Eddie Speed  - Note School

On Timing the Market: "What's the best time to be in the note business? I said, there's two things. Either it's inflationary times or disruptive times. Right now we have both."

It is always best to have an attorney before you need one, especially in business.

Often, to make a deal happen, you need financing.  In real estate especially.  But often the typical bank cannot offer financing for a home to an entrepreneur.  We just don't check the W2 box like the banks want to see.  So where can you get financing for a home, if you are an entrepreneur?

From another angle, you want to invest in something that has some great returns, but being a landlord isn't really your idea of fun.  What is another real estate investing option that can help you make money in your sleep?

Eddie Speed has started the Note School.  A school that teaches how to invest and offer notes to people that need financing outside of traditional banks.

Eddie shares insights from his decades of experience teaching people how to "be the bank, a strategy that has helped countless real estate investors convert their rental properties into seller-financed opportunities. As rental profits dwindle and banks tighten their lending standards, Eddie explains how seller financing can transform a landlord’s cash flow and serve an underserved market of aspiring homeowners. From practical math to tax strategies, and a behind-the-scenes look at the NoteSchool training process,

Listen as Eddie explains innovative ways to thrive in disruptive, inflationary times. Whether you’re a seasoned investor, a curious landlord, or an entrepreneur seeking new revenue streams, Eddie’s expertise will open your eyes to possibilities beyond conventional real estate.

Enjoy!

Visit Eddie at: https://noteschool.com/DrawIn

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Podcast Overview:

00:00 Learning to become the bank

04:18 Discussing rental properties as businesses

07:22 Helping sellers with financing

12:41 Rental income and market comparison

13:35 Tax tips for installment sales

19:13 Training successful yet overthinking students

22:05 Starting in the business

25:22 Finding a niche in real estate

27:43 Challenges of property management

32:12 Challenges with traditional mortgage lending

35:16 Frustration with appliance durability

40:36 Comparing 30-year vs 50-year loans

44:25 Finding reliable, hardworking realtors

47:50 Finding local property services

50:19 Getting started with online basics

54:43 Funding notes and marketplace strategy

Podcast Transcription:

Eddie Speed [00:00:00]:

Think and think in terms of the easiest way. People say, people say, give me a reference of seller financing that everybody can relate to the car industry. You, you buy, buy a car, maybe it's a used car or you are, you know, whoever your secretary buys, whatever that is. Right. Somebody buys a car and the car dealership carries the financing. They sell or finance the car. Does that make sense?

James Kademan [00:00:26]:

It does.

Eddie Speed [00:00:26]:

Instead of seller financing a car, you sell or finance a property. So you're not renting it anymore. You're, you're transferring the deed to the new guy, but you're saying, wait a minute, I'm going to carry, I'm going to be your bank and I'm going to carry long term financing.

James Kademan [00:00:47]:

You have found Authentic Business Adventures, the business program that brings you the struggle stories and triumphant successes of business owners across the land. Downloadable audio episodes can be found in the podcast link [email protected] we are locally underwritten by the bank of Sun Prairie Calls On Call Extraordinary answering Service, the Bold business Book as well as Live Switch. Today we're welcoming Slash, preparing to learn from Eddie Speed of the note school. So Eddie, how is it going today?

Eddie Speed [00:01:15]:

I'm great, how are you?

James Kademan [00:01:17]:

I am excited. We're talking about real estate notes and I gotta admit, I don't know much about that at all. So I'm excited to learn from you. So let's start with the basic foundation. What is the note school?

Eddie Speed [00:01:31]:

Well, note school teaches people how to be the bank. There's basically two ways you could be the bank. You might have a rental property that's far more profitable for you to finance the rent property than continuing to pay rent and taxes and insurance and the plumber and the all that. Right. And, or you may say, no, I don't have a rent house, Eddie. I just, I like the idea of being a bank. How would I find a note? And so we have run a school for 25 years showing people how to go be the bank.

James Kademan [00:02:09]:

So help us with a foundation here. A real estate note. Is that essentially the same as the deed or what is that?

Eddie Speed [00:02:15]:

No, is what we all sign when we go to the title company and buy a house and get financing.

James Kademan [00:02:22]:

Gotcha. So it's the loan on the property.

Eddie Speed [00:02:25]:

You know, you sign a promise to pay to the bank, it has an amount that you owe, it has interest, it has a monthly payment and then you sign another document that says if I don't pay, the bank can foreclose. Usually in some states that's a deed of trust in some states, that's called a mortgage, something kind of like that.

James Kademan [00:02:46]:

Okay.

Eddie Speed [00:02:47]:

Yeah.

James Kademan [00:02:49]:

So if somebody has a property, is this. I guess in this case with the notes is this. You are helping somebody purchase the property. So instead of a bank, they'd be using this person?

Eddie Speed [00:03:00]:

No, I. No, I am, I am pretty specialized in the business, and so we help people. Seller finance.

James Kademan [00:03:12]:

Okay.

Eddie Speed [00:03:13]:

So I deal with a lot of landlords. Main, I don't usually deal with too many mom and pops. Normally the people that I deal with are people that are real estate investors. Some really big, some super small, but normally they're a real estate investor. And so I help them create notes and I buy notes that they've already created. And in the, in the little, narrow little world of seller financing, I bought 50,000 seller finance notes. Wow.

James Kademan [00:03:42]:

So I feel like that's a lot.

Eddie Speed [00:03:44]:

It is. And in that little industry, it is. And so we're. We're pretty. We've got a seat at the table in that industry. And so we find a lot of these notes and we spend a lot of energy trying to find them. Right. So we do pretty good at that.

Eddie Speed [00:04:00]:

And then right now we have a really active program where. And a lot of the podcasts and things I do, people are interviewing me, like, okay, how do I convert my rental to seller financing? Because rentals aren't making near the profit they used to. Inflation messed up the rental model.

James Kademan [00:04:18]:

It turns out as I, as I interview people that are in the real estate world and I look at the rental property world, I'll reach out to a real estate agent and I'll be like, hey, man, from my point of view, a rental property is a business. You look at what it costs, acquisition costs, and then the money coming in, the revenue, the expenses. I don't see how some of these businesses are making money. Who would buy this? This is a. Not necessarily a failing business, but it's a business that's going to cost you money rather than make you money, unless you're working on speculation and saying, in 30 years down the road, this is going to be worth more.

Eddie Speed [00:04:55]:

So we help people get paid now versus having to wait for appreciation.

James Kademan [00:05:00]:

Gotcha.

Eddie Speed [00:05:01]:

And if you, if you just look like this would be kind of an easy way to think about it. The average rent in the United states is about 1800 bucks.

James Kademan [00:05:12]:

Okay.

Eddie Speed [00:05:13]:

Ohio and California and Iowa, and you know what?

James Kademan [00:05:19]:

In the whole US So you got New York and San Diego, and you

Eddie Speed [00:05:21]:

also have everywhere in between, right the middle of nowhere. The average single family house rents for about 1800 bucks. Okay, that's not an apartment. That's not. That's not a duplex. That's it. That's a single family standalone house. The average payment that a brand new customer pays their mortgage payment is 138% of rent.

Eddie Speed [00:05:49]:

Okay, so that tells me the banks are making. Getting a bigger payment now. That includes taxes and insurance. So you got to saw a little off of that. Right. But Even if it's 110%, 100, 115%, people's mortgage payment is more than rent. But wait a minute. If I'm the landlord, half of my money runs out the door and paying expenses.

Eddie Speed [00:06:10]:

And if I'm the bank, none of my money runs out the door. So it doesn't, it doesn't take a, you know, a long spreadsheet to look at the math and go, you know, you know what, Eddie? It is more profitable for me to be the bank than a landlord.

James Kademan [00:06:27]:

Gotcha. So tell me, who is coming to you?

Eddie Speed [00:06:35]:

In the last two weeks, I've been to the largest two real estate masterminds for house people in the United States. So call it top, you know, 800 top thousand house buyers. A good percentage of them are in. Are one of those groups or another couple that I'm involved in. They have. I sit down with a guy on Friday who's a fractional CFO for other real estate investors....