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Every new business must start doing bookkeeping. Tracking your finances is necessary to keep all documents in order. Debbie Mullins of Cole Ten Group talks about the fundamentals of setting up your books at the early stage of your business for you to be able to save a lot of headache and time. It is important having a second eye and working through things as people tend to commit errors in their books. At the end of the day, every business must stand alone and should not co-mingle with personal stuff.
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Not everything is rosy in life. That includes the note business. As investors, we may have been dealt with a couple of blows here and there with our deals, assets, or properties. No matter what the situation is, we all have suffered fallbacks. Chris and Gail bare their pain points by sharing some of their failures in the note business. They talk about problem properties and what to do about them, looking into selling them and how to recover afterwards. Gathering from other’s experiences, they share some stories that show how even though note investing is a great and fun business to be in, we have to put on the right glasses to see the challenges and work it entails.
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On this open mic night, Chris and Gail bring back Dan Deppen and Chad Urbshott to talk about their real estate and note investing experiences, particularly the worst houses they’ve ever encountered while doing deals. Chad is the President of Equigrowth Capital and Managing Director of Equigrowth Properties. He’s been involved in real estate and construction nearly all his life. Dan is a real estate investor and the founder of Fusion Notes, a private real estate investment firm. Join us for insights on doing rehabs, using BPOs, running AVMs, turnkey rentals, and a whole lot more.
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In any business, especially in the note business, don’t count your chickens before they hatch. When you’ve been in this business long enough, you realize that people say a lot of things that they never come through with. Chris starts off with an email from his servicer and a boarded note, and then proceeds to answer some questions with Gail about high-UPB assets, doing partials on a CFD, joint ventures, the difference between a pre-bid and a post-bid, using AVMs, when to BPO and O&E reports, and more. They’re also joined by one of their friends, a full-time note investor, who shared one of his horror stories about a note he bought out of a partnership. Find out how that plays out in this episode.
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There has been an influx of what the real estate industry calls joker brokers. Joker brokers are basically people that receive big tapes from all the usual sellers but then turn around and send it out to their list pretending that they are direct to the seller. The sad thing is that you usually only find out that’s not the case when you start asking for collateral files and more information. In this episode, Chris and Gail talk about the proper way to broker a note, how you put tapes out when you do have loans to broker, and the three signs to know if somebody is a joker broker trying to sell you assets.
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Chris does a case study of a deal in this episode which he calls A Killer of a Deal, the reason being that the borrower was convicted and in prison for the murder of his wife. The property was a performing note, a nice little home that was acquired in June of 2017 that had an unpaid balance of $45,000 with a payoff of about $48,000 and was worth about $70,000. Chris discusses the background of the property and its modifications, as well as the lessons he learned about balloon payments. He also answers some questions about selling at auctions, putting forced-placed insurance, lowering bids, Contract for Deeds, and a lot more.
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At some point in our lives, our concerns slowly start to shift. We do different things at different phases as we begin to become more future-minded, anticipating what will happen next and asking whether or not we are prepared for them. For those of us who are handling our own businesses, we may have thought about what would happen in the future if we are to suddenly go away. Who would take care of the things we leave behind? Will somebody be able to find the master key to our “If I Die” folder? Gail and Chris explore this conversation as they talk about securing your notes and making sure you have a plan where everything is in a certain spot.
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Making investments and all the risk around it can sound intimidating with all its complexities. That’s why finding people whom we can get advise from and walk us through the basics to make us aware of the precautions we can take can be such a great help. On this episode, Chris and Gail continue to feed us with a great amount of knowledge as they talk about questions they have been getting over the past months from investors. Some of the questions they shed light on are about property locations, hiring realtors, legal descriptions, neighbors around the property, deficiency judgment, forced place insurance, title insurance claim and some important details around these.
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Risks can be part of every investment that we make but this can be avoided or kept to a minimum if we take extra precaution. Chris and Gail talk about possible risks and possible ways on how we can take precaution when getting into deals. They share their knowledge on what we should be looking at when getting into deals. Some topics they touched on are possessions in IRA, matured loans, “non-JV” deals, transferring services, foreclosed properties, state taxes, toxic assets and many more.
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Everyone tends to think they can never really do anything with IRAs. Gail and Chris set out to give us the creative uses of IRAs, going deep into the rules and how you can get a property out of it. Gail shares about a property that has her whole IRA at risk and discusses how she got out of it, showing what rules apply when you have contradictory rules between the township where it is happening and your own contract. They then talk about how Cash for Keys could be used while reflecting on the moments in the note business that gives great satisfaction.
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