April 18, 2025 • 31 mins
Nathan Turner of Earnest Investing spills the beans on how note investing isn’t just about crunching numbers—it’s all about those real connections! They dive into Nathan’s winding road into the note world, where he went from being a struggling landlord to a note investor who’s shaking hands and making deals. This chat highlights the importance of in-person events, like the upcoming Diversified Mortgage Expo, where networking can turn into gold. Nathan shares gems from his years in the biz, including how diversification is not just smart but super creative these days. So whether they’re seasoned pros or just dipping their toes into the note investing pool, listeners are in for a treat full of stories and strategies that’ll totally boost their game!
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Chris and Nathan Turner dive into the vibrant world of note investing, revealing how Nathan's journey started unexpectedly while dabbling in fix-and-flip real estate. As luck would have it, after getting stuck with a property he couldn't sell, he decided to rent it out, only to discover that being a landlord was less glamorous than HGTV made it seem. With a sprinkle of humor, Nathan recounts how he and his partner stumbled into note investing, believing they were inventing seller financing while actually stepping into an already established niche. They emphasize the power of community in note investing, sharing stories about the relationships formed at conferences like the Diversified Mortgage Expo (DME), which Nathan now heads. These gatherings aren't just about deals; they're about learning, sharing knowledge, and building partnerships that can last a lifetime.
The episode also highlights the importance of diversification in the note space, as Nathan discusses different niches within note investing that can offer unique opportunities. With a light-hearted touch, they explore how the DME is evolving, focusing on themes that open investors' eyes to various avenues to enhance their portfolios. And let's not forget the fun element; the duo chats about an ax-throwing competition set to kick off the DME, adding an exciting twist to networking before diving into serious investment strategies. It’s a reminder that in the world of finance, having a good laugh and throwing axes can lead to building solid relationships.
Whether you're an experienced investor or just dipping your toes in the note space, Nathan's insights and the community vibe at DME provide invaluable guidance on how to navigate this unique market. The episode wraps up with Nathan encouraging everyone to connect, collaborate, and maybe even throw an ax or two, because in the end, it’s all about those essential connections that can transform a career.
Companies mentioned in this episode:
- Earnest Investing
- Diversified Mortgage Expo
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:46):
So I just recorded an episodewith Nathan Turner of Earnest Investing
and host of the DiversifiedMortgage Expo, which is going to
be May 2nd and 3rd down in Nashville.
But people should get there onMay 1st to participate in the ax
throwing competition.
(01:06):
What I loved about thisconversation was, you know, it wasn't
only about the conference, itwas, you know, how to focus on what
to learn, who should attend,who should you meet, not only at
conferences, but just how tonavigate the node investing world
professionally.
And that's something becausewe are a very tight knit community.
(01:27):
It's important for people tounderstand we're not as much in competition
as you see other types of realestate investors.
We're more focused on buildingour company, but building it through
partnerships, mentorships, inselecting the right vendors.
So hope you enjoy this episodewith Nathan, who has been in the
note space for over 15 years.
(01:50):
And I think this will be agreat episode for people to further
their note investing career.
And make sure to check out theDiversified Mortgage Expo early next
month.
Foreign.
Turner of Ernest Investing aswell as the host of the Diversified
(02:14):
Mortgage Expo.
Nathan, how are you today?
I'm doing great, thanks.
Good to be here.
Yes, we were just chattingbefore hitting the record button
on what we're seeing in theeconomy, what's going on.
And Nathan being up in Canada,I'm sure has his own opinion that
we're not going to dive intoall of that today.
What we want to dive into ismore about Nathan's background, but
(02:37):
also educate investors on theDME conference that is coming up
very soon and talk about whynode investors should attend conferences,
what to look for and get outof these conferences and then even
talk about some of the next steps.
As Nathan and I have been tomany conferences and each one is
(02:59):
unique and different from whatyou can get out of it.
But yeah, we'll talk all about that.
But first, Nathan, why don'tyou tell people a little bit about
your background in regards to,you know, how you stumbled upon or
got into note investing.
Yeah, and that's the rightword for it.
And that's probably most Note investors.
You just kind of fell into it.
(03:20):
Not a lot of people thought,hey, I know, I'll go search this
out.
No, most people fall into itand I did too.
So I was doing fix and flipreal estate in Canada and I got stuck
with one property at the endof that, just as we were coming up
in about 2008, 2009, oneproperty I couldn't sell, so I rented
it because that's what you dowith real estate, right?
If you can't sell it, you rent it.
(03:41):
And I figured out very quicklythat the.
The monthly cash flow wasnice, but I didn't like anything
else about being a landlord.
Like, it was.
It was hard work.
It was across the country.
So I.
I just, I didn't have verymuch control.
I felt like my propertymanager was awful and it was just
not a fun experience.
I didn't en that whole idea of it.
(04:03):
It's, you know, it was not anice neighborhood.
Like, so there's a lot ofthings going against me.
And.
And, you know, you learn asyou go.
And I know how that goes, but.
But I didn't know.
And so I got stuck with thisone house and I'm like, this is.
This is garbage.
I don't know why people dothis landlord thing.
It doesn't make sense to me.
And then it was because it's not.
As lucrative as HGTV makes itout to be.
(04:25):
No, no.
On tv it looked a whole loteasier and better and much more profitable.
And like, I say, like, we didokay, but certainly not worth the
effort, as far as I could tell.
And then, so kind of fastforward a little bit.
We eventually sold the houseas the market kind of picked up a
little bit again.
And so I was free of that.
(04:46):
And I thought, well, I likereal estate, but I don't know about
this landlording thing.
And it was shortly after thenmy, My old partner Corey, he contacted
me and said, hey, these guysout of California, they have all
these properties in the Midwest.
They don't know what to dowith this stuff, so they want us
to come on board and just kindof help figure it out.
(05:08):
And again, this was like 2008,2009, when nothing was going well.
And these guys had bought thisportfolio in 2007 at the height of
the market.
It was supposed to be a flip.
They were supposed to flip itout to a different outfit.
And it just.
The deal fell through.
And now all of a suddenthey're stuck with all these properties.
So Corey and I, we thoughtwe'd invented seller financing.
(05:28):
We were like, brilliant idea.
We'll sell these houses onterms, carry back notes.
And the thinking was, youknow, landlording is terrible.
So how do we get monthlypayments out of this without having
to take care of the house was.
That was the motivation.
So kind of stumbled into thisnote thing.
So, you know, the thinkingagain is the person in the house,
(05:50):
they're the ones responsiblefor taking care of it.
You know, if something breaks,they gotta Fix it.
Banks don't do that kind of thing.
And just kind of figuring outas we went along, figured out there
was such thing as a nodeinvesting world.
I went to my first nodeinvesting conference.
It was noteworthy back in 2009and I was blown away at just that
(06:11):
there's a community, people dothis, it's a real business.
And that was the introductionfor me.
So I just went from there nonperforming for a long time.
Now we're doing performingwith the fund and it's awesome.
I love it.
Yeah, it's interesting becauseI had coffee this morning with a
gentleman who more like thesales side for a law firm that's,
(06:31):
you know, works a lot in theraising capital side of things.
And when I was explaining tohim what we did, you know, it caught
him off guard because again,people heard of lending funds or
you know, a lot of the privatelending and stuff like that.
But when people mention nonperforming loans on, you know, single
(06:51):
family.
Yeah.
Everyone always says, I don'tknow anybody that does that.
Like you can do that.
And that's what happened to me.
I was in real estate for 20years and then it stumbled upon note
investing.
And the way I stumbled upon itwas I was looking up tax liens.
At first I'm like, wow, thisis like watching paint dry.
And there was no strategy ontax liens.
(07:13):
And then on bigger pockets,the group of tax liens was tied to
note investing.
I'm like, what's this noteinvesting listing thing?
And I was pissed.
You know, the first time Ifound out about like who's hiding
this from me?
But no, you're right.
Most people get into this aredisgruntled fix and flippers.
I like to call us goats.
(07:33):
We're just getting old andtired of owning.
Real estate is where most ofus come through.
But yeah, and over the years,you know, you've done very well.
And I know several years agoyou decided to, you know, provide
additional education contentfor people with the Diversified mortgage
expo, say DME for short.
(07:54):
And it's heading up now on its10th anniversary.
So congratulations.
I know you weren't running itall those 10 years, but still to
keep up the tradition, won'tdive a little bit into that.
Yeah, it was, you know, againstumbled into the people that you
talk to, the connections you make.
So it was Kimberly BanksFawcett and Liz Brummer Smith that
(08:15):
had it before me.
Wonderful ladies.
They're fantastic.
Kim, bless her heart, I loveher to death.
And she just said, I'm not forthe I'm not for the stage.
And I thought, you're nutsbecause you're awesome.
But okay, fine.
And.
And Liz, her and her husbandat the time, they're living in an
RV and traveling all over theworld and.
And doing all kinds of things.
They're still doing that.
And she says, you know, Idon't think it really makes sense
(08:37):
with my lifestyle.
I'm like, yeah, I think you're right.
I don't think sense for whatyou're doing either.
So, yeah, they approached andsaid, hey, are you interested in
taking this over?
My immediate answer is yes.
And like, oh, by the way, howdoes it work?
How much does it cost?
Those were all total secondary questions.
And the reason is because from2009, I went to every note conference
(09:00):
I could go to.
And that has literally builtmy business.
It's just going and attendingand talking to people and meeting
people.
Who's selling, who's buying,who are the vendors that I can get
in touch with that can help merun this.
I'm.
I'm still living in Canada.
Everything I do is in the USSo I need help on the ground in the
right country, people that canhelp me do whatever I need to do,
(09:23):
whether that's an attorney,whether that's a servicing company.
I mean, you name it, I needall those guys.
So.
So that has.
Literally, that is how I'vebuilt my business is just by going
to conferences, meeting people.
So I figure if.
If I can build the business byattending these, then surely running
a conference will be that much better.
And it has been.
It's been fantastic.
(09:45):
Interesting.
You mentioned that aboutmeeting, you know, going to conferences,
because again, part of theconversation I had this morning with
this individual was he coinedthe term zoom exhaustion.
And, you know, there's so manymeetings and conversations that people
have in Zoom.
People now tend to skipconferences and some of these things.
(10:05):
I was at a conference back inlast month, you know, and it was
down in Miami, and there weresome people who, again, I've had
many conversations with onthis, but just getting to meet somebody,
shake their hand, have dinnerwith them, have a drink, or just
talk.
Sometimes not even business,but outside of business as well,
(10:27):
is so important.
That side of things important.
Building your note company isso important, and I can't stress
enough for people, you know,and again, I'm probably the worst
offender where I just want tosit in my basement and just, like,
plug numbers all day.
But I also.
I spent many years trying tobuild what I've started by going
(10:50):
places and Meeting people andhaving those conversations.
And now I'm like, you said,that's exactly how you learned as
well.
Yeah.
And.
And you're totally right.
I can't stress it enough.
Like, I, it's hard for me tooverstate how important it has been
to what I'm doing today andcontinues to be.
I.
Every time I go to some noconference, whether it's mine or
somebody else's, I learn something.
(11:11):
I, I meet somebody or, youknow, something comes up where I'm
like, oh, that's cool, or something.
And it has made all the difference.
And so it's, it's like I said,I can't overstate it enough.
It's been just absolutely amazing.
So tell us a little bit about,you know, the.
Yeah, I'll say.
DME and having ran it, youknow, for several years now, like
(11:33):
anything, I'm sure the firstyear there's things like, you know,
I think I could do this alittle better, tweak and so forth.
Yeah.
You know, you know, coming upon this year, what are some of the
things you're excited about aspart of the conference when that
people can expect.
Yeah.
This year, I guess the changethat we've made is the theme.
(11:55):
So the theme of this year iswe're leaning into that idea of diversification
within notes.
There are so many differentniches within an already niche industry.
So we've got guys coming totalk about, you know, buying structured
settlements, buying tax liens,doing, doing different things within
notes that are still notes,but just a different angle on the
same kind of idea.
(12:16):
So I'm excited about that.
I think that's going to bereally interesting for people.
I, I hope it doesn't, youknow, distract people from doing
what they want to do, but Ijust want to open people's eyes.
Like, look, there's a lot ofdifferent avenues you can take here
and, and maybe add to youralready existing business or maybe
you're getting started and youthink, you know what?
(12:37):
All this looks great.
That's the thing I want tofocus on and, and, you know, pick
a lane.
Yeah.
And interestingly, I was onconversation over the weekend with
somebody who somewhat what we were.
You just hit upon and talkedabout where there's all these other
investment strategies out there.
But sometimes you get people.
And one of the ones that Ithink people have really pushed and
(12:57):
think is the greatest thingsince sliced bread is the whole subject
to component and you know,somebody was talking about how, oh,
like that's the only thing youshould be doing this and that, and
you know, a conversation I hadas part of this group was, hey, look,
to me that's just another toolin your tool belt.
There's certain periods oftime where that is a great strategy
or there might be a deal thatcomes up.
(13:18):
But that shouldn't be youronly strategy because you could do,
you know, other types ofseller financing.
You could do buying nonperforming, you could do tax liens.
There's so many options withinthis space that it's good to know
all of them, but also know thepeople who are involved because we
see so much crazy stuff and toknow, oh, this would be a good deal
(13:40):
for this person or that person.
And that's where theseconferences come into play.
Yeah.
The one other thing I will saythat your conference has far and
above, you know, takes thereign of superiority is you have
an axel on competition beforeit so that you know that one's tough
to, for anybody, tough to challenge.
(14:02):
You know, some I've seen havegolf tournaments and stuff which
are cool, but you havefreaking ax throwing.
Tell, tell me a little bitabout that.
How, how did you come up with that?
I was, that was one of myfirst ideas was like, we're taking
over the conference and we'regoing to do an ax throwing tournament.
And I was talking to Dave Putzand he's like, you want to do what?
And I'm like, I trust me, man,it's going to be awesome.
You'll see.
So the reason is my brother inlaw, my, my wife's younger brother,
(14:25):
he's the one who invented thesport of ax throwing.
Okay.
So if you go back, MattWilson's his name.
If you want to go back andsearch, you'll find them.
You know, 2006, I think iswhen it first got started.
Yeah, he's in the Wall StreetJournal, he's been on Discovery Channel.
He's done all these differentthings because he's the guy that
invented the sport.
Now there's tons of differentones out there, but that's my claim
(14:47):
to fame.
I know the guy that startedthe whole, the whole thing.
But having done that, havinggone to his locations and throwing
an ax, it's a ton of fun.
And I think one of the, one ofthe advantages of something like
an ax throwing is you've got acouple of people throwing.
First of all, nobody's thatgood at it.
(15:09):
So you don't need to feel intimidated.
Yeah.
It's not like you can gopractice somewhere or who practices.
Most people have not ever doneit before.
And that's great.
So you come and you get together.
It's tons of fun.
It's very, you know, there's awhole area behind where you're throwing
axes, where we've got food andjust place where you can hang out
so you get to meet peoplebefore the conference even starts.
(15:31):
So when you get in thereFriday morning, you've already met
10 people that you werehanging out with last night that
you've never met before.
So right from the get go youcan start those conversations you
already know and like eachother now you got to build that trust
so you can do some business together.
So that's, that's the whole idea.
Get to know people so you cando some business.
So are you throwing it at atarget, a servicer, an attorney or
(15:53):
all the of the above is thequestion that I have.
So you put up the picture ofme, the thing that you are having
the most issues with.
So for those in the space,they'll get that little joke of,
you know.
And yeah, we love ourservicers, we love our attorneys
but you know, they're likeyour in laws, they sometimes can
drive you nuts.
(16:13):
So yeah, no, we need them, welove them.
But yeah, you got to make sureyou stay on top of things.
That's part of the job.
What do you think is you know,going to be the biggest takeaway
this year based off of, youknow, the economy?
It's very different I thinkthan probably it was a year or so
(16:34):
ago.
So I'm just curious, you know,and again you've got the theme that
you've outlined and stuff, youknow, what are some of the like aha's.
You think people are going towalk away from this in regards to,
you know, hearing what's goingon in the world?
Yeah.
So we also have, we've gotsomebody from MBA coming, Mortgage
(16:55):
Bankers association, whichwe've done in the last couple years
and I, I find it very helpful.
And as much as they havereally great information and some
great stats and things likethat, I don't necessarily take that
as gospel truth because theyhave their information and then we've
got somebody like MelodyWright who's coming and then, and
(17:15):
she's been, she went throughthe whole crash last time and if
you haven't seen her onYouTube or substack or somewhere,
check her out because she'svery interesting.
She's going to be there.
Other people that have gotsome larger hedge funds that have
a little bit more of a macroview of what's going on and what
they're seeing in their ownfunds so that we can kind of piece
(17:37):
together what stats we'rebringing, plus what people are actually
seeing on the ground so thatwe can maybe see the future a little
bit and get to understand alittle bit about what's happening
and what might be coming downthe pipe so we can prepare for it.
Yeah.
One of the things I like toshare with investors, especially
the ones getting started, isdon't worry too much about what's
(17:58):
going on with the macro economy.
I mean, you want to knowhousing and some of these things.
If you're trying to buy a$50,000 note, you know, you're playing
in a 16 trillion dollarindustry, you're going to be able
to find a note.
You know, that's, that's thekey is going to be building that
team around you.
You know, finding a note isone thing, but then building that
team around you who can manage that.
(18:21):
And you want to talk a littlebit about some of, you know, your
sponsors and some of the otherpeople that are going to be at the
event that people can networkwith so they can start building that
team.
Yeah, for sure.
So before you even get thenote, are you using your own money
or are you going to usesomebody else's?
If you're using somebodyelse's, IRAs are a great place to
start.
And so we've got a couple ofdifferent IRA companies coming where
(18:43):
you can get together with themand help understand how you can use
other people's money.
In that same vein, we've alsogot lawyers that can help you figure
out how to structure so youdon't start messing with other people's
money and get yourself intoall kinds of trouble with government
agencies and things that allthe initials that you don't want
to be associated with and thenyou buy that note, first you gotta
(19:05):
find that note.
So who are some people thatare gonna be at the conference that
are selling notes?
Those are gonna be there too.
Servicers that can then walkyou through and like actually collect
the payments on your behalf,which I highly recommend.
Can you do it on your own?
Well, debatable, but I wouldhighly recommend highly, highly,
highly using a servicer.
And they're gonna be the onesthat are gonna be taking care of
(19:27):
that note for you.
You've got attorneys that aregoing to be there.
What happens if they start non performing?
If they, if they stop makingpayments for some reason, you're
going to need an attorney.
So they're going to be thereas well.
And like all the way along,every step of the way.
That's who we want to havelined up there.
We've got mortgage servicing,like software, a couple of different
(19:49):
companies that are coming tohave that click to mail guys that
are will help you to findthose notes where you can send out
postcards, like all kinds ofthings that are helping you every
step along, along the way tojust build your business.
And you probably have like aninsurance company or somebody.
Insurance, insurancepreservation companies.
I mean it's the other thingabout these conferences that I'll
(20:12):
share as well.
And I love, you know, youknow, seeing sometimes on like Reddit
or some of these places,people always asking, I can't find
any, I can't find any offmarket deals.
I can't find any of this.
And the one thing I alwaystell people is your best friend should
be a note investor.
Yeah.
And the reason I say that ispeople listening go back to how Nate
(20:36):
stumbled upon this, how Istumble upon this.
What were we prior disgruntledlandlords or property owners.
So if we take a property back,the last thing we want to do is hold
that property.
If we have an investor step inand say, I'll buy it from you.
And we bought it at discount.
So hopefully, you know, we canstill make a decent spread.
(20:56):
You know, you're not going to,you know, you could you make more
renovating and selling.
Absolutely.
But that's not what we're inthe business mostly to do.
So I always tell people, justbecause you're not into notes, that
if you're a wholesaler or aninvestor, these are some of the conferences
you should attend.
It's like Matt Kelly, I knowyou know, Matt always says, here
are some of the otherconferences known investors should
(21:18):
attend.
It's no different for otherpeople depending on the type of deal
you're looking for.
Here's what you should beafter because I bet you if you walk
the crowd at your conference,I'll ask you how many people or how
many deals you think peoplehave that are in foreclosure or just
finished foreclosure thatthey're sitting on an reo, you know
how many?
Dozens.
All the time.
(21:39):
All the time.
Where?
Yeah, that's exactly right.
Even the note investor, likeyou say, as a note investor, I don't
want to own property.
So as soon as I take back aproperty I'm looking to sell it.
I want to get it back out thedoor because I don't want the property.
That's not what I'm about.
I want the note.
So if I don't have a note anymore.
I need to sell it.
So if there's somebody therethat's a wholesaler, somebody that's
(22:00):
a fix and flipper, great, cometalk to me.
We'll make a deal.
Yeah.
And the truth be told, youtypically can get a very good deal
on these types of assetscompared to, you know, some of the
other deals that you see out there.
Yeah, these are all off market.
Again, I don't have.
I don't want to deal with theRealtor if I don't have to.
(22:21):
And no offense to a realtor,but if I can get it done off market,
it's just faster and easierand cheaper.
So we've talked about the conference.
Can you talk briefly, which wehaven't yet.
And we'll make sure.
We also put this at the beginning.
Intro.
When is it?
Where is it?
Is.
You know, give some peoplesome information about it.
Right.
That's probably important.
(22:42):
Yeah.
So it's coming up quick, May2nd and 3rd in Nashville, Tennessee.
And get in town earlier on the1st, because that night we're going
out throwing axes.
And you want to be part ofthat because that's a big part of
it is just getting out thereand networking.
Yep.
Yeah.
That first night is, you know,the way, you know, a lot of people
(23:02):
say things after that firstnight, everything else is like, you
know, extra credit or bonusmaterial, you know, the relationships
you'll meet, hanging out from,you know, drinking beers or if you
don't drink, whatever, youknow, throwing axes.
You know, actually I have thewebsite open.
I just see Bob Repass sittingthere watching a woman throw an ax
(23:22):
and stuff and so forth.
And I think it's some paperstack guys there as well.
And for people listening, youmight not know who those people are,
but those are people you wantto get to know.
And it's also an environment.
And I'm curious to get yourthoughts on this.
We've both been in that fixand flip space and other aspects.
The people in the nodeinvesting space are so much nicer
(23:45):
and easier to work with andwilling to help than the other aspects
of real estate.
Would you agree with that?
Absolutely.
And I'm not exactly sure whythat is, but it's definitely true.
Where you walk into any noteconference and people are so open
and so willing to share andjust so friendly versus there's an
edge of competition in a lotof the property ones where nobody
(24:07):
wants to, you know, really gettogether with people they don't know,
which is completely opposite.
In a note conference, you goin Everybody's best friends right
away.
It's great.
I think part of it is, like,you go to some of these conferences,
they meet people who are inthe same area, so they are fighting
for deals, and there are lessdeals sometimes that they're fighting
with the same where in thenotes base.
(24:28):
Again, you know, I rarelyinvest in my backyard, and there's
loans.
Your profile is probablydifferent than mine, and there's.
Yeah, there's overlap and soforth, but we're typically seeing
so much inventory or enoughinventory that it doesn't matter.
And if I win a bid against youor you win a bid against me, it's
like, okay, next one.
It's not like, oh, my God, youknow, in houses, people get upset
(24:51):
and stuff.
And notes, it's like, okay,you know, and.
But also, man, that's great.
But also, a year later, I'll,you know, call you up and basically,
hey, whatever happened with that?
I know, you know, fellowCanadian Chad Earp shot.
You know, he's bought someloans for me, and many people have
and always ask him, like,whatever happened with that?
(25:11):
And stuff.
And I had one loan thatliterally one woman bought from me,
and like, three weeks later,it paid off, you know, and stuff.
And I was like, oh, man, thatstinks and stuff.
But in the same token, I'mlike, that's awesome.
And the other reason why it'sawesome sometimes is she made really
good money.
So what's she going to do?
She's going to be okay buyingfrom me.
You know, it's like buying ata car dealership.
(25:32):
You have a bad experience, youdon't want to know that person anymore.
No, exactly.
And the guy that I'm buyingfrom today, I might sell to tomorrow,
because that's just how it goes.
And we're.
We're constantly circlingaround notes and selling them to
each other, buying from eachother all the time.
Yeah.
Right before this call, I gota call from somebody over at, you
know, office at CrosbyCapital, like, hey, you know, we're
(25:55):
interest interested in this loan.
And, you know, I sold themalone, like, in October.
I bought one from them in December.
And, you know, we just kind ofback and forth and yeah, we compete,
but also they're mostly in NewYork, so they can have New York.
You know, I'll give them allthe New York loans they want.
But, yeah, no, and it's very much.
It's a sort of competition,but it's a friendly competition,
(26:16):
and.
And everybody's friends andlike you say, I'll win it this time.
You'll win it next time.
So what?
So with that, the one thingI'll mention to people who are new
to space and getting involvedin stuff is, you know, don't burn
your bridges in this spacebecause it is a super small space,
you know, and some people dothat by getting assets under agreement
(26:39):
and not closing the deals.
Sometimes just coming up withsuch a low bid can irritate people.
You know, some people don't care.
I'm at a point in my lifewhere I don't care.
It used to bother me and Ibasically, like, get real.
But now I'm just like, what?
You know, as I get older, I guess.
But I think the biggest thingis just do what you're going to say
you're going to do, and ifthere's a reason why you're not going
(26:59):
to close, just have thatreasoning or excuse.
The BPO is much lower.
Or, you know, don't walk awayfrom a deal because there's $150
tax bill when it's a $20,000loan with $100,000 valuation.
Like, yeah, you know, that's.
You'll be able to worksomething out in those situations.
Yeah, yeah, exactly.
And that's my philosophy, too.
(27:21):
Like, if.
Even if there's like $1,000tax bill, I'm probably.
For me, I'm probably not goingto go back to that seller and be
like, oh, well, let's knockoff a thousand bucks.
You know what?
Keep the relationship, keepthe deal.
Do it.
If the whole deal hinges on$1,000, you probably don't want to
do that deal in the first place.
Yeah.
So just take a small hit thistime because you'll, you'll make
(27:43):
it up next time.
Yeah.
And I'll share a quick storybefore we wrap this up of.
We had, you know, it was onlytwo loans under agreement, and they
were a larger firm and, youknow, get them under agreement, we
get through half a duediligence and like, oh, we're going
to have to pull one becausethe borrower is going to pay it off.
Like, cool.
(28:03):
But, like, I really don't wantto go through the hassle of both.
So, you know, we'll just.
In this instance, they're coolwith us passing because now one of
them was like a 200,000.
The other one was like 60,000.
I'm like, you know, it really.
I kind of wanted to get bothof them.
So they come back like threeweeks later and like, okay, you want
to do both the deal.
The borrower's not paying offI'm like, yes.
(28:25):
So we go through, we finishdue diligence and we get to a point
of, okay, loan sale agreementliterally sent via DocuSign.
Yeah.
Not getting signed.
Two days pass and we're like,what is going on?
And like, oh, the borrower isgoing to pay it off, so we're not
going to sell it to you.
And later I'm like, okay.
And I'm like, don't even askme if I'm closing on the other one.
(28:46):
Right?
So.
So then they come to me.
This was back in like Januaryand February.
Then like two weeks ago, theycome back to me like, hey, you still
have interest in these two loans?
I'm like, no, I'm good.
Like, you know.
Yeah, it's one of those thingswhere, you know, as a buyer, usually
it's the, you know, the, youknow, the buyers, you know, sometimes
(29:09):
the sellers feel it getsburned by people not closing.
But in the same token, youknow, again, it's that reputation
of, as a seller, you know, youdon't want to be pulling assets from
people.
You know, there's re.
There's reasons sometimeswhere, oh, I, you know, I had one
that basically the servicerscrewed up on the total payoff and
it was $60,000 higher.
(29:29):
And I'm like, hey, look, youknow, that makes a difference.
Yeah, yeah, it makes a difference.
And I apologize and stuff, butI covered their due diligence costs,
I gave them their money backand all that stuff, you know, and
sometimes that happens, butsome of these instances where it's
like, oh, I just wanna.
I think the situations change.
You really get in that gray area.
(29:50):
So.
Yeah, no, that's exactly it.
It's.
It's so much aboutrelationships that, yes, take the
hit if you need to, just topreserve the relationship because
that, that is going to make adifference later on.
So, as we wrap up, some finalthoughts, you know, about, you know,
your company, the conference,you know, as a person sponsoring
(30:12):
it.
What are you looking to walkaway from after the event this year
besides getting a few daysrest and, you know, buying your wife
a nice dinner for helping youout in all of this.
We're bringing our kids even,so we're going.
There you go.
Before we're going to hang outin Memphis for a couple of days and
just.
Because that's fun too.
But no, it's.
For me, it's all about the,the networking.
(30:33):
It's all about.
Ideally, what I'm looking foris people who are creating notes
that are looking to sell themand not the mom and pops that are
doing once in their life.
Ideally, I'm looking for theguy that is buying property at a
discount, selling it on terms.
They collect their down payment.
They can do a first and asecond if they want, whatever.
But they're creating a notewith the intention of selling it
(30:55):
to me or somebody like mewhere we can tap into that and just
have an ongoing, you know,revolving door where they can continue
to come back to me with othernotes that they've created.
That's that's my ideal.
That's definitely somethingI'm looking for.
Great.
Well, Nathan, thanks forjoining us today on this episode
of the Paper Trail.
And, people.
Yes.
Make sure to check out the DME event.
(31:18):
We'll have all the contactinformation in the show notes as
well.
So, Nathan, thanks for coming on.
Thank you.
So I just recorded an episodewith Nathan Turner of Earnest Investing
and host of the DiversifiedMortgage Expo, which is going to
be May 2nd and 3rd down in Nashville.
But people should get there onMay 1st to participate in the ax
throwing competition.
(01:06):
What I loved about thisconversation was, you know, it wasn't
only about the conference, itwas, you know, how to focus on what
to learn, who should attend,who should you meet, not only at
conferences, but just how tonavigate the node investing world
professionally.
And that's something becausewe are a very tight knit community.
(01:27):
It's important for people tounderstand we're not as much in competition
as you see other types of realestate investors.
We're more focused on buildingour company, but building it through
partnerships, mentorships, inselecting the right vendors.
So hope you enjoy this episodewith Nathan, who has been in the
note space for over 15 years.
(01:50):
And I think this will be agreat episode for people to further
their note investing career.
And make sure to check out theDiversified Mortgage Expo early next
month.
Foreign.
Turner of Ernest Investing aswell as the host of the Diversified
(02:14):
Mortgage Expo.
Nathan, how are you today?
I'm doing great, thanks.
Good to be here.
Yes, we were just chattingbefore hitting the record button
on what we're seeing in theeconomy, what's going on.
And Nathan being up in Canada,I'm sure has his own opinion that
we're not going to dive intoall of that today.
What we want to dive into ismore about Nathan's background, but
(02:37):
also educate investors on theDME conference that is coming up
very soon and talk about whynode investors should attend conferences,
what to look for and get outof these conferences and then even
talk about some of the next steps.
As Nathan and I have been tomany conferences and each one is
(02:59):
unique and different from whatyou can get out of it.
But yeah, we'll talk all about that.
But first, Nathan, why don'tyou tell people a little bit about
your background in regards to,you know, how you stumbled upon or
got into note investing.
Yeah, and that's the rightword for it.
And that's probably most Note investors.
You just kind of fell into it.
(03:20):
Not a lot of people thought,hey, I know, I'll go search this
out.
No, most people fall into itand I did too.
So I was doing fix and flipreal estate in Canada and I got stuck
with one property at the endof that, just as we were coming up
in about 2008, 2009, oneproperty I couldn't sell, so I rented
it because that's what you dowith real estate, right?
If you can't sell it, you rent it.
(03:41):
And I figured out very quicklythat the.
The monthly cash flow wasnice, but I didn't like anything
else about being a landlord.
Like, it was.
It was hard work.
It was across the country.
So I.
I just, I didn't have verymuch control.
I felt like my propertymanager was awful and it was just
not a fun experience.
I didn't en that whole idea of it.
(04:03):
It's, you know, it was not anice neighborhood.
Like, so there's a lot ofthings going against me.
And.
And, you know, you learn asyou go.
And I know how that goes, but.
But I didn't know.
And so I got stuck with thisone house and I'm like, this is.
This is garbage.
I don't know why people dothis landlord thing.
It doesn't make sense to me.
And then it was because it's not.
As lucrative as HGTV makes itout to be.
(04:25):
No, no.
On tv it looked a whole loteasier and better and much more profitable.
And like, I say, like, we didokay, but certainly not worth the
effort, as far as I could tell.
And then, so kind of fastforward a little bit.
We eventually sold the houseas the market kind of picked up a
little bit again.
And so I was free of that.
(04:46):
And I thought, well, I likereal estate, but I don't know about
this landlording thing.
And it was shortly after thenmy, My old partner Corey, he contacted
me and said, hey, these guysout of California, they have all
these properties in the Midwest.
They don't know what to dowith this stuff, so they want us
to come on board and just kindof help figure it out.
(05:08):
And again, this was like 2008,2009, when nothing was going well.
And these guys had bought thisportfolio in 2007 at the height of
the market.
It was supposed to be a flip.
They were supposed to flip itout to a different outfit.
And it just.
The deal fell through.
And now all of a suddenthey're stuck with all these properties.
So Corey and I, we thoughtwe'd invented seller financing.
(05:28):
We were like, brilliant idea.
We'll sell these houses onterms, carry back notes.
And the thinking was, youknow, landlording is terrible.
So how do we get monthlypayments out of this without having
to take care of the house was.
That was the motivation.
So kind of stumbled into thisnote thing.
So, you know, the thinkingagain is the person in the house,
(05:50):
they're the ones responsiblefor taking care of it.
You know, if something breaks,they gotta Fix it.
Banks don't do that kind of thing.
And just kind of figuring outas we went along, figured out there
was such thing as a nodeinvesting world.
I went to my first nodeinvesting conference.
It was noteworthy back in 2009and I was blown away at just that
(06:11):
there's a community, people dothis, it's a real business.
And that was the introductionfor me.
So I just went from there nonperforming for a long time.
Now we're doing performingwith the fund and it's awesome.
I love it.
Yeah, it's interesting becauseI had coffee this morning with a
gentleman who more like thesales side for a law firm that's,
(06:31):
you know, works a lot in theraising capital side of things.
And when I was explaining tohim what we did, you know, it caught
him off guard because again,people heard of lending funds or
you know, a lot of the privatelending and stuff like that.
But when people mention nonperforming loans on, you know, single
(06:51):
family.
Yeah.
Everyone always says, I don'tknow anybody that does that.
Like you can do that.
And that's what happened to me.
I was in real estate for 20years and then it stumbled upon note
investing.
And the way I stumbled upon itwas I was looking up tax liens.
At first I'm like, wow, thisis like watching paint dry.
And there was no strategy ontax liens.
(07:13):
And then on bigger pockets,the group of tax liens was tied to
note investing.
I'm like, what's this noteinvesting listing thing?
And I was pissed.
You know, the first time Ifound out about like who's hiding
this from me?
But no, you're right.
Most people get into this aredisgruntled fix and flippers.
I like to call us goats.
(07:33):
We're just getting old andtired of owning.
Real estate is where most ofus come through.
But yeah, and over the years,you know, you've done very well.
And I know several years agoyou decided to, you know, provide
additional education contentfor people with the Diversified mortgage
expo, say DME for short.
(07:54):
And it's heading up now on its10th anniversary.
So congratulations.
I know you weren't running itall those 10 years, but still to
keep up the tradition, won'tdive a little bit into that.
Yeah, it was, you know, againstumbled into the people that you
talk to, the connections you make.
So it was Kimberly BanksFawcett and Liz Brummer Smith that
(08:15):
had it before me.
Wonderful ladies.
They're fantastic.
Kim, bless her heart, I loveher to death.
And she just said, I'm not forthe I'm not for the stage.
And I thought, you're nutsbecause you're awesome.
But okay, fine.
And.
And Liz, her and her husbandat the time, they're living in an
RV and traveling all over theworld and.
And doing all kinds of things.
They're still doing that.
And she says, you know, Idon't think it really makes sense
(08:37):
with my lifestyle.
I'm like, yeah, I think you're right.
I don't think sense for whatyou're doing either.
So, yeah, they approached andsaid, hey, are you interested in
taking this over?
My immediate answer is yes.
And like, oh, by the way, howdoes it work?
How much does it cost?
Those were all total secondary questions.
And the reason is because from2009, I went to every note conference
(09:00):
I could go to.
And that has literally builtmy business.
It's just going and attendingand talking to people and meeting
people.
Who's selling, who's buying,who are the vendors that I can get
in touch with that can help merun this.
I'm.
I'm still living in Canada.
Everything I do is in the USSo I need help on the ground in the
right country, people that canhelp me do whatever I need to do,
(09:23):
whether that's an attorney,whether that's a servicing company.
I mean, you name it, I needall those guys.
So.
So that has.
Literally, that is how I'vebuilt my business is just by going
to conferences, meeting people.
So I figure if.
If I can build the business byattending these, then surely running
a conference will be that much better.
And it has been.
It's been fantastic.
(09:45):
Interesting.
You mentioned that aboutmeeting, you know, going to conferences,
because again, part of theconversation I had this morning with
this individual was he coinedthe term zoom exhaustion.
And, you know, there's so manymeetings and conversations that people
have in Zoom.
People now tend to skipconferences and some of these things.
(10:05):
I was at a conference back inlast month, you know, and it was
down in Miami, and there weresome people who, again, I've had
many conversations with onthis, but just getting to meet somebody,
shake their hand, have dinnerwith them, have a drink, or just
talk.
Sometimes not even business,but outside of business as well,
(10:27):
is so important.
That side of things important.
Building your note company isso important, and I can't stress
enough for people, you know,and again, I'm probably the worst
offender where I just want tosit in my basement and just, like,
plug numbers all day.
But I also.
I spent many years trying tobuild what I've started by going
(10:50):
places and Meeting people andhaving those conversations.
And now I'm like, you said,that's exactly how you learned as
well.
Yeah.
And.
And you're totally right.
I can't stress it enough.
Like, I, it's hard for me tooverstate how important it has been
to what I'm doing today andcontinues to be.
I.
Every time I go to some noconference, whether it's mine or
somebody else's, I learn something.
(11:11):
I, I meet somebody or, youknow, something comes up where I'm
like, oh, that's cool, or something.
And it has made all the difference.
And so it's, it's like I said,I can't overstate it enough.
It's been just absolutely amazing.
So tell us a little bit about,you know, the.
Yeah, I'll say.
DME and having ran it, youknow, for several years now, like
(11:33):
anything, I'm sure the firstyear there's things like, you know,
I think I could do this alittle better, tweak and so forth.
Yeah.
You know, you know, coming upon this year, what are some of the
things you're excited about aspart of the conference when that
people can expect.
Yeah.
This year, I guess the changethat we've made is the theme.
(11:55):
So the theme of this year iswe're leaning into that idea of diversification
within notes.
There are so many differentniches within an already niche industry.
So we've got guys coming totalk about, you know, buying structured
settlements, buying tax liens,doing, doing different things within
notes that are still notes,but just a different angle on the
same kind of idea.
(12:16):
So I'm excited about that.
I think that's going to bereally interesting for people.
I, I hope it doesn't, youknow, distract people from doing
what they want to do, but Ijust want to open people's eyes.
Like, look, there's a lot ofdifferent avenues you can take here
and, and maybe add to youralready existing business or maybe
you're getting started and youthink, you know what?
(12:37):
All this looks great.
That's the thing I want tofocus on and, and, you know, pick
a lane.
Yeah.
And interestingly, I was onconversation over the weekend with
somebody who somewhat what we were.
You just hit upon and talkedabout where there's all these other
investment strategies out there.
But sometimes you get people.
And one of the ones that Ithink people have really pushed and
(12:57):
think is the greatest thingsince sliced bread is the whole subject
to component and you know,somebody was talking about how, oh,
like that's the only thing youshould be doing this and that, and
you know, a conversation I hadas part of this group was, hey, look,
to me that's just another toolin your tool belt.
There's certain periods oftime where that is a great strategy
or there might be a deal thatcomes up.
(13:18):
But that shouldn't be youronly strategy because you could do,
you know, other types ofseller financing.
You could do buying nonperforming, you could do tax liens.
There's so many options withinthis space that it's good to know
all of them, but also know thepeople who are involved because we
see so much crazy stuff and toknow, oh, this would be a good deal
(13:40):
for this person or that person.
And that's where theseconferences come into play.
Yeah.
The one other thing I will saythat your conference has far and
above, you know, takes thereign of superiority is you have
an axel on competition beforeit so that you know that one's tough
to, for anybody, tough to challenge.
(14:02):
You know, some I've seen havegolf tournaments and stuff which
are cool, but you havefreaking ax throwing.
Tell, tell me a little bitabout that.
How, how did you come up with that?
I was, that was one of myfirst ideas was like, we're taking
over the conference and we'regoing to do an ax throwing tournament.
And I was talking to Dave Putzand he's like, you want to do what?
And I'm like, I trust me, man,it's going to be awesome.
You'll see.
So the reason is my brother inlaw, my, my wife's younger brother,
(14:25):
he's the one who invented thesport of ax throwing.
Okay.
So if you go back, MattWilson's his name.
If you want to go back andsearch, you'll find them.
You know, 2006, I think iswhen it first got started.
Yeah, he's in the Wall StreetJournal, he's been on Discovery Channel.
He's done all these differentthings because he's the guy that
invented the sport.
Now there's tons of differentones out there, but that's my claim
(14:47):
to fame.
I know the guy that startedthe whole, the whole thing.
But having done that, havinggone to his locations and throwing
an ax, it's a ton of fun.
And I think one of the, one ofthe advantages of something like
an ax throwing is you've got acouple of people throwing.
First of all, nobody's thatgood at it.
(15:09):
So you don't need to feel intimidated.
Yeah.
It's not like you can gopractice somewhere or who practices.
Most people have not ever doneit before.
And that's great.
So you come and you get together.
It's tons of fun.
It's very, you know, there's awhole area behind where you're throwing
axes, where we've got food andjust place where you can hang out
so you get to meet peoplebefore the conference even starts.
(15:31):
So when you get in thereFriday morning, you've already met
10 people that you werehanging out with last night that
you've never met before.
So right from the get go youcan start those conversations you
already know and like eachother now you got to build that trust
so you can do some business together.
So that's, that's the whole idea.
Get to know people so you cando some business.
So are you throwing it at atarget, a servicer, an attorney or
(15:53):
all the of the above is thequestion that I have.
So you put up the picture ofme, the thing that you are having
the most issues with.
So for those in the space,they'll get that little joke of,
you know.
And yeah, we love ourservicers, we love our attorneys
but you know, they're likeyour in laws, they sometimes can
drive you nuts.
(16:13):
So yeah, no, we need them, welove them.
But yeah, you got to make sureyou stay on top of things.
That's part of the job.
What do you think is you know,going to be the biggest takeaway
this year based off of, youknow, the economy?
It's very different I thinkthan probably it was a year or so
(16:34):
ago.
So I'm just curious, you know,and again you've got the theme that
you've outlined and stuff, youknow, what are some of the like aha's.
You think people are going towalk away from this in regards to,
you know, hearing what's goingon in the world?
Yeah.
So we also have, we've gotsomebody from MBA coming, Mortgage
(16:55):
Bankers association, whichwe've done in the last couple years
and I, I find it very helpful.
And as much as they havereally great information and some
great stats and things likethat, I don't necessarily take that
as gospel truth because theyhave their information and then we've
got somebody like MelodyWright who's coming and then, and
(17:15):
she's been, she went throughthe whole crash last time and if
you haven't seen her onYouTube or substack or somewhere,
check her out because she'svery interesting.
She's going to be there.
Other people that have gotsome larger hedge funds that have
a little bit more of a macroview of what's going on and what
they're seeing in their ownfunds so that we can kind of piece
(17:37):
together what stats we'rebringing, plus what people are actually
seeing on the ground so thatwe can maybe see the future a little
bit and get to understand alittle bit about what's happening
and what might be coming downthe pipe so we can prepare for it.
Yeah.
One of the things I like toshare with investors, especially
the ones getting started, isdon't worry too much about what's
(17:58):
going on with the macro economy.
I mean, you want to knowhousing and some of these things.
If you're trying to buy a$50,000 note, you know, you're playing
in a 16 trillion dollarindustry, you're going to be able
to find a note.
You know, that's, that's thekey is going to be building that
team around you.
You know, finding a note isone thing, but then building that
team around you who can manage that.
(18:21):
And you want to talk a littlebit about some of, you know, your
sponsors and some of the otherpeople that are going to be at the
event that people can networkwith so they can start building that
team.
Yeah, for sure.
So before you even get thenote, are you using your own money
or are you going to usesomebody else's?
If you're using somebodyelse's, IRAs are a great place to
start.
And so we've got a couple ofdifferent IRA companies coming where
(18:43):
you can get together with themand help understand how you can use
other people's money.
In that same vein, we've alsogot lawyers that can help you figure
out how to structure so youdon't start messing with other people's
money and get yourself intoall kinds of trouble with government
agencies and things that allthe initials that you don't want
to be associated with and thenyou buy that note, first you gotta
(19:05):
find that note.
So who are some people thatare gonna be at the conference that
are selling notes?
Those are gonna be there too.
Servicers that can then walkyou through and like actually collect
the payments on your behalf,which I highly recommend.
Can you do it on your own?
Well, debatable, but I wouldhighly recommend highly, highly,
highly using a servicer.
And they're gonna be the onesthat are gonna be taking care of
(19:27):
that note for you.
You've got attorneys that aregoing to be there.
What happens if they start non performing?
If they, if they stop makingpayments for some reason, you're
going to need an attorney.
So they're going to be thereas well.
And like all the way along,every step of the way.
That's who we want to havelined up there.
We've got mortgage servicing,like software, a couple of different
(19:49):
companies that are coming tohave that click to mail guys that
are will help you to findthose notes where you can send out
postcards, like all kinds ofthings that are helping you every
step along, along the way tojust build your business.
And you probably have like aninsurance company or somebody.
Insurance, insurancepreservation companies.
I mean it's the other thingabout these conferences that I'll
(20:12):
share as well.
And I love, you know, youknow, seeing sometimes on like Reddit
or some of these places,people always asking, I can't find
any, I can't find any offmarket deals.
I can't find any of this.
And the one thing I alwaystell people is your best friend should
be a note investor.
Yeah.
And the reason I say that ispeople listening go back to how Nate
(20:36):
stumbled upon this, how Istumble upon this.
What were we prior disgruntledlandlords or property owners.
So if we take a property back,the last thing we want to do is hold
that property.
If we have an investor step inand say, I'll buy it from you.
And we bought it at discount.
So hopefully, you know, we canstill make a decent spread.
(20:56):
You know, you're not going to,you know, you could you make more
renovating and selling.
Absolutely.
But that's not what we're inthe business mostly to do.
So I always tell people, justbecause you're not into notes, that
if you're a wholesaler or aninvestor, these are some of the conferences
you should attend.
It's like Matt Kelly, I knowyou know, Matt always says, here
are some of the otherconferences known investors should
(21:18):
attend.
It's no different for otherpeople depending on the type of deal
you're looking for.
Here's what you should beafter because I bet you if you walk
the crowd at your conference,I'll ask you how many people or how
many deals you think peoplehave that are in foreclosure or just
finished foreclosure thatthey're sitting on an reo, you know
how many?
Dozens.
All the time.
(21:39):
All the time.
Where?
Yeah, that's exactly right.
Even the note investor, likeyou say, as a note investor, I don't
want to own property.
So as soon as I take back aproperty I'm looking to sell it.
I want to get it back out thedoor because I don't want the property.
That's not what I'm about.
I want the note.
So if I don't have a note anymore.
I need to sell it.
So if there's somebody therethat's a wholesaler, somebody that's
(22:00):
a fix and flipper, great, cometalk to me.
We'll make a deal.
Yeah.
And the truth be told, youtypically can get a very good deal
on these types of assetscompared to, you know, some of the
other deals that you see out there.
Yeah, these are all off market.
Again, I don't have.
I don't want to deal with theRealtor if I don't have to.
(22:21):
And no offense to a realtor,but if I can get it done off market,
it's just faster and easierand cheaper.
So we've talked about the conference.
Can you talk briefly, which wehaven't yet.
And we'll make sure.
We also put this at the beginning.
Intro.
When is it?
Where is it?
Is.
You know, give some peoplesome information about it.
Right.
That's probably important.
(22:42):
Yeah.
So it's coming up quick, May2nd and 3rd in Nashville, Tennessee.
And get in town earlier on the1st, because that night we're going
out throwing axes.
And you want to be part ofthat because that's a big part of
it is just getting out thereand networking.
Yep.
Yeah.
That first night is, you know,the way, you know, a lot of people
(23:02):
say things after that firstnight, everything else is like, you
know, extra credit or bonusmaterial, you know, the relationships
you'll meet, hanging out from,you know, drinking beers or if you
don't drink, whatever, youknow, throwing axes.
You know, actually I have thewebsite open.
I just see Bob Repass sittingthere watching a woman throw an ax
(23:22):
and stuff and so forth.
And I think it's some paperstack guys there as well.
And for people listening, youmight not know who those people are,
but those are people you wantto get to know.
And it's also an environment.
And I'm curious to get yourthoughts on this.
We've both been in that fixand flip space and other aspects.
The people in the nodeinvesting space are so much nicer
(23:45):
and easier to work with andwilling to help than the other aspects
of real estate.
Would you agree with that?
Absolutely.
And I'm not exactly sure whythat is, but it's definitely true.
Where you walk into any noteconference and people are so open
and so willing to share andjust so friendly versus there's an
edge of competition in a lotof the property ones where nobody
(24:07):
wants to, you know, really gettogether with people they don't know,
which is completely opposite.
In a note conference, you goin Everybody's best friends right
away.
It's great.
I think part of it is, like,you go to some of these conferences,
they meet people who are inthe same area, so they are fighting
for deals, and there are lessdeals sometimes that they're fighting
with the same where in thenotes base.
(24:28):
Again, you know, I rarelyinvest in my backyard, and there's
loans.
Your profile is probablydifferent than mine, and there's.
Yeah, there's overlap and soforth, but we're typically seeing
so much inventory or enoughinventory that it doesn't matter.
And if I win a bid against youor you win a bid against me, it's
like, okay, next one.
It's not like, oh, my God, youknow, in houses, people get upset
(24:51):
and stuff.
And notes, it's like, okay,you know, and.
But also, man, that's great.
But also, a year later, I'll,you know, call you up and basically,
hey, whatever happened with that?
I know, you know, fellowCanadian Chad Earp shot.
You know, he's bought someloans for me, and many people have
and always ask him, like,whatever happened with that?
(25:11):
And stuff.
And I had one loan thatliterally one woman bought from me,
and like, three weeks later,it paid off, you know, and stuff.
And I was like, oh, man, thatstinks and stuff.
But in the same token, I'mlike, that's awesome.
And the other reason why it'sawesome sometimes is she made really
good money.
So what's she going to do?
She's going to be okay buyingfrom me.
You know, it's like buying ata car dealership.
(25:32):
You have a bad experience, youdon't want to know that person anymore.
No, exactly.
And the guy that I'm buyingfrom today, I might sell to tomorrow,
because that's just how it goes.
And we're.
We're constantly circlingaround notes and selling them to
each other, buying from eachother all the time.
Yeah.
Right before this call, I gota call from somebody over at, you
know, office at CrosbyCapital, like, hey, you know, we're
(25:55):
interest interested in this loan.
And, you know, I sold themalone, like, in October.
I bought one from them in December.
And, you know, we just kind ofback and forth and yeah, we compete,
but also they're mostly in NewYork, so they can have New York.
You know, I'll give them allthe New York loans they want.
But, yeah, no, and it's very much.
It's a sort of competition,but it's a friendly competition,
(26:16):
and.
And everybody's friends andlike you say, I'll win it this time.
You'll win it next time.
So what?
So with that, the one thingI'll mention to people who are new
to space and getting involvedin stuff is, you know, don't burn
your bridges in this spacebecause it is a super small space,
you know, and some people dothat by getting assets under agreement
(26:39):
and not closing the deals.
Sometimes just coming up withsuch a low bid can irritate people.
You know, some people don't care.
I'm at a point in my lifewhere I don't care.
It used to bother me and Ibasically, like, get real.
But now I'm just like, what?
You know, as I get older, I guess.
But I think the biggest thingis just do what you're going to say
you're going to do, and ifthere's a reason why you're not going
(26:59):
to close, just have thatreasoning or excuse.
The BPO is much lower.
Or, you know, don't walk awayfrom a deal because there's $150
tax bill when it's a $20,000loan with $100,000 valuation.
Like, yeah, you know, that's.
You'll be able to worksomething out in those situations.
Yeah, yeah, exactly.
And that's my philosophy, too.
(27:21):
Like, if.
Even if there's like $1,000tax bill, I'm probably.
For me, I'm probably not goingto go back to that seller and be
like, oh, well, let's knockoff a thousand bucks.
You know what?
Keep the relationship, keepthe deal.
Do it.
If the whole deal hinges on$1,000, you probably don't want to
do that deal in the first place.
Yeah.
So just take a small hit thistime because you'll, you'll make
(27:43):
it up next time.
Yeah.
And I'll share a quick storybefore we wrap this up of.
We had, you know, it was onlytwo loans under agreement, and they
were a larger firm and, youknow, get them under agreement, we
get through half a duediligence and like, oh, we're going
to have to pull one becausethe borrower is going to pay it off.
Like, cool.
(28:03):
But, like, I really don't wantto go through the hassle of both.
So, you know, we'll just.
In this instance, they're coolwith us passing because now one of
them was like a 200,000.
The other one was like 60,000.
I'm like, you know, it really.
I kind of wanted to get bothof them.
So they come back like threeweeks later and like, okay, you want
to do both the deal.
The borrower's not paying offI'm like, yes.
(28:25):
So we go through, we finishdue diligence and we get to a point
of, okay, loan sale agreementliterally sent via DocuSign.
Yeah.
Not getting signed.
Two days pass and we're like,what is going on?
And like, oh, the borrower isgoing to pay it off, so we're not
going to sell it to you.
And later I'm like, okay.
And I'm like, don't even askme if I'm closing on the other one.
(28:46):
Right?
So.
So then they come to me.
This was back in like Januaryand February.
Then like two weeks ago, theycome back to me like, hey, you still
have interest in these two loans?
I'm like, no, I'm good.
Like, you know.
Yeah, it's one of those thingswhere, you know, as a buyer, usually
it's the, you know, the, youknow, the buyers, you know, sometimes
(29:09):
the sellers feel it getsburned by people not closing.
But in the same token, youknow, again, it's that reputation
of, as a seller, you know, youdon't want to be pulling assets from
people.
You know, there's re.
There's reasons sometimeswhere, oh, I, you know, I had one
that basically the servicerscrewed up on the total payoff and
it was $60,000 higher.
(29:29):
And I'm like, hey, look, youknow, that makes a difference.
Yeah, yeah, it makes a difference.
And I apologize and stuff, butI covered their due diligence costs,
I gave them their money backand all that stuff, you know, and
sometimes that happens, butsome of these instances where it's
like, oh, I just wanna.
I think the situations change.
You really get in that gray area.
(29:50):
So.
Yeah, no, that's exactly it.
It's.
It's so much aboutrelationships that, yes, take the
hit if you need to, just topreserve the relationship because
that, that is going to make adifference later on.
So, as we wrap up, some finalthoughts, you know, about, you know,
your company, the conference,you know, as a person sponsoring
(30:12):
it.
What are you looking to walkaway from after the event this year
besides getting a few daysrest and, you know, buying your wife
a nice dinner for helping youout in all of this.
We're bringing our kids even,so we're going.
There you go.
Before we're going to hang outin Memphis for a couple of days and
just.
Because that's fun too.
But no, it's.
For me, it's all about the,the networking.
(30:33):
It's all about.
Ideally, what I'm looking foris people who are creating notes
that are looking to sell themand not the mom and pops that are
doing once in their life.
Ideally, I'm looking for theguy that is buying property at a
discount, selling it on terms.
They collect their down payment.
They can do a first and asecond if they want, whatever.
But they're creating a notewith the intention of selling it
(30:55):
to me or somebody like mewhere we can tap into that and just
have an ongoing, you know,revolving door where they can continue
to come back to me with othernotes that they've created.
That's that's my ideal.
That's definitely somethingI'm looking for.
Great.
Well, Nathan, thanks forjoining us today on this episode
of the Paper Trail.
And, people.
Yes.
Make sure to check out the DME event.
(31:18):
We'll have all the contactinformation in the show notes as
well.
So, Nathan, thanks for coming on.
Thank you.
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