Investing is a rewarding endeavor if you can do it right, but it can also be TAXing if you don’t play your cards correctly. If you’re tuning in, chances are you’re interested in becoming a note investor and take your share of its golden egg of opportunities and possibilities. But there’s a slight problem: how do you start? In this episode, Dan Deppen shows you the ropes on how you can start strong and end strong in your path to note investing with his comprehensive plans and strategic blueprint. Join him as he dispels you from the restraints of being plan-less and overwhelmed in your note investing journey.
—
Watch the episode here:
Listen to the podcast here:
How To Become A Note Investor In 30 Days
In this episode, I’m going to have a replay of a webinar that I did on How To Become a Note Investor in 30 Days. This webinar was part of the new Note Launchpad course. In the webinar, I talked about the path I took in notes and a little more of the backstory on how I learn notes, got into the business, and then the five phases that I’ve come up with for becoming a note investor. There are a few things I referenced in a webinar. It’s a bonus that was available after the webinar that you might not be able to take advantage of. There’s a lot of good information in there. Depending on when you’re reading this, with the Note Launchpad, the way that’s going to work is going to be available at different windows and time. If you’re reading this, you’re interested, and it’s not available, drop me an email at Dan@FusionNotes.com and I will help you out. I hope you enjoy the replay of the webinar.
—
Welcome, everyone. I’m going to be talking about How you can Become a Note Investor in 30 Days. I haven’t done a webinar for a while. It’s a little bit overdue but there are some things I wanted to talk about and some new materials I have coming available that I wanted to share. If you’re not that familiar with me, I want to give an introduction. I’m a full-time note investor and I also teach real estate investors how they can become, not just note investors but active note investors as well. There are a couple of different online courses I’ve put together over the years. One on Due Diligence and Pricing. I’m going to talk about some stuff that’s a lot more in-depth.
Some background on me. I started my career as a Mechanical Engineer in the aerospace industry building, satellites, antennas, mechanisms, and some other things, and then I got hired for government contracting, I went and got my MBA at the University of Colorado and then became a product manager. I’ve been an active investor since I was about nineteen years old. I started in stocks, moved into options, eventually real estate, and then distressed mortgage notes. I’ve got two amazing girls. They’ve got a decent size multimillion-dollar note portfolio that I operate. I was attracted initially to note because it’s a niche.
There are a few more nuances maybe than some other areas but if you can get it figured out, you can find some cool opportunities. I’ve always been surprised why this niche has not blown up and become larger. I enjoy sharing information to note investors so they can partake in it. I do that through my show The Note Investor show, my newsletter, and things like a webinar. We’ll do a little bit of sorting to make sure you’re in the right place. This is for you if you were interested in investing in mortgage notes but more specifically, I know a lot of people sometimes have read a book on notes or read some blogs like mine or Chris Seveney’s. They’re interested but they’re having trouble getting started like books, podcasts, and some other things have a lot of good information but it can be challenging to take all of that information and then put it together in a way that’s more actionable. Other people have fallen down the YouTube rabbit hole or active on Facebook groups and learning. Maybe you’ve also done some training before or expensive training.
A lot of times, when people have done this, they’re still come away overwhelmed by how to put everything together or you’ve bought some notes. You’ve already got in the game but you’re not sure how to scale. One of the things you’ll find in notes is you can do a couple of 2, 3, 4, maybe 5 and keep things in your head but you start talking about 10, 20, 30, 50, or 100 notes. You need some systems in place for your business. It’s something that I try to talk about as much as I can because it’s key. Having the right systems and processes is the key to scale. It’s something that you don’t hear discussed even a lot of the other educational materials.
Starting From Scratch
A lot of it is centered around the basics of notes a lot of times. What happens is people end up spending lots of times, sometimes months or years, and don’t close on a note deal. If you’re interested in learning how to get there, even from zero to being able to buy notes in 30 days, this is possible. There are probably some old crusty people that will scoff and say, “You need years of experience before you can do that.” I don’t think that’s true if you know what to do when you have a step-by-step system to get there.
This May Not Be For You If
This may not be for you if you’re looking for somebody to tell you that, “Note investing is just all like magical happiness, rainbows, unicorns, and it’s easy. You get rich quick with this one weird trick,” or something like that. That’s not what this is. I’m the first to tell you that. I’ve talked about this a lot on my show and other places. Note investing is challenging. It has share of ups and downs. It’s lucrative and worthwhile but I don’t even pretend to suggest that it’s easy necessarily.
If you’re one of the people that are interested in the space and you enjoy taking information on it, there are a lot of people that do this and there’s nothing wrong with it where they’re in note investing or other forms of investing in multifamily. They’ll take training, watch videos, and gathering information but don’t have the intention of going out and using it to do deals. Some of the stuff I’m going to share and talk about is for people who are interested in getting in the game and doing something concrete. It’s also not for you if you’re the person who enjoys paying for overpriced. There are people out here like this. I’m not kidding around. I talked to someone who was bragging that they had spent almost $100,000 on various real estate training programs.
The right systems and processes are the keys to scale a business. Click To TweetThat’s not good unless you’re going to apply that and get a return. There’s also a lot of that even over priced training. Some of it I’ve taken myself and some of it I haven’t but some of them in particularly what I’ve heard from people is that they’ll sign up for some training, whether it’s a seminar or some school, and they think they’re going to learn everything they need to know about notes. They get presented enough information to get them excited and what their whistle and then go, “If you want the real information, you can buy this other thing.” That’s even more phenomenally expensive. I liken it to Charlie Brown trying to kick the football. This stuff that I’m presenting is all-inclusive.
I’m going to talk about it in the Note Launchpad and some other things coming up, but that’s all there is. It contains everything. There’s not like I’m not going to come back later and go, “If you want the information, you got to buy this other thing that costs ten times.” It’s not how I roll. It’s also not for you if you’re the person that wants to go super slow and get a delayed return. There are a lot of people who in the interest of reducing risk or being careful to plot along very slowly. If you look at their returns, they get on their actual deals versus the amount of hours they sunk into it upfront, it doesn’t make any sense. If you’re going to go insanely slow, you may take those hours and go work at McDonald’s or make twice as much if that’s what you’re going to do.
Be A Note Investor
I’m going to share the 5 Phases process that I developed to turn someone from a real estate investor, or even not a real estate investor into a note investor in 30 days. Note investor is someone who can go out, source find filter, price, due diligence, and close on a note within 30 days and that brings you to Phase 2. There are the other five phases where it talks about scaling. You don’t need to spend tens of thousands of dollars to do this and it’s not the equivalent of getting a Bachelor’s Degree or something like that. I will share to you how you can start buying notes, not just buying notes but get a business up and running.
I’ll share some of the detailed systems and processes that I put together to enable my portfolio to scale. If you wanted to become a note investor but you don’t have the time, you don’t want it to take forever, and you’re not going to shuck out $20,000-plus, you want someone that’s experienced to show you what you need to do step-by-step to follow the bread crumbs. Maybe you’re coming at this from other aspects of real estate investing and there are some issues there that you don’t want to deal with anymore or you’re finding it more challenging to find deals and other areas of real estate investing. For example, REOs seem to be in quite short supply. Underlying real estate prices are going up. If you’re trying to do fix and flips or other sorts of things that can become more difficult to get deals. A lot of areas cap rates are coming down or if you spend some time in the note domain but you found that overwhelming and confusing and all over the place then this will be the right spot.
The good news is I do help people with these all the time. This is a testimonial sprinkled. Some of these is my friend Eric Sage. The Note Launchpad that I’m going to talk about has been in beta. I’ve got a lot of good feedback in that. I made a lot of improvements to the course and refined it as it’s gone. Eric said, “I can’t believe the amount of detail and information you provided.” A lot of real estate training courses and other things tend to get too superficial. If you want the details, they try to sell you something else. Everything I’m discussing here has all those details. Joey also said, “It’s not a 40,000-foot view of a new industry but an in-depth step-by-step firsthand account of what it is and how you can be a successful part of it.”
If you were able to do all this and you had this step-by-step process, you could go to becoming a note investor in 30 days, which would mean that you’d be able to price notes whether they be performing or nonperforming. You had all those systems and processes to know what to do once you bought them. You can start not just buying notes but build a business to scale and then have someone along with you to show you step-by-step how all of this can work. That absolutely can be a reality and I can give you a little help to get there. A little more about my backstory, I’ve built a note business over the years that provides a full-time income.
I get to work with a lot of cool people along the way. Getting there, I wasn’t always straightforward and always in this position. I was working as a product manager. I had been doing all of these other investments on my own. I came across notes and I wanted to learn how not just to be a note investor but manage a decent size portfolio. I got there eventually but it took me longer than I would have liked. I made a lot of mistakes along the way and some of those were painful. I explored some of the training options and some of them are surface level or overpriced and we’re still missing a lot of things.
Even once I started buying, I definitely got overwhelmed. It was interesting. Once I got to about twelve notes or so, I started running issues on a couple of deals that I had that I never even know that I should be looking out for. All the upkeep with keeping track of loan servicers and attorneys and everything else became too much of a headache and it got stressful. I didn’t join one of those expensive masterminds. There were a lot of good aspects of it. I met some awesome people that I still work with and it did help me get started. The problem with it was while there was a lot of good basic information, there were details and systems that weren’t there that I had to put together on my own. That road was more painful than it needed to be. At the end of the day, whether there were a lot of upsides to this, the group didn’t quite deliver on what he had promised.
It was struggling to grow this portfolio and it was running into various problems. I would lose deals sometimes because I’d be mispricing assets either pricing too conservatively. I had one in particular that I priced too high. I had vendors dropping the ball and not always catching them right away. I had some issues that fell through the cracks. I didn’t catch in total a couple of months and that got a little pricey. I ran into weird things like crazy city code enforcement, people who resembled folks more like the mafia than anything else. Some challenging borrowers you’ll find as you get into this, there’s a lot of variation in the borrowers that you run into.
It got stressful and challenging. I’ve reached different points where I wasn’t sure how I had to put it all together and other people have reached this as well. There are other people I know who’ve gone down this path and hit rough waters on a particular deal or ran into something that made them sick and they act like, “I’m out of here.” I plowed through and was able to get some of those pieces put together eventually. It took time, but I learned those fixed or putting the systems together. I started to get to note business and figured out. My big thing was documenting the systems, processes, and lessons learned. Some of this came from my upbringing in the aerospace industry where that’s what you do because you’re dealing with these big complex systems.
One little thing that falls through the cracks can cause serious problems. Having good systems is a big deal or when something goes wrong. Going back and learning that lesson so it doesn’t repeat becomes a very big deal as well. I went from this stressed-out, scatterbrained guy with this small portfolio to getting things under better control and then scaling out to a much larger portfolio. When you get to that point, that’s where it started cashflowing the way that I wanted but it took some doing to get there. Now, I’ve got that scalable business, I enjoy teaching other people about how I do it and avoiding some of the mistakes that I made. That’s a lot about my story.
Myths And Truths Of Note Investing
I’m going to talk about some of the myths and truths of note investing. There are a lot of myths out there. Mistake number one that a lot of people make is they think that if you’re going to learn notes, you got to go and spend boatloads of dollars on training from some guru and that’s not the case. The good news is there are a lot of options out there for learning notes that you don’t have to break the bank that they can pay for themselves as long as you do one deal. With Note Launchpad, you’ll be able to get up and running a lot faster and with more confidence than options that are not just 10X price but 20X to 30X of the price.
The second mistake people make is assuming that it’s going to take a long time before they can start buying notes. People talk about becoming a note investor, note buying, and that’s the end of the process. It’s almost the beginning of the process. Without a doubt, you have to do your homework or know what you’re doing. There are a lot of disreputable people with bad notes for sale with the various laws that you’re going need to learn how to catch but that doesn’t mean that you need to spend 6 to 12 months going in circles or going back and forth being cautious or whatever. If you know what you’re doing, you know the steps, you can follow them, and you have someone to ask questions along the way then you can absolutely get fine within 30 days.
What you want to focus on, when you think about being efficient, and getting active in this is not just collecting information. It’s learning the things that you need to know in the right order and then take an action on. If you have a step-by-step system, you can do that. The other mistake is thinking that pricing notes are one area where people make a lot of mistakes. You need to think it’s like one-size-fits-all. They have these over-simplified rules like I pay X% of UPB for performing notes and Y% of UPB for nonperforming. They’re going to do some stair-step thing and that oversimplifies it. It doesn’t take into account of some important factors. What a lot of people do, especially engineers like me is didn’t over-rotate the other way. They make it extraordinarily complicated and make these elaborate ROI calculators that are way more intense than they ever need to be. The right answer to this is going to be somewhere in the middle. I’ll talk about note pricing method so that will give you the information you need.
You can price things out very quickly while preventing mistakes. One of the things you’ll find as you get in this is most of your offers don’t get accepted. I’ve stopped keeping track, but I believe less than 20% are the offers I put out to get accepted. If you’re spending way too much time during pricing and filtering, then you’re wasting 80% of the time. This is my opinion with rookie investor’s mistake is they want to try to buy the deals that have the highest ROI or they go, “I’m a good investor. I only buy performing notes that have a 20% yield to maturity.” That might seem backwards to some folks because as an investor, aren’t you trying to get the highest return? The answer is yes, you definitely are. What happens is even though notes are a great business, there’s no free lunch out there. A lot of times, risk is even more correlated. What happens is if you go through and say, “I’m only going to buy the notes that people will sell me at a super high ROI.”
That means you’re going to buy the riskiest sketchiest assets out there. That’s referred to as getting drunk on yields, so you don’t want to do that. When I target an ROI, when I bid notes, it varies from asset to asset. If it’s a less risky asset, I’m willing to accept a lower return but if it’s a risky asset, that could be okay, I need a much higher return. Mileage varies and you need to learn how to do that in a way that’s straightforward and simple. You don’t get lost in the weeds. The other one and this is prevalent now is assuming that the opportunity to buy notes is gone, years past the financial crisis, the inventory is too low, all the prices are too high, you miss the opportunity, and it’s all gone.
No investing is not challenging. It has its share of ups and downs. Click To TweetThe market is not the same now as it was years ago. It’s true that pricing has gone up over the few years, but the reality is any market, whether you’re talking about mortgage notes, real estate, or other things, they go through cycles and they have ebbs and flows. The thing is if you know where to look and you have the good processes for finding them, you’ll be able to find plenty of notes. There are over $1 trillion of seller finance notes being created and the overall mortgage market is so massive. If you think about the size of a portfolio that you need to make to be able to be in this business, you don’t have to pick up that many.
It’s a mistake to get tinkered on things because things were better in the past to put this into real estate terms. I bet you’re coming back in time in California, you look at the prices. People would say, “Years ago, there were so much less. We missed the window, it’s all over.” You look at what prices have done since then. With the pandemic and some of the other things and the forbearances that are going to run out at some point time, the market will see the next wave of mortgage notes hit the market. You want to be ready when those show up. I don’t know if that’s going to be 6 months or 6 years. You can’t predict timing but you can bet your ass that there are going to be plenty of opportunities in notes coming down the line. That’s what not to do.
Five Steps
I want to talk about what you should do. I introduced you to the Note Launchpad framework. Step one or Phase 1 is the part where we Learn The Foundation. Sometimes, it’s the only thing contained in other courses where it’s the nuts and bolts of what note investing is, how it works, some the paperwork, how note works, things you can do to make money, and all of those basic things that are very foundational. In step two is where we go out and start buying notes. A lot of people think of this as the end phase, but it’s the beginning because after you buy a note, you got to do something with it. That’s a start.
In Phase 2, I talk about things like, “Where to find notes, when you get notes, how to put together your business model, how to filter a tape to find the assets that fit your model that you might want to bid on, how to scrub them a little further to make sure you’re identifying the quality and assets, how to get them priced, how to present offers, and how to negotiate.” When you get offers accepted, “How to do that.” The final stage is due diligence. I’ll also talk how note deals work as far as closing them and the different ways that they work. The way that note deals have been traditionally and are mostly closed. The way that Paperstac does it and that whole life cycle of a deal.
Once you get a hold of a note, you’ve got to work your portfolio. I call it adding value to your assets. Some of this is day-to-day management. If you’re buying nonperformers, how to rehab the borrower and flip nonperformers into performers, which risk can get very lucrative when you do that. In my portfolio over a couple of years, if I buy by a certain model, I can turn a nonperformer into a performer about 2/3 of the time. That’s if I buy at a certain rate. I know with the property has been vacant for ten years, that’s not going to happen but if you do it right, it can work out very well.
In step four is where I talk about the systems and processes to allow you to scale like standard operating procedures working with assistance, those sorts of things. Phase 5 is where I talk about Funding Your Growth if you want to build a larger portfolio unless you happen to have a large net worth and you can put a certain chunk of it into notes. At some point, if you want to grow more than what you’re able to, you’ll need to take on outside funding. I talk about how to do that in the right way. In the Learn The Foundation, I kick it off with what I call the money mindset. You’ll find that in investing in general, not just in notes, I relate it a lot to sports. I’m a big golfer. If you look at some of the best golfers in the world on the PGA Tour, from a physical standpoint and the standpoint of their skillset, it’s hard to tear them apart on the way they use their minds and the way they approach. Their games what tends to differentiate them.
I get into the actual note foundations where I talked about some of the nuts and bolts. I talk about how to set up your business, whether that might be an LLC if you’re buying notes after tax or setting up an IRA. I talk about marketing made easy. Marketing is a subject that scares a lot of people, but if you want to build a more scalable business, you need to be able to do that. I show you how to do that in a way that’s very straightforward, easy, tee you up, and going to be easy to execute on.
We get to the part where we start buying notes. Step one, we’ve got to find people who are selling notes. I drove out list of a lot of the folks that I use. Some of those are places you may have already found or you haven’t found, and then also how to prospect for other sellers. Once we start getting tapes, we need to figure out how to filter them to see which assets meet our business model and that we can make offers on, how do you do your pricing, submitting your offers, your due diligence, and then closing things out. A lot of people think of this as the end of the game. In reality, this is getting warmed up.
Another testimonial here from the beta program that I’ve been running, it’s damn put together a great, step-by-step easy to follow manual for note investing. It’s engineering background running to the organization of the course is teaching style straight into the point and explains the ups and downs. It makes up the big earning potential, but also cautions about the downfalls, which sometimes get forgotten and includes a variety of spreadsheets that would save you time and evaluation. That’s the other thing I’ve done in this course, when I did the mastermind that I mentioned, they said, “Here’s a bunch of information. I’ll go build all your own spreadsheets and go figure it out.” That was super time-consuming. In Note Launchpad has a pricing calculator for performing notes and nonperforming notes, a lot of checklists, or other things. You can download these things, use them, and you’re modify them to fit your needs. I don’t go through this whole nonsense of, “Pay me $15,000 to learn this and go and figure everything out on your own.”
In step three, this is where we start operating the business. Some of this is you’re going to have to put together your model. One of the things you’ve got to ask yourself is your goal, “Are you doing notes as a property acquisition strategy? Are you doing it as a strategy to buy nonperformers and turn them into performers? Do you want to hold on performing notes?” There are a million different strategies and I talk about of some of the strategies where they might fit and then how to map those strategies to a set of filters that you can use. I talk about other things like, “How to deal with vendors.”
It’s sad news but unfortunately, it’s not so simple as hiring a loan servicer, some attorneys, turned some other vendors, and then having them do all the work for you. In theory, that’s supposed to happen. In reality, things fall through the cracks all the time, especially as you get into a larger size portfolio. Being able to have those alarms in place to notice when things fall through the cracks and follow up is key. I talk about how to do loss mitigation, negotiate, forbearance, trial payment, loan modification agreements with borrowers, how to deal with REOs, which is the bane of my existence. I hate those things. For some of you who have other real estate investing backgrounds, that might be the easy part for you but for me, I find it a challenge. I talk about some of the things that I’ve learned and what you can do.
Once we can understand notes, we’re buying notes, and we’re operating them efficiently now, we want to start to build the systems to scale. If you find a couple of notes, you can keep things in your head, not too bad and you start going larger than that especially you start getting into the $20,000, $30,000, $50,000 range. You’re going to need systems. One of the things I talk about is how to use a CRM or a Customer Relationship Manager, go through details, and give you all the information on the things that I track in my CRM through each deal and how I use it. I use Pipedrive as the tool, but it doesn’t matter what tool you use. Some people use Podio or might use other stuff but what I’m giving you is the information that I track in my CRM, so you know what to do.
You can take that and apply that to your tool of choice. Maybe you’ve got one that you already use for your business. I talk about how to work with assistants. I’ll give you a copy of a job ad that I’ve used successfully a few times and some of the different kinds of assistance you can use. Some of the meat and potatoes that people have been asking me for that I’ve not shared except for one situation and that was a close friend. It’s the standard operating procedures that I build. This is like the operating manual. I talk about things how to handle loss mitigation which means working with borrowers, tracking deals, your forbearance agreements once you get a lot of these in place, and then managing your REOs and a bunch of other odds and ends, and then we get to funding.
Once you can do all that, unless you happen to have boatloads of funds laying around and you want to use it all on notes, you’re going to need some outside funding. One of the things that I love about notes is that note deals tend to be rinse and repeat. Once you build a process, you can apply it again and it can scale. You’re going to need outside money at some point if you want to do that. This section is super blunt. I have a lot of warnings and I’ve seen way too many horror stories, not just in the note business but in real estate as well.
Whether you’re going to get outside funding or the other thing I talked about is how if you’re going to fund somewhat else, how to screen operators, how to deal with investors, and how not to find funding, but find the right side of funding. There’s a lot you need to understand to do this. One of the things I was paranoid about, I almost didn’t put this section in there because I worry about having some knucklehead, get ahold of this, and giving them the right tools to go out there and do evil. That’s why it’s a blunt phase. You need to understand SEC rules. There’s a lot of laws involved when you go out and get funding. I’m not an attorney and there’s no legal advice contained within the course. You do need to understand the basics of those rules and where to get help with those. I talk about how to screen partners or principles and what to do to be a reliable, dependable operator.
I also go into detail on the different ways you can take funding. They’re three ways that I’ve done it. Two of these are the same. Partials are a popular one. One of the ones I’ve been doing increasingly is loan hypothecation. Loan hypothecation is the same as partials at the end of the day. They’re technically different, whereas with a partial, you’re selling a part of a loan. In hypothecation, you’re taking a loan from an investor but instead of having a piece of property as the collateral, you’re using a note as collateral and then joint ventures, which have been very popular for a long time. One of the things that I found fascinating as I went through this journey which was one of the pleasant surprises is finding funding is probably the easiest part of my business.
For years, I’ve had a line of investors at all times waiting for me to find the right deal. The challenge you’ll find is finding the right deals at the right price, that’s the harder part. Getting the funding is not that hard in and of itself. However, you have to do it right in terms of not knowing what you’re doing and being a good operator, but it also comes down to screening your funding and finding the right partners. I’ve heard a lot of nightmare stories from folks who do what I do or they’ve had issues with the JV partner’s knock on wood. I haven’t had those problems, but you also show you how to screen and find the right people who do not have money but are more savvy investors, understand that not everything is going to go perfect all the time, and there are going to be good partners to work with over the long-term.
If you’re interested in investing in mortgage notes and you’re one of those folks who like to read some books and it sparked your interest or you’re spending a lot of time on YouTube and Facebook. This is also good if you’ve already gone through the point and you built some systems, and you bought some notes that you want to scale and you’re not quite sure how to do that, or you want to be a note investor but you don’t have forever to dork around with it, you don’t have $80,000 to spend, and you want someone to show you what to do. You’re getting sick of going on these rabbit holes, going down different areas, getting in circles, overwhelmed, and confused, then this will help you get going within 30 days.
Investing is like sports; it's hard to tell apart the golfers from their physiques; the difference is the way they approach their games. Click To TweetIf you could make this transformation to be an active note investor in 30 days, what would that do for you? You’d be able to get ahold of the tapes, price fast for your systems in place, and then have someone to give you help along the way. Those possibilities can become realities for you. No question. At this point, there are two options if you’re one of those folks, so you can continue to spend time and energy, figuring things out, and going in circles or the step-by-step answers for how to do it. You can start getting access to more deals and getting them done moving a lot faster.
Inside Note Launchpad, you’ll get everything you need to start buying notes within 30 days. Not only that, but you’ll be able to start building not just the business but one that’s scalable. I want to talk a little bit more about the way that this works. In Phase 1 in Learn The Foundations, I mentioned, I’ll start with the money mindset, which doesn’t even involve notes specifically. It’s one of the most important probably modules in the course of my personal opinion. We’ll get into the Note Foundations Program and not through your Note Foundations, you’ll have a pretty solid understanding of what it is to be a note investor. Even the foundations part isn’t this like a super high-level overview, but it’s the meat and potatoes of what you need. We’ll get into setting up your business and then learning how to do your marketing.
By the time you’re through Phase 1, you’re going to be way ahead where most people aren’t if they’re doing these overprice couple day math seminars or some of the mastermind groups that are out there. In Phase 2, you won’t become one of those people. Plenty of the mastermind I was in, there were a lot of folks who spent $15,000, traveled to events, did all this stuff, and then never bought a note. I won’t let you become one of those people. By the end of Phase 2, if you follow the plan, you’ll be making offers on notes and there’s enough time in there if things go well. Getting some of those accepted, you’ll be able to start closing on notes. I’ll give you the list of sellers that I use. I’ll teach you how to count your county records and find sellers on their own and how to reach out to potential sellers.
Once you’ve got that inventory, you use what I call the fast fail train method to do a quick screen to figure out which assets that you can make offers on and then we’ll go through how to negotiate. Into the nibble note pricing, negotiation, complete your due diligence to get through the close of the deal. By the time we get them to this phase, you should be blazing ahead of where most of the other folks are. Phase 3 is what starts getting into some of the more secret sauce. Buying the note right is where a big chunk of your profit comes from, maybe most, but there’s a big difference between note investors operate a portfolio well and efficiently versus ones that let their assets struggle along.
In the last modification magic section, I’ll talk about how to turn nonperformers into performers. As I said, for me, it was about 2/3 of the time if I follow my plan and then you learn what you need to do on a day-to-day basis for your portfolio. I have a lot of information that talks about things I like to do on a weekly basis, monthly basis, or quarterly basis and gives you all those systems. You can manage this thing and you won’t let things fall through the cracks. By the time you get to Phase 3, you’re not somebody who’s a note buyer or an active note investor, you’ll be a competent note operator, which is different animal.
In Phase 4, that was where we scale. We put gas on the fire. There are other systems and processes here. This is where I get into a lot of the detailed like checklists, things you’re going to need to scale, how to use a CRM, and how to set it up. I gave you all of my standard operating procedures and I see you have a typo there that I’ve created and also how to work with an assistant. You’re not going to hire an assistant and have them solve all your problems you have to solve. If you have the systems and processes, it easy to onboard an assistant and get them up to speed. If you have a great assistant and whatever they move on to the next thing, you’ve got to start over and get that next person up to speed, you’re not always starting from scratch.
In Phase 5 is where we add the funding. This is where you can add some rocket fuel to your business. The creative financing toolkit is going to have all those creative financing methods. I don’t talk about how to do partials, hypothecated bounds, or JVs. I will give you spreadsheets that you can use and templates to help put these deals together. There’s the Note membership. This is the private Facebook group where if you have questions, you’re working on a deal, and there’s something you’re not sure about, I check this every day. That’s where you can get your questions answered, get other feedback. I may occasionally add additional members-only content into the Facebook group.
I did that with the Systematic Due Diligence course. The Note Foundations Program is all the basic building blocks part of it. That’s where we’re learning the fundamental setting of your business. These are essential notes for newbies. You could consider this Note Investing 101. The marketing part is a step-by-step guide on how to market your business. It talks about things like, “How to send an email, how to set it up, what to say, how to run your list, how to set up a website, which you go into, where are places you can go, and pay someone a couple of $100 to get it set up for you.” You’re not going to get stuck on the marketing piece you can very quickly and efficiently get to it.
In the final note section, I’ll give you my list. I tell you what the number one question that I get asked is,
“Where can I go buy notes?” A couple of years ago, I made a video on where to buy notes. I got 11,000 views. It was 20X views of any other video I made. This is worth the price of admission in and of itself. In the fast filtering method, that’s where we’re going to put together your business model based on what you’re trying to do whether you’re trying to do performing notes or nonperforming as a property acquisition model or nonperforming as trying to rehab the borrower. You can get through the fast filters quickly, and then know the pricing in these calculators for both pricing performing notes and nonperforming.
It’s not just the calculators but it was also all the theory behind it. You don’t want to do is plug numbers into a spreadsheet, want to understand what all the pieces parts are, and why all of those things are in them. The last is mitigation magic which is I insert my secret sauce. That’s where you learn how to work with borrowers and convert those nonperformers into performers. Sometimes, loan servicers can do this for you. I’ve often been disappointed when I’ve tried it. We did it quite exactly that way. The systems and processes savvy is where you get all of the standard operating procedures, checklists everything that you need, and then the creative financing toolkit will show you how to set up partials, JVs, and all of those other deals to take on outside funding.
The funding formula is where you’re going to learn, not how to raise capital, but how to do it the right way and get the right capital. I noticed that it seems like there is a lot of cash laying around on the sidelines. Someone that has money is not in and of itself that rarely are the things you want to get the right partners to work with. I’m being conservative with the values. It’d be $12,500 but that’s not what this is overall but it’s worth a minimum of that.
This was a blog I put together where I talk about some of the things I do on a day-to-day basis. It’s some of the things that I ran into. I went through a handful of case studies and some of these are case studies that I haven’t talked about publicly. Some of them are still in process, so I don’t even know the final answer. I wanted to give the behind the scenes look of some information that I don’t share anywhere else. That’s a thank you for people who signed up. “What are some of the alternatives to learning notes this way? Could do private coaching and there are some folks who do that?”
I’ve done a little bit of this on a consulting basis. If I was going to work one-on-one with folks, it would get very expensive, very fast, and where you would end up with, if you went down this road is you would be spending a lot more money and it would not be as step-by-step and not nearly as complete. You could do a $15,000 mastermind like I did, that could be okay. As I said, when I did that, I learned a lot but it was missing. I had to build all of my templates, my processes, my calculators, and there were a lot of things missing.
There are masterminds out there that are a lot more expensive than this one. You could go to a school to learn notes that could cost you $20,000 to $80,000 and oftentimes, you take one piece of training and then get upsold to the next one. You could do that or you could work with me and have me do it all for you. That’s great. If you can learn to do this on your own, there’s a lot of value and niche. If you don’t need me. What does that cost? It’s not $15,000. You can get started now for $150.
The way that Note Launchpad is set up, there are two options. You can do the twelve monthly payments of $150 each or if you wanted to do the full pay, get a discount and it’s $1,497. I wanted to set this up so that you do this and you buy even one note, it’ll pay for itself on the first deal. If you’re spending $15,000, $20,000 if you think about it, you got to deploy a lot of money notes to have that pay for itself. I didn’t want to do that. The other thing I considered was breaking these 5 Phases into separate courses because there are some people who want to learn the foundations or who can buy notes but they’re like, “I want to learn how to scale.”
There are some people who are like, “I can scale a little bit. I want to learn how to get funding.” Rather than break all those up and charge separately for all of those, I just priced it so that even if you only care about one of the modules, it becomes worthwhile. That was the theory behind this. How did it get started? You can go to NoteLaunchpad.com and then if you join, you’ll get an email to have linked to the private Facebook group and some other information, and then you can get started. You could get all the way there and then one last testimonial from Derek.
He’s one of the good guys. He says, “A note investing game does ethics, background investing approach, and experience stand to benefit new and experienced investors alike are personally invested within field knowledge providing this extremely high value.” Derek was one of the folks who went through the beta program. We finally got something in the industry that allow you to start buying notes within 30 days. That’s been missing and has been long overdue. I am going to wrap it up there. One person asked, “I don’t have a finance background. Will I be able to handle this?” Yes, a finance background is helpful. There’s no question about that but I explained the theory of how these work and then give you the spreadsheet.
It’s designed so that you don’t need to finance the background to do that. Someone else asked, “What happens if I don’t like the course?” There’s a 30-day money-back guarantee. I’ve had this on other courses. If you sign up for this and you’re like, “Dan lied to me, none of this stuff is in here. It sucks.” Let me know and you can have a full refund. It’s not a problem. I’ve had the same guarantee on my other courses and I’ve only ever had one person take me up on it. The reason they took me up on it was they bought the course and then said, “I don’t have time to do this.” They never even log in to the course. It wasn’t that they didn’t like it, but you don’t have to worry about that. The investors I work with, I want them to be all-in and feel like they’re getting value. Someone else asks, “Where to see you all the calculators and checklists.” Yes. You get all of that stuff. I don’t tell you how to build them. I give them to you if you want to modify them or do other things, you can do that.
Thanks so much for joining. I’m blown away by how many people stay and signed up in general. Somebody asked here one more question like, “How realistic is it for the beginning investor to participate if you don’t have a lot of capital?” You would want to have money to buy notes on your own. A lot of the notes that I buy mileage varies but they can be $20,000 to $30,000. You also want to make sure that’s not too bigger percentage of your net worth. I would want to have at least $50,000 or so ready to go. When you get the course, you have lifetime access, so you can go through it. If you’re going through it, you’re going to get there in 30 days.
You’re going to be spending a couple of hours a day during that month. There’s nothing that stops you from going at a slower pace. There was another question about, “What type of notes.” That’s funny. I can’t believe I left this out whether it’s 1st or 2nd. I only cover first, but it’s both performing and nonperforming. I do talk a little bit about seller finance in there. I’ll let everyone go and wrap it up there again. Thanks so much for joining. I appreciate it.
Important Links:
- Note Launchpad
- Dan@FusionNotes.com
- Pipedrive
- Podio
- 5 Phases – Previous episode
- Systematic Due Diligence
- Video – Where To Buy Mortgage Notes on YouTube
Love the show? Subscribe, rate, review, and share!
