Recently I had a conversation with a potential investor who was a surgeon. I had reached out to him through LinkedIn. He reached back and responded with his phone number, so I called him.
I was like, “You know, I’m Brady. We connected through LinkedIn and I invest in distressed debt backed by real estate.” And he said, “Okay, well, you know, I’ve got an appointment coming up, so I’ve got a little bit of time to talk now.” I was like, “Great. If you need to go, just let me know.”
And so, I explained to him what we’re trying to do. The banks or various entities to get rid of debt that they no longer want because it no longer meets their portfolio requirements. We have the opportunity to buy them at a discount and work to rehab the borrower. We rehab the paper, not the property and make some profit.
And you know, his first question was, “Is this multi-level marketing?” I had to assure him, no, multi-level marketing is much easier than this. They already give you a business and you just execute the business. This, Mortgage Medic USA, has to be created from scratch. Buying notes has to be a process you have to create from scratch. So, I was like, no, what you’re actually doing is you’re entering in a joint venture agreement between your LLC and my LLC. Together, we’re going to take down and procure an asset and we’re going to rehabilitate it.
The next question was, “Well, will this take a lot of time? I don’t have a lot of time.” I can appreciate that. He’s a surgeon. He gets paid to be in the hospital fixing people for a living, so I can appreciate that. I told him that’s my role in this joint venture. I’m the one who’s connecting with the vendors. Connecting the dots on the deal. Keeping up with the timelines. Making sure we’re in compliance with CFPB and Dodd Frank and RESPA and all of the steps and phases of the procure, find, fund and flip process. He was satisfied with that answer.
And you know, he asked me how long I’ve been doing it. I told him about a year and I went into a little bit more in depth because I knew this was a highly intelligent person and so I had no problems going into you know, some of the foreclosure processes and variants of the laws and rules in each state. If I’m unsure of a specific deal, I’ll show it to my other peers in the note industry and get insight from them. I told him I’m not in this alone either. I’ve got lots of fellow note investors that would happily throw a second eye onto something to make sure I wasn’t missing anything.
He liked that concept. His call dropped and I thought, okay maybe he will call me back. Maybe he’s got to go to his next appointment. And he did, he called me back and we again, had a really great conversation and I thoroughly enjoyed sharing this industry with this gentleman. Then, I believe my call dropped. We dropped calls again. And I thought I’d taken up way too much of his time, so I texted him. I said, “I really had a great conversation with you. Call when you have time.” He texted me back and he’s like, “Please call me.” It was just the highlight of my day talking to someone who was interested in this process and wants to be a part of it.
I shared with him a story about a deal in Mississippi. It was a manufactured home, but I told him some of the research I’d done on this family. They’re paying almost a $1,000.00 a month in BK 13 and I told him, I looked at all their bills and I looked at the bankruptcy and it was mostly school debt. I found them on Facebook and this is a couple with two young boys and they vacation and they fish. And you know, they must have just had something bad happen, but they are steadily paying on their mobile home each and every month often times paying more than the minimum required. So, even though it was a mobile home and it was a rural area, I thought that this asset would be a really great asset to invest in because it’s already performing.
And so, then he was asking me about, well, how long are our terms? How long are we into this deal? I said, well, we could do this 18 to 24 months. The idea is typically we would, you would fund the deal and we would work it out for 18 to 24 months, maybe even 12 or shorter, depends on the state and at the end of the deal, you’ll get your half out and I take my half. I do all the work and the labor. And I said, “Hey, it might get to a point where you might want to stay in this agreement. You might not want to exit. We might, if we foreclose you might …” And I asked him, “I said, you, I mean, because we’re in this together, you might decide you would like to let it go to foreclosure and get the capital out.” We might think together it’s a better idea to rehab the property and sell it as a turn key rental to an investor or do seller financing.
I said I’m open to what you want to do. I’m kind of here to work for you. And I think he really liked that idea that he’s really in control because it is his money, but yet he doesn’t have to stay on top and keep track of everything. He has someone guiding the ship for him. I don’t know necessarily know all note investors handle conversations with potential investors, but I would much rather have someone who was not always looking to foreclose off the get go because my goal isn’t necessarily to kill people’s emotional equity. Although that might just go with the territory. Half the time you will. Half the time you won’t. I’d prefer it less, but facts are facts and stats are stats.
Anyway, I just wanted to share with you on this episode of Notes on Deck my conversation with a potential investor and the value that I have to bring to the table, to them, to convince them that there’s someone that they can trust.
He did mention that he’d like to, he wanted me to meet his wife and I said, “That’s awesome. I would love to meet your wife and I’d love for you to meet my wife.” And I told him, “Matter of fact, I don’t hide where I live. You can go on my website and you can find my address. My address is easy to find. It’s on Google. I don’t hide it.” I told him, “Hey, stop by. It’s fine.” because I don’t have anything to hide. So I hope you also feel like you have open, kind of an open door policy with your investors and potential investors and aren’t trying to hide necessarily behind anything. Other than using an LLC to separate you from your business because you are not your business and your business is not you. I am simply a manager for Mortgage Medic USA. Thank you and have a good evening.
Hello, everyone. I just want to let you know I’m coming out. I’m coming out to be a note investor. You see, I was determined that the path of my life after retiring from the military was going to be a fix and flipper. I was so in awe of accomplishments that my grandfather did in east Texas, in a little town called Gilmer, with buying little houses, fixing them up, renting them, or selling them contract-for-deed a couple times.
In fact, I bought a couple of houses in the military that were fixer uppers. We fixed them up, and then when we were done we moved out and sold them for a lot of, well, we did well considering the areas we were living in. These were things I knew. I knew what it takes to gut kitchens and bathrooms. I knew what it takes to install windows. I’ve done it. I know what it takes to re-plumb a house. I know what it takes to get all this stuff. I know the true cost, the true time, the true labor that this stuff goes into. I was determined that was my path, so I decided I need to know people.
I joined my local REIT. A guy named Jimmy Reed, awesome man of God. I really enjoyed his meet ups at DFW, at the Fort Worth REIT group here. That first night I went, a guest speaker told me about the concept of being the bank and how I could help people stay in their homes. I thought, “Oh my goodness. This ties so perfectly with the culture that I learned in the Air Force, which is community service,” and there was a way for me to support my family with this.
We had this thing where sign up and do this and come to this class, and I was like, “Man, I’m just not sure about this. Is this true?” Because I’d never met the guy. It was Eddie Speed. I had to do more research. Then I came across this guy named Scott Carson and We Close Notes and I started following him and everyday he was posting something positive, a tip or a trick or a … not a trick, but some insights to the industry. Those things that he shared with me not only helped me understand this business, but it actually helped me in my personal life, so I’ve truly felt that Scott Carson’s been a mentor to me and he doesn’t probably even know me.
He’s never met me, but just the energy and his knowledge and his willingness to share and train, as the heart of a teacher, that’s what I’m looking for. I want a heart of a teacher, because I have a heart of a teacher. I’m sharing this with you because there is opportunity out there to buy bad debt and that sounds totally crazy, doesn’t it? Why are you going to throw good money, good money that you’ve worked hard for to buy bad debt. Well this isn’t credit card debt, people. I’m buying a house. I’m buying a piece of paper to get people to pay and that piece of paper is backed by a physical structure.
If I can help them stay in their home, great. I’ve helped them keep their emotional equity in their house. I’ve helped all those memories stay there and the neighbors probably like them and want to them to stay, but if they don’t want to work with you and you got to foreclose, well then you’ve probably helped the neighbors out, because they probably didn’t need to be in that house anyway.
Foreclosures not the … One of my neighbors is like, “Man, this sounds like you’re preying on people,” and he just happens to be a landlord. I am like, “So tell me, what happens if your tenants don’t pay their rent?” “Well, you know I’ve got to evict them.” Like, “Well why don’t you just let them not pay? Why don’t you lower their rent?” “No, no. We don’t lower their rent. They got to evict them.” Well guess what? As a note investor, I can lower their payments. I can lower interest rate, I can forgive debt, I can put them into a forbearance where we do it as a trial period.
The upside is that you’re helping communities. You’re helping people get back, helping people that want to be helped, helping them get back on track, get their lives together. You’re helping people that have been basically just forgotten. They’ve cast them aside as not worthy of their time, but these are good people. Again, not all of them are good. Some need to go and I’m sure when we get them out of there, the neighbors are going to be much happier because we can put someone else there that wants to be there.
Anyway, that’s just kind of been my coming-out-of-the-closet transitioning, figuring out what it is I want to do with my life of 20 years in the Air Force. I know one thing is I’m good with paper and I know I’m good with people and people are important. People’s lives are important, so anyway if you want to team up with me, let’s go. Let’s do it. I’m just so grateful for Scott and all of his mentoring that he does virtually everyday, everyday when he’s on YouTube. Matter of fact, I think I’ve watched every single video he’s ever made, probably since July of last year, all on Vimeo. Most everything. He shares it all and doesn’t even charge for it.
If you’re thinking about getting into this space you need to know that there’s a lot of upside to helping people, the upside of controlling your life and creating your own destiny. The downside is, if you don’t do your due diligence, if you don’t do the research, do the legwork, the footwork, put in the time and the effort, you’re going to lose, you’ll lose big. But it doesn’t have to be that way. You don’t have to lose. You can win and when you’re in a big city like me, DFW, I don’t how … I’ve got untold number of We Close Note minions within a phone call’s reach, within a driving distance and who are more than willing to help me anytime I get into a bind.
I share that with you because if you’re looking, if you’re searching for something, if you’re searching for something bigger than yourself, you thought about maybe being a landlord, well guess what? You can be the lien lord and the lien lord doesn’t have to do with toilets and tenants and dogs and neighbor complaints, because well you’re the bank and the bank always wins. That’s it. Mortgagemedicusa.com. That’s what I’m going for, that’s what we’re going to be. We’re going to fix mortgages, we’re going to fix people’s homes, not their homes, their paper, right? Because we don’t do toilets or tenants, and we’re going to be the lien lord, not the landlord.