we do take it back after foreclosure or whatever it may be, a deed in lieu, and we find out it’s in better condition, awesome. It’ll sell for more, but we almost always price current market value considering that it’s probably not in great condition. Liz Brumer-Smith: And we love using Zillow for the current the market value, and I know you’re probably thinking that this estimate is ridiculous, and you’re right. It is so far off so many times from the actual property value, and what we like from Zillow is the map, the ability to search with certain parameters -excuse me- for comps, and when I say comps I mean properties that look like they’re in similar condition. They’re in similar bedroom, bathroom size and they’re similar in sold range. I’m looking for something that’s sold in six months or more recent, typically within about a half a mile to a mile from our property, and what I love about the map too, is if you see there’s a big highway, or possibly a railroad track or something like that, that is blocking a major part, and maybe it cuts your one mile radius in half, and you can tell one side of the railroad tracks is really nice homes and then your side of the railroad tracks are not so nice. You don’t want to take the just arrogate of all of those comps within the six months. You really wanna find something that looks like yours and is in similar condition and area. Liz Brumer-Smith: You can do that with Zillow. We like to just look around the map. There’s ways to filter all this information, and you can find the at least three comps that appear to be as similar to your property as possible, and just really take into consideration the condition of the property again. And then we just average that out and that’s really what we go off our current market value for, and again if your note is accepted in that formal due diligence stage, this is where you’ll verify that information, but this helps you get a pretty good picture right away. Liz Brumer-Smith: The next thing you’re gonna do is identify the annual taxes and the unpaid taxes. A lot of times, if you’re buying a non-performing note, you’re going to realize quickly they have not been paying their taxes either, and this is very important for you to know, because not only if you do take the property back you’re gonna be responsible for those taxes, but there’s also potential tax sales that can happen that can jeopardize your position as a first lien or second lien note holder, and this is important to know if it’s already in that process of a tax sale or not. We locate the actual tax collector or tax assessor’s website, which typically can tell you how much is owed, and we also take into consideration the annual tax rate. Because if you do go through foreclosure, not only are you gonna have to pay the unpaid taxes, but you’re also going to be responsible for the current tax rate. If it takes you a year to foreclose, that’s a year of taxes you’re now responsible for. It’s definitely important to take both of those into consideration. Liz Brumer-Smith: Okay. Here’s an example of some past-due delinquents. Obviously this is an example from a while ago, cause 2015 was the most recent tax year due, but often times the websites make it very clear as to what has been paid or what is currently owed. Liz Brumer-Smith: And then you’re going to identify possible liens or judgements in public records, and now this is a really tedious part of due diligence, and I know there’s a lot of investors out there that invest in notes that don’t actually research this up front because it’s something that they can discover in their O&E or their title search in their formal stage, but for me, I find it very helpful to see if there’s other liens or judgements that would make that note unappealing for me, because sometimes, if there is, let’s just say, there’s an IRS lien that was recorded before my mortgage. That can actually jeopardize my position and they have the right to claim if I do sell any overages. While I suggest talking to an attorney about all of the specific details about that, there are certain liens that are important for me to know about, and may make it so that I have to adjust my bid to a lower amount because I’m going to have to pay a judgment or a lien, and I like to gather this information beforehand if possible. Liz Brumer-Smith: Public records are not available in every county or every state. It’s not always something you can do, but if it is possible, I suggest always looking in public records for anything that may impede your title. I say this is tedious because typically, if it’s a common name, you may have hundreds to thousands of results for this, and you’re gonna have to figure out by looking at the legal description, which I have highlighted here, how to make sure it matches your actual property that you are researching so that you’re only finding liens or judgements that are applicable to your property. So this shows you here there was a Lis Pendens on this specific property, but there’s also a lien and a judgment specifically tied to that property as well, and this is a great example. Liz Brumer-Smith: I mentioned the IRS lien, and this one here is the internal IRS lien that’s recorded here. So, these things matter, and if you can find this beforehand, it helps you weed out deals that just aren’t worth while, or at least make an educated bid so that you’re not having to fade out on the back end. Liz Brumer-Smith: The last thing that you’re going to want to research in your preliminary due diligence stage is bankruptcy. We use pacer.gov. It is a paid membership. You actually have to go on and register with them if you aren’t already registered now, and I believe it’s ten cents per page view. If you are below, I believe the threshold of like ten dollars per quarter, they do not bill you. If you’re not doing an extensive, extensive amount of research, you probably won’t be billed from pacer. We do do a significant amount of research each quarter. So we actually do receive our over bill, but it’s pretty insignificant in the bigger picture. Liz Brumer-Smith: But you’re actually gonna log onto pacer.gov, and you’re going to make sure that you search for the borrower’s name in whatever county or area of the state that they are in, and it’ll tell you if they’re in active bankruptcy. You can see all different documents on the bankruptcy. You can see if they’ve surrendered their property, if they’re keeping their property. If they’re on their plan, you can see their plan. It’s really useful information, and we found that a lot of times the seller’s information about in the tape is not always accurate for this. Even though they may have a column that said BK and yes or no or if they’ve been discharged or not, I always verify this, because we’ve found I can not tell you how many times that it’s inaccurate. Trust but verify all of this information, and this is where you’re doing that in that preliminary due diligence. Liz Brumer-Smith: You may be thinking, “Holy moly, that is a lot of stuff to do.” Especially if you are like I was when I first started off, possibly with another job full time and you’re just doing this as a side gig in the meantime until it can be something that replaces your full-time income, or maybe you are traveling like I am and you just don’t wanna dedicate this much time to doing all of that for, let’s say, possibly one asset, or you could get a tape with 50 assets that you have to do this on. It can be a lot of work. Liz Brumer-Smith: When I first started off, I was spending a huge bulk amount of my time on due diligence. I mean, you can see I was equally contributing my time to finding sellers and raising capital which really those two should be the bulk of, I think, your effort, because that’s where you’re gonna be getting that money from, and once I outsourced that entire process I just talked about, I now am spending a very small amount of my time on due diligence. Really I have my virtual assistants, that now do this for me, do all of that research and then I just actually just look at the tape, and say, “Okay, I like this asset.” Put it in my calculator, and then I make my bids based on that, but it really doesn’t take up a ton of my time like it used to. I can actually focus my efforts and my business on getting more deals, getting more money and obviously working out the deals to make my profit. That’s why I love outsourcing. It’s why I’m here to talk to you guys today, not just about due diligence, but about how to accurately outsource that entire process, because it is a lot and you can’t just hire someone and say, “Here you go. Do it.” Liz Brumer-Smith: Because due diligence, especially preliminary due diligence, it takes a skilled eye. They have to know what they’re looking for. They have to know how to look for it, and sending a few emails with instructions may work. If it does let me know, because that would be amazing. I’d love to hear someone’s success story on that, but normally you’re gonna need something much more involved to accurately train someone to do this well. Brecht Palombo: I’ll just support your statement there a bit. We’re an entirely remote team, and I have some people overseas and some people here in the states, and whenever I’ve hired sort of the more low cost data finders, people who do contact gathering and that kind of stuff for us, I can’t agree with you enough about how essential it is that you have your process and your systems really well documented where you’ve got a standard operating procedure where you’re not giving them an idea of what you want them to do, but you’re really spelling out exactly how you want things done and why, and often we’ll do it internally with videos and checklists and screenshots and full court press, because there’s really nothing, I don’t wanna say there’s nothing worse. There are lots of things worse, but going through hiring somebody to do the work and then paying them to do it, and then paying them back and having it not be satisfactory or up to your own level of quality is a very frustrating thing. Brecht Palombo: And when you consider the difference in the value of time, of your own time, versus what is available out there in the world market for people to do this kind of work for you instead, really makes a lot of sense but only if you’re doing it right. It can either be a real investment, and you’re getting leverage out of more people, or it can be an expense where, if you don’t do it right, where you’re just blowing money on things that don’t work. That’s my two cents. Liz Brumer-Smith: You hit the nail on the head there. It’s so true that we know from actually our first virtual assistant. We kinda tried to do it just figuring it on our own where we just sent lot of emails. I didn’t really do the detail process like you mentioned, and it ended miserably. Luckily, it wasn’t with due diligence. Thank God. That would have been even worse, but we tried outsourcing another task, and that’s when I realized: Okay. If I’m gonna outsource due diligence, I need to do this right. Because a lot of the times, if you do get something where it’s unsatisfactory, a lot of the times the misconnection there, or where there was an error, was from how you portrayed the information to them. There was some miscommunication there that caused them to not be able to perform to the standards you were expecting. Liz Brumer-Smith: So, automating and outsourcing. The first thing you’re gonna wanna do, if you do decide to do this yourself, it’s 100 percent achievable if you do do it yourself. I was able to do it myself. As Brecht mentioned, he was able to do it from his own systems with his business that’s completely remote. So it’s … No matter, even if it’s not due diligence, if you do wanna create a program in general, this would be what you go through. Luckily, I’ve done it for you, if you are interested in due diligence, but you’re gonna create a training program, and you need to create the content for this. So he mentioned screen sharing earlier, making sure that you are actually doing detailed checklists where you are giving step by step guides. We love doing all of those things in addition to recording videos. Liz Brumer-Smith: So instead of just doing a screenshot, we actually do screen shares where I go through the entire process of going through a tape so slow and so detailed, and I give them every scenario that can happen. Especially with due diligence [inaudible 00:24:35] since every county has a different website. It’s not one of the things that you can outsource. I show them if it’s a difficult county what does it look like, how to get over those hurdles in my videos so that they can live up to my expectations of completing my assets. Liz Brumer-Smith: And there’s lots of different websites and softwares that you can use that record or screen share for you. One that I like is EasyVideoSuite. They actually, you do have to purchase them, and they’re on the more expensive side compared to others. If you’re not gonna be doing this for on a large scale, it may not be worth your investment. Another one that’s much more affordable is Camtasia, and I think they even have a free version that allows you, if you’re just doing this for your own internal use, or you’re doing it from a smaller scale, this could definitely be a good way to screen share. Liz Brumer-Smith: I record every single thing that we do, that we’re outsourcing. I’m sorry, Snagit is another one. They also have a free version I believe. And we just screen share every single thing that we do, so detailed, and we try and use a slower pace as well, just because if you are hiring, sometimes they might be English as a second language. We try to be very clear and we enunciate and we just go at a slower rate to make sure they really understand. Liz Brumer-Smith: We also do visual guides because some people like to listen and watch. Other people like to be able to read. It’s easier for them to understand that way. We like to give them both opportunities, and it spells out and just gives them one more way to check something before they actually have to come to me asking questions. Liz Brumer-Smith: Here’s an example from one of our guides that we use for our due diligence program. I actually show them where to click. I highlight examples. I show them where I got the perfect comp. I give them examples of past due taxes. We highlight the areas in net or online that they should be looking. I give them the links to the websites that they should be using. It’s all right there for them. Liz Brumer-Smith: The next thing you do once you’ve created your program, is actually finding your assistant. We like to use Upwork. It used to be, I believe, oDesk is what it was called, and they’ve switched to Upwork not. They have the largest platform and the largest number of virtual assistants available, and I think you can find an extremely highly qualified virtual assistant that you can put in your preferences for where they might be location wise. You can put in your preferences for how much you want to pay, any prior experience, all of those things. That’s our suggestion for who to use, and you’re gonna create a job post. You’ll receive tons of applications right away. Some of them will be really good candidates. Others are not so great, and you’re gonna have to review them and figure out, based on their qualifications and experience, who seems like they’re gonna be the right fit for you. Liz Brumer-Smith: We do have a special process that we use when we find and hire our virtual assistants, and if you do end up becoming a part of our program, we actually give you the job posting and we tell you what our secret is for finding out or weeding out, rather, the ones that aren’t gonna be the best fit for our types of business. Liz Brumer-Smith: And then you’re gonna interview your best applicants, and I like to narrow it down to just three, because if you keep too many, it just becomes overwhelming and it makes your decision harder. I interview them either with Skype or you can use Google Hangouts, and you can virtually chat with them if possible. I think that’s best. You get a feel for their ability, their english language, their ability to understand and speak, and in addition to asking them questions to get to know them better and really see if they’re gonna be the best applicant for you. Liz Brumer-Smith: Then we like to start a contract on Upwork based on a trial basis. One of the questions I ask the applicants in my interview, is if they’re willing to work during their training period for a lesser amount then what we actually contract them to pay once they’re trained, and most of the time we haven’t actually had anyone say no to that, but it gives them a way to still have them paid off, obviously for their time and effort of learning, but that we’re not paying top dollar for … I mean you are gonna have to work with them during a learning basis. Liz Brumer-Smith: Alright. You’ve created your program. You’ve found your VA. Now you have to train them. As you already mentioned before, detailed instructions are key. If you can house this all in one place, those videos, all those download guides, and checklists with the detailed instructions, you wanna do this once so that you don’t have to do this over and over again. If you do have to hire more virtual assistants. Rather than having to recreate this every single time, we do suggest housing it all in one location. So you can either put that on a training platform or a free website like Wix. Liz Brumer-Smith: This is where we house ours. We are on a platform called Teachable which we absolutely love. It makes it really user friendly for our students, our clients, and it also make it really user friendly for the virtual assistants. As you can see, all of these are different modules that teach the student different aspects of note due diligence, and it gives them all of their guides and checklists in one location, and the videos are embedded right there in the website. That’s what we use. We love it, and it also has a spot for people to comment and ask questions. If your VAs have questions, they can get their answers there. Liz Brumer-Smith: And we even give them opportunities to practice. If you’re gonna do this on your own, we highly suggest actually giving them real time tapes or real time assets to do what they’ve learned. They need to actually prove to you that they understand how to do this, and we give you a practice tape, if you do join the program, that has an answer key for your virtual assistants to go through. That way you’re not having to do the work yourself. We even give you the email templates to send to them with the practice tape and things like that. We really make it as easy as possible for you. You will still have to make sure they’re following through with things. They are your virtual assistant, but we give you everything you need to make it as simple as possible. There’s an example of a practice tape that we would send them. Liz Brumer-Smith: And then the answer key will have everything inserted into it directly including the links, images, everything you would expect for them to provide for you. What you’re really having to do, when you have your own virtual assistant, is you will … I’m sorry that we can’t do this for you, but you’re gonna have to give them feedback and make sure that they’re following through with their tasks with you. It’s an essential part of having a virtual assistant. You have to keep that communication open and be very clear with what you expect, the timeline in which you expect things, and also give them feedback based on the results. If it’s not up to your standards, you need to explain exactly why and how they can improve upon it moving forward. So I’m sorry we can’t do that for you, but that’s on you. Liz Brumer-Smith: Oh, I don’t know why that was there. Liz Brumer-Smith: Okay, so the … Oh, that must’ve been … Okay, yeah. Here’s an example of an email I sent back. That’s why. I’m sorry. Here’s an example of en email I sent to one of our virtual assistants. Here’s some things I noticed if you’re having trouble. Based on this example for property number nine, this is where I found this information, and adding up the total. This was before I had the complete program when I was still doing it kind of step by step for each VA I hired, and figured out that’s not the smartest way, but being concise with what you want and what you’re expecting is so important. Liz Brumer-Smith: Alright. Then you get them working. Once you have them hired, and once you have them trained, they’re ready to do due diligence for you, and that’s what you hired them for, to have more time to be able to work on your business instead of in your business. Maybe you just wanna travel or be with your family. I mean, the time opportunity that utilizing what you can actually pay someone else to do this work for you. Your time is more valuable than that, and now that you’ve trained them on this process, utilize them. Liz Brumer-Smith: Note investing club, as I mentioned before, gives you all of this. It’s the only, I’ve found, it’s the only virtual assistant training program specifically for due diligence. We give you everything you need to not only find, hire and train your virtual assistant, but to give you that feedback we talked about. We give you the job posting we talked about. We give you all of those videos and guides and checklists so that you don’t have to create them yourself, and you can get them hired and trained on this entire preliminary due diligence process in a really short period of time. Liz Brumer-Smith: Well, I already just went over all of this. We pretty much just give you everything you need. If you’re thinking, “Well I’m not sure. I’m not ready to have my own virtual assistant. Maybe I don’t have enough assets to support the need for having my virtual assistant quite yet. I’m still just growing my inventory list. I’m just starting to use Brecht’s program.” Whatever it may be that you’re not ready for your own virtual assistant, we actually have two companies: Tape Techs and Note Investing Club. Liz Brumer-Smith: So Note Investing Club helps you if you want your own virtual assistant. We give you everything you need to make it as easy as possible to tain them, but if you’d rather just upload your tape, or upload your one asset to be scrubbed, you can have my virtual assistants do it for you, and my virtual assistants, at this point, I hired my first virtual assistant back in 2014. I’ve had her now for four years, and she’s the same one I had from the beginning. She’s incredible, and if she leaves me now, I’ll be so sad. But, I now have four virtual assistants who help us with the due diligence process, and they are extremely experienced. They’ve done thousands and thousands of assets at this point in time, not just for myself but also for clients. They know what they’re doing, and how to look and how to research, and they know the preliminary process from start to finish, and you can pretty much upload the tape, and we will give you everything that we talked about, in addition to the picture of the property right into the tape. We give you the link to the property appraiser’s website. Liz Brumer-Smith: Here’s actually a video that kind of shows you an example of a client’s tape. Video: Tapetechs.com is an asset research company that saves you time by outsourcing the preliminary due diligence process to a highly trained virtual assistant. When you go to tapetechs.com, you are able to upload your inventory to be scrubbed by a trained virtual assistant. Video: First, you’ll choose if you’d like the tape to be completed in 24 hours or in 48 to 72 hours. Next, you can choose to filter the tape to your specific buying criteria or choose to have the VAs research the entire tape. Video: Our goal is to make the bidding process as easy as possible. We provide you with all of the information you would want to make a quick and informed bid all in one location. Video: The spreadsheet. Here’s an example of a completed tape for a past client. Our virtual assistants start the research process by providing you with the property’s county and population size. They then find, or verify, the borrower information and evaluate the property condition. We even provide links to the property appraiser and Google images right into the spreadsheet. So there’s no additional searching on your end. This helps you save time and submit your bids faster, beating out the competition. Video: Virtual assistants know how to verify taxes, search for potential bankruptcy cases on Pacer, and search for liens or judgements given the information is available to the public or available online. You will receive the property information such as the bedroom, bathroom count, age of home and property type, square feet, as well as the area’s crime rate. Video: The best part about Tape Techs is the current market value. Our virtual assistants have been trained to find a true evaluation, not just use estimates from Zillow or Eppraisal. Our VAs know how to find similar, nearby sold or for sale homes in similar condition and area in order to derive your value. Not only do we give you our value based on real comps, but we back up our value by linking those comparable properties directly into the spreadsheet so you can easily access the properties that helped our VAs come up with that number. Video: Our virtual assistants have been highly trained using an extensive training program from our sister company, noteinvestingclub.com. They have completed asset research on hundreds of assets and have been tested with challenging properties to ensure they are able to find the best and most accurate results. What are you waiting for? Free up time by outsourcing your due diligence to tapetechs.com today. Liz Brumer-Smith: Alright. That’s actually an older video. Obviously, we’ve switched platforms in this past year. You can see that if you go to our actual website at Note Investing Club. That’s the old platform. We redid everything when we switched. We figured if we’re switching platforms, we might as well update all of the videos and content guides to make them even better for our clients. Liz Brumer-Smith: If you do go to Note Investing Club, I just wanna let you guys know it is completely revamped. We’ve added more videos than we used to have when we first started the program, and we have a lot of clients that signed up when we first started the program, and we got feedback from them, and we’ve improved the systems based on their feedback as well. It really is a brand new program, and it’s an amazing amount of content that’s in there if you are deciding to outsource your due diligence. Liz Brumer-Smith: If you do wanna do Tape Techs, you’d rather just upload and go, these are the things that we actually research for you. We put the property picture directly into the tape for you, which the video didn’t show you but that’s something that we’ve added based on feedback from our clients, and you can either do it in 24 hours, which is seven dollars per asset, or if you’d prefer 48 to 72 hours, it’s five dollar per asset. There’s really no other program out there that will do this for you. There are some click and go due diligence programs that you can kinda download where it kinda gives you aggregated results based on … it just finds like the Zillow’s estimate and puts it into a spreadsheet for you, and that information’s good, but it’s not the full picture. It’s not gonna be able to always find liens and judgements. It’s not looking on Pacer for that information, and it’s not just using the real estate website’s values. It’s actually, I think it’s more through information than you can get anywhere else. Liz Brumer-Smith: These are our programs. We offer both to note investors like yourself. If you want to outsource your due diligence, I highly suggest it. It is changed our business. It’s changed the amount of time that I have to focus on my business. We do have all of this information and more. If you actually go to this link right here, bit.ly/DistressedPro . You can actually get a foolproof guide to outsourcing your due diligence to virtual assistants in your note business. We don’t just talk about due diligence there. We also talk about other ways you can utilize virtual assistants in your note business. I go into more details on the processes we use for finding and hiring VAs. We talk more about different ways that you can create these programs and how we created our first program. It’s a ton of free information there. If you go, we will also give you a discount if you do decide to join Note Investing Club. The discount will only be if you go to this link. I suggest if you’re interested, it is well worth it, and this discount is not offered anywhere else. This is just because we are a part of this program here today. Brecht Palombo: Well, I really appreciate that, and I know anybody who’s getting started would really appreciate that as well, and I think I said at the beginning of the call, I really get a lot of folks who ask about this, and so I expect you’re gonna have a lot of clicks on that link. Can you tell us what the discount is? Liz Brumer-Smith: Yes. I believe you’re gonna be getting 75 dollars off. Brecht Palombo: Okay. Liz Brumer-Smith: I believe it’s 75 dollars off, if it’s not, write to me and I will make sure that you get 75 dollars off, and yes. The program is 499 normally. If you actually go directly to the website, there’s no place that you can find a code or anything like that. The only place you’re gonna get this is through ** Sorry this offer is closed **. Brecht Palombo: Cool. I appreciate that. Well that was really insightful for us, and so you’ve, it sounds like you’ve really nailed this and you’ve done a lot of work to get your systems and your processes in place, and it sounds like you’re, on Tape Techs there, it sounds like you’ve probably had thousands and thousands of assets go through there. Yeah? Liz Brumer-Smith: Yes. We were actually even, for a short period of time, scrubbing them for a hedge fund. The hedge fund ended up using Note Investing Club to start then training all of the new assistants that they hired. They started using the Tape Techs service because they had access to our other program. Brecht Palombo: Yeah. Liz Brumer-Smith: But, so yeah. For them, we were scrubbing hundreds to thousands each month for them. Brecht Palombo: That’s cool. Liz Brumer-Smith: Yeah. Brecht Palombo: As somebody who has been able to achieve enough success in this business to be able to leave their job and travel the country and all that, what would you say to somebody who is just now sort of investigating the note business and trying to make some decision on whether or not they wanna go in on this and do it? Liz Brumer-Smith: I would say it’s going to be a challenging ride. Nothing you ever do that’s out of the norm, it’s just gonna be super, super easy the whole way through. So there will be challenges, but it is a hundred percent worth it. It is totally attainable and totally achievable if you’re willing to put in the work and be able to get over those challenges, those hurdles, and keep moving forward, because so many times I see somebody starting off, and everyone make it sound like it’s this big easy complete process and there is a lot of work that goes into it, and you have to be able to put in that time, but also be able to … gotta have a little bit of grit to get through some of the tough times, but if you focus on it and you learn and keep doing it at a hundred percent, it is attainable. I’m living evidence of it, going from a kindergarten teacher to now living in an RV doing this full time. Brecht Palombo: Well that’s awesome. Well Liz, I really appreciate you coming on here and sharing your knowledge and laying that whole process out for us here. I’m fairly confident you’re gonna have a lot of clicks on that link, and it was insightful for me and really helped me kinda get my head around some of the ways that you’re doing things over there. I appreciate it, and I know anybody who’s listening to this today appreciates it too. Thanks very much. Liz Brumer-Smith: So glad I could be here. Thank you so much for having me. Brecht Palombo: Yeah. And enjoy your travels. Liz Brumer-Smith: Thanks. Bye. https://www.distressedpro.com/note-investing-club/feed/ 1 noBrecht Palomboreal,estate,reo,foreclosu

How do you get started in the note business? In this episode of the DistressedPro Professional podcast we have Mike Ruscica and Barbara Gelok. They will be walking us through their most recent note investment and highlighting just how easy it easy to invest in mortgage notes. This episode is full of insight into exactly what it takes to be successful in this business. Video Interview Transcript: Brecht: Hey everybody! This is Brecht Palombo with distressedpro.com and I’m on here today with Michael Ruscica and Barbara Gelock. Alright. Barbara: Thank you. That was correct. Brecht: I didn’t think I was going to get that right. Barbara: Most don’t. Brecht: I was talking to Mike the other day. Mike and Barbara have been working together for about a year. I was talking to Mike the other day. You were telling me about an excellent deal that you’ve been doing on the notes space. I wanted to bring you on to talk about that because I think that it is the kind of story that folks should hear if they are considering getting in to this business at all. So, I’m hoping that you’ll just sort of lay out all the pieces of that for me. Click here to Download the Note Conference Case Study PDF Brecht: Mike, we’ve known each other for seven years, something like that? Mike: 2010. Brecht: Too long anyway. Mike: Yeah. Yeah, too long I’m sure. Yeah, in 2010 I got a subscription to your Distressed pro and I’ve been using it ever since. Brecht: And you guys have been, you are certainly one of my main go-to guy when things come in, and I’m not sure what to do with them or if I think somebody would be better advised by someone other than me, I send them to you and it’s for reasons like the deal that you were going to tell us about right here. So, we dive in here, and you kind of tell us about … You’ve been a full time note investor for that same time right? Eight, nine years, something like that 2010? Mike: 2007. Yeah, I stumbled onto this non-performing note business the day that I sold my last flip house. And I didn’t know it was my last flip house and I didn’t know that the market was going to head to where it headed in 2007 and I luckily found out about this distressed note business and I really found my home with this business and so I mainly purchased non performing second mortgages. I liked that space. I can buy them cheap enough and really screw up and still make money and really if I pay twice what I should have paid for it I can still get away with a profit and that to me is important because before we know it we’re all going to be hitting it 100 percent buying average. So yeah, I can buy a couple bad ones and still get out alive. Brecht: Cool. Mike: It buys me a lot of room. Brecht: So tell me about this good one that’s what I want to hear about. Mike: Yes, so today’s Tuesday we close on Friday on note that Barbara, Barbara is my student, we’ve been doing this for about a year. Barbara, why don’t you give us the rundown from A to Z on how this note went and how it started off rough. Barbara: Sure, okay, this particular note is in a non traditional state, was purchased last April. It had been in contact on and off with the borrower. He planned on putting the house on the market, never did throughout the entire summer, then we revisited. We actually set the demand whether through an attorney last September and I started responding more. Tried to come up with a solution. We do have a contact that we do a refinance and we tried that avenue, but after two months we found out that he did a loan mod on his first decision. Therefore, he would never be able to refinance for a twenty-four month period. So, every option we explored dead-ended and then we wound up not hearing from him, starting January of this year. Brecht: When did you guys buy the note and how much did you pay? Barbara: Purchased it last April. Mike do you wanna? Mike: I don’t recall the purchase price. Barbara: We went 50/50. I would say about 22 grand, if that, 20 grand. Mike: Yes, so you’re into it for 11.5, I think, and I was into it for 11.5. Barbara: Correct Brecht: And what was the unpaid principal when you bought that? Mike: The unpaid principal, I would say, was around sixty thousand dollars. Then we had an arrears of another twenty-two or twenty-three thousand. Brecht: Alright, so you paid 25 cents – 23 cents on the dollar, something like that – in that ballpark. Mike: Yes, and we always just talk about the unpaid principal balance. We never purchase the arrears; the arrears kind of come along for free. Brecht: Okay. Mike: Okay, so in this deal with Barbara – the way I try to structure these deals with my students is: the student takes care of interviewing the attorneys that we are going to use in foreclosure, because she is going to be the one that has to work with this attorney. It has to be someone that understands our process. They understand that if we foreclose and we take it all the way to sell, then we’ve both done a bad job. We want to foreclose to get the borrower to do something. Mike: In this situation, Barbara started foreclosure, interviewed the attorney and now this forced the hand of borrower to do what he said he wanted to do when we first bought this note; which was sell the house. So, he thought that he was in the driver’s seat – he would sell it when he was darn well ready and willing to do it. We needed to accelerate that. We accelerated that by starting foreclosure and coming up with a sell date. Mike: So, the sell date, believe it or not, was … Didn’t the sell date actually end on the day of this guy selling his house? So we actually had to postpone another 14 days past that date, so that he could actually get his house on the market; under contract and sold for us to get a full pay off. I checked my accounts on Friday, kind of forgetting that this closing was coming. I just went in and I checked all my different accounts that I had, to see what payments came into my bank accounts. I’m like “Whoa! Where did this extra 83 grand come from?” I called Barbara and I said that I guess we had that closing today and I can’t even repeat what she said. Mike: I don’t know if you remember Barb, but it was like – Barbara: Yes, I was out and with my son in public and everyone turned their head. Mike: And that part I did not know. That was the first time your son had ever heard you speak like that, I’m sure. Barbara: Of course. Brecht: Was it the first big pay-off for you, Barbara? Barbara: No, actually not. Last year was my first. Actually, the first one I started working with performed very well. But, this was pretty amazing as well. Brecht: How quickly did things getting going after you got started, Barbara? Barbara: Pretty quickly. I think it was the boot camps that Mike provided. I went through each on and took notes; was able to go back on my notes. For each one, they wrote pretty lightly, so I had a good base. I’m not shy when it comes to having something to do or something to accomplish. It was different; I never really had to contact attorneys. Some attorneys understand that we just want them to perform; others start questioning statutes, craziness. You just have to find the attorney that you want to work with. It’s pretty smooth after that. Mike: Yeah. So, let me add to that. This business of note investing; once you acquire the notes, that is definitely another big part of why you and I are together. You are helping me source product and then once we acquire the product doing the do-diligence, there’s really only three factors that we work with. One of them is borrower management, servicer management and attorney management. If you can manage those three, or you can eliminate any one of those tree, it’s an even better day at the beach. So, I’ve eliminated a lot of my servicer management because, as Barbara stated, we went right to foreclosure with this one. So the attorney is acting as our compliance officer; I guess you could call it. They are handling the communications between the borrower and us. So, we’ve go the legal comfort that we are doing everything by the book. Then, in this situation, it was Barbara speaking with the attorney. Then, we are speaking with the borrower’s realtor and she was informing us of the progress and gave us a copy of the purchase contract that came in. The offer was for full price. It looked like the borrower was still going to walk away with a nice chunk of change, even after we got paid. This was a fairly sizeable mortgage. We buy second mortgages, this was a second mortgage that we purchased. So, we did get a full pay off on this one; with all of the arrears and all of the unpaid principal balance. Brecht: Nice. Mike: Barbara is a great student. She calls me up, “Hey, what are we gonna do here.” So, Barbara’s got 75,000 dollars on the line, that she purchased five or six notes 50/50 with me. So, she’s got some incentive to get these things going. We have a weekly call. We review each note. We say okay, “Where are we at with this one, this one is going to foreclosure, this one is in bankruptcy.” We need to … file … I’m looking at my board of the things I’m supposed to be doing … We need to file proof of claim with the bankruptcy attorney on that one. Another one, we’ve got three performing, I think Barbara? Barbara: Yes. Mike: So, we’ve had some really good success. Another note that we own together, unfortunately, I’m only 30% partner on that one. She is 70%. We got a 24 thousand down stoke on that one. Right? Barbara: Yes Mike: 24 payments of $1000 each. That was the new negotiation. Because we negotiated with this guy, it turned out that he was getting like a 40 thousand dollar discount. If he could come up with a thousand dollars a month, for 24 months – we’ve received five or seven payments of that so far. Barbara: Yes. Mike: Five, with another nineteen to go. Brecht: Cool. Mike: So to date; I’ve just counted up Barbara’s numbers, she had 75,000 in – maybe another two or three thousand she had to add for attorney fees. With this large wind that we just go on Friday, she will have received back 77/821. Brecht: Cool. So, with what outstanding still to come in? Mike: So, we have the most recent not that Barbara worked at with the borrower as a $375/month payment until the year 2040; only 82 I think. Brecht: And still kicking. Mike: You’ll be 92 Brecht. So, there is $375/month coming in off of that one. Another one is getting $328/month for another 25 years. This other note we get nineteen payments of $1000 each, for the next two years. We still have three outstanding we still need to do something with. So, it’s a total return on investment. Brecht: Yep. Mike: All the cash back and having a lot of upsetting. Brecht: Yep, that’s fantastic and just in a little more than a years work. Mike: Yep, I think that’s about right. Barbara: Yeah. Brecht: Nice. Well, what would you say to somebody who is looking to get started in this business who has been kind of shy, or maybe they’ve been lurking around, reading some stuff; now they’re kind of listening. Maybe their thinking about it. Brecht: Let me ask you this first: Barbara, do you have any experience before you started working with Mike? Barbara: I have been in real estate since 2000. Brecht: Okay. Barbara: I actually do have a real estate background. I do have my MBA in fiance, so I understand the financial part of it; calculating forbearance agreements and general rate of return. Brecht: So, why work with Mike? What’s the difference. Why not just go do it yourself? Barbara: Well, Mike provided all of the bootcamp and all the tools to understand the business. I can’t say that’s just because I have seventeen years of real estate background and a degree, that I definitely needed his help when it came to educating myself to the business. Brecht: Yeah. Barbara: The weekly coaching; conferencing that he had, extracurricular finds that keep me on base, actually, to obtain my goal. Mike: Can you speak a little bit clearer into the microphone? It sounds like you are breaking up, Barb. Barbara: Sure. Barbara: Like I said, I could not just dive into this business without Mike’s help. Brecht: Yeah. Barbara: For Sure. Mike: Well, thank you. Brecht: It’s that kind of business, I think, where there’s sort of a lot of components. It’s not rocket science, but it is sort of black box-ish, even if you’ve been in real estate for a while. Brecht: Mike, what would you say to somebody who’s thinking about getting started, now? Mike: It’s kind of … I mean, when I first got into this business, I realized that this is a team sport. I can rely on people that are in my network to help me along. There’s a lot of different things that could happened. There’s a lot of moving parts; as far as having an attorney in the right state, in this situation, Barbara actually had to go out and interview four or five different attorneys, foreclosure attorneys.Had I not had Barbara; had I been doing this not myself, I probably would have reached out to my network and said, “Hey, who’s got a good attorney in Colorado?” – or wherever the note is. I treat this as a team sport, just like I treat my students on relying on their input to further all of our success. Mike: I have a group of people, about a thousand people that ar in my network that I reach out to. Had I not had an attorney in Colorado, I would blast this out to my people. I would’ve gotten thirty responses: “don’t use this guy, use this person, this one is great” – all above. It is definitely a team sport. I treat it as such with my students, my partners; with my associates that are in this business. You include it. Mike: So, for somebody that … I would have never even dreamed that this business existed, if it wasn’t for my mentor reaching out and saying, “Hey, check this out.”. Like we are doing now, check this out! We did this on Friday! Mike: It took us from April until October to get it done, but once we started moving, we were moving in the right direction. Brecht: Yeah. Mike: The lessons that we learned, just on this one alone, Barbara – we catered to the borrower more than we probably should have. Brecht: How do you mean? Barbara: Yeah. For sure. The conversations I had with him; it just seemed like he was stringing us along for a good three months and I was getting frustrated. Again, trying to figure something out and yeah. It finally [inaudible 00:18:21] in the long run. Mike: Yeah and three months is nothing. Mike: I mean, you are an excellent student, Barbara to have, because we work well together. We move right along and so it is definitely a team sport. Mike: For someone, like you had asked, is sitting on the fence or something – go find yourself someone that will walk you through the paces that has as much at stake as you do. Mike: Barbara had 75,000 dollars at stake to get these things up and running. So, I had something at stake, she had something at stake and so we needed to get to the end game; which is getting our money back – and now getting it to the [inaudible 00:19:07], Brecht: Right. Mike: So now, even if we didn’t do another deal, we would have probably … we are going to get two or three more of these things performing. We’ll have had no cash flowing for the next thirty … at least twenty years on all of them. Twenty years of multiple streams of income. That’s why you and I were talking about affiliate marketing; getting these multiple streams of income to flow into your life. Brecht: Yeah. Mike: Whether it’s notes … the note business for me has worked for the last ten years – to build up my portfolio of streams of income coming in. So, that I can do the life that I want to design for myself and for Barbara. Barbara signed up for my course … How long did it take before you quit your job? Barbara: Four months. Brecht: Wow. Mike: Four months to feel comfortable and start realizing profit; and realizing that this has potential. You can really put some legs on this thing. Mike: Yes, 75 grand – 77 thousand coming in. I think, Barbara, you own maybe three or four rentals, right? Barbara: Four rentals and I am purchasing a vacation rental at the beach; if it doesn’t storm again. Mike: Yeah. Barbara’s down in Florida; in Jacksonville area. Mike: Yikes. We are just watching these things roll through. It allows us to … Barbara travels ten times more than I do. I mean, it’s amazing. This business allows that type of lifestyle. Barbara doesn’t physically have to be anywhere to do this business. So, she proves it. You’re testing it out, right Barb? Barbara: Yes, I actually do better when I am away. Mike: That’s good. Brecht: It’s a phenomenon, isn’t it? Barbara: Yes. It never use to be that way though. Brecht: Right. Mike: Yeah. Not with your j-o-b hanging over your head. Brecht: Yeah. Well, here is what I would say: If you are watching this video and you’ve been kicking it around and you’re serious about it – you’re looking for a mentor, you’re looking for somebody whose notes show up; someone who is gonna hold your hand and have skin in the game and get a deal done with you – I can’t recommend Mike enough. He’s been excellent to me over the years. He’s been here for Barbara. He’s been excellent for students. We are gonna have some information right here on this page about how you can find Mike and how you can get started with him. Brecht: Mike, thanks a lot for coming on here. Barbara thanks for coming on and telling us the story of that note. Mike: Yeah. Thank you – thanks guys. Barbara: Thank you. Mike: Thanks Barbara. Appreciate it. Click here to Download the Note Conference Case Study PDF https://www.distressedpro.com/noteconference-case-study/feed/ 5 noBrecht Palomboreal,estate,reo,foreclosures,distressed,note,buying,non,perf

How do you get your first note deal direct from a bank? It’s easy to feel overwhelmed when you are starting in the mortgage note business but as Jamie and Joe are about to show you, you will be successful if you consistently take action on the information included in our program. On today’s podcast we have Jamie Kubiak and Joe Bayarena from Cross Country Notes. They will be telling us about how they followed the steps outlined in the distressedpro program to acquire a tape containing 33 profitable assets. https://s3.amazonaws.com/dp-site-files/audio/Cross+Country+Notes+Jamie+Kubiak+and+Joe+Bayarena.mp3 Click here to Download the Cross Country Notes PDF Transcript: Brecht Palombo: Hi, and welcome back everybody. This is Brecht Palombo with the distressedpro.com Professional Interview Series, and today I’m really happy to be talking to Jamie Kubiak and Joe Bayarena. Now, did I say that right Joe? Joe Bayarena: Yes. Brecht Palombo: Fantastic. And the reason I wanted to get these guys on here is they’re professional real estate investors who have made a switch over to notes and while we were working on something for Realty Motor, another business that I have where they’re setting up their note purchasing website, we got to talking about a deal that they recently secured with a bank, and so I wanted to just kind of talk a little bit about that. And I’m going to ask them to reveal some stuff for us here. Just to kind of give up a picture of what’s available and what’s happening out there. And then maybe we’ll talk a little bit about how if you have some money that you’re looking to invest, and maybe you’re not doing the prospecting or maybe you are, but you’re not having as much luck as Joe and Jamie that where you can go and you can work with some folks like these to put your money to work. And so with that, if you guys could tell the story, we started talking, it sounds like you signed up for Bank Prospector, and the training that we have at Distressed Pro, and you got down to work. Is that right? Joe Bayarena: That’s correct. Right. My role, because I have a big mouth I guess Jamie would say, I got on the phone and started using Distressed Pro and I’d listen to some of the videos and watched everything in Distressed Pro and everything that you provided for us. And so I just started getting on the phone and calling banks and I must have done that and repeatedly calling the same banks and leaving messages. Most of the time I was talking to somebody they were interceding or a gatekeeper for the CEO or somebody a little bit higher up, like you suggested, talk to somebody higher up and then move down. And so, that’s what I did and I think I was on the phone for about four or five weeks, six weeks and leaving messages and one of the banks that I called, I had talked to his assistant and after about the fourth time I called her she started laughing and she recognized my voice. She says “I’m going to let you through so that you can leave a message for the CEO because you’re very persistent, aren’t you?” So, she finally let me through and I think left three or four messages for him and this guy’s just as bad as the secretary. But finally, one day Jamie and I were sitting in the conference room and this guy calls me, the phone rings and I answer the phone and it’s this banker from San Antonio. He says “Joe, I’ve gotten your messages a couple of times and I appreciate you being patient.” He said “I just haven’t had the chance to call you back because we had so many meetings, but actually you’ve called at just the right time because we’re just getting ready to get rid of some notes.” I was ready because I had practiced about a million times on the right lingo and everything else to say to him and went through the whole and so he said “Well here’s what we got”, and initially we got like 47, is that right Jamie? Jamie Kubiak: 40 something, yeah. Joe Bayarena: Yeah, 40 something notes that he and he ended up some of them paid off and they fell off and he re-buys the list and we’ve been back and forth 20 or 30 times, I guess, on the phone. And then we finally got a list of about 33 or 30 assets that are finally going to get done and some of them are performing notes and some of them are nonperforming and Jamie is more of an expert than I am on Excel and some of the other things. Jamie Kubiak: So it works out, but in summary Joe just did what the training instructed and he used the CRM built into Distressed Pro to make the calls and he kept notes and he followed up and we got this tape. It worked. Brecht Palombo: Well that’s fantastic. This was with the CEO? Is that who you ended up doing the… Joe Bayarena: Actually, when I hung up the phone with him, Jamie and I are pretty much rookies at this. We kind of started backwards at making the phone calls and seeing what we could do. I said “Now we got Distressed Pro, let’s get to work”, so I got on the phone and when this banker called us and I hung up, Jamie and I look at each other and go “Now what do we do?” Brecht Palombo: Yeah, well, it’s the right order because if you can find the deals, even if you don’t have the capital ready to go, you’ve got it invested in other things, whatever, if you can find the deals, the money will be there. I really think that you went about that exactly right. How long from the time you began making calls, did you say five or six weeks from the time you began making calls to the time you finally got a call back? Joe Bayarena: I guess I didn’t talk to any CEOs or presidents of banks. I did talk to several, and one of them in particular told me “Oh Joe, I think we only got one or two properties. Our bank is in really good shape” and I was looking at Distressed Pro and I knew he had like two and a half million in distress. So I knew he wasn’t telling the truth, but I didn’t want to say anything, so I just sent him an email and he said “Well I have a guy here that deals with all the notes Joe, so we’ll get back to you in a few weeks and see what we can do with you.” So, I still have some other people that I have been talking to and this is just one with 30 something assets that ended up dropping in our laps. Brecht Palombo: The timing, right, really is the thing. They were ready and you were there and I think that’s kind of what I try to promote is for people to understand that “no” doesn’t mean “no forever”. It means “I don’t have anything on my desk right now”, right? Joe Bayarena: That’s exactly right. He just called me at the right time. Brecht Palombo: Yep, exactly. And so the more those folks who you’re communicating with who are getting used to hearing your voice and your persistence, as the time becomes right for them, you’ll be there. That’s the idea that I really try to harp on is that it’s not you dial the phone, they say “Oh, yep, here’s the tape. Send me a wire.” It’s a matter of being there when they’re ready to go and that requires some systemized follow up where you’re going to call them or you’re going to send them an email or whatever it’s going to be, so congratulations on that. Can you talk a little bit about what you’re expecting for returns and what it all looks like? What the deal looks like? Joe Bayarena: He’s done more of a spreadsheet on it. Brecht Palombo: Actually, before we get into that, let me just mention that the method that you guys are using, which in my experience in sales we call this the hunter skinner. It’s a really good model, especially if you’re going to be partners where somebody is going out and bringing in the business and then once something comes in, the other partner takes it on and does all the back stuff. And that, I know a number of people who are doing that and it makes a lot of sense, so with that, I’d love to hear about the numbers and what’s happening with that tape. Jamie Kubiak: Okay, yeah. This is Jamie. So there’s 33 assets in this tape and the numbers are different for each one. This tape is unique in that all of the assets are underperforming. Some are more delinquent than others, but the history is they all catch up once a year after tax returns. They also all have 15 year balloons. They’re amortized over 30 years, but have 15 year balloons, which is an interesting thing that works in our favor. Joe Bayarena: Kind of unique, yeah. Jamie Kubiak: And thirdly, all of these assets have a tremendous amount of equity. So, on average, each of these has 80% equity on all loans. So even if they’re nonperforming, because of all the equity they’re very likely to become re-performing because somebody wouldn’t want to lose their property for a very small loan. So the numbers are, because they have equity and the monthly PI payment is so much lower than what a market rent is, the re-performing exit strategy or outcome is the most likely and the returns on those on average for the 33 assets is about upwards of 25%. If you take that back and it just starts re-performing again, we season it for a period of time and then sell it at 85%, our return would be 25% or better on the aggregate. Brecht Palombo: Wow. Jamie Kubiak: Should we foreclose on any of these, should that happen, not terribly likely, but if it did then our return would be triple digits. Brecht Palombo: Wow. So it sounds like you’re working with local banks, with local product, right? Is that correct? Joe Bayarena: Exactly. Brecht Palombo: Yep. It sounds like, with the type of loan you’re talking about, sounds like maybe this is some portfolio product that they had because it’s a little different. Joe Bayarena: Right, what happened was that this bank decided to help people in the area in his city and they decided to go out and do something special for people and help them out, so interest rates were anywhere from six and three quarters to seven and a half percent and that’s why, like Jamie said, they’re all 15 year balloons. They’re 30 year loans, 15 year balloons. It was a unique thing and now they want to get out of some of them. I think they had a, I forget exactly what the total package was, but some of them were in good shape and they didn’t want to get rid of those at this time, but he said “We might do it in the future.” Brecht Palombo: And so, I don’t want to spend too much just praising Distressed Pro and Bank Prospector, but what would you say to folks who are looking to do this type of work and looking to get deals from banks in terms of your experience with dealing with our materials and our software and all that? Joe Bayarena: I’m going to tell you that you should use Distressed Pro if you’re going to call banks because all the banks are in there. Every single bank and credit union, anybody that you want to talk to that’s a financial institution is going to be in Distressed Pro. And all you got to do is, just like Brecht suggested, you’re not going to get anything from the big banks, but you start off with the smaller banks and that’s what I did. I just went to the smaller banks, the community banks, banks in the area and started calling every single one of them. And for the most part, it’s just going to take persistence and smile and dial and make notes of what the name of the gatekeeper is. If you’re going to talk to the secretary of the CEO, then you’re going to write her name down and when you call back you’re going to say “Hi Irma, or Linda or whatever his name is. How are you today? This is Joe” and after you reach them a couple of times you’ll develop a relationship and eventually they’re going to let you through. But you have to make notes and the software, when you do get Distressed Pro, Brecht has developed a, when you get the person you want to talk to, and you’re usually going to go to a president or CEO so that you can move down the line and get to the person you want with the referral, you’re going to get a referral from the president to talk to somebody that’s going to handle the notes. They’re going to listen probably more attently if you say “Well, the president asked me to give you a call and talk to you about the distressed assets you have in your books”, which is something that you’re going to find in some of the videos that Brecht provided, so if you go through all the material that’s in Distressed Pro, that’s very, very well put together, and if you’re persistent in your phone calls, you’re going to find that you will eventually get to a bank, if you’re going to stay on the phone and do what it takes. Brecht Palombo: Nice. So I really appreciate that. What I’d love to talk a little bit about is I know a lot of folks who are doing these kinds of deal are looking for investors and JV funding and that kind of thing. Are you guys open to working with investors if you’re returning these kinds of rates, if somebody’s qualified, will you take their money? Jamie Kubiak: Yeah, actually, we would. That’s what we’re working on right now. All these assets are close. We’re in Austin, Texas. All these assets are an hour, an hour and a half away from us and so we’re well positioned to have boots on the ground in that city, so we’re seeking joint venture partners that want to partake in the profits with us on these deals. Brecht Palombo: Awesome. So, one of the things that I know that happens in this business is after you do a deal or two, with a bank you usually do two or three, or three or four and it goes on like that and it’s not a thing where you get a tape every month, but it’s a thing where it might be a couple times a year, it might be once a quarter, might be every other quarter, whatever it is. But the beauty is once you’ve established a relationship, they keep making loans, right, so they’re not running out of product anytime. And what’s interesting about this particular case where you’re saying that some are performing or re-performing and all that, it’s not always that you have to have these deep, deep discounted really rough type of situations. Sometimes it’s pretty clean, like what you’re talking about. Joe Bayarena: We were surprised at the assets we were looking at as well. Brecht Palombo: So how would somebody get in touch with you? What’s the best way for them to find you if they’re looking to invest or looking to JV on notes like this with you? Jamie Kubiak: Yeah, I would say the best since Joe and I both have hard to spell last names, our website is crosscountrynotes.com and that’ll be probably the easiest way to find us. Brecht Palombo: So, there you have it folks. You pick up the phone, you do what other people have already done to be successful. You do the same thing and then you do a bunch of it and then out the other end you’ll find some deals. So, if you’ve got some money to invest and you’re looking for some guys who are out there turning over real deals direct from banks, I suggest you look up crosscountrynotes.com. Jamie and Joe, I really appreciate you coming on and telling you’re story. It helps us a lot just to get it out there. It’s wonderful and refreshing to hear people who are just doing it exactly as it’s meant to be done and having the kind of success that you’re having in really not too long a time period, so congratulations on that and thanks for coming on. Joe Bayarena: Thank you Brecht. Jamie Kubiak: Thank you. https://www.distressedpro.com/crosscountry-notes/feed/ 1 noBrecht Palomboreal,estate,reo,foreclosures,distressed,note,buying,non,performing,notes,real,estate,broker,real,e

Master title due diligence when buying mortgage notes! What’s the best way to handle due diligence when buying notes? What do you need to look out for? These are critical questions we get from note buyers as they get started and scale. In this podcast episode, we tackle these critical issues with ‘The Man for Title’, Alex Goldovsky. Click here to Download the Title Due Diligence Bonus PDF Alex and his global team at Pro Title USA have been an instrumental force in the industry, helping new note investors and the largest institutions to spot title defects and potential risks, create smart due diligence processes, bid better, and secure better margins. Listen in and Get the Details Now Alex Goldovsky Title Due Diligence Due Diligence: Liens, Liens, Liens Safely and profitably investing in notes and buying pools is all about liens. You’ve got to know your liens. There can be so many types, including: Mortgage liensTax liensLien assignmentsHOA liensCode violation liensMunicipal and utility liensIRS liensState tax liensMechanics liensDOJ liens Curable, Dangerous, Negotiable Some of the issues you’ll encounter when completing your due diligence can be curable. Even among the really scary sounding ones. If you know your title, how the order of things impacts your ability to collect, and have good help, you can turn ugly scenarios into highly lucrative gold mines. Others, for example; finding out that your pool of 30 million loans is pretty much all unsecured can seriously change your risk level and how much you’ll want to bid. Some debt just might not be collectable, at least not for a while. Then there are liens which can be negotiated way down, if you have the experience. Experience vs. Inefficiencies The thing is that most investors don’t want to learn hyper-expensive lessons via trial and error. Then there are the time constraints, even if you know what to do. It can soak up a lot of time driving around to local townships to find out if there are code enforcement liens or demolition orders. Or simply dealing with no-tech savvy authorities who want you to mail in a physical check to make your request. Unfortunately, there are just still a lot in inefficiencies in this business. This is where Alex and his team of 1,500 title professionals in offices around the country and world have really been crushing it. Pro Title USA comes highly recommended by some pretty serious note buyers, and even won the contract to help the FDIC with their commercial assets. They’ve worked with Fannie Mae, and were the company of choice to help Freddie Mac with their first big sale of distressed assets. They know the ins and outs of different states, counties, and towns, and can even help with title searches in Puerto Rico and the Bahamas. The 50 Point Quality Control Tax & Title Checklist Alex Goldovsky has streamlined title due diligence with technology, and have developed a 50 point checklist to help investors fast, with a product that even costs less than $50 per asset. Living trustsRedemption periodsBankruptcy filingsDemolition ordersDeed restrictionsBreaks in the chain of assignmentWhat to watch out for in specific states and cities Click here to Download the Title Due Diligence Bonus PDF Bulletproof Title Due Diligence by Alex Goldovsky Bulletproof Title Due Diligence by Alex Goldovsky Alex has actually “written the book” on title due diligence.If you’re an investor of any kind – doing note deals, tax liens, or any other deals involving title – then you know how important due-diligence is.When you’ve beat your competition to a good deal you don’t want pooch the whole thing by failing on your due-diligence. Not only do you have to be thorough, you have to be fast.That’s why I’m recommending you checkout by Alex Goldovsky. Unless you already consider yourself and your process to be world class in due diligence – I urge you to check out Alex’s new book. For less than the cost of a decent cocktail you’ll have instant access to deep industry knowledge that was hard won over a period of years and many thousands of due diligence reports. Get the Book https://www.distressedpro.com/title-due-diligence/feed/ 10 noBrecht Palomboreal,estate,reo,foreclosures,distressed,note,buying,non,performing,notes,real

Solve More Problems, Make More Money With Judgments & Asset Recovery! As the market continues to change, investors are looking for more ways to make money, maintain strong yields, and concrete relationships with asset management contacts. In this new episode of the DistressedPro Professional Podcast, we talk with two finance experts who may just have a solution which will help investors achieve this. Click here to Download the Recovery Analytics Bonus PDF Rodney Gagnon and Stephanie Archer know a thing or two about debt, judgments, and generating cash in asset recovery. They’ve been navigating a commonly overlooked niche, with big dollar amounts up for grabs. They’ve been doing it for over 20 years. Listen in for the Details Now The Missing Billions Non-performing mortgage loans have exploded in visibility and popularity among investors over the last decade. However, there was a lot more to the credit and foreclosure crisis than residential home loans and REOs. Commercial and consumer debt was at giant levels back then. Much of which has become non-performing unsecured debt. With the last few years being far busier for this type of credit, it could be one of the biggest sectors for debt in the near future as well. There are billions of dollars of this debt. Much of which may no longer be tied to original real estate collateral, or has simply been sitting around, without much action being taken. At least not effective action. A lot of it may have been converted to judgments, but has then just stalled out. Many workout officers and bankers are sitting with this paper on their books and desks. They’d love to do something with it. They just don’t always know what to do, or have the ability to pursue it efficiently. Rodney and Stephanie, have been stepping up to help, and real estate and note investors all over the country could be participating too. Finding the Money Coming from financial investigation and banking backgrounds Rodney and Stephanie are putting their decades of experience to work in enforcing commercial judgments. Using creative strategies and thorough tracing techniques they are able to help creditors turn these dead assets into vibrant new sources of income. Often acquiring portfolios of this debt for just 3 to 4 cents on the dollar, they are collecting millions through garnishments, real estate, tapping offshore bank accounts, luxury vehicles and private planes, and sizable settlements. Most notably; they are able to track strategic defaults and fraudulent transfers, and hold debtors accountable. Download the Transcript to Find Out How This episode is packed with tips on how to build stronger relationships and bank on this asset class. In this interview you will find out: How to buy debt for 1-10 cents on the dollarWho to build relationships with to open new opportunitiesWhere to meet the right peopleThe types of data, and data sources for finding this moneyThe type of real estate debt that could be a goldmine for debt investors Dig in and get the Details Now Click here to Download the Recovery Analytics Bonus PDF https://www.distressedpro.com/recovery-analytics/feed/ 0 noBrecht Palomboreal,estate,reo,foreclosures,distressed