Wednesday, October 28, 2020

Burnt Out Landlords - Real Estate Investing the Easy Way With Mortgage N...

Burnt Out Landlords - Real Estate Investing the Easy Way With Mortgage Notes Uncover Why Savvy Investors Use Proven Mortgage Note Strategies for Massive Monthly Profits In Today’s Ever-Changing Market… Risk-Free! Discover more about Note School and profiting without Tenants, Toilets and by taking our FREE one day class: https://new.noteschool.com/virtual-10-10-20/?utm_source=video&utm_medium=lead-gen&utm_content=YouTube&utm_campaign=1-day-class Latest Class Information: https://noteschool.com/3-day-classes/pop/ Download a Brand-New eBook by Eddie Speed It’s A Whole New Ball Game With Creative Financing https://lp.noteschooltraining.com/moneyball-getstarted Follow us: https://youtube.com/c/noteschool https://www.noteschool.com/ https://www.facebook.com/thenoteschool https://www.linkedin.com/company/noteschool/ https://www.linkedin.com/company/colonial-funding-group-llc/ https://twitter.com/thenoteschool https://www.instagram.com/thenoteauthority/

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Brian Lauchner (00:12): All right. Welcome, My name is Brian Lauchner. Welcome to NoteSchool TV. I'm glad you're joining us. You're joining us live for the greatest content in the market right now, specifically in the NoteSpace. And today we've got a very special guest, very near and dear to my heart. We've got the one and the only Eddie Speed. And so what I want to do is just a couple of things. First, I would like to tell you that if you would like more up-to-date content on a weekly basis, you want to know what's really going on in the market, you want to know what's going on in the Note Business, then join us every single week. Join us on Facebook Live, YouTube Live at 11:00 AM central time. Every single week you want to go and like, and subscribe these channels and turn on these notifications so that you're always in the loop. When we're going to go live. Brian Lauchner (01:09): If you are not familiar with NoteSchool, you can learn more by simply going to www.NoteSchool.com/VirtualGold. And you'll learn a little bit more about that, moving forward. You can also go to www.NoteSchool.com/TV. If you're not catching this live, if you're watching this in the future. But as we kind of dig in today, I want you to really engage bring your questions, write your comments, share this with your friends that you think it might be valuable for them it's going to provide some value to them and their business. Today, we are going to be talking about something that is really unique. We're going to be talking about what is a BOL? And the person who's actually going to be telling us about what a BOL is, is Eddie Speed himself. And if you're not familiar with who Eddie Speed is I'll sum it up like this. Brian Lauchner (02:00): Eddie speed has been in business for over 40 years and he's done over 40,000 deals. And so he is not a flash in the pan. He is the real deal. I look up to him, he's my mentor, and he's taught me so much. And so I'm excited to introduce to you today, Eddie Speed. Who's going to be joining us. And the question I have for Eddie as he comes on the screen here is Eddie, tell us a little bit about what is a BOL? And I got you. You're still muted here, Eddie. Let me, let's get you unmuted and then and then go for it. One second. There we go. Eddie Speed (02:44): How about if I unmute myself? Brian Lauchner (02:45): Go. Eddie Speed (02:45): How are you, Brian? Brian Lauchner (02:49): I'm doing great, Eddie. And I am just, I know that everybody that's watching this right now is confused on what this new term is. And so we're trying to figure out a little bit more of what it is, and you're the guy to teach it to us. So share a little bit about what's going on in the brain of Eddie Speed. Eddie Speed (03:10): A BOL right? Brian Lauchner (03:14): Yeah. Eddie Speed (03:15): Stands for Burnt Out Landlord. Brian Lauchner (03:19): Not burned out, burnt out. Eddie Speed (03:21): Like it'd be burned out too. Burned out, burned up, but Burnt Out Landlord. Right? And people say where in the world, is that written in the NoteSchool dictionary? Brian Lauchner (03:33): Yeah. Eddie Speed (03:36): Because we made it up, but it's a thing. It's a real thing. It's a big thing. Brian Lauchner (03:42): So tell us a little bit about where did this term come from? And why is it that it's so timely and important right now with all that's happening in the market? Eddie Speed (03:53): You know, we, our executive team is very, very, very seasoned in the mortgage and real estate investor space. Literally our executive team has come from significant mortgage banking operation, significant hard money lending operations, significant, I mean, all of those variables. And so the guys behind us that support Brian, you and I, right? They're data guys. And they research and do a lot of work all the time. And I, you and I would be out doing training events and we would come back in and we say, man, it's really funny, somebody like I had, like half the class came up to me and said, Oh my God, I got a bunch of rentals and they're driving me crazy. And after hundreds of trips and thousands of times this happened, we started realizing that this was a customer that showed up at NoteSchool over and over and over. Eddie Speed (04:54): And so we started doing a lot of research, right? Who is this Burnt Out Landlord? Why are they burnt out? And there's a lot of information that will go into this and we can't possibly cover it all in one show, but we will clearly talk about this along the way to the point, Brian, I'm going to say this, if you're in a real estate investor and you're trying to utilize any form of creative financing, which I think you, every real estate investors should be doing that, right? If you're in the NoteSpace and you're using any form of private, passive capital, right. Which I think everybody in the NoteSpace and everybody doing creative financing should be doing, if you're in one of those two categories, which is what Brian you call what are active and our passive group. Brian Lauchner (05:48): Right? Eddie Speed (05:48): Right. So if you're in either one of those categories and you're not dealing with a Burnt Out Landlord, I would say you are probably missing a gigantic part of the equation. Because the Burnt Out Landlord drives the NoteSchool business. It drives how we fund our business, It drives how all of our students fund their business. We're solving a problem for Burnt Out Landlords. And also we're doing business with Burnt Out Landlords because they're selling their Burnt Out Landlord property to us with creative terms. So that whole customer base is big. Brian Lauchner (06:28): Yeah. Eddie Speed (06:29): So you want some stats? Brian Lauchner (06:31): I do, Yeah. Lay them on me, what do you got? Eddie Speed (06:34): Well, I got a brand new report and I mean, brand new as of this morning. Brian Lauchner (06:40): Okay. Eddie Speed (06:41): Alright. 22 million residential doors. One to four family are rentals. 88% and this is all source data. Okay, So I'm not going to all the sources, but I'll promise you, It's all. We didn't makeup any stat here and they're all verifiable good sources. So 22 million, 88% of those 22 million rental properties are owned by investors that own one to five units. Brian Lauchner (07:16): The average Mom and Pop investor. Eddie Speed (07:18): The average Mom and Pop, right? 55% of those investors, the Mom and Pops, manage their own units. Brian Lauchner (07:33): Wow. Eddie Speed (07:34): So they're not corporately managed. They're not using a rental property management company. They're managing themselves. Brian Lauchner (07:40): Right. And just to jump in here on that, because when you say that, what really stands out to me is, you know, I've both managed my own rental properties as well as hired a management company to actually manage them. And there is a very big difference between dealing with your own tenants and toilets and turnover versus outsourcing it. And I think the important thing to focus on, and what I really heard was obviously, if you were managing, when you have that many people, self managing their own properties, the level of headache, right. Is going to be substantially higher with anybody who's self managing, right? And the likelihood that they're going to become burned out is going to be obviously greater than those who are, you know, not self managing. Eddie Speed (08:24): So I'm very good friends with a lot of people that own turnkey rental property management companies, right? Some of the biggest turnkey real property management companies in the country. In fact, I'm fortunate enough that I get to do some consulting and training for them, right? So I know a lot of these guys and their stats are not the same as far as problems of the stats of the small guy. And I look at and think it's pretty simple. They have a vetting process for tenants. They have an approval process, They have everything proceduralized, they're running it like a real business, right? I think small landlords realize that they bought an investment, but found out they bought a small business. And that is managing property was a business, not just an investment. Brian Lauchner (09:17): Yeah. And I think to that point as well is we're giving a lot of credit to the average landlord that their original intent was to become a landlord. When, in my experience, as an active investor, over the past several years, what I have found is that there's a lot of people, especially in the last 10 years, as we've talked about you know, over the last several months, is all these people who got involved in real estate during this last big boom. They wanted to flip houses, right? Just like Chip and Joanna Gaines or the property brothers whoever. And so by getting involved, they flip their house and their $20,000 rehab budget magically becomes 30,000 or 40,000. And now all of a sudden flipping the house, doesn't sound like a good idea. And they become what I've been, I've always called it an accidental landlord, right. Until you've told me this, Right? And so by accidentally having a tenant now you're gonna, they think what's going to happen is they're going to be able to make all this money, right. Eddie Speed (10:12): Because rental properties, that's how that's how wealth is built. Right. But they're ignoring the reality that comes with obviously tenants, toilets, and turnover. And so a lot of these people you're even talking about, it was never even their goal. And a lot of times they're only self-managing because they need every penny they can in their cash flow to justify to themselves and to their spouse that see, this is still good. We're still making money. Eddie Speed (10:38): Yeah. I mean, there's no, we want to be clear. We're not making fun of anybody. Brian Lauchner (10:44): No, of course not. Eddie Speed (10:44): We're simply saying that this is a market condition and our job, every entrepreneur, every real estate entrepreneur, I really people say Eddie, you're a note guy. You bought all these notes, and then all this Note Business, but how did I do all this business? I help real estate investors utilize notes and creative financing. That's how I bought so many deals. I didn't do it just one Mom and Pop at a time. I did it because I streamlined business models that real estate investors could use. So whether you're a small real estate investor in you've done two deals or you're, I got two deals yesterday didn't make any difference, Right. We figured out real estate investors need this process. And we've figured out that the Burnt Out Landlord is the target customer that has the biggest problem to be solved, right? We didn't wake up one day and just make up some catchy term. We woke up day after day after day, these people showing up at our doorstep, or they're showing up at a NoteSchool train person's doorstep. And they all were, they led back to this frustrated person who found out that in reality as you said, Brian, they are running a business they never intended to run. Brian Lauchner (12:08): And I think to kind of back up, I'd like to hear a little bit more about, you know, every investor who's watching this right now live is asking, it's always the same two questions. How does this help me get more deals? And how am I going to be able to find money to do these deals? So tell us a little bit about why the BOL is such an important topic when it comes to finding deals and funding deals. Eddie Speed (12:32): All right. So this report, and I haven't even released it yet. I mean, I'm serious. Like this is all fresh as it gets. And for this is a software company that is called Rentec Direct. So they have software with about 200,000 landlords, small landlords. And they are reporting a decline in the money they've collected every month. And so as of September 20th, it's now saying 35% of landlords did not collect a rent check in September. Eddie Speed (13:09): It was 17% in April. So 17% of people didn't collect rent in April. And I know that professional landlords stats are not going to be that bad, Right. I know all the guys that Sir, that have turnkey properties and manage thousands of properties. And they're like, well, our stats aren't that bad. I get that. But you got to remember the small landlord did not have the vetting process. They didn't have the business processes to go vet the tenants the way your system did. Mr. Big landlord, property manager. And so understand this is just this is what I think the small guys experiencing that the big guys are going, but we're not quite seeing it this way. And, let me just tell you something, Brian, that is pain. Brian Lauchner (13:57): Uh-huh. Eddie Speed (14:01): When I met you originally and you came to a NoteSchool class years ago, right? You and your dad. Brian Lauchner (14:06): Yeah, 2016. Eddie Speed (14:07): Right? And you came to a NoteSchool class when I met you, you were out there basically wholesaling houses, full time wholesaler. And you were good operator in the business and stuff. And you were like zeroed in on who to go chase. But today, if you were a house buyer, particularly if you wanted to go buy houses with wholesale financing terms like that, you could, there's two ways to buy. You can buy with price or you can buy with terms, right? I would go chase this guy that has, has a pain problem that would love to get rid of it and still not lose his shirt because you could structure financing around this and show how somebody not to lose your shirt, but to go get rid of your immediate problem. Eddie Speed (15:00): So if you're a real estate investor and you're saying, why does the Burnt Out Landlord matter to me? It is because there is to me, a glowing fire around this problem. That means a real estate investor could come in and solve the problem. Brian Lauchner (15:17): Yeah. So for everybody, who's listening in case you missed that, right? If you were an active real estate investor, and you're trying to find that next deal, what he just said is we're targeting as active investors. We're targeting motivated sellers. And what Eddie had just said, in case you missed it is the most motivated seller right now is this Burnt Out Landlord, someone who has a lot of the headaches, but more importantly now they're not even receiving income, but most of them have leveraged properties as well. So now they're getting pain from both sides. I'm not receiving income and I've always got money going out. Brian Lauchner (15:48): And so this target avatar, if that's what you want to call it, is a very crucial target, and more importantly, what I'd like for you to talk about next is this Burnt Out Landlord. Why is it that they're going to say yes to my offer versus every other wholesaler who's sending the mail. Eddie Speed (16:07): Well, the other wholesaler, that's sending a mail or messaging them some way and trying to get them to sell their house. He's trying to buy a house at a discount. Brian Lauchner (16:16): Yep. Eddie Speed (16:16): You're going to say, I don't have to buy your house at a discount. I just can't pay you. I can't pay you for the house today. I'll pay you for the house over time. Right? So you can structure financing around it and increase the price because you're going to structure the terms and let's be fair about it. The terms are going to be to your advantage, the real estate investor, not the Burnt Out Landlord. Brian Lauchner (16:39): Of course. Eddie Speed (16:41): And he can decide whether we wants all cash today or he wants to take, you know, the value of his property and accept it over time. So that's a strategy that's very, very useful. And I was teaching for a extremely advanced group of real estate investors the other day, extremely advanced, right. All a hundred houses a year plus guys, right. And and so at the end of it, they said, okay, Eddie, give us the big takeaway of the market. You think we ought to chase? Eddie Speed (17:13): I just told you what. I just told you the same thing that I told these guys. I don't have a different answer. If you're asking me today, if you're a real estate investor and you're not chasing that market, I think you are ignoring the biggest pain in real estate today. And you can buy properties in a manner where you can structure, how you pay them over time to really create what we, what you and I referred to. Brian as wholesale terms of the financing, not wholesale price. Brian Lauchner (17:45): Got it. So that addresses really our first piece, which is, The question every investor wants to know is where do I find the deal we just talked about? And why are they going to sell you the house over someone else? Cause the price. Cause you're going to give them this higher price. Now the second piece of this, and this is where creative financing and your brain can just go crazy is how do I find the money to do this? Right? Where does the funding piece come from? So tell us a little bit about the funding aspect and why it's so scalable with creative financing. Eddie Speed (18:15): So the other side is the Burnt Out Landlord is not looking to go buy another rental. He's already figured out he can't manage this business. So the Burnt Out Landlord though, is not out of money. And we have a lot of statistical data, they show they're sitting on a huge pile of money. They're just don't have a tolerance to go buy another job. Right? So they, so then we can take their capital and use them to fund our note business. Or you can fund your real estate investing business, right? And there's various ways that you can do that. But we have learned that the Burnt Out Landlord is, he is dying. He's not dying to go jump in the stock market, right? Brian Lauchner (19:03): Right. Eddie Speed (19:03): He's not dying to go buy another rental, but he's sitting on what we call dry cash. He's looking for something to go do with his money. He's just not looking for a job attached with it. So he can be truly become the bank and not a landlord, and that solves his problem. Now it funds your business. That's a pretty big problem solver for us. Brian Lauchner (19:27): Uh-huh. Eddie Speed (19:27): But it's big problem solver for him too. It's a win, win, Brian. Brian Lauchner (19:32): Yeah, absolutely. I think that the way that my brain understands that really well is specifically with the fact that they're burned out. We know that they're tired. We know that they've got headaches is just imagine having a conversation with one of these Burnt Out Landlords. And essentially what you're saying is, look, I get it. You like the fact that you got into real estate because you like the good pieces with you're going to get cashflow. When the tenant pays, it's going to be protected by a real asset. You could drive by it everyday. Right? But what you've learned is there's the headache piece, the bad piece of tenants and toilets and turnover, and putting more capital into a property that you originally didn't maybe anticipate putting that much money into. And so the conversation becomes, look, what if there's a way for me to show you how to keep the good cashflow and a hard asset, but I could take away the bat. Brian Lauchner (20:17): If I could show you a way to keep the good and take away the bad, would you be open to talking about that? And it becomes a very smooth conversation for them to say, yeah, actually I do want to play the bank. The bank just gets their money and they're left alone. Oh, that's why I got into real estate. Right? And so it is a very logical way. Eddie calls the talk off, it is a very logical rational conversation. Excuse me, it's not this slick salesy approach that you see I think you know, over the last several years from people, these new things, like there's so much reason in this because there's so much there's pain and Eddie's in my opinion, crack the code on how to go out and facilitate this conversation so that when now we have not just the properties we want to buy, but the funding that we want to come with it. And I think that no matter how many investors I talked to over the years, it's always those two questions in one way or the other. It's always, you know, where's the deal or where's the money, Eddie Speed (21:16): You know, Brian, it's why we decided, and this is our inaugural first, you know, TV show, right? It's our, Brian Lauchner (21:24): Live. Eddie Speed (21:24): This is our first one. And we can pick a thousand subjects. I mean, I've, we could go, we can teach all day every day for months, literally, and talk about something that's not, it ties together, but it's not the repetitive saying the same thing over and over and over. And we pick the single biggest topic today to address, which was the Burnt Out Landlord, because he such a factor in the market. Let's look at real estate investing overall. Okay, So you've been a full time real estate investor for a number of years. Brian Lauchner (22:06): Uh-huh. Eddie Speed (22:06): Okay. So why didn't the person that sold you a house just go list it and sell it through a realtor? Did they not know about realtors? Brian Lauchner (22:19): They were willing to give up certain things, but not willing to do other things. Eddie Speed (22:24): Yeah. So, they didn't want to go list it with a realtor, cause they had to go stage the house,. Brian Lauchner (22:30): Uh-huh, or put money into it. Eddie Speed (22:30): Or they needed to fix the bathroom up or, you know, they had it, they needed to close it quicker than the realtor would or all the above. Right? Brian Lauchner (22:41): Yeah. Eddie Speed (22:42): So what you're saying is, you still acknowledge that the traditional real estate brokerage is the biggest piece of real estate, right? You were a real estate investor and you represented a ring around it, but you weren't the whole market. Brian Lauchner (22:59): Correct. Eddie Speed (22:59): You weren't even the biggest piece of the market. Brian Lauchner (23:01): Correct. Eddie Speed (23:02): What you found out though is as a real estate investor, you are a problem solver, that traditional real estate brokerage wasn't solving. Brian Lauchner (23:13): Yep. Brian Lauchner (23:14): So that's how I see what we do, Right. You were trying to buy every house at a discount and you found out that you could buy a piece of the business you'd make about 20 offers in one person would sell to you right? Ain't that, about your stats? Brian Lauchner (23:30): Yeah. Eddie Speed (23:30): Okay. And that's pretty much that story we hear over and over, but, remember 19 people said no. Okay. So you're just solving a problem that in those 19 transactions, if you got somebody willing to carry term for you and we'll all agree, it's how you say it. It's not just how you whiteboard it. Although knowing how to whiteboard it is cool. Right? Brian Lauchner (23:59): Yeah. Eddie Speed (24:00): And we like teaching that it's fun. But the truth of the matter is it's also fun to talk about the talk off, how do you get them to do it? So if I were looking for a customer that's a most likely today to listen to terms, it's going to be that Burnt Out Landlord. And by the way, it's cool because you know, that's a definable customer out there. That's a definable motivated seller, Brian, and you know a lot about chasing motivated sellers and how to do it. We're just trying to make sure that all of you are dialed in. This should not be a secret. Brian, I'm going to go back to some stats. Brian Lauchner (24:38): Okay. Eddie Speed (24:40): My dad grew up in the country, Right. And so, as you know, I love country expressions because they're, they resonate, they tell a story, Right. Brian Lauchner (24:50): Yeah. Eddie Speed (24:50): My dad used to say, that's big as a wagon wheel, you know, and you just always had this picture in your mind, like how big is a wagon wheel, right. Brian Lauchner (24:57): Yeah. Eddie Speed (24:58): It's a big wheel. Right? So my dad used to say, that's as big as a wagon wheel. This market is big as a wagon wheel. You're talking about 22 million houses, right? 88% of them are owned by small time investors. And about half of them just bigger half easy number, about half of them manage their own properties. We have data that the small time, real estate investor, 35% of them didn't get a rent check in September. Just do the simple math. I mean, you're talking about millions. Brian Lauchner (25:38): Yeah. And I think that, and this is kind of be, I just, I gotta brag on you for a second because this is, I think a lot of people hear this conversation and they say to themselves, well, I've marketed to landlords are absentee, you know, owners before, and here's the reality is Eddie, as you heard a second ago, I met him in 2016. He actually told me to add creative financing at that time. And I didn't, but here's what you got to understand. I didn't, because I didn't have a problem in my business. Right. In 2016 the market was perfect for wholesalers, buyers were everywhere, marketing was working. And really what you got to understand is the market shifted. And so if the market shifted, what new action do I have to take in order to get the result that I'm expecting? And what Eddie's saying right now is you have to take out your previous experience, if you've talked to landlords before, maybe you're a landlord and things are going great for you, but the reality is, as he just told you, the market shifted, things changed, and so therefore you need to adapt to that. And this is why it's so important that you tune in live to these these streams, Brian Lauchner (26:44): Because we're going to be coming with the most relevant, the most timely content on a weekly basis so that you can be as competitive as you possibly can in the marketplace. And so I think that kind of, as we go forward, obviously Eddie has all this information and in his head and we're going to do everything we can to kind of extract that. And he's very willing to share with us, he's a great teacher. And so join us every single week. And we're going to go out and put book in on this first episode. And I just want to invite those of you who are saying, look, what's NoteSchool? How do I learn more about the creative financing world? The Note Business? Here's what you want to do. If you're wanting to learn a little bit more, if you're wanting to even hear more Eddieisms, right? Brian Lauchner (27:29): If you want to know what it means to be as big as a wagon wheel, want to do is you want to go to www.NoteSchool.com/VirtualGold. This is a one day class that we're going to be teaching to really equip you with the knowledge of creative financing and notes, and really what's going on in the marketplace. This class is a deeper dive using case studies real world by NoteSchool students, real world case studies that will show you and really equip you better to go out and be competitive in your marketplace. It's a full day of content, right? This entire day is meant to equip you and get you up to speed with real market conditions and actionable Intel to go out and take that next step in your business, whatever that looks like for you. And so as always, I just want to encourage you, make sure that you are subscribing and turning on the notification so that you get this live and ahead of your competition, but also make sure if you're wanting to learn more about NoteSchool, go to that link, get involved and we will see you there. Brian Lauchner (28:30): It's going to be fun. I will catch all of you next Wednesday at 11:00 AM central time. Do not miss it for more content. And we're going to be bringing on more of the NoteSchool teaching team and more subject matter experts to help equip you and help you become more competitive in your marketplace. You guys have a great day and we'll see you next week.
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