Brian Launcher (00:00):
How do you really talk to an investor about investing in notes? Stay tuned.
Brian Launcher (00:18):
Well, if you're somebody looking to raise some money, you are going to want to pay attention today. I want to welcome you to NoteSchool TV. I'm so glad you're here. We're going to be here every Wednesday at 11:00 AM Central Time. So make sure you're joining us in the easiest way to do that is simply by start by liking these videos, subscribe to the channel, and if you really want to participate, make sure you're clicking the bell notification. It'll turn your notifications on. You will be notified. It'll give you a little alert on your phone or on your device that tells you, Hey, we're going live, that notifies you to jump on engage with us, bring your questions. Ooh and ahh, I'm sure. Right. And just, and kind of participate and learn with us. Today, we've got an awesome show, but if you're trying to figure out really what it is we're even talking about, we even what notes are, what NoteSchool is all about.
Brian Launcher (01:06):
You can learn a little bit more by going to NoteSchool TV, I'm sorry. www.NoteSchool.com/TV to learn a little bit more, get engaged and kind of take that next step. Today, we do have a special guest, but a couple of things first is going to be number one, make sure you're sticking around until the end. After the show, we're going to have a little bit of an after party. We hang around afterwards, chat with the guests a little bit more, answer a lot of your questions that you bring up, that you type into the comment box there during the show. And then we'll try to do our absolute best to give you as much value as we possibly can. And before we get too far down the roads, let's start by talking about the news.
Brian Launcher (01:57):
How you doing?
Joe Varnadore (01:58):
You know what? I am wonderful. And things just keep getting better on the news front here. We've got some stories that are hot off the press, so we'll just jump right into them, Bud.
Brian Launcher (02:11):
Do it.
Joe Varnadore (02:12):
All right. Housing Wire as of yesterday, March 23rd, delinquency rates rise for the first time in nine months. Right? So delinquency rates on mortgages in the United States had kind of, they were kind of tinkering down just a tad and boom in February, which is the latest one for reporting popped up to 6%. So that is up from like 5.85 to 6%. I know that it's just a tad raise, but guys, here's the thing. What that means at 6% is that there is about 3 million, almost 3.1 million delinquent loans out there, at this point, add to that
Joe Varnadore (03:00):
The 2.5 million loans that are in forbearance and we've still got a pile and we've still got a ways to go. Second up, another Housing Wire article from yesterday, home sales plunge, 18.2%, but demand stays strong. New home sales, 8.2% higher than a year ago. How can that be? Right? Well it's because the demand is crazy. And as the demand gets more crazy, the number of houses on the market gets smaller, right? It says after nearly a decade high in January, new home sales for single family homes plummeted eight to 18.2, to an annually adjusted rate of 775,000 in February. The sharpest month over month declined since 2013. So again, things are hot, hot, hot on that side. Isn't it crazy with the way things are on the first slide? The first story is that, well, you know, delinquencies, but home sales are crazy.
Joe Varnadore (04:11):
And then finally this morning, Home Flipping Hits a Four-Year Low. This is an m report, a story from a couple of days ago. And it says the 2020 U S Home Flipping Report from Adam Data Solutions found that 241,630 single family homes and condos in the United States were flipped in 2020. That is down 13.1% year over year for 2019. And the story ends up with the 2020 ROI with off more than 10% or 10 percentage point from peaks of the past decade. So guys less houses, more competition. And then on the other side, the ugly truth of the delinquencies. That is the news for today. Eddie, any comments on any of these?
Eddie Speed (05:11):
Well, we're obviously in a hot real estate market. We are continuing to monitor both loans and forbearance and loans that are delinquent. And yeah, I mean obviously if listings are down, what did they say? 1.4 million realtors compared to a million properties listed. That's wild.
Eddie Speed (05:35):
How'd that work, Brian?
Brian Launcher (05:37):
That's a tough math problem.
Eddie Speed (05:40):
Sort of, somebody's not going to get a check. Right? So yeah, so those are things that I think the alternatives that we continue to talk about are ways to find a crease in the market. Right? We can find out where the competitive things are, where is there a underserved area in the market. And that's what we're always trying to focus on.
Joe Varnadore (05:59):
That's what we're always doing for sure.
Brian Launcher (06:01):
Yup. And I think right now in today's marketplace, there's a couple of really big opportunities for those who are obviously paying attention. And so, I think today we've got a special guest and we're going to kind of talk a little bit about that, right?
Eddie Speed (06:15):
Yeah, absolutely. I'm excited.
Brian Launcher (06:17):
All right. So who do we got today, Joe?
Joe Varnadore (06:19):
Well, so we have our friend and esteemed NoteSchool Investor, and a friend of ours, Mr. Richard Thornton all the way from the Bay area in San Francisco, California. Good morning, Richard.
Richard Thornton (06:36):
Hi, How are you guys?
Eddie Speed (06:37):
We're great. Richard, glad you're here.
Richard Thornton (06:40):
Good. Glad to be here.
Joe Varnadore (06:42):
Right. And absolutely excited to have you here this morning and you've got a great story, Richard. I mean you have yeah, we appreciate your story and I'm going to kind of run some few slides in the background and I'll be in the background and we'll let Eddie talk, we'll talk a few minutes. Okay.
Richard Thornton (07:01):
That's great. Whatever you'd like, Joe.
Joe Varnadore (07:02):
Okay. Very good.
Eddie Speed (07:04):
So, Richard, I think that one thing it's interesting about your story is you were in another segment of real estate, which was commercial real estate lending,
Richard Thornton (07:13):
Right.
Eddie Speed (07:14):
And you kind of made a definitive choice to kind of move away from that, for your own kind of private wealth building. You were able, you guys were able to sell your company and do well. Congratulations.
Richard Thornton (07:25):
Thanks.
Eddie Speed (07:25):
And now, you're on the next horizon, which is the wealth building strategy for yourself. And I know that you, Martha it was on last week, right? And you know, Martha very well, you and her have collaborated a lot about your strategies. And so, I know that you are fully aware of how she does and things and her likewise, and we just thought it would be really cool to kind of do a one-two punch and have you on today and Martha essentially tell a good story last week about how she got started with her dad teaching to this stuff. How did you, what made you focus on well, Richard?
Richard Thornton (08:11):
Retirement.
Eddie Speed (08:14):
Well, most real estate people today are focused on transactional income and not growing their wealth at the same pace.
Richard Thornton (08:23):
Yeah, so one of the things I really like about the note business in general is I came from a very regulated environment, very cookie cutter environment and as, you know, notes or anything but that private notes. And I liked that. I liked the fact that you're helping people, the fact that you can be creative in a lot of things you're doing and basically chart your own path. And so that's exciting for me.
Eddie Speed (08:51):
That's great. Well, you have done really good with it, and you particularly have become very successful at raising private capital and you and I use the expression, the burnout landlord, right? Because we found that a lot of people found that their rental business was a lot more of a job than it was just an investment. And they tend to do really well with you. Tell me about your typical investor. What is he, what's his story?
Richard Thornton (09:21):
My typical investor or my avatars were taught to say, is somebody who's 50 and over somebody who has a combined family income of 200 plus and probably has about that much money to invest in addition to whatever else they have in their self-directed IRA or their 401k or whatever.
Eddie Speed (09:45):
So he's got 200,000 in dry personal cash, plus some, probably some more money in a retirement account.
Richard Thornton (09:52):
Correct.
Eddie Speed (09:53):
And he isn't buying the next rental?
Richard Thornton (09:56):
No he's not. I can, some of them have rentals. I will say that with my current marketing campaigns, I've been surprised to find how many people want to convert from rentals to notes.
Eddie Speed (10:15):
Well, they want to move from a part-time job to be in the bank.
Richard Thornton (10:20):
Right.
Eddie Speed (10:22):
Let's look at it. Let's look, Joe, pull up some slides for us, if you will. Let's just go through a quick case study and I want to ask you Richard, like your kind of your thought process, like how, when you're looking at these deals, what are you looking for? And so tell us about this deal.
Richard Thornton (10:40):
Okay. This is a little deal that I found in Hamilton, Ohio. Nice clean little neighborhood, little houses you can see. The value on it's about 76,000. And I knew I could get the note on it for about half of that. When I looked at it, I had a nice long pay history on it. So as you can see there, the loan balance was 37,000. I also liked the terms is what my practice is to selling principles. I like to sell the front end of the mortgage usually around 10 years and keep as much of the back end as I possibly can. And that's really where I make my profit on a lot of my deals.
Eddie Speed (11:25):
Richard, you live in the Bay area in California and you, but you're buying an asset that's located in Ohio. Why are you okay with that?
Richard Thornton (11:35):
I'm okay with that because the margins are better. And the deals are more bite-sized. So I looked at a note about a month ago. It was out here in California. It was $800,000 note and the person had a private mortgage on it. You say, well, why does somebody who has an $800,000 mortgage need a private note? And he was a tech guy and he's from India. And he could not qualify, even though he had plenty of income, could not qualify for a mortgage. The mortgage rate was 6% and I'm buying it for five and that's not something that's A of that size and B of that rate that's really marketable. So I get better margins in the Midwest.
Eddie Speed (12:17):
Yeah. I mean, this is nice looking house.
Richard Thornton (12:20):
Yeah. It's a nice clean little house, you know, mom and dad lived there and very nice jobs. I could get a decent tail out of it and I could still get my investor a nice secure return. Now, most of my investors want to be completely passive. They want to be set it and forget it. So that's what I focus on. I sell whole notes and other things too, but this is the basis of my practice.
Eddie Speed (12:48):
All right. So the payment is 348 a month and we can see there that there has been literally, is that correct? 94 payments made
Richard Thornton (12:56):
That's right. So I had a nice long pay history on this. They'd been playing like clockwork for all that time. And that to me is always the biggest factor is what my payment history is.
Eddie Speed (13:06):
Yeah. So you're looking at their propensity to pay, their likelihood of paying. And you're going, I can measure a lot of that looking forward based on 94 years of looking back, right? Yeah,
Richard Thornton (13:20):
Exactly.
Eddie Speed (13:21):
Eight years.
Richard Thornton (13:23):
I'm sorry.
Eddie Speed (13:24):
That's eight years.
Richard Thornton (13:25):
Yeah. So they'd been very reputable up to this point and I mean, you know, they'd had a few hiccups here and there, like we all do, but nothing more than like 60 days late, and then they made it up. So, that sounds good to me.
Eddie Speed (13:39):
350 a month, 348 a month is their payment. That's their house payment.
Richard Thornton (13:43):
Right.
Eddie Speed (13:44):
That's not their cable bill.
Richard Thornton (13:46):
No, that's just their principal insurance. I'm sorry. Their P & I payments. And that's what comes to me or the investor.
Eddie Speed (13:54):
I think Martha's cable bill is 348 a month.
Richard Thornton (13:57):
Yeah. As busy as Martha is, I can't say that she's watching much TV though. So I, we consider that.
Eddie Speed (14:06):
All right. Let's talk about risk here. Let's talk about risk in the deal, how much money you have in it, compared to what the collateral is worth. Tell us about that, Richard.
Richard Thornton (14:17):
Okay. Well, when I buy any note, I don't care if I'm going to broker it or whatever. I always assume that I'm going to own it, because it's safer, investors like to hear that. And that's one of my selling points. But B sometimes I do, sometimes that, everybody's got different criteria. What I liked about this is, I had a great pay history. I had a nice little community. That's very stable and growing. Obviously the collateral has been taken care of and I'm at 42% of property value. Those are, that's a good cushion and a good assurance that they're going to continue to pay.
Eddie Speed (14:55):
All right. So let's compare that to another investment. How do you see this and this buying this note and having 31,800 into it, but the collateral, the underlying collateral, the house, you know, you don't own the house, you just own the mortgage on the house. Right? How would you compare that to some other investment?
Richard Thornton (15:16):
Well, I don't know of any other investment that I can invest in stock market, annuities or anything like that and have three or four ways to get my money back if for some reason the payment stream fails. And that's what I always look for. I want to make sure I have at least three exits on any property. So in this instance, I could foreclose and sell the property. I could rent it out. The rent is more than double in this neighborhood of what the mortgage payments are. A matter of fact, I think it's almost triple and I could also sell it to a another note holder who likes to buy non-performing notes because they think that they'd like to take care of that upside. So that's, those are three very strong factors to me.
Eddie Speed (16:09):
Yeah. And you just don't have the dollars on this deal. If you own it as a rental, you've got all the dollars invested in it. Right?
Richard Thornton (16:18):
Right. You got all the dollars invested in it. And then by the time you get your rent even though it's three times what your payments are here, you've got to take out all your expenses, your insurance and everything else. And you've got to deal with all that. That's the three T's toilets, tenants, and trash. You have to deal with all that. And buying a note. We don't have to do with that. You know, that's not your problem.
Eddie Speed (16:45):
One thing I like about a note is that you are the bank you're secured by the property, in this analogy, you were very secured by the property, more than twice the property value of compared to what you invested in the note. And then, a note means that you basically are receiving a cash flow of payments. And so this little time bar here shows that, 348 a month over the life of the note, right? 266 months, you bought it for 31 innovative strategy here, Richard, you bought the whole cashflow.
Richard Thornton (17:23):
Right. I bought the whole cashflow and what my goal is, in every partial I sell is, I try to cash out and put just a little bit of money in my current pocket. I, my whole strategy is to roll my portfolio three times a year, if I can. So let's say I have $150,000. Okay. I want to buy a note on January 1st, be out of it in 90 days and have a partial done roll that over, buy another one and buy another one. I'm not only successful with that. Quite often. I only get to do two a year, but you can see if you have you know, six or $700,000, whatever it is that you might have in your self-directed IRA. And you keep rolling this over, you're building a very nice annuity for yourself.
Eddie Speed (18:15):
So figuratively speaking, Richard, you bought the whole pizza.
Richard Thornton (18:18):
I bought the whole pizza. I sold part of the pizza and I made a profit albeit small. I sold this, I bought it for 31,815. I sold it for 34. So I put $3,000 in my pocket, nothing to brag about, and certainly nothing to live off of. We should all be cognizant of the fact that we can't live off of selling partials. You have to have a day job. You have to have some other form of income. If you want to have a solely, a partial sailing practice,
Eddie Speed (18:50):
But you made 3000, but you own the back 10 years of this note.
Richard Thornton (18:56):
I do.
Eddie Speed (18:58):
In addition to the 3000 you already made.
Richard Thornton (19:01):
That's correct.
Eddie Speed (19:02):
Joe calculated your yield on there. It's in the little green box there.
Richard Thornton (19:09):
Joe's very good at very high, you know, your exact numbers. And he gets a little bit fuzzy, but very high is a good way for him to look at it.
Eddie Speed (19:16):
Yeah, it is a very high yield. You know what I say? It's enough.
Richard Thornton (19:21):
Yeah, it's enough. That's right. It's enough. Now, even, so the question I quite often get from investors as well, or fellow students is they say, well, what if he pays off early? Okay. I still have a margin in there where I would get some more money off the unpaid balance that wasn't paid. But if even if he pays off, I don't know, after four payments, that's four payments that I wouldn't have gotten otherwise.
Eddie Speed (19:49):
Yeah. And just, I don't want to get too wrapped around the axle and a lot of numbers today, but, there is a process that NoteSchool goes through and shows people how to calculate that. And it's a solid number. It's a good number. You, if it paid off, let's just say in a couple of years you probably would make about 10 grand. So you would've made 3000 upfront. You wouldn't have gotten all the money because it did pay off early, but you would have still gotten them probably another 10 grand. And that's a solid deal. And the residual factor in this and the wealth building factor in this is huge. If I looked at your math there and you said, I want to do this three times a year, you've made $9,000 on your money upfront. And if that math held true, the 48,000 at the end, you made almost $150,000 in future wealth.
Richard Thornton (20:43):
Yes.
Eddie Speed (20:45):
On a $35,000 investment.
Richard Thornton (20:49):
Yes. I don't want to hold myself up as typical Eddie, but I would say that I, more than covered the cost of my tuition for NoteSchool in the first year.
Eddie Speed (21:00):
Well, I would say that math and a little bit more, right? Yeah. So, this is a strategy that we teach this isn't all that we teach. There's other things that we can do, and there's ways to make a little more money up front, but this was a heck of a good strategy. And you could have gone into the, just the regular rental property business. Right?
Richard Thornton (21:22):
I couldn't have, yeah. I mean, after we sold my company, I had a whole lot of ways to go. But you know, when we sold the company, we had 70 people to manage and I was sort of done with that. And so this was a very good path for me to go.
Eddie Speed (21:41):
So I learned this as you know, from my father-in-law and I didn't sell a company with 70 people. I was living in a 10 x 40 mobile home, true story. Right. So you can kind of do this from any perspective, right. And you can do it when you're at a stage where you want to work part time, and you're trying to grow wealth and you can still make transactional money as you showed. So that's really, so anything else about investors? What do they commonly tell you? Why do they like this?
Richard Thornton (22:17):
They like this because of the security of the transaction. They also like it because I'm somewhat of an asset manager for free, meaning that they know that I'm not getting really paid until the end of the transaction and when they're paid off. And so that's very valuable to them. That's a huge selling point. They typically don't know that I make a little bit of money up front, but even if they did, it's insignificant in, when you look at the entire deal my biggest concern is after they've been paid off, and that means a lot to them.
Eddie Speed (22:58):
Look, it's a lot less work than a rental and they can sleep at night seemingly better. Right?
Richard Thornton (23:06):
Right.
Eddie Speed (23:06):
Joe.
Joe Varnadore (23:10):
So, you know, Richard. Here's my take on this being in the back and getting to hear this and knowing you and knowing your business, you're not just using $35,000, right? I mean, you're doing as many of these deals as you can possibly deal, but just understand for people that do just have $35,000, they can take that strategy and turn that. And what, you know, Eddie termed here a few months ago, and we laugh about it, the capital recoupment plan, right? That's what your terms are all about, you know, you, that money over and over and over.
Joe Varnadore (23:48):
And then, we have a friend of ours that says, I'll take 10. Right? So again, you know, those are the deals that you've just hit on a daily basis. You know, you knock them out of the, you know, I call it, knocking them out of the park. They're not home runs to most people, but, you know, it's just the consistent level of doing this. Talk about that, you know, just a minute and kind of, what that means to you. And then, so best advice you can give some new investors out there that are coming into the fold.
Richard Thornton (24:18):
Okay. Well, I'd say that you don't have to have a lot of money to do this, as you just indicated. If you can pull together enough money to buy a note from friends and family. You can buy your first note, roll it over and then take a few profits. Maybe give them the upfront money, but keep the back for yourself. Or there's a lot of different ways to slice it. What I would tell people is to get a website, get yourself known, if you want to sell whole notes, which is a good way to start to generate upfront income, it's just broker notes. Go to Notes Direct or wherever and buy some notes and sell them to different individuals. That way you can get some good current income. You get to know the business and what's important. And therefore, you can move forward and then you can move into partials. So that would be the number one thing. The number two thing is, start building content on the web. So get a YouTube channel brand it. If you go to my YouTube channel for American North Capital, you can see I've got about 21 videos up there. And I'm adding to them every month and people like that. They want to know that, you know what you're talking about and that's a huge marketing tool.
Eddie Speed (25:39):
That's great.
Joe Varnadore (25:41):
Yeah.
Eddie Speed (25:44):
I wanna go to NoteSchool too, I'm just saying.
Joe Varnadore (25:48):
That's exactly right. Yeah. And Richard, what I, you know, what I hear you saying is, there is certainly more than, than one way to make money. And we do, we talk about making money today, for those that want to just they need eaten money is what we call it at NoteSchool, but then there's, you know, some people want to make money today. Like you're doing, and then they've got money down the road, right? So, you know, one of our favorite sayings that NoteSchool is, it's your chalk and your chalkboard. And as you come in, and this is one of the strategies that I know you love and I love, and you know, Eddie and I've talked about, Eddie you started the 1980. I started in 1990 and I did buy and sell all the note for 20 years before Eddie said, why the heck are you doing that? Why don't you keep some of those back ends? Right. So sell some partials. So, you know, it's all about the knowledge for sure.
Richard Thornton (26:46):
Right.
Eddie Speed (26:46):
All right. We better bring Brian on and bring it out. Richard, you going to stay with us for the after party for a little bit. We may have some questions that we can get into there. I hope we can. So Brian,
Brian Launcher (27:02):
Yeah, absolutely. Sorry. It looks like I cut you off a little bit, but absolutely we appreciate Richard. And one of the things that he said that I love too is, he really differentiated between profit versus yield or return, right? And he said, yeah, I'm making some profit, but really, as you saw from a wealth perspective, he's using this model to really grow some wealth. And obviously that's what a lot of us are after. Right? We want to know that, we've got some security and a solid plan moving forward that we're actually going to reach our wealth. And so obviously we appreciate Richard. He's going to hang around, but before we get too far down the road here, I want to at least mention our sponsor because NoteSchool TV is sponsored by Notes Direct and the Feeding Frenzy Friday.
Brian Launcher (28:02):
Yeah. The Feeding Frenzy Friday is a playlist that we have of content videos that we're creating where each week we are going to break down a note, that's on Notes Direct it's simply content that's going to help you better understand how to break down the details of note, the pros and the cons and help create you into a master of due diligence and really make sure you've got that confidence to go out and make sure you're buying some notes. So if you want to see some of the playlist and some of the previous videos go to www.NoteSchool.com/FFF for Feeding Frenzy Friday, and check that out. Next week, we have our one and only Eddie Speed as he's going to do The Monthly Note Industry Update. And he's going to bring some really relevant content to kind of better inform you about what's going on in today's marketplace, specifically today.
Brian Launcher (28:53):
And obviously next week as well, we will be live just like we are every single Wednesday at 11:00 AM, Central Time. We go live and we'd love to engage with you. And again, this video is valuable to, you got some, some value out of this, like the video. It does a lot for us. It means a lot to us as well. We'd love for you to subscribe to the channel. And if you're wanting to, to comment and, and be notified, or maybe you are watching this in the future, and you say, man, I wish I could have said this thing, man, turn those notifications on by clicking that bell. And you'll be notified when we go live so that you can jump on just like everybody else. It may be you're new and you're trying to figure out what that next step is for you.
Brian Launcher (29:32):
You can always go to www.NoteSchool.com/TV to learn a little bit more about notes and NotesSchool, and really what we teach. I saw a comment right here from MrsProcket67. It looks like you're trying to enroll in our Gold in Notes class this weekend, and you're getting an area it's because the class is full. So it's not an option anymore. What I would encourage you to do is you could actually go to www.NoteSchool.com/virtualgold And register for our next class, right? And as long as there's going to be spots available there, we'll get you into that class. Absolutely. So if you're somebody who's just, I need help right now, I need, I've got this burning desire to either succeed in my real estate business, or I need some help to be able to accomplish this next thing in a specific situation.
Brian Launcher (30:20):
And you just need help right away, man. I would encourage you to go to www.NotesSchool.com/TV and simply click on the contact tab and just reach out. There's a phone number there. There's an email there. We'll do our absolute best to get you the best information we can get you on the right path so that you can succeed. Just like Richard is doing every single day. We're going to stick around here. And as we move forward to this after party, if this is an awesome show and you loved it, man, make sure you're going, checking out previous episodes of NoteSchool TV, for those of you who can't stick around, we'll see you next week. And for those of you who want to hang around for the after party, we'll see you on the other side.
Brian Launcher (31:09):
Well, we are back in the after-party here and it's always nice to, not just have Richard, but we've got all kinds of people on here. Thanks for the great content, man. Thanks for saying that. We really appreciate you joining Albert and participating, Ryan and Jenny. It's great to hear from you all as well. And so we've got a lot of people on and we'll kind of go through some questions, but I thought I would kind of kick things off by looking at some of the content Richard and people want to better understand this avatar thing you mentioned at the beginning. Like, why did you create this avatar? I know you said that you, you've NoteSchool's the one that kind of trained you in how to figure out who that is, but why is this avatar the way it is? How did you come up with that?
Richard Thornton (31:55):
Hmm. Well, it was the lowest hanging fruit in a way. And I was of that category. So, it was people that I could deal with. I have to say that I've had to spread it a little bit more or increase it, Brian. The more I've gone online, but what does that mean? That means that the income requirements have stayed the same in the savings requirements, but the crowds are becoming younger. I'm getting more and more 35 and 40 year old investors who are just calling me because they see my stuff on YouTube and they have,
Richard Thornton (32:40):
They come to me educated, which I think is interesting.
Brian Launcher (32:45):
Yeah and one of the things that's really fascinating about that comment is there's a whole new group of investors who just got an education in what owning a rental property is really like. And this burnout landlord category that we've been talking about for months now is just, it's that perfect person that's going to fit that avatar. Right? And so our audience is actually growing as well, as this situation develops in our country. Right? Joe, are you going to say something?
Joe Varnadore (33:14):
Yeah, go ahead.
Richard Thornton (33:17):
Well I was just going to say is, one of the things I like to ask people in a nice way is, how long did it take you to determine that your passive income wasn't? It wasn't passive. You were doing a lot of work to generate that income from your rental. Go ahead ,Joe.
Joe Varnadore (33:33):
Well, and you know, I hope everybody got the point of all of this. So Richard buys a note for $31,000. He sells a piece of it and makes $3,000 in today money, but, and he's got all of his money back, right? He's got every dime of his money back $3,000 in his pocket. Then he has 126 payments, almost 12 years out that he has $0 in of $348 a month that you know, that in itself is amazing. And I just want to make sure everybody got that. And our good friend Melvin is on today with us as well. He's a good friend of you, a brand new NoteSchool student Mel.
Brian Launcher (34:24):
Yeah. And there's another comment from Ken George. And I want Eddie to answer this because I know how Eddie's going to say it. And I just love to hear it. But Eddie, Ken wants to know, do you have to have a mortgage license?
Eddie Speed (34:36):
Yeah. So if I'm going to buy a note, if I'm going to buy a note and sell a note, I'm not saying that I'm going to broker a note or flipping note, Richard's in the state of California. And if you do more than eight a year, you are going to need a license to flip notes and make fee income. But if you're going to buy and resell well, Brian, I've got a driver's license and a fishing license, but I don't have a note reselling license.
Brian Launcher (35:11):
Yeah. The first time I heard you answer that question. You said you needed a driver's license, a hunting license and a fishing license. And these last two are optional.
Eddie Speed (35:20):
I got to be politically correct. I do have a hunting license, by the way.
Brian Launcher (35:26):
Yeah. I love that. And obviously, we've even got people chime in, in the comments as well, even answering the questions for us as well. Bumbling Bee Homestead even says, NoteSchool is worth every penny, if you want to learn how to do note investing. That's awesome. Obviously to hear and that's, I mean that's very encouraging, right? To have you jump on here. Another question here, man, they're coming in so fast here, out of all the marketing sites as far as how you're doing your marketing, how are you generating these leads? You know, what are some marketing pieces that you could speak to?
Richard Thornton (36:04):
So, Albert, I think that's one of the interesting things that I have learned, which is I'm not really using any marketing sites. I've got somebody who posts for me on YouTube, Facebook and other social media every week, matter three times a week. But the biggest thing is to have my own channel for American North Capital on YouTube and have content up there and keep adding it and to put all the tags in there and the keywords. And as you do that, people will find you because there's a program called keywords everywhere, and you can download that for free. And there's a very simple process that you can go through, where you can locate what the key words are. You put those as tags in your videos, and then when people search for those, they find you and your videos show up. So, they're actually educated by the time they come to me, which is makes my sales process much easier. It's free. It doesn't cost you anything to have a YouTube channel. And so that's something I would recommend to people.
Brian Launcher (37:13):
Yeah, absolutely. And even Wayne Garrett on here saying that your website encouraged him to go out and take action, right? Create his own website. Exactly what you're talking about. Put in those little steps that are actually going to create huge leaps in your business. Aldo is also saying you know, this partial selling strategy and then rolling over the investment capital over and over is brilliant. It's the brrrr strategy of the note business, Eddie, you know, this thing you're teaching, it might be a thing. It might be a real thing.
Eddie Speed (37:48):
I like it although yes, that's what I'm wanting you to get the picture of isn't it? This is, the real deal that this business is rinse and repeat, you know, that is what Richard's doing. He's rinsing repeating. And so people think you got to have a zillion dollars to be in this business. You have to have a zillion dollar idea, right Richard? You don't have to have a zillion dollars, you just have to have a zillion dollar idea. We get paid the most in this business to be creative.
Joe Varnadore (38:15):
Yeah.
Richard Thornton (38:16):
Right. To figure out the pieces of the puzzle. And it's, that's one of the things I was trying to convey earlier, which is in my commercial business, the commercial businesses is fun and it can be very profitable, but there's not a lot of flexibility in this. And as you well know, there's a gazillion ways to solve one of the problems that come before us. And I liked that. I liked that juggling. And I like that flexibility.
Brian Launcher (38:39):
Yeah. I think a lot of investors, no matter how they got into the real estate space, we all really want the same thing. Right? We want the good pieces, right? The cashflow, the return on investment, but we want to take away the bad. And a lot of people just don't understand or they maybe they haven't been introduced to kind of what Eddie teaches in the fact that with notes, you can keep the good. And in fact, with what you're doing with partials, Richard, you get really, really good, right? But you don't have to deal with a lot of the risks that can come with the tenants and the toilets and that kind of stuff. And so it becomes this perfect storm that really allows the investor to say, man, this is what I got into real estate. I thought I wanted this thing, but really what I wanted was essentially what notes are, which is allowing you to keep the good pieces and pull away the bad. And that is a man that's a really, really big deal.
Joe Varnadore (39:33):
And by the way, Brian for our, the nice lady that was talking about the class, our next class is April 15th, 16th, and 17th. So that is a Thursday, Friday, Saturday, by the way, we know that. So,
Brian Launcher (39:48):
That's all.
Joe Varnadore (39:48):
Why don't we wrap it up and we'll call it a show.
Brian Launcher (39:54):
You got it. Well, Richard, Hey, thanks so much for joining us. I really appreciate it. It's always good to see you and the love kind of you sharing your experience. It's going to be encouraging, to a lot, on the, other note investors, Eddie and Joe. It's always a pleasure. Glad to see you here. We'll see you too next Wednesday. As we jumped back onto NoteSchool TV, and try to bring you note investors, the best content we possibly can. If you miss the show, make sure you go ahead and leave us a comment. Anyway, we're definitely going to follow up on these comments. If you're on Facebook or YouTube or something else drop a line to us. We'd love to connect with you, even if you miss the show. Otherwise we'll see everybody next Wednesday on the other side.
Richard Thornton (40:34):
Great. Thanks Brian.
Joe Varnadore (40:35):
Thank you, Richard.
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