E313 | Behind DME: Nathan Turner’s Journey from Investor to Industry Connector

So I just recorded an episode with Nathan Turner of Earnest Investing and host of the Diversified Mortgage Expo, which is going to be May 2nd and 3rd down in Nashville.

But people should get there on May 1st to participate in the ax throwing competition.

What I loved about this conversation was, you know, it wasn't only about the conference, it was, you know, how to focus on what to learn, who should attend, who should you meet, not only at conferences, but just how to navigate the node investing world professionally.

And that's something because we are a very tight knit community.

It's important for people to understand we're not as much in competition as you see other types of real estate investors.

We're more focused on building our company, but building it through partnerships, mentorships, in selecting the right vendors.

So hope you enjoy this episode with Nathan, who has been in the note space for over 15 years.

And I think this will be a great episode for people to further their note investing career.

And make sure to check out the Diversified Mortgage Expo early next month.

Foreign.

Turner of Ernest Investing as well as the host of the Diversified Mortgage Expo.

Nathan, how are you today?

I'm doing great, thanks.

Good to be here.

Yes, we were just chatting before hitting the record button on what we're seeing in the economy, what's going on.

And Nathan being up in Canada, I'm sure has his own opinion that we're not going to dive into all of that today.

What we want to dive into is more about Nathan's background, but also educate investors on the DME conference that is coming up very soon and talk about why node investors should attend conferences, what to look for and get out of these conferences and then even talk about some of the next steps.

As Nathan and I have been to many conferences and each one is unique and different from what you can get out of it.

But yeah, we'll talk all about that.

But first, Nathan, why don't you tell people a little bit about your background in regards to, you know, how you stumbled upon or got into note investing.

Yeah, and that's the right word for it.

And that's probably most Note investors.

You just kind of fell into it.

Not a lot of people thought, hey, I know, I'll go search this out.

No, most people fall into it and I did too.

If you can't sell it, you rent it.

And I figured out very quickly that the.

The monthly cash flow was nice, but I didn't like anything else about being a landlord.

Like, it was.

It was hard work.

It was across the country.

So I.

I just, I didn't have very much control.

I felt like my property manager was awful and it was just not a fun experience.

I didn't en that whole idea of it.

It's, you know, it was not a nice neighborhood.

Like, so there's a lot of things going against me.

And.

And, you know, you learn as you go.

And I know how that goes, but.

But I didn't know.

And so I got stuck with this one house and I'm like, this is.

This is garbage.

I don't know why people do this landlord thing.

It doesn't make sense to me.

And then it was because it's not.

As lucrative as HGTV makes it out to be.

No, no.

On tv it looked a whole lot easier and better and much more profitable.

And like, I say, like, we did okay, but certainly not worth the effort, as far as I could tell.

And then, so kind of fast forward a little bit.

We eventually sold the house as the market kind of picked up a little bit again.

And so I was free of that.

And I thought, well, I like real estate, but I don't know about this landlording thing.

And it was shortly after then my, My old partner Corey, he contacted me and said, hey, these guys out of California, they have all these properties in the Midwest.

They don't know what to do with this stuff, so they want us to come on board and just kind of help figure it out.

It was supposed to be a flip.

They were supposed to flip it out to a different outfit.

And it just.

The deal fell through.

And now all of a sudden they're stuck with all these properties.

So Corey and I, we thought we'd invented seller financing.

We were like, brilliant idea.

We'll sell these houses on terms, carry back notes.

And the thinking was, you know, landlording is terrible.

So how do we get monthly payments out of this without having to take care of the house was.

That was the motivation.

So kind of stumbled into this note thing.

So, you know, the thinking again is the person in the house, they're the ones responsible for taking care of it.

You know, if something breaks, they gotta Fix it.

Banks don't do that kind of thing.

And just kind of figuring out as we went along, figured out there was such thing as a node investing world.

I went to my first node investing conference.

And that was the introduction for me.

So I just went from there non performing for a long time.

Now we're doing performing with the fund and it's awesome.

I love it.

Yeah, it's interesting because I had coffee this morning with a gentleman who more like the sales side for a law firm that's, you know, works a lot in the raising capital side of things.

And when I was explaining to him what we did, you know, it caught him off guard because again, people heard of lending funds or you know, a lot of the private lending and stuff like that.

But when people mention non performing loans on, you know, single family.

Yeah.

Everyone always says, I don't know anybody that does that.

Like you can do that.

And that's what happened to me.

I was in real estate for 20 years and then it stumbled upon note investing.

And the way I stumbled upon it was I was looking up tax liens.

At first I'm like, wow, this is like watching paint dry.

And there was no strategy on tax liens.

And then on bigger pockets, the group of tax liens was tied to note investing.

I'm like, what's this note investing listing thing?

And I was pissed.

You know, the first time I found out about like who's hiding this from me?

But no, you're right.

Most people get into this are disgruntled fix and flippers.

I like to call us goats.

We're just getting old and tired of owning.

Real estate is where most of us come through.

But yeah, and over the years, you know, you've done very well.

And I know several years ago you decided to, you know, provide additional education content for people with the Diversified mortgage expo, say DME for short.

And it's heading up now on its 10th anniversary.

So congratulations.

I know you weren't running it all those 10 years, but still to keep up the tradition, won't dive a little bit into that.

Yeah, it was, you know, again stumbled into the people that you talk to, the connections you make.

So it was Kimberly Banks Fawcett and Liz Brummer Smith that had it before me.

Wonderful ladies.

They're fantastic.

Kim, bless her heart, I love her to death.

And she just said, I'm not for the I'm not for the stage.

And I thought, you're nuts because you're awesome.

But okay, fine.

And.

And Liz, her and her husband at the time, they're living in an RV and traveling all over the world and.

And doing all kinds of things.

They're still doing that.

And she says, you know, I don't think it really makes sense with my lifestyle.

I'm like, yeah, I think you're right.

I don't think sense for what you're doing either.

So, yeah, they approached and said, hey, are you interested in taking this over?

My immediate answer is yes.

And like, oh, by the way, how does it work?

How much does it cost?

Those were all total secondary questions.

And that has literally built my business.

It's just going and attending and talking to people and meeting people.

Who's selling, who's buying, who are the vendors that I can get in touch with that can help me run this.

I'm.

I'm still living in Canada.

Everything I do is in the US So I need help on the ground in the right country, people that can help me do whatever I need to do, whether that's an attorney, whether that's a servicing company.

I mean, you name it, I need all those guys.

So.

So that has.

Literally, that is how I've built my business is just by going to conferences, meeting people.

So I figure if.

If I can build the business by attending these, then surely running a conference will be that much better.

And it has been.

It's been fantastic.

Interesting.

You mentioned that about meeting, you know, going to conferences, because again, part of the conversation I had this morning with this individual was he coined the term zoom exhaustion.

And, you know, there's so many meetings and conversations that people have in Zoom.

People now tend to skip conferences and some of these things.

I was at a conference back in last month, you know, and it was down in Miami, and there were some people who, again, I've had many conversations with on this, but just getting to meet somebody, shake their hand, have dinner with them, have a drink, or just talk.

Sometimes not even business, but outside of business as well, is so important.

That side of things important.

Building your note company is so important, and I can't stress enough for people, you know, and again, I'm probably the worst offender where I just want to sit in my basement and just, like, plug numbers all day.

But I also.

I spent many years trying to build what I've started by going places and Meeting people and having those conversations.

And now I'm like, you said, that's exactly how you learned as well.

Yeah.

And.

And you're totally right.

I can't stress it enough.

Like, I, it's hard for me to overstate how important it has been to what I'm doing today and continues to be.

I.

Every time I go to some no conference, whether it's mine or somebody else's, I learn something.

I, I meet somebody or, you know, something comes up where I'm like, oh, that's cool, or something.

And it has made all the difference.

And so it's, it's like I said, I can't overstate it enough.

It's been just absolutely amazing.

So tell us a little bit about, you know, the.

Yeah, I'll say.

DME and having ran it, you know, for several years now, like anything, I'm sure the first year there's things like, you know, I think I could do this a little better, tweak and so forth.

Yeah.

You know, you know, coming up on this year, what are some of the things you're excited about as part of the conference when that people can expect.

Yeah.

This year, I guess the change that we've made is the theme.

So the theme of this year is we're leaning into that idea of diversification within notes.

There are so many different niches within an already niche industry.

So we've got guys coming to talk about, you know, buying structured settlements, buying tax liens, doing, doing different things within notes that are still notes, but just a different angle on the same kind of idea.

So I'm excited about that.

I think that's going to be really interesting for people.

I, I hope it doesn't, you know, distract people from doing what they want to do, but I just want to open people's eyes.

Like, look, there's a lot of different avenues you can take here and, and maybe add to your already existing business or maybe you're getting started and you think, you know what?

All this looks great.

That's the thing I want to focus on and, and, you know, pick a lane.

Yeah.

And interestingly, I was on conversation over the weekend with somebody who somewhat what we were.

You just hit upon and talked about where there's all these other investment strategies out there.

But sometimes you get people.

And one of the ones that I think people have really pushed and think is the greatest thing since sliced bread is the whole subject to component and you know, somebody was talking about how, oh, like that's the only thing you should be doing this and that, and you know, a conversation I had as part of this group was, hey, look, to me that's just another tool in your tool belt.

There's certain periods of time where that is a great strategy or there might be a deal that comes up.

But that shouldn't be your only strategy because you could do, you know, other types of seller financing.

You could do buying non performing, you could do tax liens.

There's so many options within this space that it's good to know all of them, but also know the people who are involved because we see so much crazy stuff and to know, oh, this would be a good deal for this person or that person.

And that's where these conferences come into play.

Yeah.

The one other thing I will say that your conference has far and above, you know, takes the reign of superiority is you have an axel on competition before it so that you know that one's tough to, for anybody, tough to challenge.

You know, some I've seen have golf tournaments and stuff which are cool, but you have freaking ax throwing.

Tell, tell me a little bit about that.

How, how did you come up with that?

I was, that was one of my first ideas was like, we're taking over the conference and we're going to do an ax throwing tournament.

And I was talking to Dave Putz and he's like, you want to do what?

And I'm like, I trust me, man, it's going to be awesome.

You'll see.

So the reason is my brother in law, my, my wife's younger brother, he's the one who invented the sport of ax throwing.

Okay.

So if you go back, Matt Wilson's his name.

If you want to go back and search, you'll find them.

Yeah, he's in the Wall Street Journal, he's been on Discovery Channel.

He's done all these different things because he's the guy that invented the sport.

Now there's tons of different ones out there, but that's my claim to fame.

I know the guy that started the whole, the whole thing.

But having done that, having gone to his locations and throwing an ax, it's a ton of fun.

And I think one of the, one of the advantages of something like an ax throwing is you've got a couple of people throwing.

First of all, nobody's that good at it.

So you don't need to feel intimidated.

Yeah.

It's not like you can go practice somewhere or who practices.

Most people have not ever done it before.

And that's great.

So you come and you get together.

It's tons of fun.

It's very, you know, there's a whole area behind where you're throwing axes, where we've got food and just place where you can hang out so you get to meet people before the conference even starts.

So when you get in there Friday morning, you've already met 10 people that you were hanging out with last night that you've never met before.

So right from the get go you can start those conversations you already know and like each other now you got to build that trust so you can do some business together.

So that's, that's the whole idea.

Get to know people so you can do some business.

So are you throwing it at a target, a servicer, an attorney or all the of the above is the question that I have.

So you put up the picture of me, the thing that you are having the most issues with.

So for those in the space, they'll get that little joke of, you know.

And yeah, we love our servicers, we love our attorneys but you know, they're like your in laws, they sometimes can drive you nuts.

So yeah, no, we need them, we love them.

But yeah, you got to make sure you stay on top of things.

That's part of the job.

What do you think is you know, going to be the biggest takeaway this year based off of, you know, the economy?

It's very different I think than probably it was a year or so ago.

So I'm just curious, you know, and again you've got the theme that you've outlined and stuff, you know, what are some of the like aha's.

You think people are going to walk away from this in regards to, you know, hearing what's going on in the world?

Yeah.

So we also have, we've got somebody from MBA coming, Mortgage Bankers association, which we've done in the last couple years and I, I find it very helpful.

And as much as they have really great information and some great stats and things like that, I don't necessarily take that as gospel truth because they have their information and then we've got somebody like Melody Wright who's coming and then, and she's been, she went through the whole crash last time and if you haven't seen her on YouTube or substack or somewhere, check her out because she's very interesting.

She's going to be there.

Other people that have got some larger hedge funds that have a little bit more of a macro view of what's going on and what they're seeing in their own funds so that we can kind of piece together what stats we're bringing, plus what people are actually seeing on the ground so that we can maybe see the future a little bit and get to understand a little bit about what's happening and what might be coming down the pipe so we can prepare for it.

Yeah.

One of the things I like to share with investors, especially the ones getting started, is don't worry too much about what's going on with the macro economy.

I mean, you want to know housing and some of these things.

If you're trying to buy a $50,000 note, you know, you're playing in a 16 trillion dollar industry, you're going to be able to find a note.

You know, that's, that's the key is going to be building that team around you.

You know, finding a note is one thing, but then building that team around you who can manage that.

And you want to talk a little bit about some of, you know, your sponsors and some of the other people that are going to be at the event that people can network with so they can start building that team.

Yeah, for sure.

So before you even get the note, are you using your own money or are you going to use somebody else's?

If you're using somebody else's, IRAs are a great place to start.

And so we've got a couple of different IRA companies coming where you can get together with them and help understand how you can use other people's money.

In that same vein, we've also got lawyers that can help you figure out how to structure so you don't start messing with other people's money and get yourself into all kinds of trouble with government agencies and things that all the initials that you don't want to be associated with and then you buy that note, first you gotta find that note.

So who are some people that are gonna be at the conference that are selling notes?

Those are gonna be there too.

Servicers that can then walk you through and like actually collect the payments on your behalf, which I highly recommend.

Can you do it on your own?

Well, debatable, but I would highly recommend highly, highly, highly using a servicer.

And they're gonna be the ones that are gonna be taking care of that note for you.

You've got attorneys that are going to be there.

What happens if they start non performing?

If they, if they stop making payments for some reason, you're going to need an attorney.

So they're going to be there as well.

And like all the way along, every step of the way.

That's who we want to have lined up there.

We've got mortgage servicing, like software, a couple of different companies that are coming to have that click to mail guys that are will help you to find those notes where you can send out postcards, like all kinds of things that are helping you every step along, along the way to just build your business.

And you probably have like an insurance company or somebody.

Insurance, insurance preservation companies.

I mean it's the other thing about these conferences that I'll share as well.

And I love, you know, you know, seeing sometimes on like Reddit or some of these places, people always asking, I can't find any, I can't find any off market deals.

I can't find any of this.

And the one thing I always tell people is your best friend should be a note investor.

Yeah.

And the reason I say that is people listening go back to how Nate stumbled upon this, how I stumble upon this.

What were we prior disgruntled landlords or property owners.

So if we take a property back, the last thing we want to do is hold that property.

If we have an investor step in and say, I'll buy it from you.

And we bought it at discount.

So hopefully, you know, we can still make a decent spread.

You know, you're not going to, you know, you could you make more renovating and selling.

Absolutely.

But that's not what we're in the business mostly to do.

So I always tell people, just because you're not into notes, that if you're a wholesaler or an investor, these are some of the conferences you should attend.

It's like Matt Kelly, I know you know, Matt always says, here are some of the other conferences known investors should attend.

It's no different for other people depending on the type of deal you're looking for.

Here's what you should be after because I bet you if you walk the crowd at your conference, I'll ask you how many people or how many deals you think people have that are in foreclosure or just finished foreclosure that they're sitting on an reo, you know how many?

Dozens.

All the time.

All the time.

Where?

Yeah, that's exactly right.

Even the note investor, like you say, as a note investor, I don't want to own property.

So as soon as I take back a property I'm looking to sell it.

I want to get it back out the door because I don't want the property.

That's not what I'm about.

I want the note.

So if I don't have a note anymore.

I need to sell it.

So if there's somebody there that's a wholesaler, somebody that's a fix and flipper, great, come talk to me.

We'll make a deal.

Yeah.

And the truth be told, you typically can get a very good deal on these types of assets compared to, you know, some of the other deals that you see out there.

Yeah, these are all off market.

Again, I don't have.

I don't want to deal with the Realtor if I don't have to.

And no offense to a realtor, but if I can get it done off market, it's just faster and easier and cheaper.

So we've talked about the conference.

Can you talk briefly, which we haven't yet.

And we'll make sure.

We also put this at the beginning.

Intro.

When is it?

Where is it?

Is.

You know, give some people some information about it.

Right.

That's probably important.

Yeah.

So it's coming up quick, May 2nd and 3rd in Nashville, Tennessee.

And get in town earlier on the 1st, because that night we're going out throwing axes.

And you want to be part of that because that's a big part of it is just getting out there and networking.

Yep.

Yeah.

That first night is, you know, the way, you know, a lot of people say things after that first night, everything else is like, you know, extra credit or bonus material, you know, the relationships you'll meet, hanging out from, you know, drinking beers or if you don't drink, whatever, you know, throwing axes.

You know, actually I have the website open.

I just see Bob Repass sitting there watching a woman throw an ax and stuff and so forth.

And I think it's some paper stack guys there as well.

And for people listening, you might not know who those people are, but those are people you want to get to know.

And it's also an environment.

And I'm curious to get your thoughts on this.

We've both been in that fix and flip space and other aspects.

The people in the node investing space are so much nicer and easier to work with and willing to help than the other aspects of real estate.

Would you agree with that?

Absolutely.

And I'm not exactly sure why that is, but it's definitely true.

Where you walk into any note conference and people are so open and so willing to share and just so friendly versus there's an edge of competition in a lot of the property ones where nobody wants to, you know, really get together with people they don't know, which is completely opposite.

In a note conference, you go in Everybody's best friends right away.

It's great.

I think part of it is, like, you go to some of these conferences, they meet people who are in the same area, so they are fighting for deals, and there are less deals sometimes that they're fighting with the same where in the notes base.

Again, you know, I rarely invest in my backyard, and there's loans.

Your profile is probably different than mine, and there's.

Yeah, there's overlap and so forth, but we're typically seeing so much inventory or enough inventory that it doesn't matter.

And if I win a bid against you or you win a bid against me, it's like, okay, next one.

It's not like, oh, my God, you know, in houses, people get upset and stuff.

And notes, it's like, okay, you know, and.

But also, man, that's great.

But also, a year later, I'll, you know, call you up and basically, hey, whatever happened with that?

I know, you know, fellow Canadian Chad Earp shot.

You know, he's bought some loans for me, and many people have and always ask him, like, whatever happened with that?

And stuff.

And I had one loan that literally one woman bought from me, and like, three weeks later, it paid off, you know, and stuff.

And I was like, oh, man, that stinks and stuff.

But in the same token, I'm like, that's awesome.

And the other reason why it's awesome sometimes is she made really good money.

So what's she going to do?

She's going to be okay buying from me.

You know, it's like buying at a car dealership.

You have a bad experience, you don't want to know that person anymore.

No, exactly.

And the guy that I'm buying from today, I might sell to tomorrow, because that's just how it goes.

And we're.

We're constantly circling around notes and selling them to each other, buying from each other all the time.

Yeah.

Right before this call, I got a call from somebody over at, you know, office at Crosby Capital, like, hey, you know, we're interest interested in this loan.

And, you know, I sold them alone, like, in October.

I bought one from them in December.

And, you know, we just kind of back and forth and yeah, we compete, but also they're mostly in New York, so they can have New York.

You know, I'll give them all the New York loans they want.

But, yeah, no, and it's very much.

It's a sort of competition, but it's a friendly competition, and.

And everybody's friends and like you say, I'll win it this time.

You'll win it next time.

So what?

So with that, the one thing I'll mention to people who are new to space and getting involved in stuff is, you know, don't burn your bridges in this space because it is a super small space, you know, and some people do that by getting assets under agreement and not closing the deals.

Sometimes just coming up with such a low bid can irritate people.

You know, some people don't care.

I'm at a point in my life where I don't care.

It used to bother me and I basically, like, get real.

But now I'm just like, what?

You know, as I get older, I guess.

But I think the biggest thing is just do what you're going to say you're going to do, and if there's a reason why you're not going to close, just have that reasoning or excuse.

The BPO is much lower.

Or, you know, don't walk away from a deal because there's $150 tax bill when it's a $20,000 loan with $100,000 valuation.

Like, yeah, you know, that's.

You'll be able to work something out in those situations.

Yeah, yeah, exactly.

And that's my philosophy, too.

Like, if.

Even if there's like $1,000 tax bill, I'm probably.

For me, I'm probably not going to go back to that seller and be like, oh, well, let's knock off a thousand bucks.

You know what?

Keep the relationship, keep the deal.

Do it.

If the whole deal hinges on $1,000, you probably don't want to do that deal in the first place.

Yeah.

So just take a small hit this time because you'll, you'll make it up next time.

Yeah.

And I'll share a quick story before we wrap this up of.

We had, you know, it was only two loans under agreement, and they were a larger firm and, you know, get them under agreement, we get through half a due diligence and like, oh, we're going to have to pull one because the borrower is going to pay it off.

Like, cool.

But, like, I really don't want to go through the hassle of both.

So, you know, we'll just.

In this instance, they're cool with us passing because now one of them was like a 200,000.

The other one was like 60,000.

I'm like, you know, it really.

I kind of wanted to get both of them.

So they come back like three weeks later and like, okay, you want to do both the deal.

The borrower's not paying off I'm like, yes.

So we go through, we finish due diligence and we get to a point of, okay, loan sale agreement literally sent via DocuSign.

Yeah.

Not getting signed.

Two days pass and we're like, what is going on?

And like, oh, the borrower is going to pay it off, so we're not going to sell it to you.

And later I'm like, okay.

And I'm like, don't even ask me if I'm closing on the other one.

Right?

So.

So then they come to me.

This was back in like January and February.

Then like two weeks ago, they come back to me like, hey, you still have interest in these two loans?

I'm like, no, I'm good.

Like, you know.

Yeah, it's one of those things where, you know, as a buyer, usually it's the, you know, the, you know, the buyers, you know, sometimes the sellers feel it gets burned by people not closing.

But in the same token, you know, again, it's that reputation of, as a seller, you know, you don't want to be pulling assets from people.

You know, there's re.

There's reasons sometimes where, oh, I, you know, I had one that basically the servicer screwed up on the total payoff and it was $60,000 higher.

And I'm like, hey, look, you know, that makes a difference.

Yeah, yeah, it makes a difference.

And I apologize and stuff, but I covered their due diligence costs, I gave them their money back and all that stuff, you know, and sometimes that happens, but some of these instances where it's like, oh, I just wanna.

I think the situations change.

You really get in that gray area.

So.

Yeah, no, that's exactly it.

It's.

It's so much about relationships that, yes, take the hit if you need to, just to preserve the relationship because that, that is going to make a difference later on.

So, as we wrap up, some final thoughts, you know, about, you know, your company, the conference, you know, as a person sponsoring it.

What are you looking to walk away from after the event this year besides getting a few days rest and, you know, buying your wife a nice dinner for helping you out in all of this.

We're bringing our kids even, so we're going.

There you go.

Before we're going to hang out in Memphis for a couple of days and just.

Because that's fun too.

But no, it's.

For me, it's all about the, the networking.

It's all about.

Ideally, what I'm looking for is people who are creating notes that are looking to sell them and not the mom and pops that are doing once in their life.

Ideally, I'm looking for the guy that is buying property at a discount, selling it on terms.

They collect their down payment.

They can do a first and a second if they want, whatever.

But they're creating a note with the intention of selling it to me or somebody like me where we can tap into that and just have an ongoing, you know, revolving door where they can continue to come back to me with other notes that they've created.

That's that's my ideal.

That's definitely something I'm looking for.

Great.

Well, Nathan, thanks for joining us today on this episode of the Paper Trail.

And, people.

Yes.

Make sure to check out the DME event.

We'll have all the contact information in the show notes as well.

So, Nathan, thanks for coming on.

Thank you.