Brian Lauchner (00:01):
The news that you can only find here, The Note Industry Update with Eddie Speed, stay tuned.
Brian Lauchner (00:19):
Well, welcome back to NoteSchool TV, where we are here every single Wednesday at 11:05 Central Time. So make sure you're joining and make sure that if this content is valuable to you. Make sure you're liking these videos. That means a lot to us. We'd love for you to subscribe to the channel. If this is content you'd like to regularly get. And if you'd love to participate and join in with what we're doing, make sure you're clicking the bell notification. So that, you're notified when we go live every single Wednesday, so that you can jump on type in some questions, say hi, share some stories, whatever it is that you would like to bring to the conversation. We'd love to hear from you. And if you're brand new to this channel or brand new to notes or even NoteSchool, and you're trying to figure out what this is all about and what we cover, you can always learn a little bit more by going to www.NoteSchool.com/TV to kind of dip your toe in the water and figure out what that next step looks like for you.
Brian Lauchner (01:15):
If you are again, wanting to engage a little bit farther, stick around after this, we've got a great show for you today, but after this, we're going to have a little bit of an after party where we really discuss the questions that you're typing in right now, even as we speak and throughout when Eddie says certain things or when topics are brought up, man, we'd love for you to engage with us. We'll stick around at the end and any questions we don't get to. We'd love to dig into that a little bit further. Today, we have an awesome show with some incredible timely information, but before we get into that, let's take a look at the news.
Joe Varnadore (01:59):
Well, good morning, everyone! It is Joe Varnadore. Brian, how are you today?
Brian Lauchner (02:04):
I'm doing great. How are you, sir?
Joe Varnadore (02:07):
Man, I am wonderful. And you're right. Today, we have an amazing show. And it's, The Note Industry Update and Eddie has been you know, grinding it out. You know, we've got the latest stuff there, but before we start, and I know Eddie's going to, you know, he's digging deep today. So, I wanted to give a couple of just feel good pieces today. So before we get started, so the first news article that we're going to go over is well, Houses in Austin, Texas are selling more over asking price than any other major city in the U S. And it quotes a Redfin agent, April Miller. And she said she recently helped a client with an offer for a three-bedroom, two-bath house listed at 515.
Joe Varnadore (03:00):
And pulled out all the stuff, right? The offer was a hundred thousand over asking price and they waived the appraisal in the financing contingencies, but they still came in third out of 38 offers a hundred thousand, there was four offers over a hundred thousand, over asking price. She says every a potential buyer offered more than asking price. And the four top offers were a hundred thousand over asking. You wonder what do, and they started waving the appraisal and the financing contingencies, what in the world would they, what else could they waive? Right. And then secondly, right, we talk about what's going on in the U S. So guys, I was looking yesterday in the most expensive house for sale in the United States of America is at The One, right? It's got a name it's in Bel Air, California. And it is for sale for $500 million, right. It's a hundred thousand square feet. And it is, I think it has 20 bedrooms and 30 bathrooms and just, well yeah, we can imagine what that would be like. Right. So that is the feel good news for today. We are going to, well, let's bring on Eddie and we're gonna, we'll chat just a second. And then Eddie, you're going to jump right into it, my friend.
Joe Varnadore (04:37):
So, Eddie, how would you like to carry the, you wouldn't even finance that, right? The water in Bel Air, but it would probably cost you $10 million a year to own it, right?
Eddie Speed (04:48):
Well, you know my dad used to talk about buying a horse, Joe, and he used to say buying a horse is like buying a wheel for a Cadillac, right? Because it takes the feed in the barn and the saddle and the trailer right all that. And so my dad used to laugh and tell people, and they'd look at buying a horse that they were just starting. I think if you bought that house, you'd just be starting.
Joe Varnadore (05:10):
Yeah. Oh, absolutely. Yeah. That's crazy. Right? Small city. Well, you know, Bob Hope when his house there, the way when airliners would come in and start their approach from the North into a LAX. That was their reporting point. They knew they were in the pattern when they saw Bob Hope's big house there. So anyway, Eddie, we have, you got a lot to cover. So I'm going to just kind of back out here, I'll be in the background. And let's do this thing, man.
Eddie Speed (05:44):
Well, you know once a month we try to basically look at the market in the market of real estate and how it would relate to the note industry or the creative financing industry. And this Joe has already alluded. We have an on fire real estate market, and we've pulled together a lot of data slides. There are some things that we're going to introduce you today, and I want to make sure that you kind of know what we're tracking here. So there's some terminology, you'll see this E H S and that stands for Existing Home Sales. So we believe relative to our market that we should stay focused on Existing Home Sales because creative financing is probably not going to be on the new home built or builder product, but on an existing home product. So when you look at that, this number is at an amazing number of 6,220,000.
Eddie Speed (06:45):
Now it is coming down slightly. So it really was at a peak right about here, which if you would look at that, that probably would have been about October of this year. So actually, it's not that the home sale rate is the nor as far as number of properties. It's trending down just a little bit right now. So, we're not feeling it because we're seeing increasing prices and we're going to have several these slides, and we will talk about this. So, median sales price of a property. Now, once again, that E H S what does that stand for? Existing Home Sales. So right now, Median Prices, this is going to be nationwide. Is it 313,000? And so if you looked at it, literally back at this chart in 2017, we were at about 225. So, this shows you the appreciation rate of residential properties, pretty significant there, for sure.
Eddie Speed (07:46):
And here's another expression. So Joe, I learned this expression recently from one of the guys that does a lot of analytical workforce, Mr. Kevin Moore, thank you for your help on some of these slides. And he said, Eddie, that's a FOMO. And I said a FOMO, and I've been around real estate for 40 years. And I had to ask him what that meant. And he said, it's called the Fear Of Missing Out. And apparently that's a thing like this is a common expression, particularly people that do a lot of research data. So there you go, Fear Of Missing Out. Now, this is Existing Home Sales Median Price. This is the percentage change year over year. Okay. So the percentage change year over year. And if you look at this numbers right in here, which was September and this was October of last year, and you can just see a heck of a trend and it went down a little bit in December, and now we're back up the highest of anything on the chart at 15.8% year over year change, existing home sale prices are up 15.8% from February of last year from February of 2020.
Eddie Speed (09:24):
So, wow!
Eddie Speed (09:28):
Okay. The percentage change in the amount of property sold. So these once again, we're sticking with our Existing Home Sales, and this is the percentage year over year in the number of property sold and look at these numbers in here, crazy numbers, right? All these are over 20%. So starting back in September of last year and then trending all the way into January of this year, February is off a little bit kind of interesting. So the number of home sales are back to what we were kind of in July of last year. This past month prices are up, sales are down. Why? Less properties listed. The lack of listings is driving the number of sales, the lack of listings are driving the price, right? So a shortage of inventory means that they're fighting over the inventory that they have. That's why everybody that knows anybody or they're selling residential houses, your realtor buddies, or, you know, if you're a realtor are all telling you these crazy stories about these over list offers, these multiple over list offers is Joe story about the one in Austin, it's all over the country.
Eddie Speed (11:01):
I live here in Dallas-Fort Worth, and it's certainly the case here. So here's an interesting thing. So they do a Realtor's Confidence Index. And this is just a survey. It's not really a data point, but it tells you the confidence that realtors have in the market. So first time home buyers and by the way, this is the darker orange is this year. And the lighter orange is last year. So we're fairly close to the same. As far as their competence in First-time Home Buyers. Their Sales to Investors, they're even money. Cash Sales, their confidence level is slightly higher right now. And by the way, these houses itself overprice, they've got to kick, usually got to kick the additional money in down payment. So, if you pay over list, it's gonna probably appraise at least.
Eddie Speed (11:56):
So any overage money that you're paying is an additional down payment. So cash sales are definitely a factor today. Distressed Sales, well, there's not much confidence of that. They're at a one. That's as low as you can be. And then days on the market, they were at a 20. Their index said, they're at a 20 this year and they were at a 36 last year. So pretty interesting data there. And people always want to know, well, where are these homes sales happening? By the way, any of you that want these charts, let me make sure that you know how to do it. You can go to info@noteschool.com and we're glad to provide you these PowerPoint deck. And because there's a lot of data in these things, and we realize that you guys would like to maybe have that.
Eddie Speed (12:53):
So just go to info@noteschool.com and that little watermark you see in the bottom, that's there, that's the email address, and we will be glad to send you these slides. So you might want to specify that it is, The Note Industry Update on this day. So our staff knows exactly when you're looking for that. Wow! Look at the South, Whoa! 45% of sale are happening in the South, 22% in the West, 12% in the Northeast. And look at the Midwest, 21% in the Midwest. So these two guys right here are carrying a 65% of the market, right? Two regions of the country are hearing 65% of the market. That's interesting. And then the price range of what selling, this is another interesting number. So 40%, or the 250 to 500,000. That's the clear takeaway. The second to that is the 100,000 to 150,000. And that's 31%. So take 250 and below, or 100 to 500,000, 100,000 to 500,000. And you've got 71% of what's selling. What's the other numbers? 100,000 here, 100,000, let me get my highlighter going. This is 6% of the market. So the below 100,000 is 6% of sales.
Eddie Speed (14:36):
Over a million is 5% of sales. 750 to a million is 5% of sales. Now you're going to see here in a minute, this is way up from what it was. And the 500 to 750,000 is 13% pretty interesting data there. Percentage Change in Sales From a Year Ago, same price bands. Here's something interesting. One, a zero to 100,000 is down. Number of sales is down 25%.
Eddie Speed (15:19):
Wow!
Eddie Speed (15:21):
I didn't think anything could be down right now. Well, it's according to the National Association of Realtors. The 100 to 250,000 is down 10%. I remember there were about 30% of the market, but they were a bigger piece of that pie, last year. The 250 to 500,000. Well, they're up 13%,
Eddie Speed (15:42):
The 500 to 750 is up 50%, the 750 to a million up 66%. And the over a million is an astonishing up 81% over last year, year over year comparison. Pretty interesting data there, shows you what people are chasing. What did they call it? They call it a FOMO. Fear Of Missing Out. All right. Well, I don't think this is a shocker. This is the Flipping's Gross Profit, gross margins. This is going to be the blue line. Flipping's gross margin has been going down for the past four years and I see it continuing to go down.
Eddie Speed (16:47):
Why? Why would somebody sell a house to a flipper? Because somehow listing it through a realtor, wasn't successful, no words. The reason the house buying business, buying houses for cash at a discount. The reason that business exists is because of some inefficiency in the traditional real estate brokerage model. So the real estate brokerage model, isn't filling that gap, that property didn't falls over to the house flippers. Now I've been on the bandwagon for over two years telling real estate investors that they need creative financing, because it's the way that they structure the financing can make them successful in buying a house. In spite of seemingly overpaying. In other words, the seller would be carrying and part of the financing, and you would pay him today's price, but what would tomorrow's money? The theory is, it doesn't matter what you pay for a property. It just matters when you pay it. Right? And so I believe that real estate investors we're going to have to continue to reinvent themselves in the market because their margins are slotting and in the data says so. So when that was in the Mreport, by the way, here's a very interesting data fact. I think 76% of the U S non-home owners do not plan to purchase a house in the next six months.
Eddie Speed (18:28):
Tenants are not the new fuel to buy new houses. That's what this chart says. 43% site affordability constraints as the main deterrent. So, this price surge that we're seeing in the market is pushing away a lot of who would become the next new homeowner, first time buyer types that are living in rentals. So kind of an interesting data fact there, that was an article that came out yesterday. And so we now see that Biden's Administration Announces the Extension of Foreclosure Moratorium and Forbearance Options, and that is going to be two dates. So it was it was extended to on the forbearance until June 30th at the 21. Okay. For an additional six months, which is going to end in September. And then, on the evictions for rentals that is extended to June 30th. So that is a big deal because it's driving factors in the market.
Eddie Speed (19:49):
I've been saying for six months that the burnt out hobbyist landlord, this small time, one to five unit landlord that the, that he might have disliked his rentals. He loved them when he bought them, then he found that he was making a lot more of an investment in the job than he was an investment in just real estate, because they're, self-managing three quarters of these small investors, self-manager, 17 million houses in the United States that are owned by somebody that owns one to five rentals, 75% of those self-manage. So, CNBC came out with an article this morning, talking about the now the eviction moratorium has now been stretched out, went from March now to June 30th. Now, all of a sudden, because of that reason, it's forcing a lot of landlords to sell, which is, if you go back and look at what we've been saying, I've been saying this now for six months, it's the obvious. It doesn't make us smart.
Eddie Speed (21:01):
It does mean that our team pays good attention to market data. See, I believe if you have market data, you can make smart decisions. Without market data and just looking at a couple of variables in the market might cause us to make a more emotional decision. And we all understand emotional decisions sometimes in business. Aren't good things, right? So the, this is on the on the CDC extension, but wait a minute, it's been ruled unconstitutional, say it ain't so, any say it ain't so. Yeah, so, it has been ruled unconstitutional. And so these evictions being extended is going to be a state by state basis because of that reason. And this does only apply to government sponsored entities, or it's also called government sponsored enterprises. It's funny, the E stands for actually two different things. This is going to be Fannie Mae, Freddie Mac, FHA, VA and FDA loans.
Eddie Speed (22:15):
So, these are going to be the ones that are, that these eviction ban relates to. So not every house is a rental is subject to the eviction ban is what we're saying. Okay. Let's look at the other side of the coin. Remember, we've kind of alluded to this before, and that is, we've alluded to the fact that while real estate, residential real estate is on fire. We're going to be the first to say this as a thing, real estate residential real estate is on fire, but there's an issue. And the issue is, there's a lot of loans that are delinquent and a lot of loans that are in forbearance. Let's look at delinquency. Now, delinquency this was delinquency a year ago. Okay. So this was the overall delinquency a year ago.
Eddie Speed (23:22):
And this is the overall delinquency, the latest date, which is December of 2020. Okay. What's the big bomb, right? What's the big bomb? When you see these numbers going here, you're saying, look delinquency looks better, Eddie. What's happening is the delinquency is moving over and you see it start right here. And you see it really big right here. This is for October, which is here, November, which is here and December, which is here. What about foreclosure? Nope. They're not in foreclosure. They are delinquent, but not in foreclosure. This is shadow inventory. And then obviously we see this a lot. If you just want to take a summary of the delinquent loans to get a sense of how many assets we're talking about? How big is this pile Eddie? Well, the bottom line is number of properties that are 30 more days past and past due or in foreclosure totaling 3.3 million properties, seriously delinquent over 90 days. And we think these are probably deals that won't cure. They're either going to have to be sold or foreclosed on, it's 2 million of them. Pretty big numbers there. Remember, you can get these data slides from us. If you're interested in doing more of a drill down on each one, this slides, this defines a big difference in fair and good credit. These are the people that are now qualifying for a mortgage
Eddie Speed (25:22):
And otherwise, quite honestly, the good category these guys, generally are not qualifying for a mortgage. So this category in here, this bottom category are generally what's expected. These people are the ones that are now qualifying for a mortgage. This is how tight mortgage credit is. That's why you see the average credit so tight. Okay.
Eddie Speed (25:55):
Here's an interesting thing. Here's where a dollar of rent goes. So a dollar of rent, interestingly, here's the dollar of rent. 38 cents goes the mortgage, 16 cents for building and maintenance property taxes, 12% for capital improvements, 10% for employee payroll and 10% for owners investors. You're kidding. They're profiting 10 cents on every dollar. Yes. Oh, by the way, the landlord association is putting out a lot of information right now to encourage people to buy rentals. That rental property rents are going up the average $3.
Eddie Speed (26:48):
So guess what, if you take this number right here, they're going to make 30 cents more, on the increase in rents. I don't know, Eddie. I'm not sure. By the way, new investors are outpacing existing investors at about 20 to one rate and buying new properties. So the guys that are buying rentals today are not the seasoned veterans. The guy that are buying rentals today are the HGTV new guys.
Eddie Speed (27:22):
Wow! Look at this number. As of January 31st, there was 1 million homes for sale down 26% from a year ago. And there is 1.45 million realtors. I guess there's going to be a lot of splitting commissions in this old game. Huh? Wonder if the 80 20 rule is going to apply here? 80% do, 20% of the realtors do, 80% of the business I'm betting so. I'm betting it's even more extreme than that. Affordable housing. So now you're looking at affordable housing and guess who is rising its head? Well, I have a lot of experience in the old manufactured housing world and the manufactured housing world for a brand new, higher end manufactured house is at about $200,000 pace. Pretty interesting. And here's something that is a lesser price manufactured home. And I remember back in the nineties, when one out of four houses sold was a manufactured home. And that was because of affordability. And I'll bet you that we're going to see those kind of numbers. Jump up again. So manufactured housing and the low price ban, there's little to no financing in the manufactured housing space like there is another's. So it'll be interesting as how we solve the problem. Oh, wait. I know, I know there is financing. Don't say no financing, say seller financing.
Eddie Speed (29:12):
You like that little spin, Joe.
Eddie Speed (29:18):
All right. Well, the ship is on lodged, but I finally got it loose in the Suez canal. If you've been here, the story largest ship, I guess in the world was sideways lodged in the Suez canal. There was a hundred ships backed up behind it and he's finally free. I'm glad he is. Things are looking a little out of focus here, Joe. We're looking just a little out of focus on some things. So let's talk about it. So we've got a housing shortage. We got a lack of new construction. We got lumber prices up 180% and 24,000 to the cost of a new house. Prices in real estate is on residential real estate is through the roof and interest rates are now over 3%. The highest number in history the millennials, ages 30 to 39 are buying property. Who the guys that said they were never going to buy.
Eddie Speed (30:17):
I remember that five years ago. What's a person to do? Well, the first thing a person should do in my opinion is know what the market says. We know what the market says. We have a lot of opportunities to look at it differently. So what does this all mean? Hmm, well, we have 3% of loans in forbearance. We have 5.8% of mortgages that are delinquent. Up 250% year over year from a year ago. We have loan services that have advanced $90 billion in advances to bondholders. 90 billion is the check that mortgage servicers have already advanced in principal and interest taxes and insurance payments. I hope they can keep writing the check. That extension is now into September. Wow! 9% of mortgages aren't making payments. 9% of every residential mortgage did not make a payment out of the mailbox this month. You have 10.2 million tenants that owe $53 billion in back rent.
Eddie Speed (31:40):
Joe.
Joe Varnadore (31:52):
Well, Eddie, I think that about, that's a mic drop, right? So,
Eddie Speed (32:03):
I don't know what to say, these are just the data facts.
Joe Varnadore (32:06):
You know, Eddie, you know, it's, there's such, it's such, you know, it's here and it's here, right? It's almost like there's two different economies. Well, it pretty much is with really with the straight up. And then there's this hovering piece down here below. And I guess did the thing about getting sideways? Did they, I think we had that before the ship got sideways, right?
Eddie Speed (32:33):
Well, you know, I, listen, people ask us all the time what's going to happen? And I'm like, guys, I don't know. We've never seen this market. Here's what I know. I know that landlords are in a pickle. And I know that if I were chasing buying properties on creative financing terms, and by the way I am. My number one target would be small. What we call hobbyists landlords, very part-time people there. You're trying to manage your own rentals, but they're not doing well with it. And I think their stress points really high. So if I'm looking for a soft spot in the market, that's the case. We have a high demand in the people in the note business right now, maybe the highest demand for small private investors I've ever seen in 40 years is today. I'm certain it's today. So because people, once again, they can't buy rental that will make money. So they want to buy note because it'll produce income. So, a lot of things are pushing in our direction. And so we're not doing any of this to try to scare you. We are simply doing all of this so that you now understand market voids. Joe, people make a lot of money filling in the market, right?
Joe Varnadore (33:50):
Always been that way. And you know, there are the market voids, and I'll tell you, I think this last extension from CDC may be that straw that broke the proverbial camel's back. Right? And so,
Eddie Speed (34:05):
We were sort of lonely predicting all this. Weren't we?
Joe Varnadore (34:11):
Yes, we were. For sure. And you know, it's just looking, if an informed mind makes much better decisions than an uninformed mind. So take that as it is, make sure guys and get these slides, right? I mean, I think, you know, you can get a lot out of them and there's a lot of need in there as you move forward. For sure. So Eddie, why don't we bring Mr. Brian Lauchner on here and we'll wrap this up and go to Feeding Frenzy Friday, then we'll go to the after party. And we'll talk about more about some of these data points with Brian.
Eddie Speed (34:48):
Let's do it.
Brian Lauchner (34:51):
That is right. So, obviously always good stuff. I mean, it's so good to hear this content. It's so necessary for investors to have a, really a pulse on the data. And more importantly, if you're spending marketing dollars, you're targeting people like Eddie said, you really want that to be as targeted as you possibly can. Stop trying stuff that worked maybe three years ago and look at the data and start implementing some new stuff in your strategy. So good stuff today, Eddie. Really appreciate it. Yes. Like Joe said, NoteSchool TV is sponsored by the Feeding Frenzy Friday and NotesDirect.
Brian Lauchner (35:41):
Well, I know there's some new people on here. And so if you're wondering what in the world is the Feeding Frenzy Friday? It is a playlist that we have here on the NoteSchool, YouTube channel, where each week we break down a note off of notes, direct to talk about the pros and cons of performing and non-performing notes to help you master your level of due diligence and confidence moving forward. So you can buy notes just like Eddie does. And so check that out. Next week, we've got a very special guest, Mr. Bob Bullinger, who's going to be talking about partials and we're going to get into that and how we can really build our wealth. As always, we are live. We do start every Wednesday at 11:05 Central Time. And so make sure you're jumping in and chime in the conversation going in the comment section there again, if you'd like to participate, or even these videos are valuable to you just simply click the like button as well as subscribe to the channel.
Brian Lauchner (36:38):
And like I said earlier, I mean, click that notification bell. It's a little bell up at the top and it will notify you when we go live. So that you're reminded, Oh yeah. I want to jump on. I want to ask Eddie a question that is just burning inside. Right? So check that out. You can always go to www.NoteSchool.com/TV to learn a little bit more about notes and NoteSchool, and really what we cover. We've got several of opportunities coming up to where you can come to some trainings and really deepen your knowledge moving forward. If you're somebody who says I need help right now though, Brian, I can't wait .There's this real need in my business, man. Go to www.NoteSchool.com, click on the tab that says, contact us and simply reach out. We'd love to get on a phone call and see what we can do to help you move forward and take that next step on your journey. And so, for those of you who enjoyed the show, you'd like to see past live shows. You can always click on the link that we're going to put up on the screen right here to see previous episodes for everybody else. If you can't stick around, we'll plan on seeing you next week, but for those who want to hang around for the after party, we will see you on the other side. Thanks for coming.
Brian Lauchner (37:56):
All right. Good stuff, Mr. Speed. Yes, sir. You know, it's kind of fascinating. One of the things you said that really resonated, I'm looking at the comments is this targeting burnout landlords, right? You know, I think we can all relate or at least understand, right? That look, if you're not getting rent for months and months and maybe even a year, you're really struggling because you can't really do anything as a landlord and you may not have the options that some of the other landlords have. Right?
Eddie Speed (38:33):
Yeah. You know, we started seeing this trend. We've been, we have understood that a lot of landlords found out buying their rentals took a lot more energy and effort. They found out they got a lot more invoices sometimes, and they got net rent checks. And that happened before the virus. But when the fire started, then we sort of knew there was a soft spot. And this investor really wasn't a hardened old time landlord. You know, he was a lot of times, he was somebody that was making good money, doing something and kind of the husband and wife or whatever that story is of them. They're like huh. Let's be like, they on HGTV, this looks like fun. And the fun investment took the fun out of it when they started having things go wrong with their rentals. And then all of a sudden they are in a situation. In most cases, Brian, they were not eligible for a forbearance, they couldn't stop making their mortgage payments.
Eddie Speed (39:37):
Right. But yet, the tenant could stop paying them. In other words, just because you have a Fannie Mae loan did not make you eligible for not making your mortgage payments. Yet, if the tenant lived in a house that had a Fannie Mae mortgage, he by legal right, could stop making his rent payments. And so we've been watching this for months just knowing it was a balloon filling up. Right? And I don't even think it's air. I think there's some liquid in this balloon, you know what I'm saying? I think it's going to be ugly when it pops.
Brian Lauchner (40:14):
Yeah. And I think that you know, a lot of times, especially if you follow the news and that kind of stuff, we hear about the problems, but a lot of times you don't hear about the solution. So I was going to ask Eddie, you know, for the investors who they say, look, I want to actually try to find a way to help these landlords. You know, what are some ways that an investor can say? I want to be a part of the solution. I want to try to not just help because I'm a nice guy, but I'm going to find a profitable way to help these people. What are some, what's probably the easiest barrier to entry into helping these people out?
Eddie Speed (40:43):
Statistics tell us that this small landlord, this one to five house owned property owner, right? 75% self-manage statistics also run that 60% paid cash .So there's a lot of them that, they own the house free and clear. They could afford to sell or finance it to you, Brian, because they have all equity. And they really made a long-term investment when they bought it. So they were looking to cash in, they were looking to get a check. What if they could get a check via an owner finance note, where they financed you or I Brian, to buy the property. And I could bake in all kinds of clauses, depending on the story and the situation. Even if, I didn't have to start paying them today, until I got the tenant evicted. It would lead them. I've having to go deal with it. And now a great long-term deal, but I could rent the property on the road or, you know, our strategy. We love Brian. We could resell it on the wrap note and all of a sudden, boom! We build our own bank with it.
Joe Varnadore (41:50):
Well, you know, guys it's, and that's what we've been saying is that, you know, most people that got into the landlording business, they wanted to participate in the, you know, in the run-up of the real estate business. But they only knew the bricks and mortar side, right. The property side of the business, they didn't know the note side of the business and what they were looking for was passive income. And like you said, it either the passive income, well, sometimes the invoices you know, overpowered the money.
Eddie Speed (42:23):
Yeah. We, really saw in obviously you see this in the slide deck that we did today, remember you can get the slide deck just to email us at info@NoteSchool just make sure in the body of the email to tell us which presentation it was. And we'll be glad to send it to you. And Joe, we eliminated probably another two times of slides had, we just didn't have enough time to do them. There's a lot of stuff. There's a lot of overwhelming data and things that are being written, at least at the loan servicer trade journal levels about what's happening out here. So mine it's market condition. You hear me say that lender, certain loan servicers have already written a check for $90 billion cover bond holders, principal, and interest payments and the borrower's taxes and insurance payment. So, Brian, the servicer is paying taxes and insurance on the house that he's not collecting payments out. How's that work?
Brian Lauchner (43:31):
It's a bad day.
Joe Varnadore (43:31):
Yeah. Well, and the reason they're doing that, Eddie is because if they did not, then that part of the market would collapse too. And then that would just big word. Right. Exacerbate everything else.
Eddie Speed (43:44):
Yeah. And part of it is, it's, I think I'm right in saying this it's the thing that wrote in Dodd-Frank that kind of put the lender at a little bit of a risk there when they have the Escrow Account. But the bottom line is, we are going to see a day of reckoning, I believe with loan servicers and so there is some, this shortage of credit, Brian, is not going the right direction. The shortage of credit is continuing to decline.
Brian Lauchner (44:15):
Yeah. That's so good. I appreciate you sharing that. And I know, we're wrapping up here on time, but I just wanted to encourage everybody. If this is something that you say, look, I hear what you're saying. I think I want to get involved and where I just need help learning this information. I would encourage you either to reach out to us on the contact us tab on our website, or just go to www.NoteSchool.com/TV to learn a little bit more. We appreciate everybody being here. I saw, thank you for saying hi and hello. It is a lot of first time people. I think that's really great. I love to hear from you guys. And so, we'll catch you guys next weekend. Thanks Joe. Thanks Eddie. We'll see you on the other side.
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