Brian Lauchner (00:06):
All right. Well, thanks again, Martha. We really do appreciate it. We had a lot of people on, engaging with us and one of the things that I thought would be great, Glamour Property actually asks a question about differentiating between wealth and income. And so I wanted to see if you could speak a little bit about maybe being using the money today, money tomorrow, analogy you used at the beginning.
Martha Speed (00:27):
Yes, so income to us is what we live on. Right? You know, we get a salary and we really truly try to budget and live within that salary. I mean, just like anyone would have to. Other moneys that we may have or acquire from, you know, and then we take that money and, you know, we segment it and use it only for investments and we just keep reinvesting that money. Right? So if I buy a note and I sell a partial, I get that money back. I take that money and I buy another note. And so, I don't ever mix it or actually move any of that money into money that we would need for income to live on. And so, if you can separate the two and you know, in your mind too, and, you know, separate them into different accounts, then it helps just to grow, you know, the wealth portion.
Martha Speed (01:29):
That's really what happens there, with that cashflow coming in every month. If you buy notes, if you can just hold on to them, or if you need to sell part of the cashflow and then buy another note and, you know, then just do the same thing over and over again.
Eddie Speed (01:44):
It's focus any discipline in life, great musicians, great athletes you know, anybody that's had any success, business owners, you know, business leaders who, whatever that is, if you look at their one single trait, they're probably unbelievably good at focus. And so this is, Brian I think that the thing that we just feel like is a key is Martha focuses on this. I mean, she's not unclear. And she knows where, you know, as she said, she's even got like separate checking accounts. So that all of a sudden, you don't wake up and figure out you're spending your wealth money on eating,
Brian Lauchner (02:29):
Man. That's so true. And what's beautiful is this isn't something in theory, this is literally something Martha has proven works, right? Even from starting, just flipping notes. Cause maybe you're somebody who you're saying, look, I'm brand new to this. I need that money today. Well, it seems like this daunting task what's amazing is, Martha is sharing with you in her story that not only was she flipping notes to make that income today, but she is saying with a smaller amount of money, you can just start with that and use that capital over and over. It's not about coming with massive amounts of extra money every single year. That's, what's so impressive about this model that she's put together and why they've been able to create such a legacy. You know, without just saying, yeah, I fell into $10 million, it just fell into my lap and I use that to build my wealth. Right? So it's, it's really great. Another question that came up from Deb N Kev was talking just about the tools, you know, if you want to share a little bit about, what are some things that kind of help you, you know, in the business, but also help really succeed in the business from the tool side?
Martha Speed (03:35):
Well, one of the things that you have to do initially is, you know, of course we use Excel of course, right? But is, you know, you've got to look at it on an Excel sheet or somewhere where you can say, okay, if I acquire this loan for $80,000, how many months do I have to sell to recoup $80,000? So you've got to look at the loan itself, how long is it supposed to, will it pay out? And then how much do you need to sell to recoup your investment? And so make sure the numbers work right. And then, you know, the other thing is just, you know, having a process to that, to where, you know, at the end when the loan reverts back to you, well, how many months am I going to collect and how is that going to pay out?
Martha Speed (04:21):
So, you know, how many years will it pay out? Like when does it revert back? So just kind of keeping track of those type of things. So, you can see the big picture and know, well, you know, there's going to be some loans that just won't work, right? You really can't acquire it and sell the partial and make it work because you have to sell almost the whole loan. So that doesn't work. The other thing that is a really good tool with passive investors is, so if you have a loan and it appraises for significantly more than what it sold for, that brings their investment to value way down, right? It brings my loan to value down and then for the passive investor brings their investment to value down. And so, you know, they have the lower the investment to value. Well, that gives them a big cushion between what they're investing and what the property is worth. You know, so if they're investing 50,000, that the property is worth 150, for example well that gives them a big cushion. So that makes them feel really comfortable about, you know, investing their money in that particular asset.
Brian Lauchner (05:28):
Yeah. And I think that one of the beautiful parts about the Excel spreadsheet is that it's just, it's so malleable, right? Like you're just plugging and playing. You're coming up with numbers that work for you, but does this also work for my investors? Okay. We need to change it around and not get bogged down to where you're looking for. I need a software that does this for me. So much of this is just using the creativity that you've been taught to say, all right, this is what I need to make this note work. How can I use this spreadsheet to make the numbers also work for my investors? Right? You've got to be able to justify the whole picture. Kind of like Martha said, you've got to make sure this is a win-win. And when you do, it's really beautiful.
Martha Speed (06:08):
And so like with, you know, with my passive investors, when we start out, I'll do like an executive summary for them that, you know, just to kind of lay it out a little easier for them. But then as we go down the road, you know, I can copy what I need, the information I need them to see on a spread, and put it onto a spreadsheet and send them a spreadsheet.
Brian Lauchner (06:26):
Yeah.
Martha Speed (06:27):
But it's just the educational part upfront, you know?
Brian Lauchner (06:29):
Right.
Eddie Speed (06:31):
And just, so this is an all a mystery. People say, what is NoteSchool? NoteSchool teaches all of those things that Martha just mentioned, like how, what does an executive summary look like? How much information is on it? What is this magic Excel spreadsheet your talking about? Is this hard to use? I mean, like, of course we've learned that, if you can show people these steps, it kind of gets the fog away, removes the mystery and it's down to it. But you know, it's funny, like, I can't tell you how much money and partials Martha has sold with having a trusted relationship with a passive investor and literally just sending them a poop sheet, right.? A little information sheet, you know, whatever you call it. Right? It's an executive summary that just has literally, you could look at the whole thing, Brian in four minutes, the whole thing in four minutes. And you're like, okay, I know enough. Yeah,
Brian Lauchner (07:26):
Yeah. Absolutely. And when you're raising money, that's what you got to start with. You can't just say, Hey, I got a note, they'll get you 6%. You interested? Right. You got to give them a little something else to make it happen. Well, I know we're wrapping up the show here, but I wanted to go ahead and ask a couple more questions. If we can fit it into time here. Kevin asked, when you broke her notes for cash today, do you use a personal name or an LLC for the transaction, that kind of stuff? Let me just start before we've been digging into it and say, nothing we say is going to be legal advice. I'm not an attorney, Eddie and Martha, aren't going to claim to be attorneys. But you know, Eddie, if you want to speak to this, I think that every investor knows you really don't want to ever do anything in your personal name, if you can get away from it. But in any insight you'd like to have for Kevin.
Eddie Speed (08:09):
Yeah. Probably if you could operate in an LLC, that would be best. You could probably have, if you just had your first deal or two, and you just wanted to do a DBA Doing Business As you could start there and then you probably could morph into an LLC. Once you make a little money, you think that's fair.
Brian Lauchner (08:27):
I love it. Peter asked, how to protect the notes from wealth taxes, right? This is actually Peter. This is something that Martha was referring to. If you missed the beginning of the show, she's doing a lot of these deals in tax advantaged accounts. There's some really creative ways that the law allows you to build this wealth in a tax advantaged environment. And so I'd encourage you to continue to look into that as well.
Eddie Speed (08:55):
I'm a big fan of a Roth IRA.
Brian Lauchner (08:57):
Absolutely. And if you've been following Eddie for any amount of time, man, a lot of what he talks about is make sure you're doing this in a way to where you can legally not have to pay taxes on this stuff. Right? And so, I know there's a lot of questions coming in, but we're running out of time for the show. Today. I really appreciate everybody for jumping on and engaging. I love seeing all these questions coming in right here at the end. It's great. Thanks for sticking around for the after party. We'll plan on seeing everybody next Wednesday, make sure you tune in live, jump in early and bring your questions as early as you can so we can engage with you again. Thanks, Eddie and Martha really appreciate y'all for coming on. We'll see everybody next week. We'll see you on the other side.
Eddie and Martha Speed (09:43):
Bye-Bye.
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