Thoughts from the Desk of Bob Repass…

The past year and a half has been challenging not only for our country but the entire world. Like nearly every other industry, the pandemic has impacted many aspects of the real estate, housing and note industries. NoteExpo 2021 is the time for the industry to regroup and look ahead to a bright future.

NoteExpo 2021 will welcome back the note industry to the Dallas area this fall with our in-person live event on Friday, November 5th and Saturday, November 6th at the Embassy Suites DFW in Grapevine, TX. You can register today CLICK HERE.

Now in its 8th year, NoteExpo attracts leading subject-matter experts across the note space and will feature dozens of exhibitors as hundreds of real estate and note investors from across the nation converge in Grapevine for the event. NoteExpo is more than just a conference, it is an in-person event that brings together a community of like-minded professionals working towards the common goal of creating an environment where the attendees can learn, trade and invest with their industry peers.

We are super-excited to be able to return to in person events and are looking forward to bringing together top-notch speakers and face-to-face networking opportunities for all the note professionals who are eager to connect and reconnect with their industry counterparts.

Headlining a full schedule of content, connections and community, NoteExpo 2021 will offer insights into all segments of the real estate, housing and note industries along with the most pressing topics and headwinds our industry faces. The leading experts will have plenty to discuss as they dive into topics such as opportunities in the nonperforming loan space, loan servicing and compliance, default management, self-directed IRA investments, marketing, and creative financing strategies.

Our line-up will once again consist of Keynote addresses, general sessions, NOTE Talks and panel discussions designed to help you navigate the latest market conditions and chart the course to grow your business in the year ahead. NoteExpo 2021 is THE note industry event of the year, and I personally invite you to join us November 5-6 in Grapevine. REGISTER TODAY. Bob Repass Managing Director

Stay up to Speed with Eddie

Push Through The Fog To Reach The Blue Sky

by Eddie Speed

A super high intellect is nice to have. At least that’s what I’ve been told. My sisters always made the A-Honor Roll, but I was a straight C student. (I was dyslexic, but that wasn’t a commonly addressed issue when I was in school.) Fortunately, having a Mensa membership or summa cum laude is not essential to making it big as a note investor. What is absolutely essential? Determination! If you fall seven times, make sure you get up eight.

MEET NICOLE ROMANO: FUTURE ROCK STAR

Speaking of being determined, I want to introduce you to somebody I’ve recently started mentoring. I know she’s going to succeed in a big way simply because she’s a tenacious soul who’s determined to make it. She’s all in, like somebody who checks the depth of a creek with both feet at once. She’s learning the mechanics of notes from me and tuning up her head game with Pat Precourt.

Nicole is a single mom with her own interior design business. I want you to get to know her in her own words, so I’ll let her speak for herself: “I’m part capitalist, part hippy. I’ve dabbled a bit in real estate, but my main business is my interior design company. Most people think that as an interior designer I should be flipping houses, doing the HGTV thing, making them look pretty. But rehabbing houses takes a whole lot of time; so do I really want to run another renovation project? As a business owner and single mom I only have so much bandwidth.

I’ve attended a few real estate seminars with the “gurus” over the years but never clicked with what they were teaching. I got the gist but not the fire, so I never signed up for anything. I found out about Eddie in the thick of the pandemic when I heard him speak at a Realeflow webinar with Jeff Watson.

Eddie didn’t do any diagrams; he did it with just words. I can’t remember exactly what he said, but he explained the concepts of the creative ways you can put together a deal. All circuits were fired up instantly. My mind was blown.

It’s funny, we’re very different in many ways. Eddie’s a cowboy and I’m a hippy. But when I heard him speak something clicked and I knew that I wanted as much of his wisdom as I could get, and I wanted to put it to use immediately. But we were in the pandemic and I was running mommy daycare. It took me a while to get going. First I signed up for website access, then a 1-day class, then a 3-day.

I talked with Eddie at the 3-day and signed up for a NoteSchool long term membership. I wanted to learn creative financing, and Eddie is ahead of his time. He doesn’t just motivate me—he inspires me. I jumped in because creative financing is problem solving—much like being a designer. In design, people come to me with a wish list, a timeline, and a budget; and creative financing is kind of the same way. There are lots of parts you have to put together, like a giant jigsaw puzzle. I think becoming a success in the note space is very similar to working on the large projects I’ve done. It comes together all at once. You may feel like nothing is happening, like the work is leading you nowhere, but one day all those puzzle pieces will just slide into place. You have to keep going because you could be just on the other side of a major breakthrough. Or as Eddie would say, ‘You have to push through the fog to reach the blue sky.’

My biggest stumbling block was being able to focus. Eddie makes everything so exciting. He drops you into this abyss of information. We can’t understand everything at once. I was like a kid in a candy store. So you kind of just have to pick one thing and master it.

My goal is very specific: $10K a month in passive income by next June. My commitment is to keep going! Do what you can, when you can. I carve out a little time each day for notes, and I don’t beat myself up if I can’t work for hours on notes. Some days I’ll watch a video, make cold calls, or join a deal lab. I often fall asleep at night watching videos of Eddie or Pat on my iPad!

I love the NoteSchool community. As Eddie says, ‘A team effort outweighs a solo effort about 100 to 1.’ In deal labs, you watch your peers trying to figure things out. There are people on there who are so advanced they run their own training programs—and they even seek Eddie’s advice! NoteSchool has done a great job of creating an ecosystem of various environments where I can collaborate with other students to apply what we learn.

My membership with NoteSchool also includes training with Pat Precourt who helps rewire your brain and build confidence. He’s taught me to view all the hurdles in my way as opportunities. Those hurdles are what hold back your competition! Once you’re over the hurdle, you’re one big step closer to reaching your goal. The power of notes speaks volumes. I sent Eddie a note in snail mail. I thanked him for being so devoted to his students. One of the reasons I believe in Eddie is because he believes in me.”

BE DETERMINED TO BE DETERMINED

I hope you’re as impressed as I am by Nicole. Like she said, you have to master the head game to succeed. Here at NoteSchool we explain all the tools in the creative financing toolbox, which is what I call the “ground game.” But the “head game” is equally important. Your head game keeps you focused, confident, and determined to make it no matter what obstacles are thrown in your way. I send a lot of students to my friend Pat Precourt to learn the head game. He’s a master at helping people from the neck up to achieve power over their thoughts and emotions.

Marcus Aurelius was one of only a handful of good Roman emperors, and he had a great perspective on getting your head game together: “You have power over your mind—not outside events. Realize this, and you will find strength.”

Succeeding in business is very different from getting a 4.0 in higher education. Academia teaches you how to pass a test—business teaches you how to chop your way through the jungle. We have lots of super smarties who are working hard and crushing it; on the other hand, I’ve also seen some people who had the smarts but didn’t crush it because they expected their IQ alone to make them successful.

A person’s Intelligence Quotient can be off the charts, but I look at their Tenacity Quotient. I can tell you without a doubt that my success in the note business is not from a lofty IQ but from my natural tenacity.

Did you know that the great Michael Jordan didn’t make his high school basketball team until his junior year? After trying out his sophomore year and getting kicked back to B-team, Jordan didn’t give up. When asked about the demotion he later said “Whenever I was working out and got tired and figured I ought to stop, I’d close my eyes and see that list in the locker room without my name on it. Obstacles don’t have to stop you. If you run into a wall, don’t turn around and give up. Figure out how to climb it, go through it, or work around it.” How determined are you?

Capital Markets Update

Biden Policies to Impact Markets – Part I

By: Ryan Parson   While presidential policies matter, policies never move markets uniformly Will the policies of the Biden Administration have a negative or positive impact on your investments?  A prevailing view – by about half of the  country – is that a Biden Administration would have a positive impact on the stock market. Another prevailing view – also by about half of the country – is that it would be negative. Although media pundits point to the stock market’s positive performance since January 20^th, that date has almost no significance, as markets move in anticipation of events.  It is not as if market participants woke up that morning and suddenly realized Biden was about to be inaugurated. Nevertheless, let us examine a few of President Biden’s proposed policies that will likely impact markets – being careful not to draw conclusions as to whether the impact will be negative or positive.

Things to Remember

First, remember that no political party has been exclusively great or awful for  financial assets. And, while many might view Republican presidents as more bullish for markets and Democratic presidents as more bearish, the data doesn’t support those views. Further, while presidential policies do matter, the reality is that policies will not impact sectors, industries, and markets uniformly. In other words, there will be certain sectors, industries, and markets that emerge stronger and certain ones that emerge weaker.

Government Spending

For a long time, the U.S. government has been spending more than it takes in. Consider that the federal debt has more than doubled in the past decade and now stands at $28 trillion. And all this COVID-relief spending (not all of it can be        attributed to the Biden Administration) plus the additional proposed spending for infrastructure, health care and other programs, adds more money into the economy, which could cause inflation to rise. In fact, in April, the Core Consumer Price Index increased to its highest level in 13 years, to 4.1%, and this was after an increase to 2.6% in March, which was the highest level since 2018.

Infrastructure Policy

The Biden Administration unveiled a $2 trillion infrastructure spending bill, which calls for one of the most significant and largest investments in the U.S. in         generations. According to White House, the plan is divided across four main areas:

• Quality of life at home ($650 billion)
• Transportation infrastructure ($621 billion)
• Research, development and manufacturing ($480 billion)
• Help for caregivers ($400 billion)

While many might reasonably argue how to best define infrastructure, the $621 billion “transportation infrastructure” piece does appear to have more bi- partisan support. The bill contains:

• $174 billion for electric vehicles, including a network of 500,000 electric vehicle
• $115 billion for roads and bridges, including 20,000 miles of highways and roads and the 10 most “economically significant” bridges in the S., as well as 10,000 smaller bridges.
• $85 billion for modernizing transit systems; and,
• $80 billion for Amtrak

Such spending will clearly favor construction-related industries and companies within the building products, construction materials, and machinery.

Energy Policy

The Energy industry is one that the Biden Administration     will clearly try to reshape. In fact, it started on Day One of the Biden presidency. First, the Keystone XL pipeline was stopped. Then a month later, the U.S. rejoined the Paris Agreement. And how much of the Green New Deal will  make into the proposed infrastructure plan remains to be seen.

Healthcare Policy

Many are expecting the Biden Administration to focus heavily on drug pricing control and create a public health insurance option to compete with private companies. And both policies are likely to be negative for pharmaceutical companies and health insurers.

Foreign Policy

The big elephant in the room is geopolitical tension with China as a manufacturer of so many global goods but also as a consumer of American goods. How this unfolds  of course remains to be seen, but many suspect that the Biden Administration will attempt to cooperate more with Europe and all of Asia – possibly by easing up on tariffs

• and this could bring at least a degree of stability relative to the region’s more recent

Tax Policy

The Biden Administration tax proposals can be summarized into three parts:

• The American Rescue Plan (enacted)
• The American Jobs Plan (proposed)
• The American Family Plan (proposed)

Each of these can have significant implications for the economy, investment markets, and your financial assets. We will look at these proposed tax changes next month in Part II.

The Trading Corner

Why Sell Your Loan?

By: Scot Tyler

Last month we held our annual NoteSchool Summer Summit here in Grapevine, Texas. Unlike 2020, we were able to get back to somewhat normal with an in-person crowd as well as a streaming audience. It was very encouraging to see old time NoteSchool members and meet all the new members face-to-face. If you attended in-person or on-line you know the theme of the summit was “hurdles” we all face each and every day chasing deals. We had industry experts with years of knowledge speak on “raising private capital hurdles”, “buying on terms hurdles”, “sourcing loan portfolio hurdles” and of course “buying one-off notes hurdles”. It was a great time networking and absorbing all the knowledge that was being taught.

Before the summit we polled multiple NoteSchool members and asked what their top 3 hurdles were in each of the topics listed above. After reconciling the answers, we found the number one hurdle when “buying one-off notes” was “TOO MUCH DISCOUNT”. We explained when this hurdle arises, our talk-off goes straight to a “partial” purchase option. In last month’s Buyline article I wrote about partials and how you should be pushing them on each and every call possible and if you weren’t, you were leaving deals on the table. I also spoke about digging into the seller’s motivation so you can create a purchase option specifically for the seller’s needs. What I also have found is it is our job to explain the different reasons why the seller should sell their loan.

There are calls where the motivation is hard to get out of the seller or they just don’t have any that they are aware of and again our job is to expose those reasons. What reasons do you give a seller for selling their note? Here are the top reasons I deliver that sellers are not normally aware of:

OPENS DOORS – sellers can collect on a loan for years with nothing at the end of the term to show for it. The monthly payment collected is not enough each month to really apply it anywhere and therefore is just spent with other income for bills or other expenses. Unless the seller owns several loans, the monthly income is insignificant. Having a lump sum of cash creates opportunities the sellers can invest in that will produce long-term, tangible benefits. “It’s not what you make but what you keep that matters”.

LESS RISK – Lien holders who sell their note eliminate the risk of potential costly bankruptcy procedures, exposure for delinquent taxes or insurance, possible foreclosure expenses (and repair costs) and of course the cost of reselling the property. Liquidating the note puts money in their bank and the security that goes with it.

30 YEARS? – Unfortunately, for most individuals a 15–30-year loan will far outlive their ability to appreciate the money. It is not uncommon for legal disputes to rise between family members over note payments. Selling the loan eliminates estate conflicts and converts the monthly payments into cash for the seller or their heirs to enjoy.

Let me end by saying my negotiation style is not one of a scare tactics approach, but instead one where we are educating the sellers of the risks and rewards of seller financing a property. I’m sure that seller financing was a great idea when they were in a rush to sell their property, but many sellers are not aware of the issues that can arise with owning and servicing a loan.

Here is a note that came across our trade desk that we recently funded. If you’re interested in purchasing it, email me at: [email protected]

Performing Loan – Single Family Residence – Owner Occupied
Columbia, AL
BPO $112,000.00 – February 2021
$98,000 sales price with $10,000 down payment $88,000 / 6.7% / $808.68 for 168 months
11 made / 157 left
Current UPB $84,410.08 Until next month.

This Month’s Poll Question

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