Buying NPN’sScott Carson

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Who Is In The Room

Who’s Ready For Football

• Real estate investor since 2002• Buying and selling NPN’s since 2007• President of Inverse Investments LLC• Creator of Note Buying For Dummies class• The “Love Connection” of ugly paper by Investor’s

Business Daily/Wall Street Journal

Who Is Scott Carson?

Would You Like Our Slides

What’s the Opportunity?• Nine Million Homes Underwater• Seven Plus Million Borrowers In Default• 95% of Inventory is Below $175,000 in Value• Defaults Averaging 18+ Months• 85% HAMP/HAFA Failing or Failed• 3-5-10 Year Time Frame

• How to FIND NPN’s from banks/hedge funds

• How to FUND these deals with OPM• How to FLIP notes and other Exit Strategies

• Create Win-Win-Win Situations for you, the banks, and the home owners!!!

• Case studies of other investors closing deals!

What We Will Cover

What Does Your Biz Look Like?

Buying the debt (IOU’s) on:Residential Real EstateCommercial Real EstateAuto LoansCredit Card Debt All Other Types of Debt

Becoming the Bank and Controlling the Asset

What is Note Investing?

2009 – 15M+ Borrowers Underwater (26%)2013 – 7.1M Borrowers Still Underwater (14.5%)

States Still Facing ProblemsNevada 36.4% Las VegasFlorida 31.5% Miami/TampaArizona 24.7% PhoenixMichigan 22.5% WarrenGeorgia 20.7% Atlanta

September 2013 Core Logic

Has The Market Changed?

No Postcards or Letters.Very little competition.No “dramatic” home owners.Very little paperwork.No Overwhelmed Loss Mitigators.A yes/no answer in days, not weeks or months!

Close in 30 Days or less.

No Headache Investing

Where To Find These Deals• Banks• Hedge Funds• Servicing Companies• Auction Websites• Mortgage Bankers• Private Sellers

YES and NO! (Don’t bother with Big 5-BOA, Chase, Citi, GMAC, WF)

Hedge funds have pools and pools of notes that they want to move YESTERDAY

Commercial loans versus residential notesBanks are selling SFR, Condos, Townhomes, Apartments, Self

Storage, Hotels, Motels, Mobile Home Parks, Medical, Industrial, Mixed Use, etc!

Deal with smaller, regional banks and some of the smaller lenders SUCH AS….

Are Banks Letting Notes Go?

 

Account No.Unpaid Principal

Balance Address Current Balance Accr. Int. Rate Nonaccrual DateMaturity

Date GL Prin. Balance

Past Due Days

Market Value As of Date Market Value

2550007739 $ 161,885.22 17331 NW 7 AVE 107 MIAMI GARDENS 33169 161,885.22 13,562.55 6.875 8/30/10 1/1/38 33,075.00 425 9/7/2010 35,000$

2550007314 $109,374.86 4594 NW 79 AVE 1C 109,374.86 14,015.84 6.500 11/30/09 6/1/37 45,196.58 698 4/11/2011 50,000$ 2550007315 $107,776.52 4594 NW 79 AVE 1D 107,776.52 14,019.20 6.500 11/30/09 6/1/37 43,492.89 698 4/11/2011 50,000$ 2550007318 $109,468.90 4594 NW 79 AVE 2C 109,468.90 14,014.04 6.500 11/30/09 6/1/37 45,343.19 698 4/11/2011 50,000$ 2550007319 $109,266.96 4594 NW 79 AVE 2D 109,266.96 13,844.93 6.500 11/30/09 6/1/37 45,090.72 698 4/11/2011 50,000$

2550007442 $ 74,924.99 3449 Clark RD #148 Sarasota FL 34231 74,924.99 1,217.69 6.500 11/1/10 2/1/37 48,195.00 60 11/4/2010 51,000$

2550006218 $ 81,161.04 19201 COLLINS AVE 101 81,161.04 7,070.53 4.875 2/1/10 6/1/35 56,700.00 637 2/9/2011 60,000$

2550006843 $ 136,734.74 1351 NE Miami Gardens DR 1206E 136,734.74 11,456.65 6.375 8/2/10 2/1/36 57,184.80 455 5/23/2011 61,000$

2550007150 $ 184,148.59 131 SW 117 AVE 8104 PEMBROKE PINES 33025 184,148.59 14,943.32 7.125 9/30/10 12/1/36 58,873.50 394 4/6/2011 66,000$

2550005427 $ 48,680.38 763 PENNSYLVANIA AVE 136 MIAMI BEACH 48,680.38 3,398.08 5.000 6/30/10 1/1/34 48,680.38 486 5/23/2011 67,000$

2550007422 $148,654.758290 LAKE DR 543 Doral FL 148,654.75 15,991.21 6.250 3/2/10 2/1/37 62,980.00 606 4/19/2011 67,000$

2550005668 $ 97,870.22 2420 SW 5 ST Fort Lauderdale, FL 33312 97,870.22 7,876.38 6.000 6/30/10 5/1/34 64,860.00 486 9/28/2010 69,000$

2550006678 $ 139,613.58 18340 NW 68 AVE I Miami 139,613.58 8,297.10 5.625 8/2/10 11/1/35 64,917.25 364 9/6/2011 69,000$

2550007312 $110,780.524594 NW 79 AVE 1A Miami 110,780.52 14,031.24 6.500 11/30/09 6/1/37 63,368.97 698 4/11/2011 69,400$

A Sample Tape

What Does Junk Look Like?

What Do I Do With These?

6 Different Exit Strategies1. Wholesale The Note2. Modify The Loan3. Loan Assumption4. Short Sale5. Deed In Lieu/Cash For Keys6. Foreclosure

• Let’s Start With The End In Mind!

• Exit Strategies• Wholesale the note for quick profit• Modify the loan (HHF)• Loan Assumption• Approve Short Sale• DIL/Foreclose and Sell as REO• DIL/Foreclose and Keep as Rental/Owner Finance

Let’s FUND These Deals

• 7 Unit, San Diego Apt. Complex• Worth $700K, Under contract for $375K• Wholesaled it at $410K, $35K in profit without any of

our own money in the deal!

Note Wholesaling Example

• Took a deed in lieu from property owner.• Marketed Apartment Complex for sale as REO• Sold it 4 months later at $548K ($138K profit)

So What Did Matt Do Next????

• What Do RE Investors Want?• What Are They Looking For?

• Active or Passive Investment• Secure Investment• Can They Trust You?• What’s My Return?

How To “Find” Funders?

How Do I Find Funding?

You Need Cash!Private InvestorsIRA’sLines of CreditSome Funds Will Finance

Ways To Raise Private Money• Investment Clubs• Meetup.com• Self Direct IRA Club/Events• County Records For IRA Investors• Social Media/Crowdfunding• BiggerPockets.com

• Foreclosure Time Frames• Qualified Buyers• Available Assets• Pricing Of Assets (CA vs MI etc)• Rent Rates/ROI• Comps• Return vs Size of Checks

Deals Can Vary On Size

• What Would Your Pay?• $100,000 FMV Condo• 2/2 1050 sq ft• Fort Lauderdale, FL• Rents for $1200 Month• $165,000 UPB• 24 months in default• 12 months to foreclose

• What would you pay for this note?

Money Finds Good Deals

$5,000 in Servicing/Foreclosure FeesNo Repairs NeededWorth $100K+ based on current CMA’s

What Can I Do With This?

PAID $33,000

Small Notes Can Be Found Nationwide As Well$130K 1st lien, no payments for 18 months!$110K ARV (needed $30K in repairs) $55K FMVWhat would you pay for it????

Ugly Notes Need Love Too!

Took deed in lieu from property owner.Listed our REO online.Sold in 30 days for $25,000 to cash buyer!

I never walked property, swung a hammer, collected rent, or showed up to closing!

3 hours of work for us from 1,000 miles away!

$3,750 turns into $17,150

Meet Jamie and Lanny(Taylorsville, NC)

Bought Charlotte Condo NoteUPB was $37.5K, Worth $50KPaid $17,500

Did Loan Mod for owner22% MONTHLY returnSold Asset for $45K

Make Money Holding Note

Modifying The LoanReduce PrincipleReduce Interest RateForgive Past Due PaymentsLoan DefermentSome Down PaymentAdjust Rate

Meet Jay Tenanbaum• South California Student/Investor Since December

2013• Bought 3 Notes To Start• Purchased Another 20• Invested $250K• 6 Month Yield is 40%+• Includes 3 Non Performing

800 Clubhouse Dr, West Palm Beach, FL6 Unit Apartment Complex worth $240KBorrower owes $430K (July 2010)

Purchased for $175k.

We sold it 8 months later atFC Auction for $310K!

The Bank Called Me!

WIN FOR THE PROPERTY OWNER!

• Offer Homeowners Deed In Lieu• No Deficiency Judgments• No New Late Pays on Credit• No Foreclosure on Credit• Cash For Keys• No Promissory Notes

How Do We Create Win-Win’s

WIN FOR THE BANKS• They Get Rid of Bad Debt Killing Their Books• Settle in a Fraction of Time• Banks HATE REO’s“Pretend and Extend” Mentality on Commercial

How Do We Create Win-Win’s

WIN FOR US AS INVESTORS

• Very little competition• Awesome deals!!!!• Very little overhead• Close residential and commercial deals• Nationwide Investing• YOU CAN DO THIS WITH NONE OF YOUR OWN MONEY!!!!!

How Do We Create Win-Win’s

2007 •200+ phone calls to banks a week•50 Asset Manager Contacts•5 Lists•1 Closed Deal Month = $10,000•95% Banks, 5% Hedge Funds

My Business Then

My Business Now2014• 5,000+ Asset Managers• 800+ Hedge Funds• 1 Email Blast = Hundreds of Deals• 80% Hedge Funds and 20% Banks• Personally Own 300+ Assets• Market Value of $12-15 Million+• Taught 1,000’s Of Investors How To Make Real $ in Notes

Why I Started Teaching

Investors Don’t Know What They Don’t KnowNew Investors Need Someone To CallInvestors Struggle With 3 Things1) Finding Deals2) Marketing3) Raising Money

So What is the Catch???

• Thursday-Sunday Workshop (No Pitch Fest)

• 1 Day on Finding Deals• 1 Day on Funding Deals• 1 Day on Flipping (Exits)• Evaluate Real Deals• Nationwide Team!• Put A Real Plan In Place• REPEAT ANY NBFD WORKSHOP FOR FREE!

Note Buying For Dummies

• Don’t Wait For the Class, Get Started Closing Deals Now!!!!

• Over 40 hours of Online Video and Audio Training• 230+ Page Manual From NBFD Workshops• Access to all of Scott’s Contracts and Forms

Home Study Course

August 7-10, Los Angeles, CAHilton Anaheim Convention Center

September 18-21, Phoenix, AZEmbassy Suites Hotel 24th St

November 6-9th, Philly, PAHilton Airport Hotel

Upcoming Workshops

Anaheim Workshop• August 7-10th

• Hilton Anaheim Convention Center• 4 Days of Content-No PITCHES• Meet Hedge Fund Managers• 230+ Page Manual and Contracts• Build a “Real” Real Estate Business

4 Day WorkshopHome Study Course

30 Day Fast Start ProgramFind Deal in Top 5 Markets

3-4 Hedge Fund Buyers ListsRepeat For Free!

$799**2 for 1

Note Buying For Dummies

You Are Comped In For FREE

Any Past & Present Military

4 Day WorkshopHome Study Course

30 Day Fast Start ProgramFind Deal in Top 5 Markets

3-4 Hedge Fund Buyers ListsRepeat For Free!

$799**2 for 1

Note Buying For Dummies

Questions

Note Buyer’s Club

Short Sale DealMike BridgesPurchased 2 Notes For 4 Weeks Ago$23K Total Purchase1 Note at $17KSettled Short Sale at $40K$23K Profits + 2nd Note Deal

Profits In 30 DaysWe Call This Short Papering

Deed In Lieu/Cash For Keys

Most Recent Mastermind

Contact Info

Scott@ WeCloseNotes.comwww.WeCloseNotes.com

512-585-3810