Brian Lauchner:
Can you really build your own bank? Stay tuned.
Brian Lauchner:
Well, welcome back to NoteSchoolTV. We are here every Wednesday at 11:00 AM central time. So, feel free to join us, make sure that you're checking out some of the content that we're publishing and also this content that you're listening to is valuable to you. We would love for you to go and like these videos, right? It means a lot to us. It would be great value to you as well, to subscribe to the channel, to learn a little bit more about some of the content that we're pushing out and specifically for NoteSchool TV that we do live every Wednesday. You have to click the notification bell on the YouTube page in order to be notified that we're going live that way. You know, that you can jump on. Here, what we have to say, feel free to comment, chat a little bit, engage a little bit, and even stick around because after the NoteSchool TV Show, we even do an after party where we hang out afterwards and just shoot the breeze.
Brian Lauchner:
Talk about some of the comments that have come into the chat box. Answer questions, allow you to engage a little bit more with maybe some of the guests that we've got. For those of you who are brand new to notes, you're brand new to NoteSchool, and you're just trying to figure out maybe even what this is all about, and you want to learn a little bit more, feel free to go to www.NoteSchool.com/TV , to learn a little bit more even get some free eBooks and kind of dig a little bit more into some of the content that we're teaching and take that next step. This week we've got a very special guest. He is well, you'll see he is from the NoteSchool family. And so we're going to kind of get into that, but before we bring him on, I got to bring on Joe so we can talk about today's latest news.
Joe Varnadore:
My friend.
Brian Lauchner:
Hey, what's the happy hap?
Joe Varnadore:
Well, it's just going on and for everybody on the show today, the big news is that Brian turned 36 yesterday. Happy Birthday.
Brian Lauchner:
Thank you.
Joe Varnadore:
Did the fam have a big party for you?
Brian Lauchner:
No, we, I'm more of a low-key guy, you know, so went and had friends, so yeah.
Joe Varnadore:
Happy Birthday. And for those of the, Eddie is not with us today, everybody, and this is news as well. Right, Brian? So, Eddie is, a grand, Mr. and Mrs. Speed, Eddie and Martha are grandparents for the second time their son Wood, and his wife Tessa had a seven pound seven ounce baby boy yesterday named, his name is Levi. Right? Levi Speed. So, that is number two Colt and Levi, so that's great news as well.
Brian Lauchner:
Absolutely, absolutely. A lot of good things happening,
Joe Varnadore:
Lot of great things, man, and spring is almost here, so that's good as well. So let's talk about the news, Brian, and what's going on. So, pull this article from the Atlantic Magazine written by a young man by the name of Derek Thompson. And he says, this is unprecedented. You know, that's that word? I just said, it kind of, it's like nails on a chalkboard, right? Unprecedented, why America's Housing Market has never been weirder, right? So, it starts off and says, if you think the U S Housing Market is behaving very, very strangely these days, that's probably means you're paying attention. And almost any other year, a weak economy would cripple housing, but the flash freeze recession of 2020 corresponded with the real estate, boom led by high-end purchases. So, even stranger in America's big metros, home prices are going up, rent prices are going down, right?
Joe Varnadore:
And that is strange stuff, right? Home prices are up, in for instance, in San Francisco, some 14% while rent prices fell 7%, which is the sixth largest decline in the survey. So, what does it mean? Well, home prices up, rent prices down, more tired landlords, right? So, more tired landlords means more opportunities with tired landlords wanting to sell those subject to, so that we can wrap them to new homeowners and create more inventory out there. So guys, if that looks a little bit out of focus, that's really what excuse me, what the home market looks like today, right? Just a little out of focus. So, here's what we know, Housing Shortage, right? Biggest, largest housing shortage ever. Lack of New Construction, right? They're building, but we've, the recession in 2000 the great recession, housing was overbuilt, and then nobody was building houses.
Joe Varnadore:
So, we've created this big lack of new construction. Lumber Prices reading yesterday up 180% year over year lumber prices. They're working on that. They're trying to get some new lumberyards online, but stay tuned. Average price of a new house is 325,000 or so dollars, which means the average new house that adds about $24,000 to the average new house. So, Prices are Through the Roof interest rates just ticked up over 3%, age, 30 to 39 millennials. This age group is the largest number of 30 to 39 year olds in history. And they historically by start buying houses about age 31. Here's my question guys. What's a person to do? Right? And hot off the press is here as well. Just coming up this morning home pry home, asking and selling prices hit a new high, the medium sale price of a home increased 16% year over year to 326, an all time high and the largest increase on record home sale prices hit all time.
Joe Varnadore:
Benchmark asking prices of newly listed homes hit an all time high as well, 347, 475, which is up 10% over 2020. And this is pretty shocking. The number of homes listed for sale at any point fell from 40% from 2022, a record all time low, of course, high prices and all that houses are selling 55% of sales are flying off the shelves and going under contract and closing in two weeks. So, amazing stuff. Now, I want to share this with you guys real quick, because this is something that our guests today, right? Is going to kind of allude to is what he does in the, how he draws in private capital. So guys, what this is saying is that this is the Biggest Pile of Cash Ever, right? So, the last time the cash hoard, and this is just in Money Market Accounts, guys, not in a self-directed IRA is just in Money Market Accounts was 2008 during the great recession, right? Stock market refugees. That was about 3.8 trillion. Gosh, we're talking trillion, not billion. Today, we were at about $4.8 trillion. Okay. That is a lot of cash looking for a home. We know that there's 55 to $75 billion sitting idle in in self-directed IRAs. So, guys that is the news as we see it today, and we're going to tie this big pile of cash in just a minute.
Joe Varnadore:
Alright. Hi, Brian.
Brian Lauchner:
And, and one of the things I would say too, for those of you who are with us right now, if you're somebody who's wanting to raise capital, you're struggling to raise capital, make sure you're typing this in the chat box, drop some comments so that we can talk about it in the after party and kind of see if we can address some of the issues that you're having, because after you learn from our special guests been here, I think you're going to see there's a pretty interesting opportunity knowing there's $4.8 trillion out there, what can we do to not only help these people invest this money in a solid return, with a little lower risk attached to real estate, but also be able to generate some wealth for ourselves. So, you're ready to bring on our guests here?
Joe Varnadore:
Let's do it. So, Mr. Ben Haught, right? Ben is the owner of or Managing Director and Partner, if yeah. The MD, right? They acquire investment group, he is a lot of you. If you have met Ben through NoteSchool, he's gone with that school for a long time and he is building his own little bank, a deal or two or 10 at a time. Right, Ben? How you doing?
Ben Haught:
Doing great. Happy to be here. Happy to talk about this.
Joe Varnadore:
Yeah. This is an amazing thing. Ben's gonna jump on here. And he's going to tell his story, as we go through this kind of how well, can you tell us how he started Hammelmyer and the relevance of what that looks like. So Ben, why don't we get to it? I'm going to bring up the slides here and I'm going to let you, you and I are just going to have a little conversation, right?
Ben Haught:
Alright.
Joe Varnadore:
You know, Ben, it's kind of like Elvis says, right? A little less conversation and a lot more action, right?
Ben Haught:
That song was played many a time in my household growing up.
Joe Varnadore:
So Ben, tell us a little bit about, you know, your vision when you, you know, with, with Hammelmyer and what prompted you to to jump into that. Right?
Ben Haught:
Sure. Well, I will tell you the original inception what Hammelmyer looked like before. It really became what it looks like today was different, similar, but different. And the original intent behind it was just to kind of say, I went into the doctor as, you know, a family doctor who I've known for years. And they had said, you know, what are you into? And just kind of started talking about the business, talking about what's going on. And I found that he was heavy into had a big rental portfolio. And he was one of many doctors that were in the same building. And I just happened to talk to him about that day. He was saying about notes that day. And he was saying how he wanted to kind of use his retirement money.
Ben Haught:
And he was about five, eight years away from retiring. And he's like, man, I just, you know, all the different things that you hear, you know stock market and, you know, burnout landlords and all that stuff was there. And it, I forget how I worded it. And I, for the life of me, I've tried to remember, but it was something to the effect of, he said, well, Ben, what is it that you really do? And I said, well, doc, I work with people like you who want cashflow without the headaches or something again, very similar to that. And that's what hooked him. And he was like, well, what do you mean by that? And so during that conversation I found, you know, rentals who was, he was heavy into it as with most of the investors that I've spoken with and rehabs the traditional things that you hear.
Ben Haught:
And it was like, what is it, why are you involved with that? Why was that part of the portfolio? And that's really what started setting up the engaging the conversation. And one of the earliest things I can remember is saying how, you know, it's kind of funny, you and I have spoken before Joe, and, you know, people are a lot more alike than what they realize. And it was funny cause you take all different backgrounds, all different types of people, although they all kind of wanted the same thing, as we all do. I'm sure. And that's just kinda what set everything up. And since then, we've had three iteration or reiterations kind of what I call updates would be a more accurate description just based off of, you know, where we were and kind of how we morphed without sounding like it sound, it just grew faster than what I thought it was gonna be. And that's really what happened. And so, what started off was supposed to be very small, just a small group of us of about four or five. And then they started talking to their friends and their friends. And before, you know, it, it blew up into what kinda we, the phase that we're into nowadays. So, that's kind of a background and a very three and a half years, and, Oh, actually four and a half years into a couple of minutes,
Joe Varnadore:
But then, you know, it started with a conversation, right? It started with the conversation and there has never been a better time to catch up with people that you haven't talked to in a year in person. Right? Then right now. And it's just, Hey, how you doing? What have you been up to, to them? And then what are they going to say to you? So, what have you been up to, right? And that opens the door many times. So Ben, this success, business model, you had some major requirement that this business model was not going to be another job. You're very busy with your boys and baseball and your daughter and drama, and all of that. So you had, and you work with NoteSchool as well. And so, let's just talk about this, you know, for a second here, about what you wanted your model to look like. Right?
Ben Haught:
Sure. And to that point, Joe, that's exactly a big reason of why it looks like what it like, I did not have the time, quite frankly. You know, for those of you who may not know, but I have three kids, two of which are year-round competitive travel baseball. And so we're on a field, that's a part-time job and ended up itself. And we're on a field somewhere about 10 to 12 hours a week, not including the weekend tournaments between coaches. I mean, it's so, you know, they're still relatively young 13 and 10 now. And so that, I remembered the whole point of getting involved into investing was to, you know, spend more time with them, not, not take that time away. So,
Joe Varnadore:
Not less but more, and this is what it looks like, right?
Ben Haught:
That's exactly what it looks like. So, kind of what you're seeing there, that was my requirements and it kind of being semi-sarcastic, but in the way it's presented, but this is it, you know, we're, I told them, listen, if we're going to do this, you know, we're only going to be open for business up to 10 hours a month. And that's a month, it's not a typo. And so, I went the route. It's funny, I'm going to touch on the rejecting 80 to 90% of the potential clientele. So, the reason why I did that was kind of a let's see what happens a moment. And as I was, I, you know, I read a lot, Joe and I read something where it was something where the scarcity you know, it was like, was here's a scarcity model. And if you make it where, you know, people don't want than something, you know, whatever it was. Right? Well, at the time I said, you know what I'm going to do? I was, I wanted it to be the intent behind, it was to be very selective with who I was working with.
Joe Varnadore:
You want to do business with people you like and respect.
Ben Haught:
Yeah and I had, we're going back to 2005, 2006, you know, where I had a very brief stint in what I would call wholesaling in the traditional model that people would know it is. And I remember back, man, it was just you're wheeling and dealing with just the work behind it. And that's what I did not want it to become. And so, and then there were some people where you work with and sometimes, I mean, I'm sure we've all had it, where it just wasn't worth the money dealing with, you know, either the fallout or dealing with whatever it may be. It was just, you know, just wasn't worth it. So, I started that in the back of my head and in my mind, I was like, you know, I'm gonna see what a scarcity model would look like in this.
Ben Haught:
And so I made it to where I was after a very specific person and what that specific person was, was someone who didn't know at all that wasn't going to argue with me, that just wasn't going to create a lot of attention, you know, just someone with a good head on their shoulders, that was open to the idea of seeing what I could do for them. Right? And I found, and it was really interesting where the conversations and Oh, just to kind of finish real quick limited to two to three hours for customer service. Cause again, and most of that was, Hey, listen, if you don't mind, we're going to be on a ball field so I can kind of do it. And what's interesting is nobody really cared. They didn't really, you know, it wasn't a pushback of any sort.
Ben Haught:
No, that everybody was very understanding. The issue that we had was, you know, I'm open when they're available, when they're at work and the afternoon when they can talk, I'm busy. So, there was that dichotomy. So, the fix that we came up with that was, listen, if you don't mind noise in the background, I can talk. I can, you know, they just want me there to see them anyway. They meaning the boys and had a zero marketing budget because it was all word of mouth and three and a half years. We turned three years and November 17th last year. And I have not spent a dime on marketing and still continue. We just don't need it. But it's based off of that 80 to 90% rejection rate, which is funny because I said, listen, you know, we're after a very specific type of person. And I found that the more I held to my guns and I was like, I'm not willing to bend on that. The more, what's a good word?
Joe Varnadore:
Well, the more exclusive it became and the more they went in
Ben Haught:
Yeah. It was very like, it was like, they were like, no, I really want to do this. I really wanted to. And I was like, well, you're going to have to fall in line. And, you know, I've kind of, you know, tongue in cheek here, but, they did man, and it just kind of grew from there. And then, I found that they were saying, well you know, one person said they may have a hundred thousand right now. Well, I have 150 and this other person, I have 250. I said, it's not the amount, I'm after the person. And when I, there was one point where a guy came in and tried to kinda, you know, be Mr. Big dog. And he was like, you know, I have $3 million that I could throw. And when I rejected him, the rest of them were like, it, that's a explosion that happened in my brain. I was like, you know what? That's what I'm doing. I'm after the people, after the person, that's who I want. And because they were all in the same building, it became very easy. And that particular, they kind of weeded themselves out. They're like, no, man, you're not up to the par and or you're not. So, they started doing all my screening for me. So, it was great. So, that's kinda the beginnings of it,
Joe Varnadore:
Right? So you're saying, then this is you in the middle of here, right? You're this deal architect. And you say you have source of notes through notes direct and through some marketing and some other entities or another, other companies that you can buy through. And you're passive investors, they were burnout landlords. They were stock market refugees or money market refugees, and a mutual fund refugees. They just happened to be dentists. Right? And so you just put those melded those two together. Right? So, and that's what it looked like.
Ben Haught:
Yep. Yeah. I never had to take ownership. I, in fact, I was very particular about explaining to them that the money that they sent, it never came to me. Like it goes to a third party. It goes there and, and that was very intriguing. They loved that. And it made it where it was a little bit more expedient in the sense of they're like, wait, you're not taking my money. And I was like, no, it's never, you know, it goes directly to the source and that's what you're doing. And they were very comfortable with that.
Joe Varnadore:
And what you did is what Justin Bogart was on last week, just to get it one deal at a time you put a group of investors together, so you could do five, 10, 20 deals at a time. Right? And that's kind of what it looked like. Right? So, you know, and we need to move through these pretty quickly. So, this is what they were investing in. Right?
Ben Haught:
That's it. Yeah. Typical real estate sources, stock market, some type of thing where Ginney and Treasury and ETF. And it's funny, the one of the biggest kickers was that, Vanguard High-Yield Bonds. I asked the question, well, what is it minus the fees? What's the truth? And you would've thought I asked some like, unreal, like, what do you mean minus fees? I'm like, well, there's fees involved. And that opened the flood Gates man. That one thing right there. But that was their go-to. They were, I mean, I'm kinda, again teasing a little bit, but Vanguard High-Yield Bonds at 5.8, 4% at that time, that's at that time they were it. And I said, man, we can't, you can't beat this. I was like, yes, we can actually. So,
Joe Varnadore:
That's great. Yeah. And so, and that's what that, you know, and that's, it's after the fees. Right? It's done that. So, yeah. So you were, they were looking in, let's just talk about this real quick. So you did, you know, the process, what are they investing in and then what did they want, man? I mean, right?
Ben Haught:
Yeah. They wanted, what all of us want cash flow? They don't want to do anything. They want to spend a little money to get the highest return. I mean, it's the Christmas wishlist is what I call it. I mean, it's what everybody wants. You want as little money in as most money back without having to do anything. Right? The easy button. Remember that commercial. That,
Joe Varnadore:
The easy button. Yeah. But I used to have one of those. I think I still move somewhere around here,
Ben Haught:
I have somewhere around here, I think it's in a drawer somewhere, but yeah, it's great. But it was really the point of that was really to to get them over that new factor. What I mean by that is most people aren't aware of how close notes are with traditional real estate. I mean, it's very, very close. It's not some new completely distant thing. It's very close. And so I wanted something that kind of showed a commonality. There was like, listen, Oh, you have rentals. Oh, so why'd you get that? Oh, it was because of the cashflow. Well, here's how notes kind of do the same thing. And so one of the very first deals that we did, he had the criteria was that he wanted three to four grand of income coming in a month up to 500,000 to spend.
Ben Haught:
And he didn't want to do anything like most of them want to. And so, I knew that based off the historical aspect, it was going to build a relationship. And so, the first deal I wanted to meet his criteria and exceed again, because I, the zero marketing budget kind of came in. I was like, I don't want to have to dump a whole lot of money into something with a whole lot of uncertainty of what we're going to really do with it. Right? Because, Hammelmyer what, wasn't in the picture yet, but this is what kind of set the stage for it. And so, I just went out there and knowing the figures, because I had done a few deals you know, and just kind of been involved with it. I knew I could hit those numbers that he wanted. And what you're seeing on screen is those first we did a deal where we had five performing and two non-performing, and those are the pictures of the houses that were there, bread and butter America right there in the middle.
Ben Haught:
Those are the numbers there. When you run it, we were the payment there on the second end column, that's what they were receiving a month. The investor price is what they paid for it. The broker fee is what I made essentially when it was all said and done he had up to $500,000, but he only had to spend 341. I rounded his 349 and change. And I made about 20 grand out of it. And the payments, I mean, it was almost dead center. It's 34 50 a month. Once you take away the two non-performing loans. And so here's the kicker. The kicker of it is that yeah, those are the numbers 340,905 total invested, 3,454 a month coming in and I made 20 grand and change. And the two non-performing, he had a rehab business. And he was like, man let so I introduced him to that. And we he ended up only having to spend about 250 in the whole grand scheme of things. So,
Joe Varnadore:
So Ben, this number right here, right? That was, this is one transaction, right? So, you had upfront money, right? You had $20,000 in upfront money. And then, so your investor was happy because you put this together. Right. And then talk about, you know, this, and this is just some things you're, let's get to the, you know, you had a 10% management fee and then 10% of the profits. Right? It's right here. Yeah. And let's, let's yeah, let's get through that. And let's, I love that member. This, what I'm trying to get to Ben is your,
Ben Haught:
Structure.
Joe Varnadore:
I didn't get to the things there, but you can kind of tell us that, I guess the, we kind of lost something there, but anyway, so tell us exactly then. So, this is a typical transaction. You've got money now, and then you've got money later, right?
Ben Haught:
That's correct. Yup. And so this, and this is kind of where it really went faster than what I thought it was going to do, but basically what they do now is, so that, there's the idea behind what Hammelmyer is, is that there's a 10% management fee up front. And the reason why I asked for that was because they have rentals. So, I just asked for, 10% of the management. But, I knew that I could beat the numbers that they were without again, without sounding like it sounds, I knew I could beat those numbers. And so I was like, well, listen, if you don't mind paying 10% to help keep me going with it and keep rolling, then I'll just give me 10% of the profits on the back end. And they agreed unanimously. I mean, there wasn't even a question about it.
Ben Haught:
There's about eight of them at the time. And we started going through it and that's what we did. So, we ended up whatever they spend on a note, just for numbers wise, if they were to spend a hundred thousand dollars on a note, technically they're writing a check for 10 grand to an operational account. So, it's 110 total, but there's two checks, a hundred grand and then 10 grand, which is 10% to me and an operational account. And then, whatever money that makes, say that a hundred grand term, if it turned, we had a thousand dollars profit, you know, I get a hundred bucks, but if that a hundred thousand turned into a million, I get a hundred grand. So, it's whatever the profit comes in, the way we have it structured. At the beginning we had it where it was monthly, but the CPA had a he was like, man, can you give me a cause? You know, just cause they pay on the first, they may pay on the fourth. And so I was like, well, just pay it quarterly. You know, it's, what's the difference between three months or one month? And so, as it stands right now every quarter you get a little payment today and then whatever that money generates later downfield, we get 10% of that too.
Joe Varnadore:
So Ben, what you're saying here is so upfront, you made $20,000, that was now money. And in this, on this particular transaction, you would say, okay, it's generated, you get 10% of that income, right? So, 3454 times 12 is 41, 448. You get 10% of that on a yearly basis. So, people will go well that 4148. But if we did, you know, this every month, then that stacking on top, on top, on top. So you have this money, and then you have this money. And if you did that 10 times a year, it's like the federal government said a billion here, a billion there. Now, I don't think it's a trillion that's comes into a little bit of money. So Ben, let's just kind of wrap it up and just kind of talk about, you know, your, I mean, that's a beautiful model. Right?
Ben Haught:
And it works for me.
Joe Varnadore:
Yeah. And it works for your guys, right? I mean, they're, again, they're just, you know, we always think of, you know, like a group of dentists or what a well, they've got it all going on. They're just like everybody else. Right? Just looking for a great, safe, a safe investment. And this is what it ends up being. So Brian, why don't you come back on and Alexa? And let's wrap this up and then we'll go into the after party after we do this. And more questions for Ben. We can spend some time doing that. So,
Brian Lauchner:
Absolutely. And I think what's really important for a lot of people to take away, is that Ben is basically using his specialized knowledge. What he knows to be able to provide a service and not just generate a full-time income, doing it on a part-time basis, but also keeping cashflow coming in. And then these kinds of bonus checks for the future. So he's kind of, double-dipping or even triple-dipping all because of the knowledge piece. Right? You can be the guy that goes out and does, does, does, or you can be the guy that knows what to do. And you got, what'd you say $4.8 trillion. That's a pool of money to essentially raise capital from,
Joe Varnadore:
A lot of money, lot of burnout landing on capital there. And it's just getting bigger and bigger. And Ben, you know, kind of as a closing thing with this, I mean, and this is just one group that just continually does this and you can do as many of these different groups if you want to do. Right? It's just not limited to this one. This one is very profitable, a duplicatable process. Brian, why don't we do this? Why don't you take us to Feeding Frenzy Friday?
Brian Lauchner:
Let's do it.
Brian Lauchner:
Well, NoteSchoolTV is sponsored by Notes Direct and Feeding Frenzy Friday. Feeding Frenzy Friday is a playlist that we have that you can go to our YouTube challenge checkout, where we break down notes from notes direct to help you better understand the note business, as well as master your due diligence and be able to kind of figure out, Hey, what's a great note? What's a, maybe what's a bad note based on your preferences? And all that kind of stuff. So, it's a great place to kind of get involved. And it's a great video playlist, as you can go see right there to kind of learn a little bit more about how to become a Master Note Investor. Next week, we've got a fantastic guest, the one and the only Mrs. Martha Speed, she's going to be joining us and talking about actually using that same burnout landlord capital, that massive amount of capital to be able to grow some serious legacy wealth, right?
Brian Lauchner:
Hopefully you got a lot out of today. We're going to be sticking around for an after party, but if this was a value, please like, and subscribe to the channel it means a lot for us and I'll bring you the latest content as we're pushing it out. And if you really want the latest content click that notification bell, and you'll be notified every time we post a video, as well as every single time we go live. So, you can jump on here, engage with us a little bit, bring your questions and definitely stick around for the after party. If you are somebody who's trying to figure out what that next step is for you, I would encourage you to go to www.NoteSchool.com/TV to learn a little bit more about, who we are at Noteschool. What we teach and kind of how you can get involved.
Brian Lauchner:
And if you're somebody who just, you need help right now, there's this burning desire to succeed in real estate. There's a problem in your business. You need solved, or you just maybe have some very specific situation needs that you need address, go to www.NoteSchool.com/TV and simply click that, contact us button and get in touch with us and we'll be reaching out to you. And then lastly, I would say, this is a great show for you and you enjoy NoteSchoolTV and you want to check out past episodes. I'm going to put up a link right now to where you can go and check out some of the past episodes we've done and learn a little bit more. For those of you who can stick around, hang out with us at the after party coming up. Otherwise, we'll see the rest of you next Wednesday at 11:00 AM central time. We'll see you on the other side.
Brian Lauchner:
Well, on the, one of the questions that pops up right now welcome to the after party is, where's all this private party conversation kind of happen? And guess what, it's going to be right here. So, just hang tight as we kind of dig into it. I would love to know, first of all, things have been so much for coming on today. It definitely means a lot. I would love to hear from some people about really what some of their private capital needs are, or really even what some of the goals they have, you know, for their business moving forward. And while some of those are coming up, Ben, I want to talk a little bit more about maybe some of the challenges that you've had, maybe the best advice you have for people who are starting out, who want to kind of succeed with this model. Tell us a little bit about your thoughts on that.
Ben Haught:
Well, I can tell you the biggest thing I would say is the learning, the art of the talk off. It's what Eddie would call the art of the talk off. It's what I call or my, I think it's mainly known as framing. One of the things that I learned early on was the, and the reason why I asked what are you involved with was rentals. Well, why? You know, and when you dig into what the, why they want it for cashflow, so that at that point, it's just framing it to like, here's how you have a better outlet and kind of answering it that way, rather than, you know, I, as you know, I'm not one to kind of argue over it, which is kind of going back to looking for that very specific person. And it was just kind of like, Hey, listen, here's the facts. If you run your numbers and you run these numbers, which one's better, and I let them come to their own conclusion. If they do, great. If they don't,
Joe Varnadore:
Arguing Ben with one of my mentors years ago. And he said, listen, he call me Joey. He said, listen, Joey, you can be right. Or you can be rich, but you got to chill.
Ben Haught:
That's right.
Joe Varnadore:
And I shut up and I didn't argue anymore. So, that is that part of that talk off again is so you're investing in this and it's owning this and it can be volatile. Right? I mean, we can't argue stock market is, you know, good housing market is good, but there's two sides to that. Right? But you just, you know, you were looking for these folks and they were looking to be, they just wanted to be the bank. Right? And just talk a minute about that whole bank thing. I mean, that's, that's really what it is.
Ben Haught:
And that's kind of alluding to kind of tying the two thoughts together. That's what I was going for. I was like, so they wanted the rentals, but they were burnout. I mean, you want to talk about burnout landlords once you get about two or three, those of us who have had more than a few rentals, we know that the headaches are eventual. You know, I've heard somebody say, Hey, I have two rentals and they're great. I'm like, well, get some more underneath your belt and we'll see what happens, but having that conversation with them and just taking it, here's the rentals. And that's really where the note versus rental idea came from. You know, and it's just saying, run your numbers. You know, I hear what you're saying, cause I've heard that too, but here's another way of looking at it to get you what you're really after, which was that cash flow without limited with limited effort and less headaches,
Joe Varnadore:
Passive income, that's what you're looking for?
Brian Lauchner:
Absolutely.
Joe Varnadore:
I only know the bricks and mortar side, the real estate side of the business, that's the natural way to get it. If you don't know the notes side, Brian.
Brian Lauchner:
I was going to tie into what you mentioned about the talk off. And I'm curious, you know, when you're, when you're having this talk off with an investor, right? The newer person raising capital, their thought process goes to, well, I'm going to talk about the gains they can make, the yield they can make, how much growth they can have. And I think that there are parts of the market cycle where that's good, but then there's parts of, I think the current market cycle that it's not about the gains, it's more about the capital preservation. So, kind of talk to us a little bit about, what do you see when you're having that talk off? What's most important to talk about if not the gains, what's the important part?
Ben Haught:
Yeah. you know, it's funny that I was, I just had a recent conversation with somebody. I can't remember who, but if you're familiar with the concept of bond laddering, you know, where it's staggered, it basically it's time and resources. So, we were having that concept of the talk and I was like, so if you take the stock market and again, six, 7%, depending on which ones you read, I said, what's the purpose of that? You know, if you hear you know, people are like, well, I just want to put my money and I just want to put it into something I'm like, well, let's be strategic about it. Let's be tactical. What is it that you're really wanting to do? And that's how you shape that conversation. And so we took that concept of bond laddering, and we just had it here.
Ben Haught:
If you have it over here, where, when the stock, let me just like, for instance personally, you know, Hey, we're in the stock market and the stock market, Hey, it doesn't always go good. And it doesn't always go up. So, what you do, you have those abs and flows, I think is what they're called. And so one of the things I like about the notes is it is consistent. You can take it to the bed where you're not having to ride big waves and stress out and do all that other stuff. We're not saying only do one thing or the other. But, it definitely, you know, helps stabilize when a market goes crazy. And does everything.
Brian Lauchner:
Yeah, absolutely. After a decade of massive growth, they've really amassed this wealth, they want to invest in knowing that they're going to be able to keep it. Right? Obviously the real estate market can do forever, the stock market can do this forever. Like there's some common sense here. And investors right now are very sensitive to the fact that like, we've made a lot now, how do we secure that in a way that's gonna allow us to keep us, keep it. And, this becomes a really great conversation with investors because the perfect opportunity becomes notes. I wanted to jump into another question I saw from Glamour Property, what do I tell a doctor or a prospective investor, if I'm asked how much experience I have, because people tend to want to hear from the experienced person. And I'd love to hear a little bit more about your thoughts on that. And I'll continue as well Ben,
Ben Haught:
You know, it's funny, I love this question. It's a great question. When I started and I made it more about here's what I can do. Here's what I, I, all the I's like, here's what I can do for you. Here's how I can do this. When I changed the I's to here's what you can do, and here's what your numbers are going to be. You know, what's funny is before when I said the I's, I was new to it, very little transaction history. And then, I got kicked back with that question. But the moment later on in life, when there's triple digits there, you know, I've not once had that question come to me when I made it. And the only word was switched to, here's what you can do, here's what you will get. Here's what you will, I've not been asked that question.
Brian Lauchner:
Interesting. I find it also that, you know, specifically for someone who's newer, your main objective should not be trying to pitch as many people as possible. Your main objective should be trying to position yourself as the subject matter expert in that field. Right? And you come and you get some training, you become the knowledgeable force so that when they do have questions, they come to you. Then the second piece is consistency, right? We've talked about people who have meetup groups, or they have Facebook groups and they're always pushing out content. Hey, here's how note investing can help you. You can quickly establish yourself, even with a couple of months of experience. You can quickly establish yourself as someone who has this specialized knowledge. And if it's a great fit for you, then it's amazing how much faster that conversation can, can start to develop.
Brian Lauchner:
But I would not get in your mind that you need to run around to doctor's offices and try to, that's not going to go well.
Joe Varnadore:
Some people do doctor shopping, right?
Ben Haught:
Yeah.
Joe Varnadore:
In a bad way, don't go pitch everybody and then, just you tell the story and every time you do, I laugh. And that's when your guys first got in with you, they were so used to the volatility. Right? Now, they would call you and say, how's it? How are the notes doing today? Right? How are the notes doing today? And talk about that, how you answered that question.
Ben Haught:
Yeah. So, again, they had stock background, so they, I mean, you know, it's up, it's down, it's up, it's down. And when they first bought a note I shouldn't say they, there was a few of them when they first bought a note where they would call me, you know, it's like the second or whatever. And they say, Hey, what's my money doing today? I was like, well, nothing. I mean, it the payment came in yesterday, right? Or it could have been the fifth or fourth or wherever it was, but the payment just came in and they're like, what's my money going to do? I'm like nothing until next month, they only pay once a month. And so there were so used and conditioned to the rise and fall of the market where it was funny. It was, it truly was funny where they would call me because what's my money doing like nothing, nothing until next month. And what's interesting is that after about two or three times that conversation, they mellowed out in the sense of like, I really liked the consistency. I like the yeah. The stress. So it was great.
Brian Lauchner:
Yeah. I think that's a pretty common thing. From what we refer to as the stock market refugee or the hedge fund refugee is there's this sense of urgency and panic of like, I need to know, I need to manage my money and you're putting it in a vehicle and a note vehicle that's stabilizing things. And really that's the whole point is, Hey, you can keep the returns, but we can get rid of a lot of the headaches. And once they buy into that, they start to leave you alone. You don't get near as many phone calls have been,
Ben Haught:
Not those kind of calls usually then it's like, suddenly they have more money.
Brian Lauchner:
Yeah.
Joe Varnadore:
That's the cool thing Ben. Right? You know, you should talk about that. They're going to say, well, I've only got $50,000 and then magically four months in, they go, this is going pretty good. I've got $400,000. Right? We see that happen time and time again.
Ben Haught:
Yeah. If I tease them because that's what they say. It's always old 10 grand or 20 grand. And that's all I have. Like, that's all you have and Oh yeah. Well maybe I can get the 12 or maybe I get the third. And then three, six months later, suddenly 250 grand, 500 grand. I'm like, well, what happened to 15? That's a big jump in six months from 15. Like, well, I just wanted to see what was, so they do have more money.
Joe Varnadore:
And it's not selling them then. Right? You're not selling them on the investment. You're presenting the investment. And if they want in, they get in. And then you've told me many times in our conversations, how you've actually, if somebody was a little bit too, you know, toxic, you would just fire them out of the group and pay them off.
Ben Haught:
Yeah. Yeah. We we have done that. And we will do that if that, I mean, I think the group now where it is great. I can't, I couldn't ask for a better group of guys or group of people. But yeah, there were, there was a few where we had to strategically part ways we'll say and it was just because, you know, we're not, it doesn't help a group to come in and start throwing weight around. And nobody really cares how much you know, how, what are we making, right? I mean, you could know everything if you're not making any money who cares. And so I just, wasn't willing to, and then what's funny is Dr. Steve who was the example that we showed, he was the one that was like, we're booting this guy. Cause I made sure in the operating agreement that I had no powers to do that. Cause I wanted to give them all the control and them all the resources in order to do that. Cause I didn't want anybody coming to me and I just didn't have time to hear the complainant kind of pass that. So,
Brian Lauchner:
Yeah. I love that. And I think what's really beautiful as we kind of wrap up NoteSchoolTV after party here today is that it's okay to turn down an investor, right? You've got people who have 10 or 12 grand. And when you're brand new, you think there's this mindset of like, Oh, I've gotta be able to, like, I just need to get that going. And if it's somebody who's going to invest money and they need that cashflow to live on, that's not an investor, right? We're not, that's the wrong audience. And what comes with that 10 or 12 grand who they need that cashflow is nothing but phone calls and nothing but headaches, something against them. It's just, they're not ready to take that next step. And so being selective is definitely not a problem. And it's better to wait because if you wait, if you give up the $12,000 to wait for the right guy, that right guy gives you 50, then he magically has 500, like Ben said so,
Ben Haught:
Yeah.
Joe Varnadore:
So Brian, you know, this is the example that we use of Ben using that private capital burnout landlord capital to build his bank. Right? And then next week, as you mentioned, we've got Ms. Martha Speed, Eddie's better half. Right? And she's going to talk about, how she uses the same burnout landlord capital to build legacy wealth for her new, you know, for her family. Right? All the way down to her new grandson, Levi. Right?
Brian Lauchner:
That is it. And I'll kind of say that if you're looking for a way to not just build a legacy, right? But create unbelievable wealth, like really sustainable long-term wealth, you do not want to miss next week's NoteSchool TV having Mrs. Speed on is going to be an absolute treat. I promise you, so thanks everybody for sticking around. Thanks for hanging out with us in the after party. We really appreciate the comments. Definitely go and make sure if the notifications aren't on, turn them on so that you can engage with us a little bit more. We'll plan on seeing everyone next Wednesday at 11:00 AM. Have a great rest of your week, and we'll see you on the other side.
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