011 - Ending with New Beginings - Be The Bank

Episode Transcript
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Narrator (00:19):
Thank you to create real wealth and passive income
for 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 to you byAmerican Notebuyers.
Now here's your host, justinBogard.

Justin Bogard (00:45):
Hey, hey, listener, this is season six,
episode number 11 of the Be theBank podcast.
I bet you're wondering why youhaven't heard from me for a
while.
It's been almost two months nowsince I've released an episode.
Just got a lot of cool thingsgoing on right now A lot of
changes I've been making in mycareer Not major outside of the

(01:11):
note business, but we'll kind ofget into that later today but
I've actually been doing thispodcasting for I think over five
years now.
I was looking through my statsearlier today and this is
actually my 122nd episode thatI've recorded on just the
podcast form.
I kind of get a little nerdywhen it comes to the difference
between our broadcasts that wedo monthly versus this podcast
form, and so I've decided thatthese last couple of months that
I kind of want to end mytenureship with doing this

(01:32):
podcasting stuff.
So this will kind of be my lastepisode as your host on the Be
the Bank podcast brought to youby American Notebuyers, and I
always wanted thisquintessential ending to when I
stopped doing this podcast,because there's somebody that's
very special in my career and myexperience in this real estate

(01:53):
world that I've always wanted tohave on the show, and I never
want to just have them as like aguest on the show and without
it being some sort of milestone,be some sort of milestone.
So today I have a very greatfriend of mine, my mentor in
this business, and somebody thatyou know I hold very close to
me as far as a special personthat's been able to help me grow
, and that's Mr Eddie Speed.

(02:14):
Eddie Speed is the founder ofNoteSchool and Colonial Funding
Group, and so we've had a lot offun conversations.
Throughout my career in thisbusiness a little over six,
seven years now in the notespace Met him and his family
many times, and it's alwaysreally fun to be around him,
soak and absorb all theinformation that he provides and

(02:35):
just to make me an all-aroundbetter note investor, really and
so I owe a lot to him.
And so this episode is withEddie Speed, and this is my
122nd episode, the last one thatI'll do on the Be the Bank
podcast.
And so this episode is, youknow, with Eddie Speed, and this
is my 122nd episode, the lastone that I'll do on the Be the
Bank podcast.
And so stay tuned.
Here we go.
Well, it's been a long timecoming and I finally got you on

(03:03):
the show.
That's awesome.
So today's a little rainyoutside and I live in
Indianapolis and those of youwho don't know Eddie is in
Dallas.
It feels like a video game day.
Did you ever play video gameswhen you were younger?

Eddie Speed (03:19):
You know it wasn't my thing, but I've been around a
lot of people that have, so Iget what you're saying.

Yeah, I just remember when, before we started
recording this we were talkingabout, I used to be a
competitive swimmer and we'dalways have a practice at the
local neighborhood pool, likeyou know, seven o'clock in the
morning or whatever, and onthose days that was more dreary
and rainy outside because it wasan outdoor pool.
We'd just go back to our houseand just be like man, I don't
want to go back outside, I justwant to sit back and play video

(03:47):
games while mom and dad are atwork.
So this makes me feel nostalgictoday, with all that so great.
One of the questions that Ialways wanted to ask you because
I've never heard the storybefore is and I remember my
first deal do you remember thefirst deal you ever done in the
note business?

Yeah.

I do.
Well, can you tell me a littlebit about that, like what was it
, how did you come across thedeal and what were your kind of
emotions going through it?

Well, a little background.
So the man that introduced meto this industry became my
father-in-law.
He was not my father-in-law atthe time.
In fact, to be honest with you,I wasn't even dating Martha at
the time.
We were friends but we weren'tdating.

(04:35):
Did you go to the same highschool?
No, martha was from a littletown, hattiesburg.
I was raised in Jackson,mississippi, and she was from
Hattiesburg and so I was workingdown there as a horse inspector
A horse inspector yeah, nokidding For the state, the
Mississippi Board of AnimalHealth, and I knew Martha's

(04:56):
sister from.
We had mutual friends and stuff.
We were horse people and so wehad mutual.
They had some mutual friendsthat were horse friends of mine
and so forth and so on.
So that's kind of how weconnected.
Martha had just graduated from alittle junior college up the
road called Mississippi StateUniversity as a school teacher

(05:17):
and I met her dad.
He was a retired fireman andhad been a longtime real estate
investor, did multifamilytrailer parks, built houses, did
all kinds of stuff on the side.
He was working as guy you'veever seen and so he got me
started in the business.
And when I started with him itwasn't like, okay, we're going

(05:39):
to bring you on and bring you abig salary and like, no, it was
like this, you're not going tomake anything and you're going
to go out and we're going toteach you how to do this and
then you know you can make acommission if you find a deal.
And I didn't know.
There wasn't any training,there wasn't anything like,

(06:01):
there wasn't even a pamphlet,there wasn't any kind of a
mortgage banker's book you couldread of what was a mortgagee
title policy versus an owner'spolicy versus what's a deed of
trust.
It wasn't anything.
May have been, but I didn'tknow about it.
And so I would go out and atthe time this is in 1980,

(06:22):
interest rates were 18 to 20%and I was calling on realtors,
home builders and real estateinvestors out of the yellow
pages literally would stop in atown and get a yellow pages.
And so I was kind of door todoor, just knocking the door.
Hey guys kind of door to door,just knocking the door, hey guys

(06:50):
, and so you know.
And so I was calling on awell-known home builder in my
hometown of Jackson.
I mean, this guy was like theywere on TV every day, like I
grew up with them being on TV,and I just it was around
Christmas time and I was goingin there trying to get a meeting
with this guy.
I'd been in there three or fourtimes and he wasn't ever
available.
I walk in the door and a guythat was my high school buddy

(07:14):
whose dad was a very, verywell-known electrical contractor
.
He was delivering Christmashams, okay, and his name was
Chris.
And I walked in there and I sawChris and he said, what in the
world are you doing here?
And I said, well, I'm trying togo see Mr So-and-so about some
note seller finance notes.

(07:36):
And the guy was kind ofstanding at the door because he
saw us and he came out andintroduced himself and that was
my way in the door.
Okay, now you got to rememberthis guy was one of the largest
home builders in my hometown.
I was, I was raised in thecapital of Mississippi.
It's not like Dallas, fortWorth, but I mean it wasn't.
Yeah, it was.

(07:58):
It was certainly a decentpopulation and and and I mean he
could have stumped me 20,000ways, right, like I could get
somebody in my office today.
That's just a young puppy andyou can either decide to be kind
or be cruel, right?
Always decide to be kind, bythe way.
Yeah, but I wasn't trying to BShim either, right?

(08:21):
I wasn't trying to act like I'dbeen doing this forever and I
just went.
I just sort of told him my story.
I said, look, I worked with acouple of gentlemen in
Hattiesburg and they're you know, one of them come from a long
savings and loan background.
One of them's been a realestate investor for 40 years and
they have kind of shifted theirefforts to buying seller
finance notes.

(08:42):
And I'm basically kind of afield rep and I was raised here
in Jackson and I have a realwealthy side of my family not my
side of the family, but I had areal wealthy side of the family
.
This last name was Speed andthey were very well noted in
Jackson Mississippi, like everybusiness person in town knew who

(09:02):
they were, and so that was alittle bit of a lead in and I
didn't try to overly leveragethat.
But he said you're a speed andI said, yeah, well, I'm a poor
speed.
I made him like me first and heliterally got on a private plane
that afternoon and flew toHattiesburg.
It sat out by what they theycall it a plane state, a gas

(09:27):
station for airplanes.
They call it FBO, fixed baseoperation.
That's where you take yourplane and you land and they gas
it up and you usually they got aconference room and stuff, and
so he literally stopped thereand they went and met him and
made a deal that happened.
That's the first deal I ever didand, to be honest with you, I
wasn't even in on the closing.
My father my later to be myfather-in-law took it over and

(09:51):
did it and that produced me acheck for about a year or 18
months.
You know it's been 40 somethingyears ago, so I kind of feel,
but I remember it produced me acheck every month and I don't
remember exactly how much it was, but it was, call it, 500 bucks
.
To me it was like I made athousand dollars a month working

(10:11):
for the state.
Yeah, I made 500 bucks a monthon a deal that took me 12
minutes.

And that sounds so good.

So I was kind of hooked right yeah.
So, yeah that was my first deal.

That's pretty cool, yeah, oh yeah, I'm getting
a little bit of echo.
Are you hearing echo on thebackground?

Well, I don't know.

I don't think I hear it now.
I think it went away.
Okay, I love technology.
Sometimes things appear, ormaybe it's my mind, maybe I'm
just losing it and just hearmyself talking too much.
I'm here by myself, so I don'tknow.
Yeah, my, my first deal wasreally after I went through the
note school program and it wasjust flipping a note to somebody
and I just found a really goodperforming loan.

(11:03):
I flipped it to somebody and I,I found a really good
performing loan.
I flipped it to somebody and II think I made a 12, $13,000
just flipping the note tosomebody and same deal.
I mean, I didn't spend 12minutes on it, but it seemed
like 12 minutes, has probablyspent, like you know, an hour or
two establishing therelationship and, you know,
finally the deal was pretty easy, uh, but it's just amazing what
you can do, uh, do in the notespace.

(11:23):
So, 1980, that was your firstdeal you got introduced to the
business by Martha's father andso kind of.
How did that expand from there?
Did you stop being somebodythat worked for the state, being
a horse inspector?
What does a horse inspector do?

Well, this is in the deep South, right, and so
they have a lot of mosquitoesand horse flies down there, and
there was a disease that wasspread by that, commonly known
as swamp fever, and so it's gota technical name.
But it's swamp fever is whatpeople, and so these horses,
would.
They would go to theveterinarian and before you

(12:03):
could go to a really big horseshow or a fair or something, you
had to have these horses tested, and so they would test and
they would come back positive,and so then the, the rep for the
state, would go out.
So a lot of my times was on theweekend and in evenings.
Ok, so, because that's whenpeople were home, yeah, so I
couldn't show up at their houseat 10 o'clock on Wednesday

(12:24):
morning because they wereworking.
So I could kind of do this jobduring the day and do my state
job at night and on the weekends.
So I didn't have to give it up.
And that's pretty cool how thatworked out.
Yeah, it did, and so it justgave me, you know, a base or
something to survive in.

(12:45):
Let me tell you somethingMartha chased me because of
seeing my lifestyle.
I was living in a 10 by 40mobile home.
I was about 35 years old.
She chased me because of mylifestyle.
I just want you to know thatshe was looking for that.

Oh man, I can't wait for her to hear this
episode.
You know her, yeah.

Narrator (13:13):
You know, her.

Yeah, so you were friends with Martha by Martha's
sister, right.
And so when did you actuallymeet Martha for, like when you
guys started dating and stuff,was it shortly?

after that.
Yeah, we probably starteddating soon after.
You know, I kind of got startedwith Martha's last name was
Shoemake, right so with MrShoemake and his partner and
they were really like legendaryin the sense that they were the
first people really in the Southto buy seller finance notes.

(13:49):
They were the first people toever do partials, they were the
first people to ever like they.
Just those guys were just trulyinnovators and so I just got
crazy lucky I just the onlything I did, right, justin, was
I acted on it.
Ok, most people I've observedmost was I acted on it.
I've observed most people getright in the middle of an

(14:09):
opportunity and then they don'tdo anything about it.
Let me just tell you I wasriding horses on the side.
I could send the horses home.
They were paying me to ridethem.
I was riding horses on the side.
I was working for the state.
I was living in a 10 by 40mobile home in the back of a KOA

(14:31):
campground.
Life wasn't really going thatgood, right.
So he starts telling me aboutthis business and what I could
do and what I could become, andhe also said something.
This kind of sounds a littlegross, but if you think about it
, it's a lot of truth.
He said you'll never make a lotof money wiping sweat.
Okay, and?

(14:52):
And in his early days he did alot of physical labor, although
he was doing deals on.
He wasn't working for somebodyelse, he was doing his deals,
but he did a lot of labor.
And so he understood that, andhe understood the difference
between making money with apencil and a hammer, so to speak
.
And of course, you know I'dnever had a job.
I had to take my spurs off.

(15:13):
This is the first job I everhad.
I had to take my spurs off.
And so there you go.
And so this cowboy landed inthe note business and the one
thing that I did was when theytold me to get up on Monday
morning and go call on people,buddy, I knocked it out and I
was about 830 in the morning, Iwas in some town with my yellow
pages and I knew who I was goingto call and I worked till about

(15:36):
five o'clock and then I drovehome and I did that week after
week after week.
I mean like I got after it andthey were.
He was pretty impressed withsomebody that would actually go
do it, not making any money,yeah, and so I'm always looking
for that guy.
Justin, you were that guy.

(15:57):
I'm always looking for that guyin the school.
I'm looking for that guy.
I'm looking for the next guythat's willing to go do what I
did or what you did, because alot of people won't do that.
Yeah, everybody's up for makingmoney.
I guarantee you that.
What the question is and Ididn't have any investable

(16:17):
capital, so the only way I coulddo it is I had to go make it
happen.
So, anyway, it was a greatthing.
And then so I did that for acouple of years.
After about a year they pulledme in and I worked in the office
so I really learned with Ilearned documentation kind of
closing process.
So I had about a year of justcalling on people, just knocking
it, getting out there andgetting knocked around every day

(16:39):
.
And then I did about a yearworking in the office and by
then Martha and I were datingand we were engaged and we got
married.
And July of 1982, we marriedand we had the U-Haul packed and
we got back from our honeymoonDisney World.

(16:59):
Disney World was your honeymoon.
Yeah, that's awesome.
I didn't know where to go for ahoneymoon.
Disney World was your honeymoon.
Yeah, oh, that's awesome, Ididn't know where to go for a
honeymoon.
So anyway, we went to DisneyWorld and had a fun time and
then we got back and literallywe drove out, to drove from
Mississippi to Dallas.
We already had an office and anapartment, had a little office

(17:20):
with a couple of two or threerooms in it and had an apartment
and we moved out there and bythe end of July 1982, I was in
the note business in Dallas,texas.

That's awesome.
Did she do the note businesswith you like as full time Okay?

She taught school one year and so she was really
Martha's very efficient, as youwell know.
Oh yeah, and so Martha kind ofran the you know, the office
operations, the processing side,and I was kind of the trader, I
was the deal maker and I don'tknow that I'd recommend people
do that today, but we did it forseven or eight years.

(17:59):
We were together 24 hours a dayand we did it for seven or
eight years and it probably Idon't know that I would
necessarily say to go do thatagain.
That's a great formula, but wemade it work.
Martha is an expert in thebusiness as well and she has
been very successful doing herend of the business today, but

(18:21):
anyway, we did that.
And then we grew a little bitand had a few employees and
about two or three years inanother guy that grew up in
Martha's hometown actually mowedMr Shoemake's lawns from junior
high all the way throughcollege and had gone to work in
the business.
He came out and became mypartner.

(18:42):
Okay, and great guy, love thisguy, still do on a portfolio
with him literally today and hewas my partner for 15 years.
Who was that?
Joe Davis, joe Davis, that'sright.
He was a terrific, terrificperson.
And so you know, they say somepartnerships don't work, and I

(19:04):
would say ours work.
Joe went on and runs, he's thebusiness manager for, for a
religious organization, so hekind of made another life reason
to go change.
But he still is, he's.
He's definitely the millionairenext door.
He's very quiet, nobody wouldever know it, but I know it and
and so he did really good and westill own, you know, pretty,

(19:26):
pretty sizable portfoliotogether and anyway.
So that was that was kind of ajourney and so nobody this,
nobody ever done this business.
Yeah, listen, I got dyslexia, asyou well know, and I really
people listen to me, talk andthey think, because I can talk

(19:49):
in a certain way, I can read thesame way.
If you handed me a script, I'mgoing to look like the dumbest
person you've ever met, trust me, and so I can't spell.
I'm 64 years old today and I'velearned that dyslexia is not
actually something that you, youdon't turn a certain age and
you grow out of.

(20:10):
Now you can be remediated andmy two sons, who have dyslexia,
have been to special school andbeen had a lot of remediation.
But I didn't have the benefitof that when I graduated high
school in 1978, and so I justkind of had it, and so I still
can't spell, like really I can'tspell, and it frustrates me

(20:30):
sometimes.
I think it's God's humor that Igot in the paper business when
I have dyslexia.
So Martha had the, we had alittle form.
We're going to type a contracton a house or on a note on a
house.
We had a little intake sheet.
You know name, address, howmuch is the note, what are we

(20:51):
paying for the note?
So that way she could do apurchase contract.
It'd be sitting in my office.
So they're sitting in there inmy office.
You know a little couple,they've owner financed a
property and they drove toDallas and you know, and you
know we've done some kind ofmarketing in that area drove to
Dallas and you know, and youknow we've done some kind of
marketing in that area.
So by 1982, by October, Istumbled down to the courthouse

(21:12):
Dallas County Courthouse acrossfrom the grassy knoll, right
when Kennedy was, yep, and Istumbled across there and what
I'd figured out was these deedsof trust which is a mortgage in
Texas.
These deeds of trust, it said onthe very back page after
recording, return to and itwould have Justin Bogart.

(21:34):
You know, blah blah, blahFisher, indiana, like it would
have your address, yeah.
And so I said, well, heck, theguy's address that owns this
note is right on the back.
I said we could just go to thecourthouse and get a list of
those people and mail them aletter and say did you know you
could sell your loan?
Because nobody had ever thoughtof this.
And I did it in 1982.

(21:56):
And so house buyers did notdrop mail, Note buyers did not
mail, and so I accidentally kindof figured this out in 1982.
And that's when we started dropmail.
Note buyers did not mail, andso I accidentally kind of
figured this out in 1982.
And that's when we starteddropping mail.
And dropping mail changed mycareer in the early days and we
did that a lot.

That was just for the Dallas, the Dallas area.

Well, we started out in the Dallas area and we
kind of spread out and then we,you know, at one time this is
later on, you know, another 10years later we had 100 people in
courthouses around the UnitedStates.
Oh, we had one in yourcourthouse and we used to use
seminary students and retireesand we would pay them by the

(22:42):
name and they had a littleintake sheet.
They have 25 names andaddresses on a page and we'd pay
them so much.
And that was before anybodyknew anything about lists or
scrubbing a list or whatever.
It was the crudest thing you'veever seen.
But we dropped a lot of mailand bought a lot of notes and we
became the most highest volumenote buyers in the United States

(23:07):
.
We bought more seller financenotes direct from sellers of
anybody in the country.
That was Joe and I, and Joe wasreally good on the phone and
then he taught a little group ofpeople that were good on the
phone and I then startedfocusing on buying portfolios of
notes.
So that's kind of how itprogressed.

And so who?

would you trade those to back then?
The biggest buyer originallywas a company that was
originally called FinanceAmerica and then they later were
called Chrysler First FinancialServices.
I had a lady that used tomanage that Chrysler First
financial services office but wesold loans in Irving Texas.
Her name was Susan De La Garza.
That woman has now worked forme for 32 years.

(24:01):
So I did, you know we soldloans to them and then
Associates was in the picture, alot, and I did a huge amount
with Associates.
There was a company in Spokane,washington, that we did a lot
of business with calledMetropolitan Mortgage and
Securities and you know lateryou know because I started
buying Joe ran our kind of ourone off side which was more
profitable per transaction, butit was.

(24:23):
It was a lot more work, yeah,and then I worked on the kind of
the portfolio side.
So in the later 80s, probably 80, call it 87, right, you know, I
didn't never know all this wasever going to be a story.
I do not have a picture of KenD'Angelo without he and I and I

(24:46):
spent thousands of hours withhim.
He later founded a companycalled Homevestors.
He and his brother had a realestate investing company called
Rainbow Realty in Dallas andthey'd own or finance some
properties and I bought somenotes from him and he later
contacted me around 1990.
And he says I'm going tofranchise the house buying
business Okay, and I'm going tocall it Homevestors.

(25:10):
And he was operating out of alittle house over in Dallas and
he said I want my franchisees tobe able to create notes, but
every time we go take a note toan investor, they club us on
what they're going to pay.
And he said why do you thinkthat's true?
And I said probably because youmade the note wrong.

(25:32):
You structured it the wrong way.
And so I, literally he and I,started on a journey.
We went to Walmart and got sixwhiteboards and six easels and
every Saturday morning for aboutthree months we set those up
and we basically set up a systemand a very defined process of

(25:53):
how to create notes.
Nobody had ever done it in theindustry.
Most of my industry friendsthought I was out of my mind.
And we went.
The industry, which wasprimarily dominated by then by
Metropolitan and by Associates.
Cumulatively they were doingabout $75 million in owner
finance notes a year and withintwo years they were doing $250

(26:17):
million a year.
So apparently this system reallymeant something, because I got
copied, you know.
I mean, once I came up with theidea and sorted through all the
problems and everybody elsejumped on it and kind of stole
my stuff.
Look, I'm not even complaining,I'm just saying to you,
sometimes when you're a pioneer,you got to realize you're going

(26:38):
to cut yourself with your ownmachete, yeah.
And so that revolutionized thenote business in the 90s and
I've cumulatively now closedover 2,000 portfolios of seller
finance notes.
And it's kind of funny, theyhave these Facebook pages and

(27:00):
stuff, these special Facebookpages for seller financing.
You know, most of those peopledon't know who I am Really.
I mean, they think I'm a guru,right, right.
They think they know who noteschool is, but they don't
realize you know that we'vebought all these portfolios of
notes and that we still do itand so that's the company that

(27:23):
you and martha started calledcolonial funding group back in
the 80s, back in the 80s.

So when you get a portfolio in front of you, how,
how did you, how did you guysknow how to underwrite that
portfolio?
Did you already have an idea inmind of what the, what the
institutional buyer would payfor something like that?
You just kind of just puttogether and threw a margin in
there for yourself.

Yeah, we.
One thing that really helped usgrow our business is we knew
what the exit market was.
We knew what an acceptable loanwas and we knew what was
unacceptable.
You don't need a lot of timesworking on deals that won't
close, right, and so you figureout pretty quick this is doable,
this isn't doable.

(28:06):
So we had a good ear and a goodeye for underwriting and loan
structuring.
We knew what was acceptable inthe marketplace and so I always
did it and I never went in.
I never was one of these guysthat went to the institutional
investor and always tried toargue with them and try to sell
them a trashy deal, right,because I'm just telling you,
they get to where they don'twant to play pretty damn fast,

(28:26):
right.
And so I was always the guythat worked with them and I
would say here's I would alwayskind of frame it like here's the
unredeeming factors and here'sthe redeeming factors and does
it pass?
So junky property with no downbad credit, no seasoning, they
hadn't made any payments, hadn'testablished any evidence they

(28:47):
were going to pay.
Is that a deal?
No, throw that in the garbage,get over that deal.
Now, if that same deal had threeyears pay history or four years
pay history, that could be ahorse of a different color.
And so literally I started withHomeVestors and then I did it
with a lot of other people.
I helped a guy that becamewell-known in the industry,

(29:07):
mitch Stephen, my long pal and I.
I worked with him and set up avery similar system with him of
how he manufactured notes.
And when did you meet MitchStevens?
Probably 95.

Okay, and he was in San Antonio then too, oh yeah
.

Yeah, mitch was a real go giver.
So Mitch knew a lot of otherpeople in San Antonio that did
it and one thing led to another.
I at one time I had eight salesreps that were out in the field
calling on people that weregenerating on our finance.
Now today, with technology, youdon't really do it that way,
right, but back then it was topress the flesh, flesh, get out

(29:48):
there and do it.
I've made a million field tripsin the field and going and
looking at people's collateralwhether it was land or houses or
mobile home and land I'mtalking about like seriously,
like I've worn out a set oftires on an airplane going to
carolinas or arizona or oklahomaor know wherever, looking at

(30:11):
notes and you know, and we wouldgo out and get a feel for it.
And I got to understand a lotabout how people ran their real
estate business and I didn'trealize that, but it really
helped me understand how to maketheir business better,
understand how to make theirbusiness better.
I really did know how a landbusiness operated.

(30:33):
I really did know how a housebuying operation operated and so
I really became.
I looked at it as kind ofbecoming a partner with them and
helping them manufacture theirseller finance notes.
And then obviously I'd get tobuy some of the notes and I
wanted them to keep some of thenotes.
I never wanted them toliquidate and sell all that they
had, right.
And so it's.

(30:53):
You know this all resonateswith you because you know kind
of where we are at today andstuff.
But you know there wasn't arule book, you know it was just
kind of figure it out and Iloved working with the real
estate investors.
Joe, my partner bought the oneoff side of the business of just
a mom and pop.
That owner financed one halftheir whole entire life and he

(31:16):
bought that note and he had ateam of people that did that and
they were really good at it.
And then I like working on alittle more of the commercial
side, right, people that wererunning a business doing it,
professional note creators right.

Anyway, that's how it morphed.
Were there a lot ofsimilarities with some of these
operators, whether they're landor real estate guys like Mitch
and Ken, to where their storywas similar to what you were
seeing?
So the solution you were goingto provide was like yeah, this
is the model that's going towork, because everyone's doing a
really similar path to gettheir house buying operation to
work right.

I learned there were.
If there were 10 things, therewere eight things that were
virtually identical to everybodyelse I saw and two things that
could have been market centric.
Okay, they used to always tellme you don't understand my
market, you don't understand mybuyer, you don't understand this
and that, and I'm like they gota Hispanic surname right.

(32:16):
90% of the time in the ninetiesthey had a Hispanic surname
Right and and, and you know,some of them were, some of them
didn't have credit reportsbecause they kept all their
money in the mattress Right, andwe had to figure out how to
underwrite that right and we hadto figure out this and that and
stuff.
And so you know it's kind offunny, but yeah, it's very

(32:38):
similar.
And you know, here's what Ilearned People don't
accidentally create a note.
The right way, right, thethings that you and I know about
manufacturing a note salesprice and the down payment and
the loan and the terms of theloan and the payment and the
call of the customer and how togo find that customer when he's

(33:01):
looking to buy a house.
How do you become the ad thathe wants to read or the yard
sign that he wants to attract toall of that stuff.
There was no rule book, and soI just, you know 10,000 times
they say, you figure somethingout.
I will tell you something,justin.
There are things that I didthat probably changed the
business.
That I'd done over 20,000 timesbefore I snapped to the next

(33:24):
thing that rolled it over andmade it, you know, an aha moment
, wow.
And I just tell you thatanybody that's ever tracked me
long-term would say Eddie's notsmart, he's just tenacious, you
know?

Yeah, you do have a lot of tenacity.

But I love the business, I love the people in
the business and I'm really, youknow, I kind of made the
business work for what I lovedabout it the most, and I like
working with people that createa lot of notes, yeah, so yeah,
so when did the idea of noteschool come into play for you?
Well, I got the idea fromHomevestors.

(34:08):
Okay, because.
I'm an education model,homevestor franchisees, how to
create notes.
So I was kind of running aschool doing it.
I was teaching Mitch Steven howto buy notes, how to create
notes right.
So I was kind of running aschool and so there were people
out there.
There was late night TV, youknow, there was infomercials of

(34:30):
you know, be a note broker andstuff.
But those schools weren't, theyweren't in depth right.

Was this in the 90s?

Huh, was this in the?

90s.

Mm-hmm.
Okay, so they weren't in depth.
Nothing not critical.
Some of the schools were greatand the people were great, and
some of the schools wereterrible.
Like, they were charlatans.
Right, just just like most mostreal estate info marketing goes
right, right and so, but theyweren't in depth.
You know, people go to athree-day class.

(35:02):
Well, three weeks from now,they're going to forget 75 of
what they learned, right, rightand so.
So, all of a sudden, so I, Ibuilt a school with the intent
of I'm going to tell them theright thing to do.
I've already tried this 5,000ways do it this way and this way
.
And what I learned is is I, youknow, I did a three-day class

(35:24):
and with a guy that had anewsletter for the note business
, and same thing.
I run into these people sixmonths later and I'd say how are
you doing?
Well, I'm doing this.
And it didn't work.
And I'm like no, no, no, no,that's not how I said do it, do
this.
And so I realized then thatwhat they needed was coaching.
They needed like a hand on themevery week.

(35:45):
Yeah, and, and.
So that's what kind of led meto what note school became.
It really wasn't calledNoteSchool originally.
It was OK.
Noteschool just became anidentity name it's just Ed
Speed's Note Training, you know,and anyway.
But I did that and and and what.
I didn't know at the time thatI really was going to fall in

(36:07):
love with training.
Ok, I kind of had been doing it, because that's really what I
was doing in the 90s, gettingall these people to do volume
right.
But around 2000, I wrote a bookcalled Streetwise Seller
Financing.
That was a how-to book how tomake the best seller finance
notes, and nobody had really hada book on that and so I did

(36:30):
that and that became kind of thebanner that I played and I
taught people how to go findnotes and how to create notes.
And you know, I just was tryingto go build an army of people to
go chase notes and then use myconnections in the business to
kind of be a clearinghouse andbuy those notes.
And that's kind of how itstarted.
So then I operated with wayless people because I had

(36:51):
training and I did business withmy students and so I didn't
have to have all the employees.
I taught the students how to godo it and then they brought us
business.
I heard a guy say one time I'dlike to be a small company that
does big business.
I thought that sounded prettygood, yeah that makes a lot of

(37:14):
sense.

That continuity makes sense too when you're
training.
Because you're exactly right,when we tell somebody about what
we do that kind of has aninterest in real estate or just
knows the basics of it, they getit the day you're talking to
them, but it takes a couple ofdays for them to lose, like you
said, 70, 80 percent of it.
You know they.
They get it the day you'retalking to them, but it takes a
couple days for them to lose,like you said, 70 80 percent of
it.
So that makes sense.
The continuity needs to bedriven, yeah, but then to
sustain that information andthen put it to real life

(37:38):
application, uh, because that'sthe way that you know.
When you and I had, um, been onnote school tv recently, the
best way that I learned was theadvice that mr ben haunt gave me
was just to just to watch thecase studies and just keep
yourself in front of it and,like you mentioned before, going
through the same thing 10,000times, understanding what these
buyers are willing to buy, whatthey think is a good note.

(38:00):
You know what the underwritingstandards are for that level of
person that you're going to exitto.
It just makes all the sense inthe world to keep educating
yourself and fine tuning thatcraft in the world to keep
educating yourself and finetuning that craft.

Yeah, yeah it's.
You know, when the industrystarted, there wasn't any
thought of scale.
What I tried to do was to lookat it and say how do you scale
it?
How do you teach home investorsand all of its franchisees to
create notes?
Right, how do you teach MitchSteven to do it?
Or another 20 people in SanAntonio that did it?
So I tried to figure out how toscale it and I had to start out

(38:36):
with.
You know, foundational buildingblocks Like this is how you
market your property.
This is how you create yournote, this is this and that.
And you had to answer questionsfor them that they didn't think
there was an answer to, likehow did you go find a buyer with
a better down payment?
Well, I had to go figure outthat.

(38:57):
You changed the wording in yourad and the change to would
attract to your ad.
It wasn't in the rule book.
Because there wasn't a rulebook, right?

You had to pioneer the rule book Kind of
sort of.
When did you and Martha starthaving kids?
Was it the 90s?
Yeah, 89.

And Emily's the oldest.
Emily's the oldest she turned35 this year she, she's pretty
cool.

I've actually never, never, met her in person.
I've seen her, you know, atevents and stuff, from a
distance or if she's been onstage for something.
But you, obviously you have a,you have a spark on your eye
about her because she's, she's,she's pretty cool and she's
obviously different than whatthe note business is right and
I'll kind of let you talk toEmily.

So Emily's about three years old and you know she
looks up at me and she'swearing some tutu and she says,
dad, I'm going to be a ballerina.
And you're like, ok, sure,sweetie, that's great.
Dad, I'm going to be aballerina.
And you're like, okay, sure,sweetie, that's great.
35 years later she is aprofessional ballerina and she
has been making a living at itsince she was about 18.
And so she had a little of thattenacity in her and so Martha

(40:13):
and I recently went.
She has her own operation now,her own little ballet company,
and they had their debutperformances in New York City
and then Martha and I went upthere and got to be a part of
that for a couple of days andshe's a fireball and she's got a

(40:42):
good business mind and peoplein you know some of her donors
and people that have substantialbusiness minds know how good of
a businesswoman she is.
They all know that she candance great right, but they've
noted that she has that skilland so I'm proud to do it.
You know, what I wanted for mykids is you don't have to get
out and grind buying notes everyday.
I want my kids to grow theirwealth using note strategies or

(41:03):
note investing as a strategy foran investment, and you don't
have to get out and do this fulltime.
So, emily, I think she's beento note school, she's done all
this stuff, she knows how to doit, and Emily's personal
investments are note relatedinvestments.
That's what they are.
Ok, although she's aprofessional ballet dancer.

So just quickly, so the audience understands and
I only know this because youhave told me this but how
difficult is is it for somebodyto get to the level that she got
to with the dance community,for somebody to get to the level
that she got to with the dancecommunity, Because it's
obviously a very small communityin general, with relative to
who all is trying to be at thatlevel.

Well, I think it's like any professional sport, you
know, if you looked at baseballor football, there's a lot of
little kids that play football,but very few of them ever get to
college and very few of themafter that get to the pros,
right.
So she's been in the pros sinceshe was 18 and obviously when
she started she was a rookie andan apprentice, um.

(42:09):
But yeah, there's a, there's a,there's a giant filter up to the
top and, uh, it's tough and, um, you know, it's um, there's a
lot of things and you know whenthey're, when you're her age,
you know, you've, you've, you'veseen a lot, you've been around
a lot, and I would say the thingis that inspires me is is she

(42:32):
really did get to go findsomething she loves?
Because I'm telling you sheloves ballet as much today as
she ever did when she was 20 or15.
And so, you know, so she's donereally good and I think she's
done good for ballet and hercompany is really focused on,
you know, kind of embracing thetradition of ballet, embracing

(42:55):
the tradition of ballet, butalso, you know, moving forward
into ballet, where there is away that people are treated and
conducted that is complementaryto the business, and a little
bit of some of that.
She's had the oppositeexperience.
So she's got a heart for doingthe right thing and being a

(43:17):
go-giver and I'm proud of her.
But yeah, this cowboy's seenway more ballet than you can
imagine.

That's awesome.
And so you got two boys.
You got a Wood and Hudson, Yep,and so just share a little bit
about about them.

So Wood is 30.
Wood is 30 years old.
Wood has three kids.
He lives fairly close to us.
He is a fireman and paramedicfor the Grapevine Fire
Department here in Grapevine,texas and he is, I think, done
really well there.
I think they find him to beexactly what they're looking for
and I knew Wood way longer thanthey ever knew him and I knew

(43:56):
that Wood had it in him to bethat and I'm so glad that he did
it.
I think it's God's calling thathe does that really and then he
helps you.
He prices loans.

He's got that calmness about him that it
doesn't seem like much wouldfaze him, and so in a very
critical moment he's able to bejust relaxed, know, relaxed
enough to handle the situation.
So for him to do what he doesoutside of helping with me, um,
it's, it's pretty cool that andit's it makes sense that he is

(44:29):
doing that, just by knowing hischaracter and I know everyone
listening and watching this onon youtube is doesn't have,
doesn't get the no wood, buthe's, he's pretty reserved guy,
he's pretty relaxed.

He's steady.
Yeah, you can count on wood nomatter what.
So, yeah, we're very, veryproud of wood.
We're we're honored to do it.
You know he's not reallylooking to go take over this
monstrosity of business, but wewant him to be a smart investor

(45:04):
and this is our family business.
He's a third generation notebuyer to do that.
And then there's Hudson.
So Hudson's our youngest and helives in Louisiana and he has a
day job.
He's in sales.
We helped him develop his salesskills here within our
operation, but he and his familylive in Louisiana and so,

(45:29):
because they're pretty remote,it made more sense for him to go
get a good job, and he has avery good job in sales.
But once again, it's the samething.
All of my kids.
What they do with their moneyand what they're going to do
with money as it progresses isthey're using the things that
we've learned.
So it shows me that my kids cango pursue other dreams.

(45:52):
They don't have to grind and dothis every day to go make notes
.
Their strategy, that's the mostsuccessful.
That's what we teach in noteschool.
A lot of people that are innote school, that are investors
that buy assets, they'redentists, they're high-end
realtors, they're engineers,they've got a day job, and so

(46:17):
you don't just join note schoolto go full-time into buying
notes.
Most people join note school asa note investing strategy, not
a note investing job.
Now there's some people likeyou that do it full time and it
suits me and it suits you.
But if you told me today thatWood had to go either pick notes
or the fire department, I wouldsay that would be ridiculous.

(46:38):
Pick notes or the firedepartment, I would say that
would be ridiculous.
No, no, we would not,definitely not give up what he
loves and what he clearly has anaptitude for Right.

Let's not give him that option.

I need him.
No, we're not.
We're not fixing to give him aneither, or he works, he's a, so
his fireman is is is runningthe trade desk with you and
buying notes and doing that.
Yes, we let the cat out of thebag what you're doing now.

Well, we're foreshadowing.
All right, we're foreshadowing,we'll get there.
So in this business, it's easyfor me to say this and I'm sure
you're you're probably going toreciprocate.
What I'm saying Is the lifelongfriendships that you get from
being this business, becausepeople have the same like mind,
they have the same attitude,they have the same strategies as

(47:26):
what you just described foryour kids and people going
through no school.
Would you agree that you knowyou develop a lot of lifelong
friendships just from thisbusiness?

You've been.
You've been to some of ourretreats, haven't you?
Yeah, you seem to know peoplepretty well, yeah, so we've got
people that I met from theindustry that this is.
These are the same people thatI spend all my social time with.
These are the people that Iconsider outside of my blood kin
.
They're my family, and there'sa whole long list of them with a

(47:57):
whole long list of history andstuff.
We have some charities thatwe've supported and so we've
done masterminds and differentthings, and if you go there and
see it, you see this littlegroup of people that were all
originally met from thisindustry but definitely are

(48:17):
connected, and I think you saidit like-minded.
Listen, every industry's gotits little scammers, right.
There's no industry that canescape it.
But we don't have a lot ofscammers in our business, right,
and our industry tends to weedthem out pretty quick.
And our industry representspeople that I think want to do

(48:41):
right by folks and want to dothe right thing, and it's a fine
group of people.
I could have never dreamed ofbeing in any industry that I was
more proud to be of and say I'min the note industry or the
seller finance industry and justbe around the people that we've
been able to be around.

Yeah, it's not so big as what I call traditional
real estate, like people fixing,flipping houses and landlording
, and it's small enough to wherewe do know if someone is
mistreating somebody or beingless than scrupulous about a
deal or anything like that,because word does get around.
I mean, we do talk and we domention things and be like hey,

(49:23):
I was in a deal with this oneperson and this is how it went.
Hopefully your experience isdifferent, but I just want to
share what happened to you.
So that's kind of what I likeabout the community as well.
As you know, it's it's uh, youhave to trust people, but then
you know by the examples thatyou hear if this person really
is trustworthy.
You know, based on what you seehere, that's cool.
So so your mentors are probablythe people that pioneered you

(49:47):
into this business your fatherin law and many people I would.

I would say first of all my father in law and his
partner.
My father in law was named GeneShoemake.
His partner was named EdLangton.
Ed Langton is still alive andwell.
He's now retired.
He my last 20 years owned asavings bank in Mississippi but
also bought notes.
But we still keep up with himand stuff.

(50:14):
But he's my father-in-lawpassed away 27 years ago, oh wow
, and so he.
My father-in-law's dream andhis mission was to have a family
note operation and so we'vekept that business going.
That's not colonial, that's notmy business, but we've kept a
family note operation going for27 years after he passed away,

(50:36):
still today, and so mymother-in-law has been able to
live off of his good choices andwe've kept her in notes and we
built family legacy there innotes for a long time and so it
was his passion and we could seethe light of continuing that

(50:57):
and we have, and so it's kind ofingrained in our skin, you know
yeah, that's awesome.

You guys definitely build a really cool
legacy on on both fronts on the,for your personally, for your
internal little pod there.

Then obviously you know through Martha and Martha's
father, late father yeah, I gotmy dad in the business at 68
years old Really Okay.
And my dad did the business andtold me a thousand times, if
not 10,000, before he passedaway in his eighties Son, I've
loved this more than anythingI've ever done.
That's pretty cool.
My dad's retirement was notsquared away when he was in his

(51:36):
past 65.
And within just a few years, thenote strategies.
His retirement became very goodand it let them live the rest
of their life really well.
He enjoyed the business and soit was a gift that I was
introduced to, and he got reallyintrigued by it and asked me to
help him, and I got to help hima little bit.

(51:58):
My dad was smarter than me.
He wasn't like.
My dad was a real smart guy.
My father-in-law taught me howto make money.
Yeah, making money usually is alearned trait.

Yeah, yeah, so there are obstacles that we have
to overcome in this notebusiness, and those obstacles
come from our government, and soour government is always trying
to do different things, maybemaybe to support another avenue
there they're trying to fulfillin their campaign, or their

(52:30):
their bit on whether they sit onthe House or they are there in
the Senate.
And so you kind of recognizethis, I want to say, several
years ago, and you put togethera group of people that could

(52:51):
help organize an operation tohelp fight for our causes and
what we're trying to do, and notjust for us personally as
investors but more importantlythe homeowners that can suffer
from some of these things thatget across, from bills and stuff
.
And so that organization iscalled Seller Finance Coalition,
and so if you wouldn't mindjust speaking a little bit about
the genesis of that and thenkind of where we're at today
with Seller Finance Coalition,Well, once again, you know, if I

(53:12):
seem a little sketchy in thedates, it's because I didn't
take a picture of us havinglunch that day and I don't.

I didn't put the date on my calendar.
I probably did, but I don't, Idon't know how to find it.
Yeah, it was probably around2010 that we had our first
conversations about needing a, aorganization.
Our industry had tried toorganize and have an industry
trade association and people toomany egos and too many, you

(53:40):
know things got in the way andso it became a law that said
that if you did more than sellerfinance three seller finance
transactions in a single year,that after that you had to be
licensed like a bank.
It became that law that forcedus to the reality that we had to
band together and become moreof an industry.
We formed the Seller FinanceCoalition.

(54:04):
We got lucky, lucky, lucky.
We found the best lobbyist inthe world, like this guy in
Washington DC.
I mean, this guy was terrificand is today Matt Keelan.
He is a stud and really helpedus, and when we didn't have any
money to pay him, he floated usand he did all kinds of stuff.
You frequently will see himactually on Fox TV sometimes you

(54:28):
could probably Google somestuff and see him.
So he's a very well-recognizedlobbyist in Washington DC and
good dude and he really put uson the right path.
And so there was there was ahalf a handful of us people that
are around today that were kindof part of that original group

(54:49):
Jeff Watson, attorney, and he'skind of.
He is an attorney and is a realestate attorney, so he's done a
lot of legal work for thecoalition.
I was fairly connected in theindustry and we had other people
that did it Mitch Steven, hispartner, mike, examples.
There was just a band of peoplethat just saw the good in this

(55:10):
and we've been a grassrootsthing and we've recently had
quite a dealing here in Texas,which is the giant for seller
financing is in Texas.
About 25% of all seller financenotes come out of Texas Every
year.
25% of the entire nation'sseller finance notes come out of

(55:34):
Texas.

Yeah, until we say that nobody realizes that.
Does that equate to 90,000seller finance notes?
Is that right?

So, anyway, we there was a proposed, there has
been a proposed ruling in theagency that oversees seller
financing, and and so you knowthere's.
They give us the voice to gosay what we think, and obviously
it always has to be anappropriate tone, yeah and uh.

(56:06):
So we've used this organizationto kind of fuel, getting people
in the business, that kind ofposition, and say this is what
matters to us and hey, we'd likea seat at the table.
We want to make sure it worksfor you guys, the agency meaning
, but at the same time it needsto work for us as a business.

(56:27):
And so we're doing that, and weare.
We have a bill that wehopefully will be passed in
Congress and then on to theSenate, the United States
Congress and then Senate.
That bill has been carried by aguy that is a congressman from
Lexington, kentucky, andy Barr.
Congressman Andy Barr, he's aterrific guy that has saw the

(56:48):
need of our business and saw thevalue in it, and then so it's
just, it's just, it's just goneon with people that bought into
our vision, right, and ourvision is this yes, we're
entrepreneurs and we createowner finance notes, right, but
what about the people that arebuying these properties.

(57:09):
By the way we're qualifyingthem, we're making sure it's a
suitable investment for thembuying these properties.
We're not selling themsomething they can't afford or
something that's going to makethem miserable later.
And so with that, then all of asudden you realize, man, I've
created homeownership.
I've got a guy that would havebeen a renter and now he owns
land, or now he owns a house,right, and according to the

(57:31):
National Association of Realtors, your net worth is 43 times 43
times greater if you own a homeversus if you rent.
So home ownership does matterin your accumulating wealth.
And so you start really lookingat the good in this, and it's
good for us entrepreneurs, butit's really good for the people

(57:52):
we help, and that's why we're soguarded as to doing good for
the business.
You know we don't want to gosell to people that can't pay it
back, like that's.
That's a bad deal for them.
It's a bad deal for us, exactly, yeah.

Fast forward to today.
I am those that listen to mypodcast and follow me.
They know me that I have acompany called American note
buyers and they know that I Ihave started a fund a year or so
ago and so I'm in the notebusiness, you know by myself
over here and had a partner,richard Thornton.
He's since retired and so nowhe's he's living the life that

(58:29):
he wants to live.
And so since then, sinceRichard's retirement, it's it's
really been challenging for meto raise private capital and to
run a fund and manage it.
You know, kind of as the soleowner, uh, with some help with
vendors and other otherparticipants that that help us
out.
But the opportunity for raisingcapital is out there, but it's

(58:50):
also very demanding, as you wellknow, for having your own fund
as well, and so I I've oftenjust had a quagmire this this
past year on, like where wherecan I find you know the time
where can I find the outlet toreach more people to raise
private capital?
And so that was one of mybiggest problems.
The inventory is out there,which people sometimes don't

(59:10):
believe me when I say that I waslike the inventory is out there
, you have to know how to fishin the right pond.
And so you reach out to merecently and you were trying to
change up things in youroperation and your what you're
trying to do in your vision, andyou said, hey, man, like, let's
look at this as an abundancementality and it would really
think, I think it would benefityou if you would help me out.

(59:33):
Which was which is going tohelp you out in the long run,
and that is, you know, we havethe availability to reach a lot
of different people forinventory and then we have the
ability to turn inventory overto people that really need this
in, you know, kind of on asilver platter.
They need help running duediligence, they need help, you
know, just understanding whatgood underwriting is for a good

(59:55):
deal.
And, like, you have all thosecharacteristics and I got some
of these connections and so itjust made sense kind of for us
to partner.
So fast forwarding to now, likeI've been alluding to, is that
Eddie and I are in a partnershipwhere I'm kind of running the
trade desk there at ColonialFunding Group and so with this
experience it opens the door tome to basically I've probably

(01:00:18):
been probably 12 fold on myexperience on at least
underwriting deals, because I'vehad so many to look at, not
just from one off standpoint butfrom portfolio, portfolio
perspectives.
And what I like to do the mostis kind of like what you talked
about earlier is training.
I kind of like teaching aboutmanufacturing notes on what,
what, what is a good note and,more importantly, the reasons

(01:00:40):
why you do it this way, asopposed to the way that other
operators are logically thinking.
They're sound in their logicbut they don't understand what
happens with the way that theythink when they do things.
Oftentimes I hear, eddie is,people do the 10-10-10 model.
They're like 10% down, 10%interest with 10% equity or
something into the deal, andit's like 10, 10 model.
They're like 10% down, 10%interest with, uh, you know, 10%
equity or something into thedeal, and it's like, yeah, I

(01:01:02):
understand that that kind ofmakes sense as a model, but when
you're in our world, here's the15 reasons why you really want
to kind of make it a little bitdifferent and do these different
shifts and patterns.
So that's that's what's fun tome is talking to some of these
larger real estate or landoperators and helping them fine
tune that owner finance skill.
Because what you brought upearlier and I'm glad that you

(01:01:22):
did was we're not trying to takeall the inventory from somebody
.
We're trying to show them howthey can really make massive,
massive wealth by holding theback end of their portfolio at
least, creating a lot of cashflow that gets reverted back to
them in the future and justgetting a little bit of that
money today from selling some oftheir portfolio.
And it's just.
It's just a beautiful way ofbusiness to flow back and forth.

(01:01:45):
And so for all of you listeningand watching this on YouTube
right now, uh, that that's whatI've been doing is I've been
learning how I fit into thecolonial system and how, um, you
know, I can show them some ofthe things that I've picked up
that can help them.
And then also they show me theability like, hey, here's a ton
of stuff out here that you canget a lot more experience on and

(01:02:06):
with your underwriting skillset, and then also with a skill
that I didn't know that I hadwas kind of more of a sales
mentality, and so because I'm adriving force out there and I
talk the talk and I walk thewalk, I'm able to kind of
educate this audience and beable to speak to people in a way
that they can understand.

(01:02:27):
Is this a good trade for me, orjust how do I make this trade
different the next time I dothat?
So it becomes a good trade,because you guys obviously have
the exit buyers and you knowwhat the market stands.

Eddie Speed (01:02:37):
Yeah, there's a difference between being a
quoter and a dealmaker.
Yeah, and what my vision was isI wanted us to be.
I wanted us to move out of justquoting a lot of loans.
We do quote a lot of loans,right?
Yeah, how many loans have wequoted in three months, justin?

Justin Bogard (01:02:58):
Well, yeah, we kind of started in the second
quarter, kind of exactly, and wedid look at these numbers.
So we've, on the one-offbusiness what Eddie and Kai
one-off where a broker issending us a deal we probably
average at least a hundred loansthat we look at a month.
Some's a little more, some's alittle less, and that's just
from the one-off business andportfolios in portfolios.

(01:03:24):
Portfolios comes in differentwaves.
Uh, I consider a portfolioprobably like six or more loans,
and so we'll see small packagesof like six to twelve loans all
the way up to 30, 40 to 200loans, and so that equates to
probably about six to sevenhundred of total loans that we
see in portfolios that we getthe opportunity to look at and
to price for investors.

We've had several portfolios that are in the, you
know, eight to $15 million range.
We have one that we're workingon right now.
That's 35 million.
So we deal with really bigoperators and we deal with
somebody that's got six or eightor 10 loans as well.
So what?
Cumulatively?
800 loans there and call it 400on the one off side.

(01:04:05):
So we've looked at in threemonths, twelve hundred loans,
seller financials.

It's kind of hard to believe when you look back.
Yeah, I have looked at manyloans.
Beforehand I wouldn't belooking at that many loans.
But it's also easy, easier whenyou have a model and a system
that helps you go through andfilter things pretty quickly.
Because, like you mentionedbefore, when you're talking
about Ken D'Angelo on how youknew, like you had, you know, no
seasoning, extremely low downpayment, horrible credit or no

(01:04:36):
credit it's like those threefactors are telling you like,
yeah, that's not going to work.
So we can just, you know,bypass that pretty quickly.
So having really really strongfilters in the beginning can
help you go through the level.

Our mission with people that create notes on a
recurring basis is not for themto go create a note and turn
around and immediately discounttheir note.
That's just a long way offlipping a house right.
The real deal is how do youbuild, how do you go
recapitalize and then still havea potential of having long-term

(01:05:09):
wealth?
Can you have your cake and eatit too, so to speak?
The answer is there are certainstructures that allow you to do
that.
We've done way more of it thananybody else in the note
business and we like people thatdo that.
You know a guy to me, a guythat's just interested in you
know, I want to create a note, Iwant to cash out immediately, I

(01:05:30):
want to run off.
I don't want to ever haveanything else to do with the
deal or the opportunity.
Again, I look at it and think Idon't know that they're our
kind of person.

Right.

Right, I want to deal with people that like care
about the future and care aboutthe property and care about the
people, and then I can show themsome.
We can show them some financialmodeling that could show them
how they could have long-termwealth in it in various ways.
There's more than one way to doit and then that's a for me.

(01:06:00):
Like anybody that's in thisbusiness, I've been around the
top 500 house flippers a lot.
I'm in a number of masterminds.
House flipping is justtransactional income.
It doesn't have a check.
Right, if you're just going toflip houses, you're going to
flip houses when the market'sgood and when the market gets
bad, you're going to figure outreally quick.

(01:06:21):
You don't have a businessbecause it'll go through your
fingers.
Right, if you build a businessthat has a income component, but
a wealth component meaningfuture income, future, future
value then all of a suddenyou're trending in what I
believe is a more stablebusiness and we're trying to

(01:06:43):
help people, creating notes andways that they can do that and
it's pretty fun.
I know a lot of these youngpeople in the business.
Just see me as just an old guy,but I've seen a couple of deals
.

What would you say your amount of deals that
you've kind of done transactionswith over your 40-plus year
career in this business?
What volume is that?
Just for scale to understand.

I've closed over 50,000 seller finance note deals
.
I probably looked at 300,000 or400,000 notes, so a finance
note deals.
I probably looked at three or400,000 notes, so a couple of
deals and you're not that oldtoo relative to the business.

No, I'm.
I don't think I'm old.
I don't think you're old either.
You have the gray hair.
I mean, I have no hair, so Ican't really talk about people
that have gray hair, but butyeah, you're not that old.
In the business, you still gota lot of legs left in you.

I do the business first and foremost, and that is
on the note buying side, whichis colonial, and the training
side, which is note school.
I really do love it.
And so just to say, eddie, I'mgoing to sever it and go retire
and never do this again.
I don't, that wouldn't besomething I could write into my

(01:08:06):
future.
But I mean, obviously I want tonot grind on it as much as I
did when I was younger and I,like you know, it's just like
what happened with you.
I called you and I said, likeyou know, it's just like what
happened with you.
I called you and I said, Justin, I think we can.
You can get what you want outof this business, but you know,
I think we can.
You know, like you had to makeit.

(01:08:28):
You had to make a decision like, okay, do I abandon my dream?
Well, you didn't abandon yourdream, you just repositioned how
you accomplished it.
You see what I'm saying.
That's a lot different thansaying you're abandoning what
you're doing.
You're not in a differentindustry.
You've priced more loans inthree months than you've ever
priced in your career.

That is very true .
That is very true.

And so that was the abundant mentality we're
talking about, and you're stillgoing to be able to take some of
your investors' money and godeploy their money in deals, and
you're doing it with a littlemore clarity and you're doing it
with a lot of practice now.
The reason we became so good atknowing how to create notes is
that over the past 40 years, Ihave tracked every institutional

(01:09:11):
investor that ever specializedin buying notes, most of which
I've had.
Major executives from virtuallyevery one of these companies
have worked for me, and so Iknow the statistics of their
loans that pay and their loansthat don't pay, and so nobody
has a vantage point of moreloans call it three and a half

(01:09:34):
billion dollars worth of loansand how those loans have been
bought and how they've paid, howthey're, what their performance
characteristics looks like.
Are these loans sticky?
Do they do they?
They get a check every month,and so we've formed these
opinions about what are goodloans based on statistics, not

(01:09:55):
based on just thinking upsomething.
Yeah.
Yeah, I'm just thinking upsomething, yeah.

Yeah, eddie, I've known you for a while now and
I've got to got to know you evenbetter these past couple of
months, which which has been fun.
As you can tell, we have a lotof fun with each other.
It's it's not, you know arelationship where it's you know
someone that was call a boss.

(01:10:22):
It's more of like a leadermentality and a mentorship that
still goes on between us.
But what I have that's humorousto me and I'm not poking fun at
all and I think you'll get akick out of it is sometimes it's
hard for me to relate to theterminology that you say, and I
think you know what I'm gettingat.

(01:10:43):
And so in the industry, whenyou know Eddie, we call these
Eddie-isms, and so a lot oftimes you'll say these things
and they resonate really wellbecause they're so unique to me,
because I'm a city boy.
I live in Fishers, indiana, Igrew up in the Midwest here, so
I don't hear people talk thisway before.
So I wanted to go through acouple of sayings that you say

(01:11:05):
and I also want to get kind ofthe meaning of them as well, to
how you would define that.
But they're pretty cool.
So the one that you say Barnyardvernacular, barnyard vernacular
.
You said a few of them duringthis call that I hadn't heard of
before and I didn't get achance to write them down, but
some of my favorite ones thatI've heard I'll just list them

(01:11:27):
off here is uh, I'm not anattorney and I don't play one on
tv.
Yeah, you say that one lot.
Yeah, a funny one I like is2016, when you started note
school.
Um is, I was so naive in thenote business that I thought

(01:11:50):
alone was being by yourself.
That's like the only joke thatI know in the business.
It's pretty good one.
Uh, looking down the gun barrelI I often hear you say that and
I don't know the meaning behindit exactly, but I think you
kind of get it with the visualright.

Yeah, you know I've been an outdoors person, I've
done a lot of hunting and mysons, wood and Hudson, are avid
hunters, and so you know you'reteaching somebody.
You got to aim right, you canpoint that gun, but when you're

(01:12:29):
looking at a specific target,you got to aim and you got to
look down that gun barrel to doit.

So, yeah, Okay, this one.
I don't know the meaning behindit, so I need some help.
The horse is worth what thetraffic will bear my dad used to
say that.

So I grew up around horses.
I grew up in a cattle auctionbarn.
We had a horse sale once amonth.
I was we, we raised horses andsold horses, and so what I
learned was is is those peoplesay, what's a horse worth?
The question is, what willsomebody pay for it?
Yeah, that's what establisheswhat a horse is worth is what

(01:13:05):
somebody's willing to pay for it.
So my dad used to say a horseis worth what the traffic will
bear.

Okay, this horse is what somebody?
Will pay for it uh, one thatactually makes a lot of sense.
That I don't hear you say ittoo often, but you say it every
now and then we talk aboutproperties is roses in the
flower bed.

Yeah.
Emotional equity, meaning thatthey want to live there.
The kids are in school.
That's mama's kitchen.
They those those.
They planted those roses in theflower bed.
That's their home.
That emotional equity has gotas much to do with people paying
and loving what they buy asanything else.

(01:13:48):
I place a really high value onemotional equity.
Roses in the flower bed, Irefer to it, yeah makes a lot of
sense.

This next one is very this is a very good one.
It ain't the deal you don't buythat will keep you up at night,
and it's something that youoften will tell me when I'm kind
of maybe not wishy-washy, butI'm kind of debating on if this
is something that I should bepricing or if this is something
I should be buying, and I oftenthink about this, saying I'm

(01:14:20):
just like it ain't the deal thatyou buy that'll keep you up at
night.
It ain't the deal you pass up.
Sorry, pass up, yeah.

So most people in business get to a certain point
and then they get off intosomething that's not their game,
or they get off into somethingthat they haven't really
evaluated their risk of, andthen all of a sudden they found
out they got something thatkeeps them up at night.
And so you got to be willing tobe focused in business and to

(01:14:51):
know what your box is and toknow what your box isn't.
And I've listen, I'm a squirrelchaser from way back.
Okay, like I drive down theroad and a rabbit runs across
the road, whoa, I want to gochase it.
Right, I'm that.
But I got a little more grayhair than I used to, and I've
learned that I got to stayinside my box and I got to stay
inside our disciplines.

(01:15:12):
And I've seen enough deals blowup and I've had enough deals
that didn't work over in mycareer.
That that it you know.
It's burned some.
It's burned some things in inmy soul.
I know it, and so it's not sohard for me to pass up deals
anymore because I've mademistakes and bought stuff.

I shouldn't have Staring at me like a mule at a
new gate.
Did I use it right?

First of all, yeah, the saying is he was staring
like a mule staring at a newgate, right?
So let me first of all explainthis to you A mule is a really,
really, really intelligentanimal, way more intelligent
than a horse.
A horse is dumb and will dodumb stuff to himself.
A mule will not do dumb stuffto himself.

(01:16:07):
He won't eat himself to death.
You can't hardly make him stepin a hole, right?
You can't make him step in ahole.
You can't make a mule dosomething.
You can ask them, but you can'tmake them.
Right.
And so a mule do something.
You can ask them, but you can'tmake them.
Okay, right.
And so a mule looks dumb, butthey're really more intelligent
than a horse, okay, right.
And so when you go, if you havea fence and you hang a new gate

(01:16:29):
up, the horse would be like, hey, man, there's a gate there, I
can't, I can't, you can't gothrough it.
A mule's like studying thatgate.
He's like trying to figure out,like, why they put the new gate
up and what's it about and isit different?
Like that.
You don't know what that mule'sthinking, but he's thinking way
deeper than a horse.
And so I had an old cowboyfriend that used to say that all

(01:16:50):
the time and I always thoughtit was kind of funny.
And I've taught in New YorkCity and I've taught in San
Francisco and Miami andeverywhere on the sun and when I
really have a little fun withthe audience I'll drop that in.
And they have no idea what itmeans and I know they don't, but

(01:17:10):
I know what it means.

That's awesome.
A really fun one that I like tohear is uh, they've already
cooked the pie.
Now we've got to eat the piethat they made.

Yeah, that means they've already created a note,
and now they're wanting me tobuy their pie with the wrong
ingredients.
They've made it wrong, and nowthey're they're.
They're wanting me to becomepart of their problem, and so so
the saying is you can't recookthat pie.
Yeah, and yeah, that's whatthat means.

(01:17:45):
And, justin, you ever see anynotes that are structured wrong
and now, all of a sudden,they're trying to make it your
problem because they want you tobuy it?

Yes, yeah, yes.

I have.

Okay, I'll do one more, just because we're
running out of time here.
You might get a little old ladyin tennis shoes to pay that
much.

Yeah, there's sophisticated investors and
there's unsophisticatedinvestors and so people bring us
deals all the time and they'resaying, well, I can sell this
note for so-and-so.
And we're like, yeah, you mayfind an unsophisticated investor
the little old lady in tennisshoes and they might go buy one
note from you.
That doesn't represent themarket.
What we represent are peoplethat's looked at 1200 notes in

(01:18:27):
the last three months and weknow what the market is now.
That may be bad for you if youhave loans that you're you're
wanting more than the market for, and it may be good for you if
you're trying to run a business.
That's how I look at it.

That's awesome, little old lady in tennis shoes.
I just picture it.

Most of those are just old sayings.
I just picked them up.
I didn't I don't want to takecredit for it.
It's a couple of them I've madeup or I've modified, but those
are just those are, you know.
You know I'm from the South.
Clearly you can hear me talk,right, and so people in the
South kind of you know, they uselittle analogies or they use
kind of a romance and speaking.
That isn't so common in otherparts of the country and and I,

(01:19:13):
and particularly people aroundranching and agriculture use
that.
So it's, I'm around peopleevery day and they're just used
to hear me talk that way.
Yeah, and then I get aroundpeople that are like never been
exposed to it and they're like,oh my god, these are eddy isms,
you know and stuff, and so I getin code.

Yeah, exactly, but usually they actually do
mean something, by the way yeah,they do, and and because I
don't hear them that much when Ihear them from you, they're
impactful because obviously Iremember them, because I could
write them down, but they're alot of fun.
Well, hey, man, we're runningout of time here.
We need to end this episoderight, quick.
Thanks so much for being on theshow today.

(01:19:52):
Obviously thanks for being mymentor and showing me and
creating the person that I amtoday.
These past six, seven yearsthat I've been in this note
space, it's been a lot of fun.
I really enjoy the partnershipso far that we've had and
definitely look forward to whatthe future holds and how we can
build this trade desk that we'recreating into just I don't know

(01:20:14):
, the 900-pound gorilla, I guess, if I would describe it, justin
, I'm proud of you, thank you.

I'm proud of you for many decisions your
parenthood decisions.
You're putting your girls firstand you're figuring out a way
to make this business work andstill allow you to go spend the
time to be the dad that you areand the time that you need to
spend with them.
And I appreciate how you dealwith people and your sincerity

(01:20:44):
and your honesty and yourgenuine love for people and
helping them do better notebusiness and you represent our
core values really well and Iwant to just publicly say I'm
proud of you and appreciativethat you are willing to spend
your time helping a lot ofpeople do the business better.

Well, thank you very much.
That means a lot coming fromyou and it's very special to
have you on this episode today.
Like I said in the beginning,this is the last episode that
I'm doing for the Be the Bankpodcast.
Eddie and I will probably havesome sort of formation from this
podcast to be morphed into moreof a colonial funding group.
Um, not not really aneducational format, but more of

(01:21:25):
like a discovery and a format ofkind of what, how you can be
better at the note business,especially at the operator level
, and so that's our goal is toreally help you guys that are
out there that want to createnotes how to make highly
marketable notes and obviouslywe'd love the opportunity to
price them and be able toliquidate that for you.
But you guys that are out therethat want to create notes how
to make highly marketable notesthen obviously we'd love the
opportunity to price them and beable to liquidate that for you.

(01:21:45):
But, more importantly, we wantto show you strategies that can
just build you just massivewealth.
We really want to do that.
So, for all of you guys, thankyou for always listening to my
content or running into me atevents and saying, hey, I heard
your podcast.
It means a lot to me.
I really don't know who doesthis.
A couple people have reachedout through the podcast platform
here and I've said, hey, I'mlooking for this and that I

(01:22:07):
honestly don't know how to waitto reply back to you because
they don't have the technologyto go outgoing.
They have the technology to bereceiving information.
So anybody that's reached outto me through the podcast asking
for help or wanting some sortof mentorship, obviously just
reach out to me at info at ANBfunds dot com and I'll get you
into the right path that youneed to go down.

(01:22:27):
Happy to talk with you, eddie.
Thanks again for being on theshow today.
Look forward to the nextiteration of this podcast and
until then, guys, this wasseason number six, episode
number 11, with Mr Eddie Speed.
See you Bye-bye.

Narrator (01:22:48):
Thanks for listening to Be the Bank.
We hope you learned somethingfrom today's show.
If you enjoyed this episode,please rate and review us.
Plus, check out our channel onYouTube and follow us on
Facebook and Twitter atBeTheBank, and on Instagram at
BeTheBankPodcast.
Bethebank is sponsored byAmerican Notebuyers.
Thanks again for listening.

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