Together with the many opportunities note investing provides are the downsides that, when left unnoticed, can tip its balance and send you to a bad path. While the pros always outweigh the cons, it is nevertheless important to get yourself familiar with the pitfalls in this industry. Chris Seveney and Jamie Bateman take us in this conversation to the dark side of note investing. They break down the types of people you need to be aware of—from the joker brokers to the sellers who do not fulfill their obligations—as well as the training programs that recycle content and make false promises. Helping you overcome these, Chris and Jamie then leave some useful advice for your note investing journey. Dive into this episode to learn how you can navigate the dark side of note investing. 

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Navigating Through The Dark Side Of Note Investing 

Welcome everybody to another episode. Chris, how go is it? 

It’s a fired–up Chris Seveney. People are going to have fun on this episode. 

We are talking about the dark side of note investing. Before we get to that, Chris, what do you have going on, trials and tribulations? 

Sometimes, you can't let too much emotion get involved. Click To Tweet

It has been busy. Some key highlights were I did get resolved my Pennsylvania asset where we had that Triplex set. Finally, it got resolved the day before the ejectment process, which is similar to an eviction process. This property was occupied by a disabled veteran, a single mother with a child and another single mother with three children. It would have been paying their rent but unfortunately, their landlord wasn’t paying their mortgage. Thankfully, we worked out a final resolution that is a win-win for everyone. For me, it was not a profitable deal. I didn’t lose money but it’s a time suck. That is one thing. As a Note and Bolt right off the bat, sometimes assets that are not making money take the most amount of time. Sometimes it’s better to get rid of them to focus on deals you can make money on. 

I bought a commercial rental, a piece of commercial property, random out of the blue that we bought to have a tenant in place on. That is a nice little cashflow in one. You may be familiar with it. I made a big change in the management of my company. I did a webinar on how I manage my systems with Gmail, Yanado and everything else. I pulled a 180, did a complete flip and switch over to Microsoft. The main reason why is I use Microsoft for everything in my business as well as for my 9:00 to 5:00 job. Between the two systems, I was finding that there are a lot of cool features you could do in Outlook and some of these other things. It is going to assist me and more productive. That transition is always painful because I had about 400-gig of data from all my notes that was transferring over to different servers and changing the email over. I had 40,000 emails that I had to move over to transfer. It was mind–blowing. It’s over 2,000 emails a month. 

I am reading a book, A World Without Email. The email has taken over our lives. It has been busy. I have had a lot of calls with different people. Some of my note drama continues, the mattress vomiting RV. That continues. I found out that the neighbors are the ones that had reported that, which is often the case with these types of things. It’s not always the townships that are driving around trying to find people for every little infraction. There is a battle going on between my CFD borrower and the neighbors. Meanwhile, I’m sending a demand letter for the blight issue itself. We will see where that goes. This is probably the fourth demand letter I have sent since owning this note. I bought from you this land contract. It provides a lot of material for the show. 

Another one I bought from you is in North Carolina. No word from the borrower on that one. We are getting together another demand letter. We will move forward on that one. Same old as far as some of these CFDs. Not a whole lot to report as far as our portfolio itself. It has been a busy week. It wasn’t because I followed you necessarily but I also fired my VA for different reasons. I had a call with somebody else who may be able to help me with more of the business marketing and strategy, bigger picture type of stuff. I’m working on the business. 

Can I give you some strategic advice to start? When you go to buy assets from me, run them by Ian Green. 

I should be on a show with him. 

I want to invite Ian because he picks the good ones. 

I mentioned him on a call with somebody in Florida. I said, “You need to listen to this episode because this guy knows how to pick the right assets.“ 

One thing I want to mention to you is I found the little coaster that I’ve got. What do you think of getting something like this with our show logo? It’s a marble cozy that when I did a project at Fort Belvoir, the architect got it for us. It’s an imprint of the building. It’s a courthouse we built. We are talking dark side of note investing. Let’s roll right into it. The first question I wanted to ask before we talk about some of the topics is I’ve got an email from the servicer from the borrower. It was probably three paragraphs long about this borrower’s life story. Long story short, it’s a borrower who was very close to paying off the loan. They didn’t pay off the loan but they disappeared for eight months and continue to pursue it. Some legal costs are recoverable that could add to the loan. The person was very upset about it. In the same token, they have been dark since summer. They wrote almost a short mini–story. My question is, do you read those? 

I will read anything that comes across my desk. This is one reason to have a third-party servicer to create that distance. 

There is the emotional aspect in this business but you also need to know it’s there. Also sometimes you’ve got to separate from it. In this one, honestly, I read the first paragraph. I went to the end because I knew where the story was going. At the end of the day, it was more like, “What do they want to do? What is the bottom line on this?“ I know you have gone through some hardships but these were hardships years ago. We have all most likely gone through something. I was curious. Sometimes you can’t let too much emotion get involved in something like this. 

I have noticed that. Several of our rentals are turning over. We are looking at applications and things. I can tell the woman who works for our property manager who is meeting with these potential tenants. She will like, “These were nice people. He should rent it to them.“ We are getting something like 90 emails in the first 48 hours when we list these properties. We have no issues filling them. I’m like, “Send me applications. I will look at the numbers, the facts and go from there.“ It’s good to be aware of those stories and the human aspect but you’ve got to be removed from a business standpoint. 

 

Where would you like to start on some of the dark sides of this business? 

Let’s start with joker brokers. 

Jamie, define a joker broker, a certified note investor or a certified note seller. 

Certified note broker means nothing. The term joker broker, I don’t know. I did not hear of it. 

I’ve got certified on this episode. It’s self-certification just like accredited investors. I self-certify. 

I don’t know if there are any other industries with the term joker broker. I had never heard of it until I’ve got into notes. I’m not sure. It is tough to define. Do you have a definition? 

We have had episodes on it as well. The best way to share what a joker broker is like taking a home that is on the MLS, which wholesalers who do this that is not under agreement. It’s for sale on MLS and then sending out to your network that it’s for sale at a higher price than it is on the MLS. That is essential. It’s like, “Why would I pay you more when I can go direct?“ That is the same thing that a lot of brokers in this space don’t realize. This is a small niche. Most tapes are coming out from John Keith, Revolve or Revival Brothers. There are 5 or 6 people who send them out consistently to everybody. These people will take them and send them out to mass lists that they’ve got at some seminar, some email lists they bought or some Facebook group. They will be like, “I’m exclusive or direct with the seller.“ You are not. 

Have you had your own tape sent back to you to buy? 

Yes. It happens all the time. It’s hilarious. “Here is the tape. I’m direct with the seller.” I like to screw those people. I will put in beds. I have been on my own assets. 

It’s one of those word-of-mouth types of things. You rattled off some legitimate brokers but you start learning who is the real deal and who is not. 

If people want to know like, “Where can you find assets?“ I name 5 or 6 people. If you are looking to make your first acquisitions, plus you can buy from Jamie or me, there are 5 or 6 right there that can give you plenty of products that can last you for years. Trust me because I have done it. 

That is an issue in this space. Anything else on joker brokers? 

I don’t want to use the term dishonest. Let’s talk about sellers who do not fulfill their obligations. Is that a politically correct term? Chad Urbshott would probably have a better term. 

I don’t know if it would be politically correct. 

If you are from Canada, you have to be politically correct. 

Questionable sellers or? 

Sellers who pull the deals from you or don’t provide all the information that is available on an asset sometimes. 

Truthfully, when you are selling something, you are not going to present the bad side all the time. Click To Tweet

They are knowingly not disclosing everything. There is one I was under contract to buy through Paperstac that dragged on for a couple of months because there was a gap assignment issue that was a major issue. Eventually, we backed out. It’s on there. He claimed he had no idea about it while he sure does. I’m not suggesting he is dishonest but he is not necessarily providing that information up front. Truthfully, when you are selling something, you are not going to present the bad side all the time. 

If you know something happened to the inside on an inspection report and you don’t disclose it, I think that is very shady. I have seen people do that. I know someone that has done that to me. Take the New York loans deal. If there is something that is not recoverable or something that you can’t deal with from a title or something issue, I will buy it back from somebody. I have some assets sold that somebody was asking that needed a lost note affidavit that didn’t realize. It’s like, “I will get it for you.“ The attorney said it’s okay but if you are still not comfortable, I will buy it back because that wasn’t disclosed. If it’s something that is disclosed and you didn’t look into it, review it or realize, “This isn’t as easy as I thought it was,” that’s the gray area, which is a different line. I have sold something to somebody before that knows potential recovery issues. I said, “If it’s not recoverable, I’m not going to sell you a bad asset. Your reputation will go down the tank so quickly. This is a small space.“ 

There is a big difference between being intentionally dishonest and overlooking something. Let’s face it. We have talked about some of these issues that are a big deal to a brand–new note investor, getting an ordinance fine or warning. That rolls off your back. What I’m saying is you may sell an asset to somebody where you don’t see it as a big deal. It’s legitimately not a big deal in your eyes when you have 250, 300 notes. If this is their first note and I sold someone his first note, some of these issues in my mind weren’t quite that big of a deal but to him, they were a big deal. It wasn’t that I was being dishonest. There is a difference there in your perspective based on what your business model is and your experience level as well. 

You mentioned the nuisance lien and stuff. We should get my buddy Jeff on this episode. He is dealing with an asset that has all these different types of liens, trying to figure out what is in position, what is not. He has finally got time. He finished patenting something for 5G and 6G, which I didn’t even know existed. I will drag him on this episode. He can talk. He is probably reading. I love you. It would be a great case study in another one for new investors to bring newer investors on. I like to talk to them to share their stories. 

One thing I wanted to say before we move on to the next one is that there are a lot of training on due diligence of assets. We have talked about this before on our fund episode, for example. It gets overlooked as the topic of running due diligence on your note seller. I do think that is probably more important than understanding how to run due diligence on an asset. 

I was on an episode with an investor who invested in some of my funds. He is starting a new show. I was his first guest. I was pretty pumped to be his first guest. The takeaway is he said, “What is the one piece of advice you can give to anyone?” I said, “You need to do your due diligence on the sponsor more than and as much as the physical deal itself.“ No matter what it is. Buying a car, where are you buying it from? What is your reputation? It’s easier on that because you have Yelp in all these other reviews you can find. We do the same thing there. If restaurants got bad reviews for food, do you go buy their product? 

Let’s talk about training programs. We saw Matt Kelly. If people don’t know Matt Kelly, you should. I don’t want to compare myself in any way, shape or form to Matt because Matt is, from a knowledge perspective, much more knowledgeable but from a personality standpoint, very similar. He calls it as he sees it. On his Facebook group, he posted something about, “Be careful with these training programs.” I don’t know if you have that post open. The last quote in it is awesome. If you can dig it up, I will keep talking for a minute about these different training programs. 

One of the things I will mention about training programs is my buddy, Al, gave me this example. I went to college for Civil Engineering. As part of a Civil Engineer, one of the things you have to do is you have got to design bridges or roadways. You design structures. We design things that don’t move. You take a class on concrete. There is a full class you take on concrete, which people would probably laugh at. After you take that class, it was seven weeks long, you know a good amount of stuff about concrete. You could build a concrete canoe. Does that mean that I could go design a bridge, hand it to somebody and have them go build? The answer is no. 

 

You know a lot about that product but there are so much more that you don’t know. It’s similar to note investing. You know a lot about that topic but you have never been involved in it. You are still very inexperienced. It’s the same thing with people who try and do stocks. It’s like, “I’m buying options because I read about them for a week and stuff.“ That’s great. You may do well in a few days but you are probably going to get crushed. 

By the way, his Facebook group is Note & Mortgage Investing Simplified, if people want to check that out. 

Let me read this. He sent this to me years ago. This is a great quote. This is Matt Kelly, “In absence of a substantive product, an idea will usually be sold when the idea is lacking a lifestyle is pushed. When they don’t have a lifestyle, they often focus on a message. When there isn’t much of a message, the fallback is often traditional values or even leveraging a religious angle.” When you think about that, a lot of them will start with, “You can make X amount of dollars per year.” That is usually the idea. You can make this much or you can be a note investor. When that doesn’t work, the lifestyle is you can be a passive investor and spend your time with golf, all these other things and so forth on the lifestyle. That is the next one that comes out. 

When they don’t have that, the message is you can be an impact investor by investing in mortgage notes. They go to that. When all of those fail, the next thing is you can always pull back on a religious angle. It’s interesting. When you think about this and look at the people who do some of these training programs that is exactly it. I’m like, “That is so true.“ It’s the recycled content throughout the same program. In the same token, there are some training programs out there that provide some good content. It’s what you are getting for that value that is important. 

Some of those things may be true. You can do well on notes. You can have a positive impact. It’s not like we are saying those things are completely unattainable in some form or fashion. It may not have been attained by the people teaching the training. 

I saw somebody, I’m not going to name names, say, “How to make X in notes?“ It was a high–dollar figure. I could probably guarantee you that person personally has not made that many notes. I have seen others that say how to make X in your first year. You can make X in your first year if you have a few million dollars based on the X that they have. You can be a note investor in X amount of days. You could be a note investor in X amount of days. I wouldn’t call you a note investor. I would call you somebody who has invested in a note. It’s catchy marketing phrases from that perspective. You’ve got to be very careful, do your due diligence on things. 

It’s a fine line. I went to Paper Source years ago. It was good. It got me fired up to get started in notes. It was inspirational. Some of these can be positive in that sense but don’t get carried away with it. Do your due diligence on the people who are putting these on. 

There is a big difference between being intentionally dishonest and overlooking something. Click To Tweet

Here is an example. If you’ve got $25,000 to invest, spending $5,000 or $10,000 of it on training, you will never be going to get it back. You may make 10% on a deal. If you have $25,000, you spent $5,000, you’ve got $20,000. You’ve got $2,000 coming in the door. In three years, you will get your money back. 

You could have bought a bunch of notes and learned a whole lot during that process. I was on a call with somebody who was looking at potentially getting into notes. One of his last questions was, “Is this a sustainable business? Can I make a living off of this?“ We had two minutes left in our call so I didn’t have enough time to get into it. I said, “You are not going to make $100,000 this year.“ Setting expectations is a good practice. 

Let me ask you this question on the spot. Since you have started in this note space, name one person you know who left their full-time job and has been consistently successful in this space? 

I’m sure people have done it but it may be other factors on stuff. 

Strictly just do notes. The person who pops into my head is Chad Urbshott. Chad also does other real estate deals and other types of investing. Chad comes from the same background as me, commercial real estate background. Chad has a company and so forth from that perspective. From that token, are there other people? I’m sure there are. I can’t think of any at this point. When people think, “It’s simple. Everyone is doing it,” that’s not the case. I will throw this caveat. It is challenging though. I make good money. I make decent money in notes but I also live in the Washington DC area and the cost of living is astronomical. For me, when I make notes, probably in 40 if I moved away from the Coast, I could live like a king away from the Coast but unfortunately, I don’t, which I like where I live. I know there is a dark side. You can make money. We had Ian on it and his team. They made $100 something, $1,000 on that deal. By the way, he sent me pictures of the finished renovation of it. They didn’t do the renovation. He sold it to an investor or somebody. That person is selling it for $450,000. 

He is the one that wanted to do the rehab. 

I don’t want to make it all gloom and doom because some people think we talk like that. We want to be real with people from that perspective. Understand what it is. One of my goals in 2021 was to try and launch a training program. It’s May of 2021. There is not a snowball’s chance in hell that’s getting launched, but I have a membership group, which is probably going to provide as much training or more valuable training than some of these other programs out there. It’s going to be more cost-effective for people. You’ve got mentoring that you do. I do mentor. You are cheaper than me so you get a lot more people. It’s interesting because people will talk to me, and then they go talk to you. We would be talking and mention somebody. You will be all quiet. I’m like, “There is somebody that Jamie must have gotten a call from.“ I’m cool with that. I’m not dropping my rates. I’m so busy. If somebody wants that from me, then yes. I think that is what I am worth. That is what my time is worth. 

I tell them, “I’m better at notes than Chris. I only work two days a week for the government and he has a full-time job.“ I’m kidding. 

Our talk on training programs from that perspective. I haven’t taken any so I’m not going to recommend any at this point. I’m sure there are some out there. One thing I will mention about training programs, the one caveat that I will say is if you take a training program, turn around and buy an asset from that trainer who was marking it up, I would be very careful on that. Their whole point is teaching you how to buy it for the cheapest price. They are delivering one to you and marked up so you are not getting it for the cheapest price because they bought it for cheaper than you are. 

It’s a combination of a joker broker and a bad training program. The next one we have on here is joint ventures, which tend to be a controversial topic. It doesn’t need to be, in my opinion. There is nothing wrong with doing a joint venture legally. There are certain trainers and gurus out there, whether it’s intentional or not, who get caught in a situation where they are losing money on each deal. It almost becomes a Ponzi scheme or something. That has more to do with, in my opinion, the person you are investing with. It’s less to do, whether it’s structured as a joint venture or not. Be careful if you are going to get in bed with an individual before you even know what you are getting into. Do you have anything to say about that? 

One of the things that I have put on my website is that eBook about how to do due diligence on your sponsor. Being in this space for years, looking back, seeing and knowing people who have been caught up in bad deals, if there was one thing you would ask from any sponsor is, “Show me a report that you sent to an investor. Show me the last three–quarters of the reports that you sent to an investor. You can black out the name and so forth but show me those reports.” Most likely many investors probably won’t be able to send them to you because they don’t do them. If they are not doing their reports, then they don’t know what they are doing what I call bucket accounting. In my full-time job, especially during the downturn, I was working for a general contractor. We were in acquisition mode because the owner was very stable financially. They were looking to acquire other companies that were in trouble. 

I was on a team that was doing some due diligence on these companies that were in distress. They would make it look like they weren’t in distress by like, “We have all these projects, this and that.” They are making all this money but what they are doing is they are doing what was called bucket accounting. It’s no different than notes. Let’s say you have 5 notes of 5 different JV partners. If you are not managing each one like its own separate business, what they are doing is when money comes in with borrowers making payments, it goes in that bank account because it goes in one bank account. What they were doing was great. It comes in but I have this one that I’ve got to go pay the taxes. One asset might be doing badly. They are like, “I’ve got to pay tax. I’ve got to pay legally. I’ve got to pay this.“ The problem is all that money that they are using to pay for is coming from those other assets. All of a sudden, they are not paying their sponsor. These amounts of money coming in, those people say, “This is forming. Where is my money?” “I don’t have it because I don’t have it from this other one.“ Is it a Ponzi scheme? You’ve got to be careful. 

It’s more like a poorly managed fund. 

It’s a company that doesn’t know how to manage a company. It’s like, “I know how to buy a note. I know how to manage a note but you don’t know how to manage a business.“ There is a very big difference. There is that component to it. There are seven ways to skin this cat. There is this one that is in the real estate space a little more down in Jackson, Mississippi that you are familiar with. That is straight–out fraud. 

 

My first two–note deals were a Nightmare on Elm Street. Go check out that episode if you haven’t read it. I have one still in Jackson, Mississippi. I was brand new. I had no idea what I was doing with notes in particular. I’ve got connected with someone on BiggerPockets. It was recommended that I go check out this. I honestly don’t know what to call this company. These are newly originated non-owner–occupied notes. Dodd-Frank, CFPB doesn’t apply. There are a lot fewer strings attached as far as compliance and regulations. I get connected with this team who essentially pairs up real estate investors with “passive note investors.“ My note has been fine. It was originally an interest–only five-year with a balloon but we ended up amortizing it whole different. We can do a whole episode on that particular deal. I was 1 or maybe in the lucky 10%. 

Ninety percent of people who invested through this arrangement have taken a substantial loss or will lose all of their money. I have had a couple of calls with some investors. This is where the human side comes in. I was telling my wife, “I’m getting nothing out of this besides maybe a thank you email.” Some of these people were in their 70s. Their parents got talked into getting involved with this company. They think, “It’s passive income for my retirement.” It’s a whole bad situation with all these properties, particularly in Jackson, Mississippi. They were also doing this in Baltimore, Indianapolis and other areas, by the way. The whole thing fell apart. When I say the whole thing, I’m not talking about three notes. I’m talking hundreds. 

Unfortunately, these people who you trusted, who knows how much was intentional, pure incompetence? I don’t know but it goes back to doing your due diligence on the people that you are getting in bed with. There are multiple moving parts. It’s this broker company but it’s also the real estate investor. A lot are going on. What I have realized through this experience is that I know a lot more than these other investors do. I have taken this as I’m actively involved in purchasing notes. These people have no clue what they are doing. I feel terrible for them. If I were you, this is how I tried to get my $5,000 back from my $50,000 investment, trying to mitigate the losses as best as possible. It’s sad to see. It brings together many of the other top subtopics we have already addressed. Don’t take somebody’s word for it on BiggerPockets, and then get involved in a whole scheme, if you have no idea what you are doing. 

Two things that I will mention. Those are so unfortunate that they occur. The first thing I will mention is this happened in the note space where people were in these JV deals with a well-known sponsor. They were going bad. They would call me and I said, “If you want to get your money back, first thing is, don’t think you are the only person.“ When this early started on, I said, “If you think you are the only one, you are naive.” It’s like a cheating spouse. It’s like it was the first time. You catch them. You probably didn’t catch them the first time more often than not. I tell people, “Don’t wait.” It’s like having a sickness, “I’m going to wait to go to the doctor.“ Waiting usually doesn’t cure the problem. Waiting makes the problem worse. If you want to try and recoup your money, the best thing typically is to get an attorney involved. Let them handle it. It will cost you money, but then have them deal directly with the person. They can take the emotion out of it and deal with it. 

Most of these people are so afraid of attorneys or they think they are going to be $50,000 right out of the gate. We deal with attorneys all the time. I have been baffled so far that these people haven’t gone straight to an attorney. 

Be careful if you are going to get in bed with an individual before you even know what you are getting into. Click To Tweet

The second thing I will mention because you set off a nerve on me was when you mentioned don’t listen to somebody on BiggerPockets. One that irks me so much is when people throw out these referrals and it’s not somebody they have personally used. You go back to the source. It’s like, “Where did you get that?” “From this person.” “Where did this person get it from?“ “I saw it on Facebook.“ “You have never used them.” “Nope. I saw a video of them on YouTube. They spoke at a conference.“ I always ask, “Have you physically ever paid them for a service? How did they perform?“ It is a service we are talking about. I see people throw all these names out there, especially attorneys. I have seen attorney‘s names thrown out there on some attorneys that are awful. I wouldn’t pay them to clean my bathroom, never mind represent me in a case. 

People were like, “Use this person.“ I’m sitting here. Part of me wants to reach out. I’m like, “Have you used that person?“ I see people throwing out names like, “I use this person.” The person is like, “I’m not even licensed in that state.“ That person didn’t use that person in that state. That is the other thing too, just because you use an attorney, for example, in Pennsylvania, if it’s not the same attorney and it’s someone else in that firm, it doesn’t mean that firm is good in that state. I use a firm in a lot of Southeast and I tried them in North Carolina. It’s not that good in North Carolina. This is more of a personality trait essentially. When you are making decisions, you do have to try and take emotion out of them but also consider some of the ramifications though. 

For example, this asset in Pennsylvania that I had. This guy was known in the area as being not a good person. We were ready to have the jackmen and screw this guy. There are also three people’s lives who would be heavily affected. We erred on the side of caution, even though I wanted to crush this guy, we gave him another month. After that months‘ time, I wouldn’t have had any sympathy. Long haul, the guy was telling the tenants in the space, “We will get it resolved. Don’t worry. You are not going to get evicted.“ This guy didn’t have the money at the time. We ended up making the deal and back to what I started at the beginning. A bird in the hand is better than two in the bush. I have a deal that goes through the foreclosure process. They had it listed for sale, which I posed the question to the agent who is selling this property. They thought I was trying to squash them selling the asset, which I wasn’t. I just wanted to make sure who it is they are selling it so I knew and let them know it would have to be probably a short sale. 

Back in the day, sometimes emotions may have got the best of me and tried to screw you. “You can’t do it.” Big picture–wise, “Let’s keep this thing on the market. It’s a hot market. Maybe it would generate some activity.“ Lo and behold, I get a phone call. We’ve got an offer, which is $15,000 more than I thought we get an offer on. It’s good. It’s more than what we would have gotten at the foreclosure sale. Sometimes you have to sit back. One of the things I will mention with people too is it’s good to have a buddy with who you can talk. That is how the show started originally. Gail and I, would share these things and say, “What would you do in this situation?“ Jamie and I all the time are like, “What would you do in this situation?“ Sometimes you are so emotionally involved in it. It’s good to have somebody separate from it. I will have a little self–promotion. Join my membership group. You will have plenty of people that you can talk to. 

Here is my Note and Bolt. I was trying to relate it to what you were saying but this is a little bit different. Don’t forget about it does tie into your deal as well. You weren’t so much focused on profiting from that deal. It’s more of an exit and mitigating loss or risk at that point. My Jackson deal in Mississippi, the guy had been paying the whole time. He kept asking me to amortize the loan. Numbers–wise, it made no sense to do this. It’s interesting. We ended up amortizing it. He was paying back principal and interest over time, whereas before, it was a higher return for me monthly. If I had taken a short-term view and kept saying I’m not going to amortize, I think it would have gone south. There is no way he was going to come up with $35,000 on the spot when the five years were up. The point being, I viewed this as one of my biggest wins. Even though it’s not a win on paper as far as profit goes, it’s a big win as far as avoiding loss. Don’t forget about those mitigating risks and mitigating losses. Those for your bottom line can be as valuable compared to these big wins we might have along the way as well. 

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It’s also the emotional aspect of it. Not having to deal and getting stressed out over some of this stuff. I go back to my career when I was managing construction projects. The stress involved in that. It probably almost killed me. I was on jobs that were laid on the schedule. Two subcontractors had defaulted. We are losing close to $1 million on the project as a company. Going in, you walked in like a beaten dog. You are working Saturdays and Sundays to try and catch up. 

It’s like a note deal. In that instance with your full-time job, you can’t get out unless you quit. They are not going to put you on another project. You’ve got to suck it up and get through it. That is one benefit in note space. The nice is you get one of those stinkers. It’s like, “I will sell it. I will probably lose money. Put it in someone else’s problem. They are going to have to buy it. They will get it at a very good price.” It’s something that they can go deal with. Jamie and everyone out there, thank you for reading this episode. Make sure to listen to us on your favorite listening station. As always, go out and do some good deeds. 

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