February 7, 2024 • 37 mins
Imagine transitioning from a steady 9-to-5 job to the exhilarating world of real estate, where every investment is a step toward a future you design. That's the story of Lauren Wells from 7E Investments, who joins me, Justin Bogard, in a riveting narrative of her career metamorphosis. This episode promises a fascinating exploration into the world of real estate and note investing, revealing how strategic networking and sheer perseverance can lead to incredible success. We dive into the benefits of mortgage note investments for those looking to avoid the headaches of long-distance property management and dissect the vital role of synergy between business partners in propelling a real estate firm to new heights.
Resources and links discussed:
- Videocast on our YouTube Channel
- ANB Funds Website - https://anbfunds.com
- 7E Investments - https://7einvestments.com
About the Host:
Justin Bogard – Note Investor specializing in performing Residential Real Estate Debt. He finds deals and acquires them for his own portfolio as well as educates investors while walking them through the process of owning a Real Estate Note!
Connect with the Host:
Facebook - bethebank
Twitter - bethebank1
Instagram - bethebankpodcast
American Note Buyers - https://anbfunds.com/
Monthly Broadcast - https://youtube.com/playlist?list=PLzc944w1xydt5aLDrrEPHJhdJeDkBjjD4
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Narrator (00:01):
Interest in real estate.
How about wealth?
Well, they go hand in hand, andhere you'll learn all about it.
Welcome to Be the Bank, apodcast where we discuss and
debate the topics centeredaround real estate investing.
Your host, justin Bogart,shares insights into investing
in real estate to create realwealth and passive income for
(00:22):
you and your family.
He'll share stories of realestate investments done right,
walk you through the process ofowning a real estate note and,
most importantly, educate you soyou can Be the Bank.
This is Be the Bank, brought toyou by American Notepad.
Now here's your host, justinBogart.
Justin Bogard (00:45):
Hey, hey, listener, this is season number
six, episode number three comingat you.
I have a guest today, ms LaurenWells.
That's going to be on from 70Investments.
She's got a nice littlebackground I've been in the
business for a little bit anddefinitely is making waves and
has a lot of experience on thesubject of note investing and
other things related to realestate.
(01:05):
So you guys are going to enjoythis episode, so stay tuned.
Well, hello, lauren, it is apleasure to meet you.
Lauren Wells (01:22):
Thanks, Justin.
Thanks for having me today.
Glad to be here.
Justin Bogard (01:26):
You're welcome.
This is the first time I'mactually meeting you over the
internet or anything.
I don't think we've ever beenat a conference at the same time
in the real estate note world.
So yeah, this is our first time.
Lauren Wells (01:39):
Yeah, yeah, I used to go to all those conferences,
but now my role has shifted alittle bit, so I'm onto a
different set of conferences.
Justin Bogard (01:47):
Yeah, I bet.
So, speaking of the differentset of conferences that you go
to, I'd like to kind of give theaudience a background on who
you are and kind of how you cameto found the 70 Investments
Company with Chris.
Lauren Wells (02:03):
Yeah, you want to go ahead and dive into it.
Justin Bogard (02:05):
I mean you don't have to go all the way back from
birth, but you could go back,you know, at least several years
and kind of what you did in theW2, there's some air quotes
here, W2 world, until you get totoday.
Lauren Wells (02:17):
Definitely I don't know kind of who your listeners
are, but I'm going to justimagine that maybe some of them
listening might be people whohave W2 jobs.
Justin Bogard (02:27):
There's only three of them, so I could
probably name them for you.
Lauren Wells (02:30):
You, me and one other person, the person.
Justin Bogard (02:33):
Chris is the other one.
Lauren Wells (02:33):
yeah, so, you know , I was essentially a listener
who had a W2 job and wasthinking about all the ways to
get out of my W2 job and thatbuzzword of passive income and
how do I get there?
And I'm a big networker, I aminvolved in a lot of real estate
(02:57):
groups and Arab was at the time.
So how do I?
You know was networking withpeople, see what other people
were doing.
And mortgage notes appealed tome because I live in California
and I wasn't really too keen oninvesting in property out of
state and California is a bigpay to play.
Yeah, you know, get into therental market.
(03:18):
So I was like, well, I can domortgage notes, I'm okay with
that outside of California andthen I don't have to manage the
property and becoming the bank,like you said, be the bank.
So I got into that.
I started with second positionmortgage notes.
I found a mentor in the spacewho did seconds and learned all
about how to look and analyze atape, the due diligence process,
(03:41):
did a lot of free work for him,learning.
And then I heard Chris speak ata conference, a virtual
conference, and I, you know,loved everything he said.
I think his topic of hispresentation was like how you're
going to lose all your moneyand no investing.
I was like yeah, this is what Ineed to know.
Risk like a risk mitigationGreat.
(04:04):
And I basically reached out tohim on LinkedIn and said hey,
enjoyed your conversation, We'dlove to grab coffee.
While he ignored virtual coffee.
He ignored me.
Yeah, I reached out like two orthree more times.
It was like I'm kind ofpersistent like that.
Justin Bogard (04:20):
Yeah.
Lauren Wells (04:22):
And someone, a mutual connection of ours, was
like, hey, she's not crazy, youshould connect with her.
So we connected and we did aton of just kind of coffee
conversations where I would askhim a ton of questions about,
you know, I was trying tonavigate the jump from second
position to first positionmortgage notes, and so that's
(04:45):
what he did and so I learned aton there and eventually he
asked me to help manage hisother, help him manage his other
funds.
So I helped on the assetmanagement side and then we kind
of formed this.
We kind of we did about twoyears ago now launched a larger
fund, two larger funds rathertogether, and kind of divide and
(05:08):
conquer the business into theacquisitions and asset
management and then meoverseeing capital raising and
investor relations andoperations.
So that's kind of where we'reat today.
Justin Bogard (05:22):
Wow.
So you start to press to get ajob.
That's what I heard.
Lauren Wells (05:28):
I talked to.
Chris to learn, and it somehowended up that we're now business
partners in this wild adventure.
Justin Bogard (05:35):
He talks very highly of you, just so you know
oh geez, yeah.
So he commends you on all thestuff that you've done and gives
you a lot of credit for makingthe company the way that it is
today.
So just want to make sure youget your props there.
Lauren Wells (05:50):
Oh wow.
I think it's a yin and yang iswhat we are, and so our
strengths play off of each other, and so it works.
Justin Bogard (05:58):
Yeah, I always tell people when they first get
started in this business if youwant to have a note business,
you really need to have apartner with you.
It's really challenging to dothis by yourself because there's
just too many things to do andyou just need the help.
Exactly what you said, which iswhy Richard Thornton and I we
had partnered together until heretired recently and that was
(06:19):
the yin and yang.
He was not detailed at all.
He left that stuff to me and Iwas like, okay, this is, I feel
comfortable with that, I'll domore deep stuff.
And then he handled more thaninvestor relations and raising
capital stuff.
But now he left me with a backin my hand.
Now I got to figure out how todo this stuff.
You're on the show today toteach me.
(06:44):
So when you got into mortgagenote investing, did you also
have experience like in realestate investing like flipping
houses or commercial deals?
Lauren Wells (06:51):
Yeah, great question.
So I, you know, before the showwe were talking about our kids
and I'm the oldest of threegirls and I grew up around real
estate.
My dad was just, he sold realestate, so sold real estate, and
then he started when I left forcollege, got into, you know,
his own buying holds and kind ofgrew his real estate portfolio
(07:15):
Me being the oldest and I seethis in my oldest now.
You know you tell them onething and they're going to do
the opposite.
So I think that just followed meand I was like I'm not doing
real estate, I'm going to go andI'm going to do that like
Silicon Valley life, I'm goingto work at the startup, go
through the IPO.
And I did that and I, you know,found my kind of niche in
(07:36):
business development and I lovedit.
But I realized light bulb wentoff and I was like, shoot, Maybe
my dad was onto something about, you know, having this freedom
if you're investing in assetsthat pay you.
And so I kind of went back andstarted that's kind of where my,
(07:56):
I guess you could say, researchjourney began into what
different asset class do I wantto go into and how do I want to
build my own portfolio withstarting with my own capital.
Justin Bogard (08:08):
So do you like seconds or first?
Better now that you've doneboth.
Lauren Wells (08:13):
Oh well, right now I like first better.
When I was doing seconds it was.
You know the coverage wasinsane.
You know you weren't reallygoing to have to worry about
being underwater Right now.
Seconds wouldn't be somethingI'd want to really be in second
position, yeah, first, I likefirst.
Better, just to answer shortly,yeah.
Justin Bogard (08:34):
Yeah, and do you?
Did you ever get into sellerfinance paper, or you mainly
tried to?
Lauren Wells (08:39):
I looked into it.
It was one of so you know, youdecide on mortgage notes, yeah,
and then within that there'sfirst, there's seconds as seller
finance and there's all thesedifferent kind of experts in the
space.
So I remember reading a lotthat Fred and Tracy would put
out about seller finance becausethey're kind of the go to in
that space, right.
So, yeah, I looked into it andat the time I was like this to
(09:04):
do this, well, I need to be likein sales mode, I need to be
finding and sourcing, and I waslike I just I was a mom a new
mom of two at the time and I waslike I don't have the bandwidth
to do that right now.
Justin Bogard (09:20):
Yeah.
Lauren Wells (09:21):
Like you know.
So I stayed in seconds and thenmoved into first.
Justin Bogard (09:25):
Okay, yeah.
So when you are working withpotential investors that can get
into your fund and you'reraising the capital, are you
educating them on the generalaspects of like note, investing
not really getting intospecifics of first and second,
or like, how do you approachthat with education?
Lauren Wells (09:45):
Yeah, great question.
So what I've learned is somethere's a big emphasis on
education that Chris and I have.
You go to our website.
We have webinar upon webinarupon webinar of what we do, who
we are, how mortgage notes worksand even though to you and I it
might sound super simple andlike we're repeating ourselves
(10:07):
constantly, you know mortgagenotes is not something people
are talking about.
It's not like the most knownabout asset class, and so what
we say and how we've broken itdown is kind of comparing it to
fixing and flipping homes.
Yeah, so we say we fix and flipmortgage notes.
That's kind of like our how itresonates with people.
(10:29):
So how do we get people who wantpassive income, want to invest
in real estate, don't want to doit on their own and maybe I
heard a little bit aboutmortgage notes or somehow you
know they ran across, chris onbigger pockets how do we get
them to understand what we doand why we do it?
(10:50):
Well, and so again, a bigemphasis has come across.
We don't really break intofirst and seconds because we
really primarily focus on firstfor our funds.
But really, walking through,what do diligence looks like?
You know what are theinvestor's concerns, you know,
and kind of trying to answerthose while also educating them.
So, risk is this?
(11:12):
What's the risk profile ofmortgage notes in today's
economy?
How big is this market?
So, giving them, educating themover and over, you know.
Again, we do like monthlywebinars at this point and we've
gotten a lot of great feedbackon that, because people want to
know at some level, they want tounderstand what they're
investing in.
Justin Bogard (11:33):
Yeah.
Lauren Wells (11:34):
Yeah.
Justin Bogard (11:35):
They want to know how it works, but they don't
want to go out and do it Correct.
Before I buy this packetbubblegum, I want to see how
it's made, see what's in it.
Okay, I'm not going to go get afactory and make it, I'm just
going to go buy it from the side.
That's already ready for me.
Lauren Wells (11:50):
Yeah, or, like you probably know, we do have
people who think they want tobuild the factory and then they
get into it and they're likeactually note, here I'm going to
invest with you.
This is way more work than Ithought.
Justin Bogard (11:59):
Oh, I didn't know it was going to be a job.
Lauren Wells (12:01):
Yeah, yeah.
I didn't know that I didn'tknow that getting into it.
Justin Bogard (12:05):
So Passive income sometimes is not as passive as
you want it to be, unless youare on the investor side, like
investing with in a fund that weboth have.
That's, I think, is the trickthat people don't understand.
Even being a landlord, as youknow personally, being a
landlord tonight, reluctantly,had some rentals it's not
(12:26):
passive income by any means.
It's hard work, you know,especially if you don't have
things well-oiled in youroperations, which is why
business development, the skillset that you mentioned earlier,
I think is so vital for anoperation, because you have to
treat it as a business, you know.
Lauren Wells (12:41):
Yeah.
Justin Bogard (12:42):
Everything in its core function is a business, no
matter what you're doing inreal estate, and I see a lot of
investors kind of fail at thataspect and they don't understand
the financials of how to run abusiness and things like that.
They're just like, yeah, I'mreally good at wholesaling, so
I'm just going to make abusiness out of it.
It's like you look at theirbooks and you're like what is
going on here?
How are you making money?
Like there's no way you'remaking money.
(13:03):
You know, yeah, it's kind offunny, but so education is great
.
I think that is the perfect wayto start the conversation,
because everything I feel likefrom investors from the first
time this is like taboo to them.
Like it's like oh, I've heardof seller financing, but you
know, if they don't see a I wantto say a large influx of cash,
(13:28):
they assume that that's notreally a profitable investment.
You know they're not.
They're not looking at it.
As you know, this is yourretirement money.
This is something you'rebuilding towards.
This isn't like you're going togo flip a house and make 100K
in California during the heyday,you know, at any moment, and
have this influx of cash andbecome an overnight success.
That's not what this is, youknow.
Lauren Wells (13:48):
And I think that's such an important point that
you touch upon, because rightnow, if you look at any of the I
don't know people, if peopleare listening on bigger pocket
forums or you know, I'm part ofa ton of investor communities-
yeah.
And the common theme is capitalcalls, distributions are being
paused and or syndications thathave gone completely under, and
(14:11):
part of me I could write a wholeLinkedIn post about this feels
bad and I do empathize withthese people because it sucks to
lose, but also, like you justmentioned, the last pre 2022,
the 10, the decade prior to thatyou could place money probably
anywhere and win.
Narrator (14:30):
Yeah.
Lauren Wells (14:31):
Well, so due diligence I feel like the due
diligence people put into notjust the asset class but also
the sponsor, just dropped.
They were like they were.
I call it yield chasing yeah,what's going to give me the
highest return, like you know,and it worked, it did.
People made a lot of money,yeah.
However, we are not in thateconomic environment anymore.
So the investors that you'respeaking to another part of like
(14:56):
what we focus on, and thishelps us maybe, but also might
not, depending on the investor'srisk profile.
Justin Bogard (15:02):
Yeah.
Lauren Wells (15:03):
Is educating them on questions they should be
asking.
Yeah, when you're talking to asponsor, what they do is
important, but their trackrecord, their time in the
business, their communicationand transparency is also of
utmost importance.
So I think that's somethingthat we focus a lot on as well,
(15:24):
because just how do we empowerour investors, or potential
investors, to safeguard theiryou know, their capital?
Justin Bogard (15:33):
Yeah, it feels like today because I've been
paying attention to it a lotmore the last six months than I
ever have with hosers in ourindustry, and especially
multifamily, because of thechallenges that they're going
through and they make it seemlike it is just pouring gold out
there right now and I just feelreally bad for the investor.
(15:56):
That just doesn't really.
That's buying into the salestactics and not really divesting
their time into understandingthe sponsor and their education
behind it.
A couple of these peopleactually know personally in the
multifamily space and I'm seeingthis stuff on LinkedIn just so
that you everyone listening outthere knows what I'm seeing out
(16:17):
there.
But that's where I see the mostlike advertisement and push and
I think it's more of theplayers in the multifamily space
because they're desperate rightnow yeah, desperate for raising
capital.
They're desperate to find deals, they're desperate to get
capital raised so that they,like you mentioned before,
because of pausing distributionsand because of you know, asking
investors can you please putmore money in?
And oh, by the way, I'm notgoing to be able to distribute
(16:38):
any, any proceeds to you nextquarter.
Lauren Wells (16:40):
Yeah.
Justin Bogard (16:41):
You know for this , that and the other, and I do
feel bad for the investor aswell out there, but they do have
some challenging stuff in frontof them and because of all this
uncertainty they might not knowwhere to put their money, which
is probably why theself-directed IRA companies,
cash on hand continues to riseand I want to say it's probably
getting up to the hundreds ofbillions of dollars by now, I'm
(17:02):
sure all the IRA companiescombined.
I don't know if it's thetrillion dollar number yet, but
it's, it's up there.
Lauren Wells (17:07):
It's probably creeping up there.
I mean I had imagined, but, yeah, I mean you're probably seeing
the same things I'm seeing and,as someone in business
development and I guess youcould say sales, it like kind of
makes me cringe when I see someof these things.
I'm you know cause I can see,you can see, like, okay, clearly
, look at this guy's background.
(17:28):
Did he start five years ago?
What has he done?
Or, you know, a common thingI'm seeing is and Chris and I
have talked about this at lengthis, you know and it drives us
nuts is you have a debt fund allof a sudden, like a
multi-family you knowdevelopment fund is like, oh, we
have this debt fund, but thedebt fund is needed to help make
(17:52):
sure that their other investorsand their development fund
don't, you know, take a huge hit.
So, yeah, kind of like, whatdoes that mean for?
Like, where are people fallingin the capital stack?
Is it really a debt fund?
Is it dressed up as a capitalcall, you know?
So how do you, I guess?
I feel like we can probably doa whole you know series on how
(18:15):
do you spot like yeah.
Justin Bogard (18:18):
Rodsters, because I don't think the classic Rob
Peter to pay Paul.
Yeah, but they're shiftingmoney around because the
government isn't printing themmoney.
They're getting money from theconsumer and the consumers
wanting the product that they'reoffering.
So we, you know I don't knowthe exact details of your guys's
phone, I'm sure it's verysimilar to what we do but when
(18:39):
Richard and I started the fund,we said what are the things that
people are looking for?
They're looking for short term,which you know One to two years
will say short term.
They're looking for a completepassivity and they're looking
for a lot of security and whatthey're doing, and they don't
want it complex.
And so we said, okay, we'llhave a true debt fund.
We're borrowing money from theinvestors and we're paying it
(19:02):
back and that's, that's just it.
Keep it very simple.
There's no waterfalldistribution, there's just.
You know, the asset class we'regoing against is a lot lower
risk than you know Building amultifamily unit.
That's just gonna go vacant.
Lauren Wells (19:15):
Yeah so yeah, and I think it's hard, because how
do you explain, I guess?
I don't know if this is a goodanalogy, but I kind of came up
with it and we're gonna tweak ituntil it gets right.
Justin Bogard (19:25):
All right.
Lauren Wells (19:26):
I feel like here we go.
So do you know what fosterfreeze is?
I think they have thateverywhere.
It's like the ice cream, theclassic vanilla ice cream cone.
Justin Bogard (19:35):
Is that the brand name of the company?
Lauren Wells (19:37):
Yeah, the company's.
I've heard of it.
Justin Bogard (19:40):
No, okay, so I'm a, I'm a, I'm a Hoosier.
Okay, we don't get much things.
Lauren Wells (19:46):
They were like Somebody listening will know
what foster freezes but it'sprobably will.
Yeah, I'll be the only onevanilla ice cream and you could
get it dipped in chocolate ifyou want.
That was like as fancy as itgot.
Okay so I feel like mortgagenotes and the way our fun and I
I don't know much about how yourfund is structured other than
what you just said yeah are verymuch that like classic stable.
(20:07):
You know what you're gonna get.
There's nothing fancy.
We're not saying we'repromising 20% returns yeah, but
you know we're gonna hit doublesand see in triples, maybe a
home run every now and then.
But like our goal is cut thatconsistent Income for our
investors.
And I feel like these funds inthe last you know Decade that
I've come out.
(20:28):
I'm not trying to pick onmultifamily, but it's what I'm
seeing right now.
So I'm just gonna go there.
You know, there, or opportunityzones or oil and gas, it's like
, hey, we can promise all thesecrazy awesome things and we'll
give you all these high returns.
And I kind of feel like they'relike the cold stone, like
sounds good, might be good,might also make me completely
(20:51):
sick.
So do I want to be like basic?
So it's, I feel like you kindof have.
I mean, everyone should havesome cold stone in their
portfolio.
But right now it's how do youkeep your money?
Yeah, how do you not lose money?
Justin Bogard (21:05):
Yeah, I like that .
Your baseball analogy is great.
We just trying to get singlesto be honest with you.
We're just.
You know, when I I'm not surehow old you are, I'm assuming
you're younger than me and sowhen I was growing up it was
always like when you get yourpaycheck, you know you put 10%
aside, you know, after you'vealready put money into your 401k
and and your company hasmatched it and what for?
(21:26):
You know what not, and so thecompany's 401k manager would
just go out there and just makesure that the funds out there
were just returning Like six,seven percent like clockwork all
day long, very low risk stuff.
And I feel like that's what theinvestor should focus on right
now, with the uncertainty goingon, is, if you feel like there's
an opportunity to make a bunchof money, you should be actively
(21:47):
going after it.
If you're trying to make activemoney and be passive in it,
that's that's the recipe fordisaster, because I think that's
when they get caught with thoseyield goggles on and they're
trying to get those big returnsand be like wait a minute, I
didn't, I didn't get paid last,last year.
You know what's going on hereand I so.
Yeah, hopefully investors arejust realizing that you know
(22:08):
they need to do real estate.
Cds is what I call them.
That's what our funds are, youknow, low risk.
They're just, yeah, constantlychurning your money.
They're not gonna make you, youknow, 30% or anything like that
, but it's just gonna make yougrow and the risk of you losing
your money is significantlylower.
Lauren Wells (22:25):
Yeah, I agree.
Justin Bogard (22:28):
Yeah.
So what is the Typical?
What I want to say I don't havelead time is the right word,
but what?
What is the typical?
I guess lead time for aninvestor that just Figures out
like hey, there's mortgage noteinvesting and 70 investments is
having a webinar and stuff, liketypically, when do they start
(22:49):
getting curious to be like I'mready to make a decision on this
, is the investment for me ornot?
Lauren Wells (22:53):
Yeah, I think it just depends on where they're at
in their overall investmentjourney We've had people and
then what type of investor theyare.
Justin Bogard (23:02):
Okay, that's the fair.
Lauren Wells (23:03):
Yeah, so like are they?
You know a w2 employee who'slike, hey, I should probably
look into passive income options, real estate sounds good and
they come across, you knowmortgage notes and us.
That's probably a lot longer ofa play.
It is a lot longer of you know.
They might be on our email listwatching webinars in the
background for six months to ayear.
(23:23):
Yeah whereas Someone who'spretty savvy might have a
self-directed IRA and just mightbe looking for options that
could be a quick you know one,two months and Then, as far as
like, we've had investors whohave been on our email list for
six months and then they'll drop, say a hundred K, and we're
like we never talked to youagain.
We have a reggae, so it'sallowed.
I'm not trying to.
(23:44):
We're not breaking any rulesright.
Um, but you know, and then wehave investors who will be on
our you know list for a monthbut then they need to talk to us
probably five or six more timesbefore they're ready to invest.
So it's definitely runs thespectrum of like, how long have
they been looking at analternative investment and
(24:07):
what's their investmentknowledge?
And then, really, howcomfortable are they with I,
chris, and I, you know, in theteam?
Justin Bogard (24:14):
That's a good point.
I I agree with everything yousaid.
That's been my experience aswell, and the the people that
end up pulling the trigger thequickest are the ones that have
the most Disposable income,because I feel like they've
already educated themselves inthe space and if they stumble
across one of us, it's like okay, I'm once, I'm comfortable with
the sponsor, then I'm ready.
(24:34):
I'm ready to go.
Lauren Wells (24:36):
Yeah, yeah, and I think it's a big something
that's We've seen a lot ofsuccess with and I don't know
about you, but is For our retailinvestors at least.
They really want to know who areChris and Lauren, what is their
background, why should I trustthem?
And like our backstory even?
(24:58):
You know we just did a webinarlast this month it's January,
right, yeah, this month aboutyou know our backstory, our
whole back story of why welaunched this specific fund,
this offering, how we met, howwe got into mortgage notes and
our backgrounds and our you know, kind of pads to mortgage notes
are yin and yang.
So we and we received a ton ofgreat feedback on that because I
(25:21):
think once they get to trustyou, then you can talk about the
details of your fund.
But if they don't get a goodsense of yeah, I feel like this
person is gonna do right by usGood times and bad.
If you know they're gonnacommunicate, then talking to
them about the details, nomatter how great your offering
is, is it really gonna sit withthem until they bought into you
(25:45):
as a person and a sponsor?
Justin Bogard (25:47):
Yeah, it makes total sense.
I think there's too many salesypeople out there that are just
trying to herd cattle throughtheir Operations and see how
much money they can pull fromfrom that herd.
And I, you guys approach it thesame way that I do and I'm glad
that you do, which is obviously, while you guys are very
successful because you guys aredoing it In much greater volume
(26:07):
Is everyone on that calls myfriend.
You know it sounds easy, butthey're my friend.
I mean, I talked to him as ifthey're my friend, I joke around
with them and stuff, and thenwe finally get to.
You know, whatever is it, I do,or however, I can help them, and
so it's always like a help.
How can I help you or how can Ipass along knowledge to you?
And then, you know, sometimesthe byproduct is, you know, I
get, I get an investor in thefund, and sometimes it's just
(26:30):
hey, maybe down the road there'san opportunity where they can
create a note and I can helpthem or I can buy that note from
them and stuff.
So, yeah, I fully agree it's.
You know, I don't like beingsalesy in general.
I feel like I'm not a salesman.
Even I'm supposed to be asalesperson.
I just, I just want to be theirfriend, lauren.
So all right.
So 70 investments.
(26:51):
You guys have been open for two, two or three years.
Lauren Wells (26:54):
Yeah, so 70 has been around for just under a
decade.
This, these off, these twoofferings that oh yeah.
I've been around for the lastsince almost two years.
Now, almost exactly two years.
Justin Bogard (27:06):
And one of the two types of funds.
Yeah, so once a reggae, butyeah, so we went.
Lauren Wells (27:11):
We started with the regulation, a offering which
, for people who are listeningmay or may not know it
essentially is think of likecrowdfunding for real estate so
we can market to anyone, we canaccept funds from credit
accredited and non-accreditedinvestors and there's a low, you
know, barrier to entry.
(27:32):
So our goal there, when Chrisand I like you something you
said earlier was like when youand your business partner were
creating a fund, what doinvestors want?
So when Chris and I createdthis fund, it was when, like,
what did we want?
Because I wasn't accreditedwhen I first started, it started
in note.
So what do we want?
(27:52):
What did we wish we had accessto at the time when we got into
notes?
And so we wanted something thatwas accessible and available to
everyone.
So low minimum available to nonaccredited investors.
And so that's the reggae andthat's really, you know, taken
off in.
Then we also launched the regd,which is 506 C, and they run
(28:15):
alongside each other and investin the same portfolio of assets.
They're just kind of twodifferent Ways to get into the
same fund.
Justin Bogard (28:24):
Okay, so you've reggae and a regd, and they both
are the 75 million yeah, soit's 150 million.
Lauren Wells (28:31):
Between the two, 75 each.
Justin Bogard (28:33):
Okay, very cool.
So I was gonna ask yousomething else now it was it
wasn't related to the investorstuff, it was I.
I asked a friend of mine lasttime I had him on the podcast, I
think his name is Jay and Iasked him what?
No, I wouldn't ask.
I asked Richard that's what itwas.
(28:54):
Last season I asked Richardlike what was his most favorite
thing about real estateinvesting over his whole career?
And he'd been doing it like 35plus years and stuff.
So, out of your career so far,what's been your most favorite
thing that you've liked aboutreal estate investing?
And my Richard's answer Was asurprise to me because it was
the same as mine, even though weboth don't do it anymore.
Lauren Wells (29:16):
Oh no.
Justin Bogard (29:16):
I'll let you go first.
Lauren Wells (29:17):
Yeah.
So my favorite thing about realestate investing I think it's
just the ability to be creativeand for me it's the impact too.
I'm looking at it now from thefund perspective, not like the
(29:40):
individual perspective, but forme this reg A getting emails
from investors who are able toretire that to me is the most
and maybe that's a very womananswer.
I'm sure Chris would have avery different answer, but for
me this journey along the reg Aand making this accessible to
(30:03):
people has really been like itstarted out as a passion project
and it still is and it's superfulfilling and something I get a
lot out of.
It's funny because it's notwhat probably most people would
say where it's like I love thepassive income, I love the
ability to work from anywhereand whatnot.
(30:25):
For me that is all great, but Ireally love seeing how I guess
we can provide that opportunityto other people is that's been
kind of one of my highlights sofar.
Justin Bogard (30:38):
So I giggled before I ask you that question,
because Richard and I bothabsolutely love the design part
of flipping a house but at thesame time we hate it.
So that's been.
The most fun for me was I gotto have a have a clean slate and
then I got to redesign aroundit and I always thought that was
(30:59):
kind of neat.
I was not making money doingthat, which is why I'm not doing
it today, but it was just fun.
What I like about the notebusiness that keeps me intrigued
on it is is no two notes arethe same and when you go and
evaluate a deal you look at itand I just laugh because I am
(31:21):
one of those people that was.
That's still very analytical.
But when I started out I am nodifferent than any other
engineer that comes into thespace to where they look at it
and be like how do I throw it ina spreadsheet and it spits out
a?
number of times I have my answer, I'll be like it doesn't work
that way, buddy.
You got to have your your sixshooter to your, to your hip,
you know.
You got to be ready to togunsling a little bit.
(31:42):
You got to have it as an art.
It's a science, there is mathto it, but you have to blend a
bunch of things together andthere's emotion involved in it.
And there's another, another aborrower is.
You know its own character.
To me it's just fascinating, andso I don't think they'll ever
be market price for something.
I think you just have to lookat a ton of different things and
(32:04):
then what your capital stack on, what you're spending, and then
what do you need?
You know most of us areborrowing or leveraging money in
order to get some of thesedeals to do a mass volume.
So obviously we have to be waryof, you know, underlying debt.
But that's what I think is funabout the note space is that
it's so unique, it's sodifferent every time I look at a
deal.
I just laugh when somebody says,oh yeah, here, I'm just looking
(32:27):
for a 12% return.
Okay, that's that's.
Your goal is to get a 12%return.
Like I'm sorry, but it's likethere's a lot more to it than
that, like there's a riskinvolved.
Like you know, most of the timewhen people want to make that
big return, they don'tunderstand that there's going to
be some hair on that deal,especially if it's a performing
asset and they want to get ahigh, double digit return.
It's like, okay, you might, youmight get 10 payments this year
(32:49):
, but okay, you know, if theymay make 12, then you'll get
that return, but you're lucky toget that far, so anyways,
that's, this is kind of my yeah,what's going on?
Lauren Wells (32:59):
It's not specifically.
I think that's something thatChris and I talked about.
It's like and we talk about oneon our webinars.
It's like there's no one way,no two notes.
Like you said, no two notes arethe same, and it allows you to
be super creative, especiallybecause we're getting these a
discount in our case.
So you know, to be supercreative.
(33:19):
Chris definitely would doexactly what you would do throw
it in that spreadsheet.
But there's also, like you said, that human element of it,
because you are working withpeople in their different
situations and kind of having toblend the analytical and the
emotional side of it to, youknow, make the best decision.
Justin Bogard (33:39):
Yeah, it's.
If you're not, if you haven'tbeen well educated in this space
and haven't seen a lot ofdifferent types of deals you
know, from seller finance toconventional loans like to see
the different types of borrowersand situations of.
You know, low value propertiesversus high value properties and
and you wail it in there.
I have a deal I've been tryingto sell in one of our portfolios
(34:00):
forever.
There's nothing wrong with it.
I just trying to liquidate theLLC that it's in and it's in
bankruptcy and I've had it sinceit's been in bankruptcy.
There's absolutely nothingwrong with it.
But I think, because the word BKis on there and it's kind of a
lower value asset, that peopleare really afraid to do it.
But it's been paying likeclockwork for 28 months in a row
(34:22):
, like not even a blip on theradar, and even one of the
borrowers passed away as welland they're still making the
payments.
And it's not even and there'sand there's, you know, obviously
a principal balance on the backend as well as a bonus kicker,
you know somebody would get, andwhenever they sell the house or
the refi it in the future, andjust it.
Just I just laugh and go.
I don't understand why nobodywants this deal and I even have
(34:44):
it at a very high, you know,yield.
But it all comes down to, youknow, their perception of what's
going on.
Lauren Wells (34:51):
Yeah, yeah, I had.
Actually I purchased one thatwas in BK and they were making
consistent payments and thensome to get caught up through
the BK you know system and so.
But yeah, for people who aren'tfamiliar with kind of how
bankruptcy works and at whatdifferent stages, yeah, it would
probably seem like a bad asset,even if it is paying and you're
(35:14):
making money on it.
Justin Bogard (35:17):
So, yeah, I think that's a good way to do it.
Lauren Wells (35:21):
Lauren, how do we get ahold of you if we want to
ask you some more questions?
Yeah, I always say email medirectly.
You can find me on LinkedIn,lauren Wells, but I also you
know welcome email.
Justin Bogard (35:34):
So Lauren at 7einvestmentscom.
So I'm going to start with you,lauren.
Do you have an underlyingcompany or 7einvestments is what
you guys are?
Lauren Wells (35:45):
7e is the.
It's funny, we get this a lot.
So the it's C Corp, it's CWSInvestments Inc.
But our DBA is 7e.
So everyone knows this is 7e.
And when we tried to make thatshift to CWS, some of our older
investors who've been with usfor a while like seasoned, I
guess, veteran investors werelike, wait, you have a new
(36:06):
offering.
And we're like, oh gosh, no,let's back up 7e, we're just
going to stick with the 7e.
Justin Bogard (36:12):
So yeah, it's so tough to make changes.
When Richard and I combinedcompanies, I had switched from
you know, it's all a bright path, and now it's called American
Notebuyers, and it was.
It was really funny to be like.
I would never have thought thiswould have been, you know,
confused, yeah, like yes, I cansee how it's confusing when you
don't deal with it every singleday.
Lauren Wells (36:31):
So I was like okay , you know, as investment
managers, like fund managers, aswhat we do is like so
analytical and in the weeds,you're like this I'm getting
hung up on the name right now.
Yeah, Not oncoming.
Yeah, so it took us a bit, buteverything now is 7e.
Justin Bogard (36:49):
Well, it makes sense.
It's a name that has stuck fora while, so it makes sense to
keep it that way.
So, lauren, it was awesome toget to know you during this
podcast today.
Hopefully we'll get to hang outa little bit more in the future
and get to know each other.
Yeah, now some more funconversations, but thanks for
being on the podcast today.
I really appreciate it, lauren.
At 70investmentscom, you cancheck out their website,
70investmentscom.
(37:09):
You can catch the video streamof this on the American
Notebuyers YouTube channel, andI'm Justin Bogart with American
Notebuyers.
This is episode number three ofseason six on Be the Bank
podcast.
We'll catch you guys on thenext episode.
Bye, lauren.
Lauren Wells (37:22):
Bye.
Thanks for having me.
Narrator (37:26):
You.
Interest in real estate.
How about wealth?
Well, they go hand in hand, andhere you'll learn all about it.
Welcome to Be the Bank, apodcast where we discuss and
debate the topics centeredaround real estate investing.
Your host, justin Bogart,shares insights into investing
in real estate to create realwealth and passive income for
(00:22):
you and your family.
He'll share stories of realestate investments done right,
walk you through the process ofowning a real estate note and,
most importantly, educate you soyou can Be the Bank.
This is Be the Bank, brought toyou by American Notepad.
Now here's your host, justinBogart.
Justin Bogard (00:45):
Hey, hey, listener, this is season number
six, episode number three comingat you.
I have a guest today, ms LaurenWells.
That's going to be on from 70Investments.
She's got a nice littlebackground I've been in the
business for a little bit anddefinitely is making waves and
has a lot of experience on thesubject of note investing and
other things related to realestate.
(01:05):
So you guys are going to enjoythis episode, so stay tuned.
Well, hello, lauren, it is apleasure to meet you.
Lauren Wells (01:22):
Thanks, Justin.
Thanks for having me today.
Glad to be here.
Justin Bogard (01:26):
You're welcome.
This is the first time I'mactually meeting you over the
internet or anything.
I don't think we've ever beenat a conference at the same time
in the real estate note world.
So yeah, this is our first time.
Lauren Wells (01:39):
Yeah, yeah, I used to go to all those conferences,
but now my role has shifted alittle bit, so I'm onto a
different set of conferences.
Justin Bogard (01:47):
Yeah, I bet.
So, speaking of the differentset of conferences that you go
to, I'd like to kind of give theaudience a background on who
you are and kind of how you cameto found the 70 Investments
Company with Chris.
Lauren Wells (02:03):
Yeah, you want to go ahead and dive into it.
Justin Bogard (02:05):
I mean you don't have to go all the way back from
birth, but you could go back,you know, at least several years
and kind of what you did in theW2, there's some air quotes
here, W2 world, until you get totoday.
Lauren Wells (02:17):
Definitely I don't know kind of who your listeners
are, but I'm going to justimagine that maybe some of them
listening might be people whohave W2 jobs.
Justin Bogard (02:27):
There's only three of them, so I could
probably name them for you.
Lauren Wells (02:30):
You, me and one other person, the person.
Justin Bogard (02:33):
Chris is the other one.
Lauren Wells (02:33):
yeah, so, you know , I was essentially a listener
who had a W2 job and wasthinking about all the ways to
get out of my W2 job and thatbuzzword of passive income and
how do I get there?
And I'm a big networker, I aminvolved in a lot of real estate
(02:57):
groups and Arab was at the time.
So how do I?
You know was networking withpeople, see what other people
were doing.
And mortgage notes appealed tome because I live in California
and I wasn't really too keen oninvesting in property out of
state and California is a bigpay to play.
Yeah, you know, get into therental market.
(03:18):
So I was like, well, I can domortgage notes, I'm okay with
that outside of California andthen I don't have to manage the
property and becoming the bank,like you said, be the bank.
So I got into that.
I started with second positionmortgage notes.
I found a mentor in the spacewho did seconds and learned all
about how to look and analyze atape, the due diligence process,
(03:41):
did a lot of free work for him,learning.
And then I heard Chris speak ata conference, a virtual
conference, and I, you know,loved everything he said.
I think his topic of hispresentation was like how you're
going to lose all your moneyand no investing.
I was like yeah, this is what Ineed to know.
Risk like a risk mitigationGreat.
(04:04):
And I basically reached out tohim on LinkedIn and said hey,
enjoyed your conversation, We'dlove to grab coffee.
While he ignored virtual coffee.
He ignored me.
Yeah, I reached out like two orthree more times.
It was like I'm kind ofpersistent like that.
Justin Bogard (04:20):
Yeah.
Lauren Wells (04:22):
And someone, a mutual connection of ours, was
like, hey, she's not crazy, youshould connect with her.
So we connected and we did aton of just kind of coffee
conversations where I would askhim a ton of questions about,
you know, I was trying tonavigate the jump from second
position to first positionmortgage notes, and so that's
(04:45):
what he did and so I learned aton there and eventually he
asked me to help manage hisother, help him manage his other
funds.
So I helped on the assetmanagement side and then we kind
of formed this.
We kind of we did about twoyears ago now launched a larger
fund, two larger funds rathertogether, and kind of divide and
(05:08):
conquer the business into theacquisitions and asset
management and then meoverseeing capital raising and
investor relations andoperations.
So that's kind of where we'reat today.
Justin Bogard (05:22):
Wow.
So you start to press to get ajob.
That's what I heard.
Lauren Wells (05:28):
I talked to.
Chris to learn, and it somehowended up that we're now business
partners in this wild adventure.
Justin Bogard (05:35):
He talks very highly of you, just so you know
oh geez, yeah.
So he commends you on all thestuff that you've done and gives
you a lot of credit for makingthe company the way that it is
today.
So just want to make sure youget your props there.
Lauren Wells (05:50):
Oh wow.
I think it's a yin and yang iswhat we are, and so our
strengths play off of each other, and so it works.
Justin Bogard (05:58):
Yeah, I always tell people when they first get
started in this business if youwant to have a note business,
you really need to have apartner with you.
It's really challenging to dothis by yourself because there's
just too many things to do andyou just need the help.
Exactly what you said, which iswhy Richard Thornton and I we
had partnered together until heretired recently and that was
(06:19):
the yin and yang.
He was not detailed at all.
He left that stuff to me and Iwas like, okay, this is, I feel
comfortable with that, I'll domore deep stuff.
And then he handled more thaninvestor relations and raising
capital stuff.
But now he left me with a backin my hand.
Now I got to figure out how todo this stuff.
You're on the show today toteach me.
(06:44):
So when you got into mortgagenote investing, did you also
have experience like in realestate investing like flipping
houses or commercial deals?
Lauren Wells (06:51):
Yeah, great question.
So I, you know, before the showwe were talking about our kids
and I'm the oldest of threegirls and I grew up around real
estate.
My dad was just, he sold realestate, so sold real estate, and
then he started when I left forcollege, got into, you know,
his own buying holds and kind ofgrew his real estate portfolio
(07:15):
Me being the oldest and I seethis in my oldest now.
You know you tell them onething and they're going to do
the opposite.
So I think that just followed meand I was like I'm not doing
real estate, I'm going to go andI'm going to do that like
Silicon Valley life, I'm goingto work at the startup, go
through the IPO.
And I did that and I, you know,found my kind of niche in
(07:36):
business development and I lovedit.
But I realized light bulb wentoff and I was like, shoot, Maybe
my dad was onto something about, you know, having this freedom
if you're investing in assetsthat pay you.
And so I kind of went back andstarted that's kind of where my,
(07:56):
I guess you could say, researchjourney began into what
different asset class do I wantto go into and how do I want to
build my own portfolio withstarting with my own capital.
Justin Bogard (08:08):
So do you like seconds or first?
Better now that you've doneboth.
Lauren Wells (08:13):
Oh well, right now I like first better.
When I was doing seconds it was.
You know the coverage wasinsane.
You know you weren't reallygoing to have to worry about
being underwater Right now.
Seconds wouldn't be somethingI'd want to really be in second
position, yeah, first, I likefirst.
Better, just to answer shortly,yeah.
Justin Bogard (08:34):
Yeah, and do you?
Did you ever get into sellerfinance paper, or you mainly
tried to?
Lauren Wells (08:39):
I looked into it.
It was one of so you know, youdecide on mortgage notes, yeah,
and then within that there'sfirst, there's seconds as seller
finance and there's all thesedifferent kind of experts in the
space.
So I remember reading a lotthat Fred and Tracy would put
out about seller finance becausethey're kind of the go to in
that space, right.
So, yeah, I looked into it andat the time I was like this to
(09:04):
do this, well, I need to be likein sales mode, I need to be
finding and sourcing, and I waslike I just I was a mom a new
mom of two at the time and I waslike I don't have the bandwidth
to do that right now.
Justin Bogard (09:20):
Yeah.
Lauren Wells (09:21):
Like you know.
So I stayed in seconds and thenmoved into first.
Justin Bogard (09:25):
Okay, yeah.
So when you are working withpotential investors that can get
into your fund and you'reraising the capital, are you
educating them on the generalaspects of like note, investing
not really getting intospecifics of first and second,
or like, how do you approachthat with education?
Lauren Wells (09:45):
Yeah, great question.
So what I've learned is somethere's a big emphasis on
education that Chris and I have.
You go to our website.
We have webinar upon webinarupon webinar of what we do, who
we are, how mortgage notes worksand even though to you and I it
might sound super simple andlike we're repeating ourselves
(10:07):
constantly, you know mortgagenotes is not something people
are talking about.
It's not like the most knownabout asset class, and so what
we say and how we've broken itdown is kind of comparing it to
fixing and flipping homes.
Yeah, so we say we fix and flipmortgage notes.
That's kind of like our how itresonates with people.
(10:29):
So how do we get people who wantpassive income, want to invest
in real estate, don't want to doit on their own and maybe I
heard a little bit aboutmortgage notes or somehow you
know they ran across, chris onbigger pockets how do we get
them to understand what we doand why we do it?
(10:50):
Well, and so again, a bigemphasis has come across.
We don't really break intofirst and seconds because we
really primarily focus on firstfor our funds.
But really, walking through,what do diligence looks like?
You know what are theinvestor's concerns, you know,
and kind of trying to answerthose while also educating them.
So, risk is this?
(11:12):
What's the risk profile ofmortgage notes in today's
economy?
How big is this market?
So, giving them, educating themover and over, you know.
Again, we do like monthlywebinars at this point and we've
gotten a lot of great feedbackon that, because people want to
know at some level, they want tounderstand what they're
investing in.
Justin Bogard (11:33):
Yeah.
Lauren Wells (11:34):
Yeah.
Justin Bogard (11:35):
They want to know how it works, but they don't
want to go out and do it Correct.
Before I buy this packetbubblegum, I want to see how
it's made, see what's in it.
Okay, I'm not going to go get afactory and make it, I'm just
going to go buy it from the side.
That's already ready for me.
Lauren Wells (11:50):
Yeah, or, like you probably know, we do have
people who think they want tobuild the factory and then they
get into it and they're likeactually note, here I'm going to
invest with you.
This is way more work than Ithought.
Justin Bogard (11:59):
Oh, I didn't know it was going to be a job.
Lauren Wells (12:01):
Yeah, yeah.
I didn't know that I didn'tknow that getting into it.
Justin Bogard (12:05):
So Passive income sometimes is not as passive as
you want it to be, unless youare on the investor side, like
investing with in a fund that weboth have.
That's, I think, is the trickthat people don't understand.
Even being a landlord, as youknow personally, being a
landlord tonight, reluctantly,had some rentals it's not
(12:26):
passive income by any means.
It's hard work, you know,especially if you don't have
things well-oiled in youroperations, which is why
business development, the skillset that you mentioned earlier,
I think is so vital for anoperation, because you have to
treat it as a business, you know.
Lauren Wells (12:41):
Yeah.
Justin Bogard (12:42):
Everything in its core function is a business, no
matter what you're doing inreal estate, and I see a lot of
investors kind of fail at thataspect and they don't understand
the financials of how to run abusiness and things like that.
They're just like, yeah, I'mreally good at wholesaling, so
I'm just going to make abusiness out of it.
It's like you look at theirbooks and you're like what is
going on here?
How are you making money?
Like there's no way you'remaking money.
(13:03):
You know, yeah, it's kind offunny, but so education is great
.
I think that is the perfect wayto start the conversation,
because everything I feel likefrom investors from the first
time this is like taboo to them.
Like it's like oh, I've heardof seller financing, but you
know, if they don't see a I wantto say a large influx of cash,
(13:28):
they assume that that's notreally a profitable investment.
You know they're not.
They're not looking at it.
As you know, this is yourretirement money.
This is something you'rebuilding towards.
This isn't like you're going togo flip a house and make 100K
in California during the heyday,you know, at any moment, and
have this influx of cash andbecome an overnight success.
That's not what this is, youknow.
Lauren Wells (13:48):
And I think that's such an important point that
you touch upon, because rightnow, if you look at any of the I
don't know people, if peopleare listening on bigger pocket
forums or you know, I'm part ofa ton of investor communities-
yeah.
And the common theme is capitalcalls, distributions are being
paused and or syndications thathave gone completely under, and
(14:11):
part of me I could write a wholeLinkedIn post about this feels
bad and I do empathize withthese people because it sucks to
lose, but also, like you justmentioned, the last pre 2022,
the 10, the decade prior to thatyou could place money probably
anywhere and win.
Narrator (14:30):
Yeah.
Lauren Wells (14:31):
Well, so due diligence I feel like the due
diligence people put into notjust the asset class but also
the sponsor, just dropped.
They were like they were.
I call it yield chasing yeah,what's going to give me the
highest return, like you know,and it worked, it did.
People made a lot of money,yeah.
However, we are not in thateconomic environment anymore.
So the investors that you'respeaking to another part of like
(14:56):
what we focus on, and thishelps us maybe, but also might
not, depending on the investor'srisk profile.
Justin Bogard (15:02):
Yeah.
Lauren Wells (15:03):
Is educating them on questions they should be
asking.
Yeah, when you're talking to asponsor, what they do is
important, but their trackrecord, their time in the
business, their communicationand transparency is also of
utmost importance.
So I think that's somethingthat we focus a lot on as well,
(15:24):
because just how do we empowerour investors, or potential
investors, to safeguard theiryou know, their capital?
Justin Bogard (15:33):
Yeah, it feels like today because I've been
paying attention to it a lotmore the last six months than I
ever have with hosers in ourindustry, and especially
multifamily, because of thechallenges that they're going
through and they make it seemlike it is just pouring gold out
there right now and I just feelreally bad for the investor.
(15:56):
That just doesn't really.
That's buying into the salestactics and not really divesting
their time into understandingthe sponsor and their education
behind it.
A couple of these peopleactually know personally in the
multifamily space and I'm seeingthis stuff on LinkedIn just so
that you everyone listening outthere knows what I'm seeing out
(16:17):
there.
But that's where I see the mostlike advertisement and push and
I think it's more of theplayers in the multifamily space
because they're desperate rightnow yeah, desperate for raising
capital.
They're desperate to find deals, they're desperate to get
capital raised so that they,like you mentioned before,
because of pausing distributionsand because of you know, asking
investors can you please putmore money in?
And oh, by the way, I'm notgoing to be able to distribute
(16:38):
any, any proceeds to you nextquarter.
Lauren Wells (16:40):
Yeah.
Justin Bogard (16:41):
You know for this , that and the other, and I do
feel bad for the investor aswell out there, but they do have
some challenging stuff in frontof them and because of all this
uncertainty they might not knowwhere to put their money, which
is probably why theself-directed IRA companies,
cash on hand continues to riseand I want to say it's probably
getting up to the hundreds ofbillions of dollars by now, I'm
(17:02):
sure all the IRA companiescombined.
I don't know if it's thetrillion dollar number yet, but
it's, it's up there.
Lauren Wells (17:07):
It's probably creeping up there.
I mean I had imagined, but, yeah, I mean you're probably seeing
the same things I'm seeing and,as someone in business
development and I guess youcould say sales, it like kind of
makes me cringe when I see someof these things.
I'm you know cause I can see,you can see, like, okay, clearly
, look at this guy's background.
(17:28):
Did he start five years ago?
What has he done?
Or, you know, a common thingI'm seeing is and Chris and I
have talked about this at lengthis, you know and it drives us
nuts is you have a debt fund allof a sudden, like a
multi-family you knowdevelopment fund is like, oh, we
have this debt fund, but thedebt fund is needed to help make
(17:52):
sure that their other investorsand their development fund
don't, you know, take a huge hit.
So, yeah, kind of like, whatdoes that mean for?
Like, where are people fallingin the capital stack?
Is it really a debt fund?
Is it dressed up as a capitalcall, you know?
So how do you, I guess?
I feel like we can probably doa whole you know series on how
(18:15):
do you spot like yeah.
Justin Bogard (18:18):
Rodsters, because I don't think the classic Rob
Peter to pay Paul.
Yeah, but they're shiftingmoney around because the
government isn't printing themmoney.
They're getting money from theconsumer and the consumers
wanting the product that they'reoffering.
So we, you know I don't knowthe exact details of your guys's
phone, I'm sure it's verysimilar to what we do but when
(18:39):
Richard and I started the fund,we said what are the things that
people are looking for?
They're looking for short term,which you know One to two years
will say short term.
They're looking for a completepassivity and they're looking
for a lot of security and whatthey're doing, and they don't
want it complex.
And so we said, okay, we'llhave a true debt fund.
We're borrowing money from theinvestors and we're paying it
(19:02):
back and that's, that's just it.
Keep it very simple.
There's no waterfalldistribution, there's just.
You know, the asset class we'regoing against is a lot lower
risk than you know Building amultifamily unit.
That's just gonna go vacant.
Lauren Wells (19:15):
Yeah so yeah, and I think it's hard, because how
do you explain, I guess?
I don't know if this is a goodanalogy, but I kind of came up
with it and we're gonna tweak ituntil it gets right.
Justin Bogard (19:25):
All right.
Lauren Wells (19:26):
I feel like here we go.
So do you know what fosterfreeze is?
I think they have thateverywhere.
It's like the ice cream, theclassic vanilla ice cream cone.
Justin Bogard (19:35):
Is that the brand name of the company?
Lauren Wells (19:37):
Yeah, the company's.
I've heard of it.
Justin Bogard (19:40):
No, okay, so I'm a, I'm a, I'm a Hoosier.
Okay, we don't get much things.
Lauren Wells (19:46):
They were like Somebody listening will know
what foster freezes but it'sprobably will.
Yeah, I'll be the only onevanilla ice cream and you could
get it dipped in chocolate ifyou want.
That was like as fancy as itgot.
Okay so I feel like mortgagenotes and the way our fun and I
I don't know much about how yourfund is structured other than
what you just said yeah are verymuch that like classic stable.
(20:07):
You know what you're gonna get.
There's nothing fancy.
We're not saying we'repromising 20% returns yeah, but
you know we're gonna hit doublesand see in triples, maybe a
home run every now and then.
But like our goal is cut thatconsistent Income for our
investors.
And I feel like these funds inthe last you know Decade that
I've come out.
(20:28):
I'm not trying to pick onmultifamily, but it's what I'm
seeing right now.
So I'm just gonna go there.
You know, there, or opportunityzones or oil and gas, it's like
, hey, we can promise all thesecrazy awesome things and we'll
give you all these high returns.
And I kind of feel like they'relike the cold stone, like
sounds good, might be good,might also make me completely
(20:51):
sick.
So do I want to be like basic?
So it's, I feel like you kindof have.
I mean, everyone should havesome cold stone in their
portfolio.
But right now it's how do youkeep your money?
Yeah, how do you not lose money?
Justin Bogard (21:05):
Yeah, I like that .
Your baseball analogy is great.
We just trying to get singlesto be honest with you.
We're just.
You know, when I I'm not surehow old you are, I'm assuming
you're younger than me and sowhen I was growing up it was
always like when you get yourpaycheck, you know you put 10%
aside, you know, after you'vealready put money into your 401k
and and your company hasmatched it and what for?
(21:26):
You know what not, and so thecompany's 401k manager would
just go out there and just makesure that the funds out there
were just returning Like six,seven percent like clockwork all
day long, very low risk stuff.
And I feel like that's what theinvestor should focus on right
now, with the uncertainty goingon, is, if you feel like there's
an opportunity to make a bunchof money, you should be actively
(21:47):
going after it.
If you're trying to make activemoney and be passive in it,
that's that's the recipe fordisaster, because I think that's
when they get caught with thoseyield goggles on and they're
trying to get those big returnsand be like wait a minute, I
didn't, I didn't get paid last,last year.
You know what's going on hereand I so.
Yeah, hopefully investors arejust realizing that you know
(22:08):
they need to do real estate.
Cds is what I call them.
That's what our funds are, youknow, low risk.
They're just, yeah, constantlychurning your money.
They're not gonna make you, youknow, 30% or anything like that
, but it's just gonna make yougrow and the risk of you losing
your money is significantlylower.
Lauren Wells (22:25):
Yeah, I agree.
Justin Bogard (22:28):
Yeah.
So what is the Typical?
What I want to say I don't havelead time is the right word,
but what?
What is the typical?
I guess lead time for aninvestor that just Figures out
like hey, there's mortgage noteinvesting and 70 investments is
having a webinar and stuff, liketypically, when do they start
(22:49):
getting curious to be like I'mready to make a decision on this
, is the investment for me ornot?
Lauren Wells (22:53):
Yeah, I think it just depends on where they're at
in their overall investmentjourney We've had people and
then what type of investor theyare.
Justin Bogard (23:02):
Okay, that's the fair.
Lauren Wells (23:03):
Yeah, so like are they?
You know a w2 employee who'slike, hey, I should probably
look into passive income options, real estate sounds good and
they come across, you knowmortgage notes and us.
That's probably a lot longer ofa play.
It is a lot longer of you know.
They might be on our email listwatching webinars in the
background for six months to ayear.
(23:23):
Yeah whereas Someone who'spretty savvy might have a
self-directed IRA and just mightbe looking for options that
could be a quick you know one,two months and Then, as far as
like, we've had investors whohave been on our email list for
six months and then they'll drop, say a hundred K, and we're
like we never talked to youagain.
We have a reggae, so it'sallowed.
I'm not trying to.
(23:44):
We're not breaking any rulesright.
Um, but you know, and then wehave investors who will be on
our you know list for a monthbut then they need to talk to us
probably five or six more timesbefore they're ready to invest.
So it's definitely runs thespectrum of like, how long have
they been looking at analternative investment and
(24:07):
what's their investmentknowledge?
And then, really, howcomfortable are they with I,
chris, and I, you know, in theteam?
Justin Bogard (24:14):
That's a good point.
I I agree with everything yousaid.
That's been my experience aswell, and the the people that
end up pulling the trigger thequickest are the ones that have
the most Disposable income,because I feel like they've
already educated themselves inthe space and if they stumble
across one of us, it's like okay, I'm once, I'm comfortable with
the sponsor, then I'm ready.
(24:34):
I'm ready to go.
Lauren Wells (24:36):
Yeah, yeah, and I think it's a big something
that's We've seen a lot ofsuccess with and I don't know
about you, but is For our retailinvestors at least.
They really want to know who areChris and Lauren, what is their
background, why should I trustthem?
And like our backstory even?
(24:58):
You know we just did a webinarlast this month it's January,
right, yeah, this month aboutyou know our backstory, our
whole back story of why welaunched this specific fund,
this offering, how we met, howwe got into mortgage notes and
our backgrounds and our you know, kind of pads to mortgage notes
are yin and yang.
So we and we received a ton ofgreat feedback on that because I
(25:21):
think once they get to trustyou, then you can talk about the
details of your fund.
But if they don't get a goodsense of yeah, I feel like this
person is gonna do right by usGood times and bad.
If you know they're gonnacommunicate, then talking to
them about the details, nomatter how great your offering
is, is it really gonna sit withthem until they bought into you
(25:45):
as a person and a sponsor?
Justin Bogard (25:47):
Yeah, it makes total sense.
I think there's too many salesypeople out there that are just
trying to herd cattle throughtheir Operations and see how
much money they can pull fromfrom that herd.
And I, you guys approach it thesame way that I do and I'm glad
that you do, which is obviously, while you guys are very
successful because you guys aredoing it In much greater volume
(26:07):
Is everyone on that calls myfriend.
You know it sounds easy, butthey're my friend.
I mean, I talked to him as ifthey're my friend, I joke around
with them and stuff, and thenwe finally get to.
You know, whatever is it, I do,or however, I can help them, and
so it's always like a help.
How can I help you or how can Ipass along knowledge to you?
And then, you know, sometimesthe byproduct is, you know, I
get, I get an investor in thefund, and sometimes it's just
(26:30):
hey, maybe down the road there'san opportunity where they can
create a note and I can helpthem or I can buy that note from
them and stuff.
So, yeah, I fully agree it's.
You know, I don't like beingsalesy in general.
I feel like I'm not a salesman.
Even I'm supposed to be asalesperson.
I just, I just want to be theirfriend, lauren.
So all right.
So 70 investments.
(26:51):
You guys have been open for two, two or three years.
Lauren Wells (26:54):
Yeah, so 70 has been around for just under a
decade.
This, these off, these twoofferings that oh yeah.
I've been around for the lastsince almost two years.
Now, almost exactly two years.
Justin Bogard (27:06):
And one of the two types of funds.
Yeah, so once a reggae, butyeah, so we went.
Lauren Wells (27:11):
We started with the regulation, a offering which
, for people who are listeningmay or may not know it
essentially is think of likecrowdfunding for real estate so
we can market to anyone, we canaccept funds from credit
accredited and non-accreditedinvestors and there's a low, you
know, barrier to entry.
(27:32):
So our goal there, when Chrisand I like you something you
said earlier was like when youand your business partner were
creating a fund, what doinvestors want?
So when Chris and I createdthis fund, it was when, like,
what did we want?
Because I wasn't accreditedwhen I first started, it started
in note.
So what do we want?
(27:52):
What did we wish we had accessto at the time when we got into
notes?
And so we wanted something thatwas accessible and available to
everyone.
So low minimum available to nonaccredited investors.
And so that's the reggae andthat's really, you know, taken
off in.
Then we also launched the regd,which is 506 C, and they run
(28:15):
alongside each other and investin the same portfolio of assets.
They're just kind of twodifferent Ways to get into the
same fund.
Justin Bogard (28:24):
Okay, so you've reggae and a regd, and they both
are the 75 million yeah, soit's 150 million.
Lauren Wells (28:31):
Between the two, 75 each.
Justin Bogard (28:33):
Okay, very cool.
So I was gonna ask yousomething else now it was it
wasn't related to the investorstuff, it was I.
I asked a friend of mine lasttime I had him on the podcast, I
think his name is Jay and Iasked him what?
No, I wouldn't ask.
I asked Richard that's what itwas.
(28:54):
Last season I asked Richardlike what was his most favorite
thing about real estateinvesting over his whole career?
And he'd been doing it like 35plus years and stuff.
So, out of your career so far,what's been your most favorite
thing that you've liked aboutreal estate investing?
And my Richard's answer Was asurprise to me because it was
the same as mine, even though weboth don't do it anymore.
Lauren Wells (29:16):
Oh no.
Justin Bogard (29:16):
I'll let you go first.
Lauren Wells (29:17):
Yeah.
So my favorite thing about realestate investing I think it's
just the ability to be creativeand for me it's the impact too.
I'm looking at it now from thefund perspective, not like the
(29:40):
individual perspective, but forme this reg A getting emails
from investors who are able toretire that to me is the most
and maybe that's a very womananswer.
I'm sure Chris would have avery different answer, but for
me this journey along the reg Aand making this accessible to
(30:03):
people has really been like itstarted out as a passion project
and it still is and it's superfulfilling and something I get a
lot out of.
It's funny because it's notwhat probably most people would
say where it's like I love thepassive income, I love the
ability to work from anywhereand whatnot.
(30:25):
For me that is all great, but Ireally love seeing how I guess
we can provide that opportunityto other people is that's been
kind of one of my highlights sofar.
Justin Bogard (30:38):
So I giggled before I ask you that question,
because Richard and I bothabsolutely love the design part
of flipping a house but at thesame time we hate it.
So that's been.
The most fun for me was I gotto have a have a clean slate and
then I got to redesign aroundit and I always thought that was
(30:59):
kind of neat.
I was not making money doingthat, which is why I'm not doing
it today, but it was just fun.
What I like about the notebusiness that keeps me intrigued
on it is is no two notes arethe same and when you go and
evaluate a deal you look at itand I just laugh because I am
(31:21):
one of those people that was.
That's still very analytical.
But when I started out I am nodifferent than any other
engineer that comes into thespace to where they look at it
and be like how do I throw it ina spreadsheet and it spits out
a?
number of times I have my answer, I'll be like it doesn't work
that way, buddy.
You got to have your your sixshooter to your, to your hip,
you know.
You got to be ready to togunsling a little bit.
(31:42):
You got to have it as an art.
It's a science, there is mathto it, but you have to blend a
bunch of things together andthere's emotion involved in it.
And there's another, another aborrower is.
You know its own character.
To me it's just fascinating, andso I don't think they'll ever
be market price for something.
I think you just have to lookat a ton of different things and
(32:04):
then what your capital stack on, what you're spending, and then
what do you need?
You know most of us areborrowing or leveraging money in
order to get some of thesedeals to do a mass volume.
So obviously we have to be waryof, you know, underlying debt.
But that's what I think is funabout the note space is that
it's so unique, it's sodifferent every time I look at a
deal.
I just laugh when somebody says,oh yeah, here, I'm just looking
(32:27):
for a 12% return.
Okay, that's that's.
Your goal is to get a 12%return.
Like I'm sorry, but it's likethere's a lot more to it than
that, like there's a riskinvolved.
Like you know, most of the timewhen people want to make that
big return, they don'tunderstand that there's going to
be some hair on that deal,especially if it's a performing
asset and they want to get ahigh, double digit return.
It's like, okay, you might, youmight get 10 payments this year
(32:49):
, but okay, you know, if theymay make 12, then you'll get
that return, but you're lucky toget that far, so anyways,
that's, this is kind of my yeah,what's going on?
Lauren Wells (32:59):
It's not specifically.
I think that's something thatChris and I talked about.
It's like and we talk about oneon our webinars.
It's like there's no one way,no two notes.
Like you said, no two notes arethe same, and it allows you to
be super creative, especiallybecause we're getting these a
discount in our case.
So you know, to be supercreative.
(33:19):
Chris definitely would doexactly what you would do throw
it in that spreadsheet.
But there's also, like you said, that human element of it,
because you are working withpeople in their different
situations and kind of having toblend the analytical and the
emotional side of it to, youknow, make the best decision.
Justin Bogard (33:39):
Yeah, it's.
If you're not, if you haven'tbeen well educated in this space
and haven't seen a lot ofdifferent types of deals you
know, from seller finance toconventional loans like to see
the different types of borrowersand situations of.
You know, low value propertiesversus high value properties and
and you wail it in there.
I have a deal I've been tryingto sell in one of our portfolios
(34:00):
forever.
There's nothing wrong with it.
I just trying to liquidate theLLC that it's in and it's in
bankruptcy and I've had it sinceit's been in bankruptcy.
There's absolutely nothingwrong with it.
But I think, because the word BKis on there and it's kind of a
lower value asset, that peopleare really afraid to do it.
But it's been paying likeclockwork for 28 months in a row
(34:22):
, like not even a blip on theradar, and even one of the
borrowers passed away as welland they're still making the
payments.
And it's not even and there'sand there's, you know, obviously
a principal balance on the backend as well as a bonus kicker,
you know somebody would get, andwhenever they sell the house or
the refi it in the future, andjust it.
Just I just laugh and go.
I don't understand why nobodywants this deal and I even have
(34:44):
it at a very high, you know,yield.
But it all comes down to, youknow, their perception of what's
going on.
Lauren Wells (34:51):
Yeah, yeah, I had.
Actually I purchased one thatwas in BK and they were making
consistent payments and thensome to get caught up through
the BK you know system and so.
But yeah, for people who aren'tfamiliar with kind of how
bankruptcy works and at whatdifferent stages, yeah, it would
probably seem like a bad asset,even if it is paying and you're
(35:14):
making money on it.
Justin Bogard (35:17):
So, yeah, I think that's a good way to do it.
Lauren Wells (35:21):
Lauren, how do we get ahold of you if we want to
ask you some more questions?
Yeah, I always say email medirectly.
You can find me on LinkedIn,lauren Wells, but I also you
know welcome email.
Justin Bogard (35:34):
So Lauren at 7einvestmentscom.
So I'm going to start with you,lauren.
Do you have an underlyingcompany or 7einvestments is what
you guys are?
Lauren Wells (35:45):
7e is the.
It's funny, we get this a lot.
So the it's C Corp, it's CWSInvestments Inc.
But our DBA is 7e.
So everyone knows this is 7e.
And when we tried to make thatshift to CWS, some of our older
investors who've been with usfor a while like seasoned, I
guess, veteran investors werelike, wait, you have a new
(36:06):
offering.
And we're like, oh gosh, no,let's back up 7e, we're just
going to stick with the 7e.
Justin Bogard (36:12):
So yeah, it's so tough to make changes.
When Richard and I combinedcompanies, I had switched from
you know, it's all a bright path, and now it's called American
Notebuyers, and it was.
It was really funny to be like.
I would never have thought thiswould have been, you know,
confused, yeah, like yes, I cansee how it's confusing when you
don't deal with it every singleday.
Lauren Wells (36:31):
So I was like okay , you know, as investment
managers, like fund managers, aswhat we do is like so
analytical and in the weeds,you're like this I'm getting
hung up on the name right now.
Yeah, Not oncoming.
Yeah, so it took us a bit, buteverything now is 7e.
Justin Bogard (36:49):
Well, it makes sense.
It's a name that has stuck fora while, so it makes sense to
keep it that way.
So, lauren, it was awesome toget to know you during this
podcast today.
Hopefully we'll get to hang outa little bit more in the future
and get to know each other.
Yeah, now some more funconversations, but thanks for
being on the podcast today.
I really appreciate it, lauren.
At 70investmentscom, you cancheck out their website,
70investmentscom.
(37:09):
You can catch the video streamof this on the American
Notebuyers YouTube channel, andI'm Justin Bogart with American
Notebuyers.
This is episode number three ofseason six on Be the Bank
podcast.
We'll catch you guys on thenext episode.
Bye, lauren.
Lauren Wells (37:22):
Bye.
Thanks for having me.
Narrator (37:26):
You.
Popular Podcasts
Cold Case Files: Miami
Joyce Sapp, 76; Bryan Herrera, 16; and Laurance Webb, 32—three Miami residents whose lives were stolen in brutal, unsolved homicides. Cold Case Files: Miami follows award‑winning radio host and City of Miami Police reserve officer Enrique Santos as he partners with the department’s Cold Case Homicide Unit, determined family members, and the advocates who spend their lives fighting for justice for the victims who can no longer fight for themselves.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.