Become the Bank with Notes with Rick Allen

Getting a little fancy is there now you mentioned you make your money when you buy, which is true in most types of real estate, if not all types of real estate. And speaking of the. I wonder about how you even get started narrowing down what you’re going to invest in. And for example, if I know I’m going to go buy an apartment complex, then I’ll probably start by finding one, two, maybe three markets that have good dynamics, and I’m going to look for deals there.

And. Your paper stack platform is very nice. You have a lot of great filters and ways to screen through deals and a lot of awesome information. And I want to commend you of course, on, on that, especially in light of some of the other notes, investing platforms have come and gone over the years that some of them you’re not paying me to say that some of the other ones sounded fly by night, whereas your seams and I’m sure is legitimate and well-thought-through, and all those great things, but regarding sorting through deciding what you’re going to buy, maybe where you’re going to buy it because there are 50 states out there. How do you even get started in that?

It all, starts with one knowing what are you in this for? Are you in this for the passive wealth? Are you looking for performing loans? Are non-performing loans. That’s what I always tell him. He was like, look, you have to know what’s my goal is my investment goal to get a property back, or is my investment goal to, invest some of my dollars, some of my little soldiers and have them out there just earning me my income or earning, my past my mailbox money is Eddie would say so you have to establish the goal.

Then you want to look at, the market’s thing is a great option. It’s something. I tell people that, look, you want to make sure that you’re investing in areas you’re comfortable with. It always helps to have boots on the ground, but you have to go through and maybe look at there are some other things you need to look at when you’re investing in notes like licensing.

Are there certain states that are going to require me to hold like mortgage debt, collectors license Georgia? If one of them, you need to have a certain license, to own debt in Georgia. If you meet a certain threshold, if you’re investing with a comp within a company, or you’re investing more than four or five notes, and don’t quote me on the laws there, but there’s just, there’s different.

There are different requirements in different states. Some states are just like, you can own, you can invest in mortgage debt. So you want to know the licensing laws, but, and then sourcing inventory. It’s, kinda, that’s one of the nice things about the paper stack. There’s a couple about it, but one is that you can go look at inventory for free, right?

It’s free to sign up. You don’t pay for our fee, our services until you buy a buy an actual node. And then, the second thing is if it’s your first time buying a note, the paper stack has an automated to-do list that allows you to check every step along the way. So you can’t go from step one to step four without doing steps two and steps.

And it makes it to where somebody has never bought alone can do a transaction with somebody who works for a bank and they can get through the transaction without missing a step and be comfortable. And so it makes it very easy for first-time users or the first time. 

Nice. That’s definitely very helpful because it’s in any type of investing, you need a roadmap to at least get started till you’ve learned the ropes and all of that regarding the licensing and all of that.

And obviously, yeah we’re not telling people what the laws are or anything like that here, but like, where can you start? Figure that out. Is that, is there a repository online for that information? You have to go to each state and ask? No. 

We have some stuff in our knowledge base, we, because of the sensitivity of it.

I, we can’t put out there a spreadsheet one day that says you have to be licensed in this place and not licensed in that place. The easiest thing, because it a, it could change. And then if I tell somebody you don’t need to be licensed, you need to be licensed. They’re there. They’re coming back to me.

So we don’t put a lot of stuff in there. We just recommend folks like, look, go check with an attorney. And that’s the safest thing to do. When we started buying loans, I started buying loans and. Because I live in Florida is actually in Orlando because we lived in Orlando.

We bought it in our own backyard. Cause I came from the real estate space. I wanted to be able to go see it and touch it and turn the doorknobs and, look at my investment. So naturally, I had attorneys here and asked them like, where can we buy? What can we do? I would just say, just go if you’re, if you have an area like Dubai, You got to check with the attorneys.

Google’s a great place to start as well. You wanna check on Google and get some education like there are educators out there. I’ve mentioned, I went to, note school and Eddie speed. Kevin Shortell, who actually taught me a lot. He used to work for note school. He’s got his own Education pro speak productions or something along those lines, real estate without renters.

If you Google real estate without ranches, you’ll find Kevin ShoreTel and there’ll be able to guide you in. They’re much more up-to-date on Hey, you can buy them here. You can’t buy it there. 

Okay. That’s definitely good to know. Now in any real estate investing adventure, it’s the passive wealth strategy show, right?

We’re here to make it as past, as passive as possible. Of course, there’s going to be some level of time investment, but one of the main reasons I recommend away from folks just buying a single-family and managing your own property. And all of that is because of the amount of time invested.

You’re gonna spend a lot of time to make, not a lot of money. Whereas with notes, think there are a lot of options to reduce the amount of time you’re spending on your investments. But can you tell us about the average, say time investment once you start looking for notes by one oh. How can you really reduce that time, especially working with your servicer to set a strategy and all of that?

I think that’s the key. As much as you make your money on the buy the devil’s in the details. If you look at something, did due diligence is the most important thing when you buy alone, right? You want to look at the due diligence and that’s the payment history. And the servicing notes really to find out what’s the story behind the loan.

If you do the work upfront and if you’re looking for passive investments, then you’re going to be probably investing in performing loans. Non-performing tend to be a little more labor-intensive and they’re non-performing so it’s counterintuitive to say that’s a patent. That’s definitely not passive.

It can be really good returns. And I’ll talk about my favorite investment later on, but there if you do the due diligence upfront and you’re buying, performing loans, having a professional loan servicer is the way to go because they’re going to handle everything for you.

Literally, you can do nothing and just they’ll send you money on the 10th of every month after they pay them, make their mortgage payment on the first or somewhere along those lines. And you just collect the money. You can be talking half-hour a month or no time a month.

It just depends on what kind of bookkeeping you’re doing. But you can literally have nothing to do on these loans and they just keep getting paid. And then if there is something to do the servicers, usually sending you an email saying, Hey the borrower missed this payment or they paid extra or something along those lines, more of just keeping you informed.