Effective Note Fund Management With Andy Mirza

September 29, 2021




GDNI 171 | Note Fund Management

Note investing and running a fund are not easy but the tremendous return is amazing. If you exert a lot of effort, you’re going to succeed in this industry. That’s why it’s very important to know how to do note fund management so you could have the flow going. Chris Seveney and Jamie Bateman sit down for a conversation with Andy Mirza on big and small wins on deals. What did the big players in the business do? They dive deep into the difference between an operator and a capital raiser and the best practices to build strong relationships with investors.

Listen to the podcast here:

Effective Note Fund Management With Andy Mirza

Jamie, how are you?

I’m doing better and better every day. I’m recovering from a little surgery. All in all, I’m doing pretty well.

Jamie had an unplanned surgery. If you’re part of our Facebook group, you will hear about it. Unfortunately, I tend to ridicule him on it. We also have a special guest. We have Andy Mirza from Coastline Capital Fund. Andy, how are you?

I’m doing great. Thanks for having me on board.

Andy’s back from a vacation. He’s loving life. Jamie’s home recovering from surgery. I’m home with a wife and two kids who all have strep and I have a sore throat. I should be getting rest.

GDNI 171 | Note Fund Management

Note Fund Management: It’s a lot different in the note business, because you have to raise the capital first.


You’re an analyst, Chris. You can figure this one out. Connect the dots.

I may not talk as much in this episode. Jamie’s probably like, “Yeah.” We wanted to bring Andy. He’s going to be launching his seventh fund. We wanted to have Andy on and share his stories of running a fund, some of the trials and tribulations, lessons learned as well as some insights into the fund from that perspective. As we get going, I always like to start off with what happened. Jamie, I’ll start with you. Any interesting note stories?

I did get a loan mod worked out. I’ve been working on this for months. This was the most expensive note we’ve ever bought. This was a “performer” when we bought it. I’ve referred to this one before on the show. Lots of back and forth. This borrower was ripped off and was scammed for several months. He thought he was sending his mortgage payment to work out some government-sponsored loan modification. He was sending his payments to a third party. Lots of ups and downs and trials and tribulations with this particular deal. At the end of the day, we got a $10,000 deposit and the loan modification documents signed. He still has to perform. That was a big win. It was pretty exciting.

Andy, with your existing funds, any interesting insights or stories to share that you’ve had?

This is a note that I bought before we started our funds. We bought this one probably in 2016. I know you guys primarily through BiggerPockets. We post on BiggerPockets all the time. I’ve referred to this note several times especially when it comes to bankruptcy. This lady had filed multiple bankruptcies before we had it.

Back when we bought it, I was pretty new to the game. My partner never had a lot of bad experiences. He was like, “Let’s go get a motion for relief and we’ll be able to foreclose.” This note was inexperienced in how to deal with bankruptcies and borrowers that know how to game the system and use the system. When we bought it, she had come out of Bankruptcy Chapter 13. She didn’t make any effort to pay, nothing at all.

We went down the foreclosure track and went straight for it. On the last day, sure enough, she filed another Bankruptcy Chapter 13. We tried to go for relief in Los Angeles County from what I understand. We got this experience firsthand debtor-friendly. We filed MFRs twice and got denied twice. It was like, “How much do we want to fight this person in bankruptcy?” We stopped and we started accepting payments.

I don’t know if some of the readers know this. In general, if you’re on Chapter 13, the attorneys tell you, “You got to wait until they’re about 60 days late on their payments before you can file for a motion for relief.” She would be making payments on day 58 consistently. Getting over that. We were stuck between a rock and a hard place as far as like, “Our model has always been more on liquidation. We don’t want to hold on to these things.”

We bought it as a nonperforming note. We wanted to turn it into a re-performing Chapter 13 Bankruptcy so we can sell it at that price. If she’s sub-performing and paying late every single month or two then nobody’s going to give us good pricing on that. We’re stuck with a loan that we can’t sell unless we want to take a loss on it.

This went on for a while. I found out that instead of using a general practice attorney, you should go for an expert like a bankruptcy or creditors’ lawyer. We went with a creditors’ lawyer, which worked out great for us. We started getting movement on it and starting to file NFRs. We got our adequate protection order. I put that on a post. This is one of the tools you can use. We felt we could do nothing. For three years, we were accepting these late payments and not being able to sell.

We got this other attorney who said, “Let’s get an adequate protection order.” That ties right into she has to make the payments on time. She had defaulted on that a few times. On the final default, we were going to get our motion for leave. Right before that happens, she dismissed that case and filed another one. We stopped the trustee sale that we’re going to have. We had a great attorney because she tied all of these 6 or 7 bankruptcies together.

When someone files bankruptcy, normally they have an automatic state and you have to get the automatic state removed before you can foreclose. If you have two within a year, that automatic state stays for only 30 days and then it goes away. They have to file a motion to extend the automatic state. We filed an opposition to it. Our attorney drew up such a great one. It won our case for us. She tried 6 or 7 and said, “This is a pattern of conduct.” It’s fantastic. We won that notion. We were able to go to the trustee sale and it still went through. That was 5 or 6 years of struggle.

Did it sell at the sale? Did you take it back?

It’s sold at the sale.

You’re getting paid off. It’s nice.

In our market, the value came out to $525,000. We set the opening bid to $415,000. It sold for $470,000. It’s a hot market out here. We’ve been experiencing that at other sales across countries. A lot of our stuff is selling at the foreclosure sales.

We’ve had the same thing. Did you make money on the deal?


Andy and I met through BiggerPockets. People talk about bankruptcy and I’d be like, “I love bankruptcy.” I see Andy’s posts, like, “Bankruptcy is the worst thing on the planet.” It’s all about the situation. This was a repeated filer. A lot of the bankruptcies that I have bought in the past have been in bankruptcy for 12 to 18 months. They’ve been making those payments. If you buy a bankruptcy at that point, usually the borrowers will want to try and stick it out because they got all this other medical and other debt that they want to get rid of. That’s a great story.

You’re going to experience a lot of ups and downs and trials and tribulations with deals. Click To Tweet

From that perspective, I’ll share mine quickly. I have a land contract, a contract for deed. The borrower has been delinquent for about a year. To go through the final forfeiture process, we have to record the land contract. We tried to record it on a Simplifile and it came back rejected. It came back rejected because the recorder’s office is like, “Why are you recording this?” We’re like, “It’s like a mortgage. We need to record that the borrower has an interest in this property and stuff.” They don’t know what to do because they said they’d never recorded one before. They keep rejecting it.

Where is this?


Is that something where you need to get somebody with boots on the ground and knowledge on the ground and have them do it? Normally, Simplifile is fantastic. We use something else. Sometimes you have to have somebody to do it.

Do you CSC?


They’re Coke and Pepsi from what I hear. I’ve accounted for both. I’ve used Simplifile from the beginning. You’re right. I reached out to somebody local on the ground and explained it to them and my attorney as well. My attorney is like, “How’s it going with the recording?” I’m, “Awful. I can’t get it recorded.” He’s like, “What do you mean?” I’m like, “The recorder’s office doesn’t know. It’s a small county. They don’t know what to do. They’ve never seen one of these things before.” It’s interesting from that perspective. We’ve got stories of bankruptcy, recording things and Jamie with borrowers paying the wrong people, getting scammed and getting a little money.

Plenty of podcast material with note investing.

I want to start turning the focus to Andy and your fund. I have a few quick questions. How long have you been in note investing? How long since you had gotten into note investing? Was it until you launched your first fund? Why did you launch your first fund?

I first got into note investing probably in 2013. I joint venture with a more experienced investor. It turned out to be a lot more passive on my side than I wanted to. I wanted to learn to run the business but it wasn’t in his plans. We made a lot of money and we continue to make money. I’m okay with how that ended up.

In 2015, I met my partner Sean Irwin. We started buying some notes together. I had been interested in the whole note business. I have real estate business experience before that but notes always intrigued me. I like to work with a partner. I like to have somebody that helps show me everything. We invested and bought a few notes on our own.

I got to thinking, “I would like to do more of this business.” What did the big players in the business do? The big players in the business, our sellers mostly, raise capital, a whole bunch of it and then they go out and buy. It’s a lot different than the real estate investor market where you can have one deal here and then get a hard money loan and go out. It’s a lot different in the note business because you have to raise the capital first. You don’t have that same leverage play.

In 2016, that’s when I convinced Sean. I said, “Let’s do it like the big guys.” I reached out to Bob Malecki. You’ve had him on the show. He’s on BiggerPockets. He turned me on to it and I turned him to help fund documents. Our first fund was quite a learning process. You have to figure out how you want to structure that rundown. One of the things that takes the most mental energy is, how do you exactly get all the pieces to work out? We wanted to have a fund where there was a profit split with the investor. That’s a lot more difficult to achieve than a pref and that’s it. I haven’t done one of those. That’s a lot easier because you don’t have to worry about the upside and when people come in and out.

There was a post on either Facebook or BiggerPockets where somebody was like, “I want to raise some money real quick.” People were like, “You could put a PPM together. An attorney can put it together in two weeks and you’ll be up and running.” I laughed and I’m like, “If it’s your first one, plan for three months.” People are like, “That’s impossible.”

I’m like, “You don’t even know what you don’t know. What’s the waterfall? Is it a preferred return? What’s the split of the profits? Are you having a management fee? What is the order of priorities? Does your management fee go before the pref or after the pref? Are you going to get loans from other banks? That would affect IRA investors. Have you had your CPA review this?” A million things are going on.

I read a book during the pandemic or right before. It was Raising Capital for Real Estate by Hunter Thompson.

I’ve seen that book but I haven’t read it.

I love that book. It was good to read it when I did. I had a few years under my belt. I had some experience on some things that were and some things that didn’t and then making the adjustments. One of the first things that he points out in his book is the difference between an operator and a capital raiser.

In the syndication world, the operator would be the one who buys the apartment buildings, buys the retail or office and then runs that part. For the big operations, they have a whole capital raise inside of the two where you can divide up those two jobs. You have somebody who’s focused on capital raising and investor management. The other guy does all the operations work. For me, I’m doing it all.

One of the first things about getting a fund running is I didn’t realize how much work it was to do the capital raising part of it. It’s like, “I have all this great experience. I have all these JV partners. We’ve done great on a bunch of these notes. Come on in.” It’s crickets. Running a fund is different than being able to work some notes.

Are your funds 506(b) or 506(c)?

The first one was a 506(b) because we thought it would be easier. 506(b) is available to accredited investors and non-accredited investors who are sophisticated.

You’ve had a relationship with or you know. You can’t walk up on the street and say, “Do you want to invest my fund?” You hand a flyer.

The 506(c) is available to accredited investors only. They have to prove their accredited status. You can do general solicitation. 506(b), you can’t and you have to have that pre-existing relationship. It turned out once you talk to all the people you know then you’re like, “Who do I talk to now?” Not everybody’s interested in what you’re doing.

You mentioned that you’re not afraid of letting other people talk about their funds. I had someone mentioned to me that each fund is like a different flavor of ice cream. Some people like a chocolate chip and some people like rocky road. There’s something different for everybody in the grand scheme of things. The first one was 506(b) and then we’re like, “We got to go to the accredited investor route.” Ever since that first one, all of them have been 506(c).

You’re touching on one of the things I wanted to bring up with you. From the BiggerPockets forum that we interact in, I don’t know when this was exactly, you indicated that you’ve had more struggle raising capital than finding deals. I don’t want to put words in your mouth but that was my impression. For a lot of us, it’s the opposite. There’s a lot of money out there still that’s waiting for a home. I was curious if you think that was related to the type of fund you chose to go into and also if you’re still seeing those same challenges.

The first way to answer that is we haven’t made numbers. In my first fund, I raised $550,000. In the second fund, we were at $1.6 million. The next one was $1.2 million. We had one during the pandemic that we raised to $850,000. I was glad we raised it to $850,000 because of everything that was going on. Our last one was at $2.1 million. Those are the numbers I’m talking about.

GDNI 171 | Note Fund Management

Note Fund Management: Three notes might be a challenge, but if you have just one note with an investor, it’s pretty easy to keep that segregated. It also depends on where they’re at in the foreclosure process.


The funds that I’ve run and the one Jamie and I have going, we target to raise between $1 million and $2 million. In that sense, it’s easier to get that money out the door than if I was raising $5 million. If I was raising $5 million, honestly, I’m not sure what connections I have could I get that out the door.

Number one is identifying what’s small and what’s not. The second of all is the product type. That depends on what access you’d have. That’s a basic thing that we’ve mentioned on BiggerPockets all the time. We talk about the better your relationships, the better quality of the products you can get. My partner, Sean, started in 2009. He was calling brokers and people on Wall Street twenty hours a day in a year.

He would go out to Manhattan once every few weeks. He was knocking on doors trying to get his foot in the door. He’s one of those guys. He’s got that rough exterior. He likes to make that connection with people. He kept at it until finally, he got his first couple deals. They said, “If you leave me alone, I’ll give you a couple of months to sell.” He said, “Okay.” By that time, he had enough relationships with people that had capital. He was able to sell that within a week. They came back and said, “That worked out. Here are five more.” He went out and he connected the buyers to it. That got him started with those guys.

For over 4 or 5 years, he transacted $250 million. He didn’t have it but he knew the people that had it on both sides. At a certain point, when you have your capital, you’re like, “Mr. Seller, I helped you with a $10 million pool. Can you show me some of your products?” They don’t give them any special favors or discounts like that but they give them access and say, “Okay.” He was able to take a look at what they had for sale and say, “I like these couple right here.” That’s what he built up.

I walked into that in 2015 and he already had it established. I didn’t know anything better. That’s how it worked out for me. We’re pretty much targeting first-position loans, a purchase price on the loan, $50,000 to $250,000. Sometimes we’ll buy more but we generally won’t buy less than that. When I talk about having $1 million to $2 million, it goes up pretty quick. Our funds had between 5 and 12 assets. That’s a lot different than if you’re here looking at lower balance loans or lower market value properties.

Is this almost all nonperformers still or do you buy performing loans for your funds?

We buy nonperforming loans and the reason why is that, in our mind, it has the greatest potential for returns. If you make an analogy to fix and flip homes, we would be the ones buying the burnt-out husks, the ones that are torn up that are going to require a lot of work. A lot of risks but also a lot more rewards. We look at the damaged loan, the ones that are severely delinquent. Those have the highest potential for return.

Do you have a day job as well, Andy? Is this what you do full-time?

This is what I do. I was a police officer for ten years. I became a security contractor and worked overseas. I did that for thirteen years. In 2017, I was able to make the switch to full-time. I love it.

One thing I want to briefly mention is about raising money. I don’t know if you guys had time to see it. It’s only a proposal so people don’t get all in a tizzy. In part of the new budgeting process that the house released, one of the new laws that they want to implement is IRA investors, people with a self-directed IRA, cannot invest in an accredited fund, which is ridiculous when I read that. Because the IRA is not an accredited investor, they don’t want them investing.

For Jamie and I, a lot of investors who we invest with and invest with us, they’re using IRA money and our funds. I saw that and I was like, “You got to be kidding me. It’s a proposal and they propose all these crazy things anyways. 90% of it gets washed away.” That’s when I hope it doesn’t slip through the cracks because that would cause some havoc for IRA people.

I heard somebody said, “Where do we put 1031?”

That wasn’t in there from what I read. There’s an increase in different taxes. There’s a lot of rule changes for IRAs if you’ve got more than $5 million in there. I don’t have to worry about that from that perspective. I don’t want to go too deep into it. I wanted to mention it when we were talking about raising capital and stuff. Tell us a little bit, Andy, about this Coastline Capital Fund 7 that’s launching on October 1st, 2021, minimum investment, how much you are looking to raise. Why don’t you tell us a little bit about that?

We’re opening the fund on October 1st, 2021. I’m going to be doing a quick 20, 25-minute webinar on it. It’s going to be open for 45 days. We’ve learned in the past that if you have a fund open for a year, there’s no urgency to put your money in the last month. We shortened it.

It’s like when I give my daughter all day to clean her room.

It’s offering Class A and Class B units. The Class A units, given the 8% preferred return and then 60% of the profit split and then Class B and has 8% preferred return and 50% of the profit split at the end of it. We’re doing it where the first two weeks are unlimited oversubscription to Class A so anybody who gets in the first two weeks will get the higher profit split units. We’ll leave it open for a month more and then the people will be getting the lower profits split units.

These are single-purpose funds that are non-leveraged. At a certain point, we close it off to new investors. In that way, we have one pool of capital and with that one pool of capital, we go out and buy notes. Once we buy those notes then we’re liquidating them and starting to make distributions back to our investors.

The reason we did like that is that we want all the investors to be in the same pool of notes. If you don’t have the profit-sharing aspect of it then it’s easier. You can have a profit-only fund and people can come in, come out of the fund. There’s no problem. If there’s a profit split, it’s like, “What’s your in?” We can’t have people coming in and benefiting from other people’s profit.

“Let me come in a month before you liquidate. I will gladly do that because the nonperforming are going to be performing.” If you bifurcated where the returns come from, you make a little bit but you make your money on the sale. Jamie and I were going through this in our funds. It’s the same exact thing that people have to think about. What’s the length of the investment for the investor?

It’s three years. We believe that the majority of our liquidations are going to happen between 6 and 18 months. What happens once we buy the notes and start liquidating, we look at how much we need to keep in reserve. That’s the management part of this whole thing. I got to manage my funds. I get to see, “First of all, I raised X amount. I need to keep X amount in reserve to pay for the operations. I get to pay attorneys and servicing fees. I got to advance for taxes and insurance.” If we get an REO back, you get to time things like, “We have an REO over here but we have something that liquidated over here. How much do I have to go back?”

Running a fund is different than working with notes. Click To Tweet

Anything over that, 100% of that goes back to the investors to get their initial capital back. The percent preferred return accrues based on what the investor has in the fund at the time. When everybody gets their capital back first then net proceeds will go to pay that accrued preferred return. That’s the next crunch. Once we pay that out then it’s a profit split. That’s where it’s either 60/40 to the investor and 40% to us or 50/50. We’re also charging a 2% management fee that gets paid out along the way but that’s provided to nominal income while we’re working full-time on this and keep the lights on.

Especially with nonperformers, there’s not a lot of cashflow coming.

That’s one of the interesting problems from a personal standpoint because, in the beginning, we wanted to set this up as favorable as possible for investors because we want them to feel comfortable. We want the incentives to be lined up for what we do. We don’t want to be like, “Here we go, 1% or 2% capital raise fee.” We can just raise the capital. You have that in other syndications. They raise the capital and sometimes there’s a fee that gets pulled out.

I’ve seen acquisition fees where people get paid for every asset they buy, disposition fees for every asset they sell. People will go buy a lot of low-dollar low-priced stuff because they’re making money off of that. They’re trying to churn and burn the numbers.

We want to have the incentives lined up the right way. We want investors to feel comfortable and know that we have all the incentives in the world to work hard and give at the end of it. In other funds, maybe we might have to do it a little bit differently. Especially with COVID, COVID threw us for a curveball. You got to make a living.

One of the questions I want to pose to you because you touched upon this. It’s a softball type of question in a sense. You mentioned balancing the fund with keeping reserves and everything else. Would you consider that the biggest challenge or change from going out and buying 1 or 2 notes? Once you’re buying notes, you understand that process but running a fund is a lot different than managing 3 or 4 notes from that perspective. I’m curious to get you touched upon it with the inflows and outflows because the last thing you want to do is a capital call. I’m curious if you found that to be one of the most challenging parts of managing your funds.

That’s absolutely the most challenging thing. If you’re in a joint venture, it’s pleased to keep the stuff for that 1, 2 or 3 notes segregated. Even three notes might be a challenge. If you have one note with an investor, it’s easy to keep that segregated. In fund three, we had twelve. That was the most. It also depends on where they’re at in the foreclosure process. It turned out that for most of those, we had to start from the beginning. You have to absorb all those costs from your reserves. You’re getting paid management fees along the way but the investor is also getting their pref along the way. You can run into cash crunches and then what do you do?

Cash call to investors is the absolute last thing that we want to do. That’s the last thing that any investors want to hear. They want to know that their capital is in competent hands. The notes are hard to get loans on. I’ve never gotten one. I’ve heard of people doing it but I’ve never done it. When you get big enough, it’s easier but it’s still a process. You can’t anticipate how much the rehab is going to cost. If you have your reserve too high, you’re paying pref on a reserve that you might or might not need.

We’ve been using the REOs almost as the collateral to provide operating capital and to rehab the property. That’s one way of doing it. You got to time it again. A big event that the bigger guys have is that they have the warehouse lines of credit. They have the relationships with the banks where they have those agreements in place and it’s not a big deal. In what we’re doing, that’s a huge challenge.

We had Dave Van Horn on the show and he’s in a different world than we are.

I can listen to that podcast. I’d love to hear some of the challenges he has. He’s at the $100 million mark.

For those that are considering a fund, as you get started, I recommend that’s not the first thing you do because it is a juggling act that you have to constantly update and understand your books and also be good at forecasting to understand, “I’ve got this foreclosure coming up in Ohio. I’ve got this one coming up in Georgia.” Understanding also how the attorneys bill. Are they the Fannie Mae rates? Are they billing by quarters?

In Georgia, for example, it’s 60 days. You’re in and out so those costs are coming out the door. You got to pay attention to that, as well as the taxes. Make sure you understand the taxes if you have to advance those. There is a lot of things that are involved with the fund that that is different than just a single note from a business management perspective.

It’s a good transition. I was curious, Andy, if you could speak less about the money management side. First of all, are you more of the operations guy? Are you personally managing the notes themselves more than your partner?

We’re both heavily involved in all sides of it. My partner, Sean, has an asset management company too so he liquidates REOs for other hedge funds. A big part of what he does for our stuff, in particular, is that he takes over all the REO stuff that we have. It’s huge. I don’t want to deal with it when comes down to it. There was a point at which I was looking at doing fix and flips and I wasn’t that great at it. I got to a point where I was like, “I don’t like it that much.” I’m glad that he does the heavy lifting on that part. I do a lot more of the loss mitigation stuff. He definitely jumps in and helps out with that, too.

For those readers out there who are not going to start a fund, could you speak to which servicers you use or what tools you use to manage your assets pre-REO? What systems do you have in place that the everyday note investor might be able to take something away from?

I’ll start out first by mentioning some of the vendors you were talking about. With servicing, we use FCI. This comes up in BiggerPockets all the time, what servicer to use. My comment has always been, “They range from mediocre to awful.”

You probably don’t know this but Jamie and I invested in a new servicing company.

I don’t know that you invested in it but I listened to your conversation with Shante. It gave me a lot of hope. It gave me a lot of help. Here’s where I’ll go into the Notes and Bolts. This sounds familiar because I posted about this before. I remember back when I had a couple of notes with Sean. We were using Outlook to calendar stuff, email and keep track of things. Maybe we had a spreadsheet or two here and there.

Back then, I had a day job too but it didn’t take long before you get emergency calls like, “You have proof of claim due tomorrow. Have you done it?” Different fires come up all of a sudden where it’s like, “My god.” You drop everything and you’re trying to get these things done. It struck me that I need to find a better way of managing this stuff. I started looking at Basecamp and some other online tools that help with project management.

I can’t punt Smartsheet. Smartsheet.com, I always talk about it and I love it. It took me a couple of months to build it out where I wanted to. Smartsheet is Excel on steroids. It’s web-based. It can do a whole bunch of stuff and keep track of stuff. I put together different sheets for the different notes and I put different metrics on it and then I have a task list and I put different tasks. I got granular with it. I got, “Follow-up with the foreclosing attorney.” This goes to dealing with attorneys. I’ll say, “Have you gotten all the documents together that you need to go to judgment?” If I get an email that says just yes then I’ll follow it up with, “When is the hearing date?” “What has been filed?” You can nitty-gritty, be like, “What’s the next step?”

I put that in my test list and then I have an overall report that shows all my tasks. I start from today and then go down my list. That way, every day, I’m looking at, “Proof of claim, deadline.” Before that, I’ll say, “Proof of claim, drafted.” I know I got to make sure the attorney has drafted the proof of claim then proof of claim filed, I make a notation on that and then the next step after that. I don’t get those emergencies happening within. We don’t drop the ball on our side. It’s usually from a vendor like, “I can tell you that we have to do this.” All of a sudden, it’s an emergency. It’s been the hugest game-changer for me and it allowed me to handle all this stuff.

GDNI 171 | Note Fund Management

Note Fund Management: A cash call to the investors is the absolute, last thing that any investor want to do. They want to know that their capital is in competent hands.


I’ve used Smartsheet a little bit. You have too, right Chris?

I used it for a while. What I liked about it is you can set up different tabs. If you update one sheet, it updates all the information in those other sheets as well. There’s another one that’s similar to Smartsheet that I know Jeff uses but I can’t think of it. The moral of it though that I take from it because it sounds a lot like everything that I do and the same thing as Jamie is you need to manage your vendors to a tee. I’ll be like, “I need a demand letter sent. Here’s the information.” I have a reminder three days later, “Did it go out?” A lot of times, they’ll send it but they forgot to send it to you.

It’s like, “I got one. It went out on September 13th. Great.” I’ll put in my to-do task that on October 13th, it doesn’t matter where you put it but a reminder of, “This has now expired. Did the borrower communicate with the servicer? If yes, what was the outcome? If no, do you want to keep going?” Let the attorney know because a lot of times, the attorneys depending on the case management system they use, certain ones are good. Other ones, you have to be knocking on their door like, “Please get this done for me.” It’s one of those things where when you start down the road with the attorney you’re like, “I don’t want to fire him to go get a new one.” You’re married to them for that loan.

One of the things that newer note investors underestimate is how much detail there is to this and how much overseeing of vendors. You touched on it at the beginning of the show, Andy, with the two different bankruptcy attorneys. Attorneys vary wildly, not only in their level of ability to deliver on a deal in particular but their own organizational skills or business management. They’re just people too. There’s a lot of moving parts to this whole thing.

Chris was absolutely right. It doesn’t have to be Smartsheet but it has to be a tool that you find that you can use to keep yourself organized and on track on these tasks because if you lose track of stuff then you could be juggling these fires all the time and you won’t be able to do anything.

They’re your deals. Why would you expect the attorney to care about your deal more than you do?

Sometimes you’re wedded to attorneys and at a certain point, sometimes you’re going to have to say, “You got to go,” and go off to another one. This is true for a whole bunch of different industries. You learn which vendors work the best and which ones don’t. You keep the ones that do and you stay with them until things change on that side.

That touches on one of the things people like about new note investors. “You got to get your team in place before you buy a deal or something.” You should think about it and you should start researching and talking to more experienced note investors but things change. A vendor that’s great might not be so great next year.

I have an attorney in Wisconsin that was awesome. All of a sudden when COVID hit, I don’t know if they had a short staff or whatever but it’s been awful. There are three people I work with over there and one of them that was doing the bankruptcy replies to emails and phone calls, where two of them don’t. I have to pick up the phone and I called her. I’m like, “What is going on? Your company used to be so great and so responsive. Now I can’t get a response from these two people. Do they have something personal going on? Are they overloaded? I need something because if I can’t continue to get anywhere with them, I’m going to move stuff elsewhere.”

You gave me a good idea for my Notes and Bolts. Thank you, Andy. We’re coming up to that portion of the episode where Andy gave his. Like what Andy touched upon where you find good vendors and ride them like a car. Eventually, you might have to replace them and get a new one. If you’re new and you’re talking to investors and they give you a referral, ask them, “Have you used that person?” Especially if you’re getting off of BiggerPockets, which Andy and I are on or Facebook or some of these other places because I’ve had people refer people to me and I’d be like, “Have you used them?” “No, but this person did.” I reach out to the first person and I’m like, “Did you use them?” “No.”

Nobody’s used this person but everyone’s referring them because it’s like, “They were advertising on Facebook,” or, “They sold a class or an eBook for $5.” Just because somebody wrote a book, doesn’t mean they are the end-all-be-all, no matter what they are. There are note investors I know who wrote books that are good. Jimmy wrote an eBook technically.

In the same token, take it with a grain of salt. I’m not knocking anyone because I know a lot of good note investors who wrote books and stuff. I’m using that as an example of just because somebody has certain requirements criteria, if they’ve never used that person or invested in that state, you still need to double-check or cross-reference that. In the space, we had a lot of people refer people to go invest with certain investors and they got crushed because they never invested but then come to find out this person was losing a lot of money. Make sure it’s a firsthand, not the Six Degrees of Kevin Bacon separation.

I tore my Achilles so my Notes and Bolt is to never play badminton. I’m kidding.

The triplets and the other two daughters were saved from the fire, correct?

Yes. It was a manly, heroic thing that I did when I ruptured my Achilles. I was playing badminton. My Notes and Bolts is that you need to surround yourself and work with people that you trust, who can pick up the slack when you’re down because things will go wrong in your personal life. Things will go wrong in your business as well. I don’t mean to paint this like it’s the biggest obstacle anyone’s ever faced. I’m still recovering. I had surgery and every little task on the personal front is a lot more challenging. Taking a shower is an accomplishment.

My point is that Chris and Shante have helped me out. Steven, too and lots of other people. Steven does a good job. Katie as well, the list goes on. Don’t build yourself into a business where you’re entirely a one-man show. Andy, you talked about that you love working with a partner and you also have lots of vendors and other relationships, people that are informally on your team, I would say. Build in that team that can help you through the tough times.

During this time, I’ve been giving Jamie a lot of hard time and stuff and then I’m sitting here. My wife and I joined a sports complex with the kids. I’ve had three knee surgeries. I’ve been through all this. Never the Achilles but I’m giving Jamie some updates on what you’re probably going to go through, which I’m probably right on most of it. I wanted to play in this wiffleball league that’s coming up and I’ll get ready to sign up.

The big players in the business are our sellers, mostly they raise capital and then they go out and buy. Click To Tweet

I don’t want you to get hurt but if you do, I’ll be there for you.

As we wrap up, Andy, why don’t you let people know how they can reach out to you, contact you and go from there if they’re interested in your fund or just in general?

The best way to learn more about our funds is to go to our website. It’s CoastlineCapitalFM.com. Check this out on the website. There are different links. We have a dedicated investor portal where you can see our offering. I’m active on BiggerPockets as well. There’s a dedicated forum on BiggerPockets just to note investing. You’ll see all three of us there. Chris the most.

I can’t keep up with him.

Andy, there’s a little inside story with that with Jamie.

I pulled ahead of Chris on that, that they give you that little score on the bottom. It was maybe one day I was ahead of him. That didn’t last long.

I’m a little competitive. If somebody wants to reach you by email, is there an email address that they can also go to?

It’s [email protected].

Andy, thanks for coming on. We enjoyed having you on and sharing the stories and also hearing other investors who are in the same shoes as us in the sense of the struggles that we have with the funds and so forth. Also, sharing your experiences for others because sometimes, people hear us talk about and it’s like, “That’s just you being overdramatic.” When you hear more people saying the same thing over and over again.

It adds credibility to it. Thanks for having me. I enjoyed chatting with you. It was fun.

Thanks for joining us, Andy.

Thank you for reading this episode of the Good Deeds Note Investing show. As always, go out and do some good deeds. Thank you.

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About  Andy Mirza

GDNI 171 | Note Fund ManagementAndy Mirza and his partner, Sean Irwin, currently manage $4.0 Million in non-performing notes and REOs in four Funds and two joint ventures. He and his partner are currently preparing to open Coastline Capital Fund 7 on October 1, 2021.

Andy raised $2,105,000 for Coastline Capital Fund 6, which closed to investors on February 22, 2021, and purchased 11 first position, Non-Performing Notes.

Andy raised $850,000 for Coastline Capital Fund V, which closed to investors on August 31, 2020, and purchased 7 first position, Non-Performing Notes.

Andy raised $1.2 million for Coastline Capital Fund IV, which closed to investors on August 31, 2019, and purchased 5 first position, Non-Performing Notes.

Andy raised $1.6 million for Coastline Capital Fund III in December, 2018. The Fund purchased 12 first position, Non-Performing Notes in various states of foreclosure. The Fund offered a Preferred Return and a Profit Split with the capital investor.

Andy Mirza has been working with Sean Irwin to buy, sell, and liquidate Non-Performing Notes since 2014. Andy focuses on the active management of NPN’s and keeping fast moving timelines towards the various liquidation outcomes.

Andy is an experienced trustee sale buyer and real estate investor. In 2012, Mr. Mirza and a partner founded Empire Quality Rentals LLC with the idea of acquiring rental properties at the bottom of the local Southern California real estate market. Mr. Mirza handled all operations from identifying target properties, acquisitions (mostly through trustee sales), occupant transitions, initiating and overseeing property rehabilitation, and transition to a property management company.

He manages a portfolio of 19 properties with a current market value of $3.2 million. Since 2012, Mr. Mirza has conducted over 50 “fix and flip” transactions involving condos, mobile homes, and single family residences. He has held his California Real Estate Agent’s License since 2010.




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