Note investing can be a challenge if you do not do your due diligence first hand. Even seasoned note investors face risks if little research is put on the account. That is why it always helps to get note investing tips before you sign that agreement. In today’s show, Chris Seveney and Jamie Bateman take on some questions from their Facebook group, Notes And Bolts, and shed light on some misinterpretations and provide feedback for every situation in their note investing journey. Join in the discussion for healthy tidbits of learning thoughts.
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Note Investing Q&A: Tips On Legitimate Property Transfer, Financial Calculations, And More
Jamie, how are you?
Trying to get pumped up, Chris. I need a little more coffee.
It’s been interesting, which we’ll start with. I’ll let you go first on your weekly trials and tribulations.
I’ve mentioned this deal before that I’ve got. This “performing loan” in Tampa. The borrower was performing when I bought it. I’m sure this deal will come up in future episodes. It’s taken some twists and turns since I last mentioned it, but this is the most expensive note I’ve bought. I bought it in September, October 2020 timeframe and one payment were already in process. We got that payment and immediately the borrower signed up with this third-party company to issue a QWR, Qualified Written Response, which costs us money and the cease and desist order along with it, which made no sense at that time since we weren’t pursuing any legal action. Come to find out, this borrower has been paying this third-party company apparently between $800 and $1,100 per month since October 2020. He was under the impression that the company helped him work through a Federally backed loan mod or some restructuring program. We were stuck. We’d been pursuing foreclosure because we were unable to talk to the borrower directly. We had to go through this third-party company.
Long story short, it’s an alleged scam and he’s been wasting thousands of dollars. On top of that, I’m piling on. We’ll see how this all plays out, but he’s been making his payments to someone else over the months have been unable to communicate with him directly. We are moving forward with foreclosure and I’ve got $5,000 or $6,000 in legal fees that are recoverable eventually that he should be paying for. I feel bad for him, but he’s got an obligation to pay us and there is equity in the property. Theoretically, I’m protected but it would have been nice to have been getting an $850 a month since November 2020.
You did speak to this borrower?
I did. I forgot about that part. There are a Note and Bolt here. I’ll try to save it. Looking at my phone, I got a notification on my phone that someone’s scheduled an appointment on my calendar. I’ve got some times blocked off where people can schedule times on my calendar and lo and behold, it was my borrower. I had never reached out to him and had contact with him. I wasn’t even sure if I could talk to him because of this third-party company that was supposed to be the intermediary. I ran it by my attorney and she said it was okay to talk to him since he reached out to me directly. I was not calling him to collect a debt or anything. I did have some communication with him, both over the phone and via email.
I’ve since said, “Please go through my attorney.” I’ve also encouraged him in writing to let the servicer know that he’s removing that third-party company so that we can deal with him directly. I’ll try to save the Note and Bolt for later. We’ll see where this goes. It’s interesting. The other thing I didn’t mention is I sold a partial on this, which may have been a little bit early in the process, but this had a strong pay history. It’s been performing for years and I was comfortable. I’m paying someone a monthly payment and I’m not receiving one, but I’m sure we’ll have another update on this.
Before I go into my two things. I liked my stress ball that I have. I want to get Good Deed Note Investing ones. It’s a football with little rings on it. I have two of them because this one, the thing broke on it.
With everything you’ve got going on, you need those.
Before I go to mine, few things you mentioned there was one between him reaching out, but that last tail end of partial and you sold the partial. This is a very important thing for people who are out there. It’s understanding the partial agreement. Jamie’s got partial on this thing and continues to pay his investor, which I’ve done in the past as well. It might be a little bit painful. Jamie is, I’m assuming, capitalized enough and smart enough to withstand that or go through that process, which is key to keeping a good relationship with your investors.If the borrower passed away and the notes were performing, the family can continue paying. Click To Tweet
I’ve communicated with the partial buyer right away. This was the path we wanted to take.
I’m going to stay away from several of the legal ones I have because we could be on a month for some of the crazy legal stuff I’ve got going on with ours, vendors, and everybody else. Here’s one for everyone reading, or what would you do in this situation. I have a Contract for Deed that we got a forfeiture. We had to go through the eviction process and in October 2020, we finally get the eviction hearing and the borrower shows up with his attorney. The borrower hadn’t paid in about four years and using the property as a rental. He’s not living there, but we’re thinking slam dunk eviction. The borrower’s attorney at the hearing request for the forfeiture to be overturned because he believes the pay history and records are incorrect. He continues a case, but he approves overturning the forfeiture. We’re still in legal battles on this and we’re trying to get that overturned. We’ve been going back and forth for months.
What was the reasoning? It’s because of the questionable pay history or did the judge give the reason?
No, he accepted it on a verbal. Let’s put it that way. He walks in saying, “I’ve been paying.” You don’t need to provide proof for anything. Why would you need proof in court? We’ve been going back and forth. In the deal, probably right around $20,000. Unfortunately, a lot of these legal fees we’ve been accruing are not recoverable in some instances. UPB in total payoff is $28,000. His first offer was $2,500. Give him the deed, not the reinstate but pay it off. I laughed and rejected. He came back at $5,000. He doesn’t talk to me. He came back at $10,000. He doesn’t talk to me. I kept everyone. I’m like, “Full pay off.” He offered $21,000. I still go and pay me by the end of the month.
You’re into it for $20,000. That is a tough one. What’s the property worth? Did you say?
The property is worth $30,000, $35,000 tops. It depends on what the inside looks like, but there’s not a lot of equity in the property. Let’s leave it at that. I have two options. I can continue fighting this. It’s in Wayne County, Michigan, which has eviction and foreclosure moratoriums. I can continue to fight this, rack up legal fees, and spend another 6 to 12 months, or I can take the money, run, and cut my proverbial losses.
At this point, that’s what I would do. I’ve got a somewhat similar one in North Carolina.
I told the attorney to accept it. The second component of that is we would have to push off a hearing. I do want him to sign an agreement that says, “This is what he’s going to do.” If he breaches the agreement, then I’ll have some faster potential recourse from it.
To be clear, even if you got the property back, even if the judge or a new judge overturned the reversal, you’d still have to deal with the eviction. There are two major legal hurdles, is what I’m saying. I know what I would do.
I do want to bring up one more because I got this email. We’ve been trying to do a lock-out from a property in Pennsylvania. Here’s the email I got from my attorney.
When you say lock-out, what do you mean by that?
Lock-out is an eviction. We’ve got the forfeiture. We’re doing an eviction. This is a multifamily property, 2 or 3 units. The borrower hasn’t been paying. He’s been collecting rent, a very similar situation. Posted, door knocking, letters, everything, nobody’s ever responded. The borrower is not living there. I got an email from my attorney, “The tenant called me. She was upset and crying because the sheriff served her with the execution paperwork and the lock-out scheduled for April 21, 2021. I told her to tell her landlord to call me. If he doesn’t, they’re going to have to be locked out of the premises. She noted there are two other tenants. All of which would like to stay and pay the rent when you take over to possession.” My attorney says, “I told her I discussed it with you until the possession of the property. There’s nothing I can do.” He told me she’s going to call the borrower and make sure he calls me in this instance. This one is a painful one. This is the one that has the $20,000 sewer bill on it.
One that was worse than our Nightmare on Elm Street, the water bill.
It was a $20,000 sewer bill on this property. It’s three units and so forth. The whole County knows this borrower. This is what he does. He gets these properties and turns around and does this. There’s another property this guy owns on a contract for deed. I know another note investor bought because I looked at it and I was going to buy it. I turned it down because the property was condemned. I told them about this borrower. I don’t know what he’s done with it since.
This guy buys properties on CFD and then rents them out.
He’ll wait for foreclose and take some money. He’ll put like $1,000 or $2,000 down and that’d be like, “How long can I milk this?” This one has been milking for four years because the prior person didn’t do anything. He’s made out well. I’ve got some teeth that I won’t talk about.
It reminds me of somebody in Gary, Indiana.
I got this and I’m going to have a call with my attorney, but my head is spinning because we’re going to get it. We’re going to lock out these people who didn’t do anything wrong, unfortunately. They’re like, “We’re renters. We’re trying to find a place to live.” I can see why they’re flipping out because the borrower hasn’t been paying and stuff like that. This one stayed tuned. I want to mention it because this business, as we all know, isn’t very black and white. There’s a lot of gray to it. This is one of those situations. That’s extremely gray. Taking aside in the financial aspects of it, this is a whole more socialized point.
People talk about, “I want to work with a borrower. I don’t want to kick them out of their home.” Sometimes, they’re not in that property. They’re renting it out and not paying you. A good deed depends on how you define that. There’s a lot of grays like you said.
The one thing I’ll mention is I have sent people out to this property on multiple occasions but with COVID, you can’t make the contact. We’ve put taped to the door like, “Please, call us.” I never heard from him. Nobody’s ever called.
It’s like the rest of life. If you don’t have communication, there’s not a lot you can do.It’s better to ask questions and get some feedback because being in the notes industry is a learning process. Click To Tweet
That’s one piece of this episode. We got nothing else going on either, Jamie. What we’re going to do is we’re going to take some questions from the Facebook group. As many of you know, we have the Notes And Bolts From The Good Deeds Note Investing Podcast Facebook group. We’re going to run down some of the questions we’ve had, try and answer them. Maybe we don’t have the answer. Go through some of these and answer them for you on the show. We’re going to start doing this on a more regular basis for people out there.
We want to make that platform a place for people who ask a lot of questions and so forth. I’m not going to drop my membership group yet. I’ll drop it later, but this is another platform for people that I’ll even let Jamie in for free in that aspect. Jamie, let’s roll through the questions. The number one is from a good friend, Steven Burkey. He came across a HELOC that was originated to someone who since passed, relative apparently inherited the property and the debt. What kind of documentation should I be looking for to ensure the property and debt transfer was legitimate? The property is in Alabama. Thanks.
I know you dealt with this. You go first.
I’ve had a few borrowers who were deceased or ended up passing away. From a probate perspective, if there was a probate case where the property was properly transferred from that perspective, there was a will or any documents that transferred it or gives that person the authority as the executor to sign over the deed, one of the questions I would come back at is, “What’s the deed in now?”
He can look up the land records, which I’m sure he has done and then probate would be public as well.
The question is, “Is it performing or non-performing?” It’s another component. I have loans where the borrower passed away and they were performing. I let the family keep paying. Eventually, it’s a note to get the satisfaction, paid off, and they can deal with the deeds. That stuff Contract for Deeds get a little hairier because you need to know who the deed would go to. The first place I would start is with probate to see if there’s any probate on file, which a title report would typically show that from that perspective. That’s where I would start now if there is and so forth. An attorney sometimes can do what’s called an Assumption Agreement, where you can assume it from that perspective. The other component you could do if it got hairy is, I’m thinking, could you do satisfaction and then write a loan to another borrower. That gets a little hairy, but I would start with the probate.
I don’t know if it’s a HELOC. I don’t know if that’s the 1st or 2nd.
In each lot, it is a little quirky for each state so you got to be careful on that. In Alabama, I use Bleeker Brody & Andrews is my attorney. You can go to my list and pull them from my list. That’s who I use. Dennis would be able to help you. He’s in that perspective. Long story short of it is, it’s not your problem. It’s a borrower’s problem because if it’s not transferred and non-performing, you take action against the deceased individual in perspective. If it’s not performing and it didn’t go through the transfers and stuff, you can go through. If there was probate, you want to make sure that something was also filed with the probate that they were notified and filed something. I’ve had cases in the past where the lender was notified of the probate. They never filed anything and they lost the ability to recover their claim.
Some of those can be very profitable too. I mentioned before I had one I bid on, I didn’t get it, but the seller didn’t realize that the borrower had passed away. He’d been performing and it stopped. It was part of a bulk pool of notes and quick Google search, “Let me realize he passed away.” Ian Green mentioned one that was profitable for him. It’s another example of where somebody might stay away from this because the borrower passed away. As far as note buyers, they may find that more challenging, but if you’re willing to work through that probate information or take on that additional bit of research can be profitable.
Here’s an example. I closed on this loan in Georgia. A borrower passed away.
Did you buy this as part of a tape?
It was four asset acquisition. The reason I got this was I bid on ten assets and I only got two of them because somebody else bid on a bunch of others. I believe it was somebody who buys notes for their training people and tries to sell them. A lot of times, half of them fall back. When I bid on them, they said, “These two are definite. We’ve got to pause these other four because somebody is going to buy them, but they’re probably going to end up falling back on your lap.” He sends me an email that says, “These are back in play. Do you want them?” I’m like, “Yes.” He’s like, “Can you close by next Friday?” I’m like, “Let me see how fast I can get the title report.” Somebody out on the property. I got the title came back on Wednesday night, Staci Hannebrink at Accurate Group. Thank you, Staci, for kicking ass and put note out. I use preservation companies a lot of times to take photos of the properties. This one’s from the Spectrum. This is who I use down. That’s nice looking property.
It does and the roof looks pretty new.
The borrower passed away and the loan has gone nonperforming. I wonder why. The notes, the brothers and someone else who wants nothing to do with the house. I’m going to hope for a new deed on this.
Are you closing on those four?
Yes. I signed. I told him I can’t close. He’s like, “We won’t have the loan sale sign back to you until tomorrow.” I’m like, “Okay.” This is somebody I bought from a lot. I got it late then I sent the loan sale and set up the money to get wired. They sent me the agreement back. Money is out the door. One more asset.
You’ve got nothing going on. Next question.
Someone asks about my yield and on a calculator. The question came back about. They use XIRR, yield, and yield to maturity. I know some people use ROI, which is the Return on Investment or compound annual growth rate. There’s a lot of different financial calculations. Someone asked that question. What do you use, Jamie?
I use XIRR, but this is where my little opinion here might be controversial. Some note investors get a little too caught up in spending all this time and years researching how to calculate things. As you said before, Chris, “As soon as you put the information in the calculator, it’s wrong.” That’s not to say it’s not important how you’re bidding or how you’re making your calculations, but I use your performing loan calculator that you put out a few years ago with your freebies for actual performers. I also use another calculator that’s a competitor to yours. I use the Revival Brothers’ IPA Calculator.
IPA is an Ideal Project Analyzer and it runs through all different exit calculations and yield based on different exit strategies. I find it helpful. It’s Excel-based but at the end of the day, it’s like, “You can run all these numbers, but the market is going to dictate, especially in nonperformers what you’re going to be able to buy it for.” I still heavily take into account the percentage of UPB. I’m nonperformers in particular. I don’t stick to yield. It’s so hard to predict. It’s my two cents for now.
I’ll add to that and I’ll explain a few things that most people don’t also know about some of these calculations. There are two aspects with your calculator. There’s plugging the numbers that give you spit out a number, but it’s garbage in and garbage out. Meaning the information you put in, I could take the same nonperforming note and show you a 70% return and a 30% loss based on the risk profile of that loan. That’s one thing that people miss a little bit. It’s what’s the risk involved in this loan because many don’t understand the actual costs.When considering note calculations, check the risk profile and hidden and surprise costs. Click To Tweet
That gets to your presentation, you did about and hidden costs and surprise costs. It’s hard to measure risk in a calculator.
It’s very difficult but I’ll be conservative sometimes. In Florida, I put $10,000 to foreclose. If they come back and say, “No, we need an extra $3,000 on this asset.” I’m like, “If I’d knocked my $10,000 on the $7,000, I still think I’m covered. It’s a little more risky but is it worth at buy.” That’s one. Two is I’m going to do a plug because I sent to my developer my calculator, which is going to be launched as part of my membership group that people will have use of, which will calculate all those different scenarios. The best thing for it is one is bidding. The second component is if you’re going to do a loan mod. You can split the information and tell you what your returns are based on a loan mod, which is important.
When you’re going to sell a loan, you always got to put yourself in the buyer’s shoes.
Mine calculates like, “I’m selling this as a performer to somebody at 12%, 14%, or 10%.” You can put that in and it will adjust your returns. Here’s the thing. People are like, “What is all this stuff means?” XIRR is a yield. IRR is used on long-term multifamily style properties based on a year. If you’re in a seven-year deal, you’ll have a string of cashflows, start off with your investment, which is negative. You get so much per year and a bump at the end and it’s over a yearly basis. That’s fine. An IRR is the interest rate you’re paying yourself. It is what it is. If you put in $10,000, what’s your compounding interest rate? XIRR takes it based on dates. Your calculation has to have specific dates when the money’s coming in, which is always wrong because you think you’re getting paid on the first, but you’re servicing page on the fifteenth.
Right then and there, gray calculator out the window. It’s accurate. The other thing people don’t realize is XIRR assumes that your reinvestment rate is the same. If you’re getting a performing note, that’s paying you 20%. You’re thinking, “This is great. I’m getting paid 20% over time.” If you’re taking that money in and doing everything with it, as a portfolio, you’re not getting 20% on that asset. My calculator has a macro that calls XMRR that allows you to put in a reinvestment rate. Over a short period of time, it doesn’t matter, but over a 3 or 4 year period, it does. The other thing that I have in there too which is cool, is it has a borrowing rate. If you’re taking from the home equity line of credit to buy your note and it’s at 4%, it will calculate what your return is.
I was trying not to get into your calculator too much for myself, but you might be selling me. I do some form of infinite banking, so I borrow to fund my note business. Sorry, Revival Brothers, I don’t think yours has that. That’s interesting.
What’s interesting that I’m proud of is I did all that design coding myself and so forth. My form was string. It’s if, and, or. It’s ridiculous in my spreadsheet. That was my $35,000 education from Georgetown. It’s taught me a little bit of that, but it’s also taught me a lot more than that.
That’s going to be part of your membership group.
People who are called an executive member in the Seveney Note Syndicate. It’s the name of the group. They will have free access to my calculator as long as you’re a member but if you cancel, you lose it. It’s a licensed product. We did dive down that deep hole. Someone asked that question and we got very technical, but we use some internal rate of return is the actual answer, which goes back to the interest rate. You’re paying yourself.
That is one downside to note investing, especially if you’re doing it in an IRA or something you’ve got to put that money back to work whereas with stocks, it’s very easy to set your accounts to reinvest everything. It’s not the fact that it’s a little less liquid.
People, if you want to go nuts, this is overkill but you could even take that borrowing rate and call it inflation if you want to. It goes back to your point of it’s great that you give you a ballpark idea of where things are at, but it sets the goalposts for you is what you should do.
You don’t want to be on either extreme. You don’t want to be the person that doesn’t run numbers. I’ve tried to help people that have no idea what they’re doing with calculations and they’re bidding on assets. That’s not safe. I’m not recommending that. On the flip side, you do have people who, for two years, crunch numbers or more. They say, “I need to know exactly how Chris came up with this calculation. Every little Excel calculation I need to know and have full control of that before I bid on a single asset,” and they don’t buy anything. You still got to take action. There’s always going to be some risks and things you can’t plan for.
Let’s go to the next one. From an investor who was working on a Google form that wants to share with known investors when they’re ready to shop for partials, this way, they can set the expectation on what information we’ll be looking for as part of their due diligence. On the form, I thought there was a lot of good information on there like name, address, and other information. There are two things that I wanted to focus on and talk about that was on there. One was, they’re asking the investor how many notes or how much experience they have. The second was, they made a comment that the sponsor would pay for the wiring fees for them to wire the funds on the acquisition. Let’s start with that one.
That one got a reaction from me.
That one got a reaction from me as well. I made a post in this group. It’s okay to ask these questions because it’s a learning process. I’d rather have people ask these questions in the group and get some feedback. Sometimes, I am critical and so forth, but I didn’t think I was critical in this one. I give honest feedback so people can adjust. When they launch something, they’re not marketing to the masses and spraying bullets everywhere. Typically, when people do that, it’s the worst thing you can do. I know some trainers tell you, “Just spray bullets,” but you look to a novice when you’re doing that.
We were going to pick a couple of things apart here. The fact that this investor is taking this careful approach, communicating with the potential partial seller, and setting expectations, it’s better than what a lot of people will do.
Send somebody money and then six months later, like, “I’d never got paid.” I’m working with somebody with the note investor who most of us know.
If I’m only reading that question, that’s something we don’t need to talk about because it’s in the weeds and it’s going to turn me off. I’m going to think this person is going to be really difficult to deal with. Looking at this in isolation, I don’t need to send a wire. I can send an ACH that costs me $0.10, so problem solved.
If they’re saying they wire you the money, they want you to reimburse them.
Whatever works for the buyer like check.
I had the same opinion when I saw that. I was like, “This person is going to be a PITA.” If I’m paying them on the first, something happens, and gets delayed until the second, will this person be blown up my email, checking every month to make sure the payment came on the first, and the first may have been a Sunday? It’s like, “How come it didn’t come in on Saturday? It comes the next business day.” I view that I don’t have time to deal with somebody who’s into the weeds on things. It’s my first impression and I could be 100% wrong, but that is an impression a lot of investors would get. It’s one of those things where it’s part of doing business and it’s a fee or transaction costs. It’s like going to a note seller. I went and bought like this deal. I closed on these four notes. It was $75,000. I went to him and said, “Can you pay my wiring fees?” If he knows me, he would laugh at me, but the first deal he’d be like, “Who are you?”Take a careful approach, communicate with the potential partial seller, and set expectations. Click To Tweet
I want this to be a long-term relationship. As you’ve said before, when you’re selling your whole notes to people, you want them to come back. You’re not trying to rip people off. Whether I pay for your wire fee or you do is too far in the weeds for me.
The next one, I thought it was interesting. There’s a little more back and forth on it. I’d like to get your opinion on where they’re asking like, “How many note deals have you done?” Somebody asked the question like, “That’s none of their business.” From that perspective, I’m curious what your opinion is. I don’t mind in the group.
I think it’s relevant. You’re sending someone money, whether it’s for a JV, a fund, or partial. You should absolutely do due diligence. One way to do that is to ask them. That’s a great idea. What did you say?
The same thing. I said, “No, I would want to know.” As a new investor, I want to know whether this person has done 1 or 100 deals. There are pluses and minuses to both. If you insist, if it’s a person’s done less deals, you’re going to get more hands-on. I’m hoping you would get more hands-on service. Unfortunately, some instances are not the case when you’re doing someone who has a lot of notes. If you have questions and so forth, it might be a little more difficult to get in touch with them on something, but you never know. Each investor is so different, but that experience is critical to making sure, “This person is not their first rodeo. They’re buying the first note with your money. All of a sudden, it turns into a disaster.”
Here’s a free early Note and Bolt. When you’re researching a sponsor, partial seller, whoever, somebody you’re going to send money to certainly get referrals from them and talk to those people. In a previous life, I was an investigator. One of the things we learned was we had to interview certain types of leads. You have listed leads where this person gave you, a name or a referral, “Go talk to this person about me,” but then we had to get developed leads, which is you got to find them. That could be through the listed lead or somewhere else. My point is to talk to people who have worked with this partial seller before and go one step further and ask them for another referral. They say, when you’re screening tenants, you don’t only talk to the current landlord. Talk to the previous landlord because the current landlord might be like, “They’re great. Take them.” Go one step further and talk to someone else who wasn’t necessarily set up to talk to you.
Shameless plug, go to my website at the bottom. I have a free eBook of questions you should ask sponsors as well.
I feel like we do need to do more shameless plugs, to be honest, because if you listen to some of these other podcasts, the whole thing is a shameless plug. You’ve given out a lot of free stuff over the years. Anyway, what’s the next question?
“All the State of Wisconsin requires your LLC address to be a physical property location and will not accept that PO box. I’d like to avoid having my personal address on the CFDs I own. Are there any issues with putting my PO box number on a deed with my company name?”
I did chime in on this one and then there was some back and forth. I’ve personally dealt with this because in Maryland, to register with the state, register your LLC with the state, you can’t use a PO box or even a UPS address, which I’ve tried multiple times and they keep reversing it. To me, it’s state-dependent, but there’s no issue. I agree with this poster. I don’t like to have my home address on the deed, the tax records, or anything like that. Non-attorney, not legal advice, but we use our UPS address on deeds.
There are four options you could use in this instance. One is to use your home address. Not that what you want to do. Two is to use USPS with PO boxes that allow for physical mailing addresses, which I use. Three is to use your registered agents addressing your home state. Four is to use the registered agent address in that state that you’re doing business in. For example, I’m in Virginia, the website is VirginiaRegisteredAgent.com. If you go WisconsinRegisteredAgent.com, it’s the same freaking company. You sign up for whichever state and go in there. It’s $49 a year, which is cheap for a registered agent. What I do is you can use their address, care of if it’s ABC note investing XYZ, care of registered agents, Inc. Here’s the address. You can have the documents sent there. If they get them, they will send me an email when something gets there. They’ll scan it, put it in the portal, then I’ll say, “Mail that to me.” You’ve got to pay the postage or whatnot.
That one scares me a little bit, to be honest. With CFDs, you’re getting tax information and tax bills. I want to see those as soon as possible. I get a little nervous that there’s a third party involved.
A lot of people do use these mailing services. I was speaking to MetaSource about one of their services they have. I used to use attorneys as registered agents. Don’t and here’s the reason why. Attorneys, especially foreclosure attorneys, are not built to be registered agent in the sense of they’ll get mail. They stack in a pile, it’ll sit there, and it gets lost in a shuffle. I’ve used two attorneys for registered agents. Both times, they got mailed something and it never came through. One of them was in Georgia, where it was my renewal. It’s to renew my company in Georgia. They never sent me the notice to renew in Georgia. My license got canceled in Georgia so I had to renew the company to renew the license. The reason why is they sent it to my registered agent who never sent it to me, which was my attorney. These companies, that’s all they do. I got one in the mail. It was a tax bill and postmarked the 26th or something. They had it in the system on the 28th with an email to me. They’re like, “They’re good.”
This was for CFD with the registered agent address on it.
It was a CFD that had my PO box address, but they looked it up because it was delinquent taxes notice. They looked up the state for my address and the state was through the registered agent. They didn’t look into the deed. They sent it to the registered agent to make sure it was received.
You’ve already got your LLC registered to your home address. We’ve given him multiple options. He’s already got a PO box. There’s nothing wrong with using that address on the deed. It doesn’t look quite as professional as a real address. Do we have another question or was that it?
Those are the ones that I listed because I knew we’d be babbling a lot and on time. We can roll over to our Notes and Bolts.
Mine is when you’re speaking to a borrower, have some way of verifying that it is the borrower. I did this with the deal in Florida. Part of me still wondered if potentially that I was speaking to someone from this third-party company because once we started filing suit for foreclosure, they were named one of the recipients. They’re very aware that we’re moving toward foreclosure. Ask the person you’re speaking with, “What’s the last four of your social.” You should always read the Mini-Miranda as well, which is very short that, “This is not an attempt to or maybe an attempt to collect a debt.” You can Google it.
Do you record your calls?
I do not. I probably should.
I do, just in case. Say that was that company calling never went to court and you could pull out the tape and say, “You also fraudulently identified yourself as somebody else.”
That’s funny you say that because I have a borrower. He’s trying to get caught up and he’s saying he’s going to make double payments. The servicer contacted him and said, “You said you’re going to make a double payment.” He said, “No, I didn’t. You’re lying.” The servicer said, “We have a recorded phone call saying you said that.” He said, “No, you’re lying.” He hung up. Recording can be a good way to go. Those two things. Verify if the person knows the last four of the borrower’s Social at least and read them the Mini-Miranda.Co-elevation is when everyone works together and educates and learns from it. Click To Tweet
Here’s mine. It slipped my mind completely. I thought it makes sense. I bought in sometimes these HELOC loans, which the first has been paid off so they move into the first position. I sent an email to one of my servicers and said, “There are an outstanding trash and tax bill on this property. Can you advance it or I’ll pay it directly and then put it as a charge? Let me know what you want to do.” He replied back like, “Why would you do this? This is a second. That’s handled by the first.” I’m thinking, “Isn’t it?” I know because I pulled a title report, but all they have is collateral that shows and it’s a home equity.
They’re assuming it’s a second. They’re managing as if it’s a second when in reality it’s a first. I sent them a title report and said, “This one is a first and all these other ones, FYI.” It’s one of those things that it never even hit me that it’s like, “I’m buying you a first.” I’m thinking, “I’ll buy his first and stuff,” but they see it as a home equity line on the other side and shame on me, poor communication. I didn’t tell them, “This was a first.” That’s a little Note and Bolt there. Again, back to communicating with your vendors.
When you boarded it, you’re saying it.
When it was boarded, they’d get the collateral. They say, “It’s a home equity line of credit. They see the assignments and align and so forth. We’ll put in our system as a second.” They’re not tracking taxes or putting under force-placed insurance now, all that other good stuff.
I know we haven’t dabbled too much into seconds, but you can see some of the potentials there.
I like the fact that one servicer, when they have to submit a form that outlines, “Do you want force-placed on this or whatnot?” Another one says, “We take all the collateral.” While it’s a pain in the rear end to fill out the form 30 times, it’s better to get it right upfront.
I feel like we’ve covered a lot.
What do you got planned for the rest of the day and the weekend? What’s on your agenda?
I have a couple of calls and might try to run out and do something fun with the kids. My son is on spring break. My daughter has off. It’s Good Friday and that’s why they have off. It might be a little less productive than a typical Friday. How about yourself?
I’ve got a few conference calls for work. I’m going to try and plug away on some top-secret stuff I’ve got working on. Most of it is related to the membership group. I’m hoping to launch the join page so people can sign up for the waitlist and we’ll have on there everything that we’re going to be offering on that. We’ve started to get some inclinations on that. When I do something, I like to go all out with it. I’ve been working on this for a while to give people an idea of making sure what the content and everything we’re going to be providing. It’s extremely beneficial for people to network, communicate, learn, and share. In 2020, I used that term co-elevate, where everyone works together and educates and learns from it.
Another thing to mention really quickly. On April 20th, 2021, we have our webinar for the Integrity Mortgage Note Fund at 8:00 PM Eastern. For accredited investors, that’s something we’re going to be pushing. That’s another shameless plug, but Chris and I have a fund that we’re raising capital for. Check it out.
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