E326 | Jay Redding on Building a Legacy Through Notes – PTNC Know Your Speakers Series

On this episode of the Paper Trail podcast, we are doing a get to know your speaker.

We are hosting the paper trail conference September 18th to 20th in Chandler, Arizona.

Go to papertrailconference.com for more information.

And today I spoke with Jay Redding of Cassidy Investment Group.

Jay has been in real estate investing for over 20 years.

In the last 10 years, him and his son in law, who was the one who got him into note investing space, have been investing in all different types of notes and you know, recently have been doing a lot more seller financing.

So he's going to be one of the speakers on one of our seller financing panels.

It was a great episode where we talk about how to be an investor, what are the philosophies, what he's going to be talking about, the conference, give him a little insight without spoiling the entire session and really just boil down to what the space is about.

So hope you enjoy this episode and also again, hope to meet you at the Paper Trail conference.

Welcome Jay.

How are you today?

I'm doing fantastic, Chris, great to be with you.

This is going to be a fun episode because Jay and I go back little ways and we also are part of a little group that hosts a monthly webinar as well as talking about notes.

So it's always a pleasure to speak with you.

Jay, why don't we as we get started, have you start with your story and how did you get involved in note investing in the first place?

Well, I'll even go back a little further.

I actually started on the real estate side as many note investors do, like we all do.

That was Kyle and he's actually the one that got us interested in looking at the notes.

He's a very smart young man.

He doesn't want to manage rentals for the rest of his life.

And that was so, you know, the big question was, is that okay, so you know, let's, let's look what else is out there besides what we're doing here.

And he basically said, you know, I think I have an interest in looking at the notes.

It fits more of my personality and everything.

So, so we started doing some research, you know, who's the players, who's got experience, who's done this for a while, who's been through, I think this is an important factor.

Who's been through market cycles?

Not just who's the, who's the hot topic.

At the time.

And our mentors have basically been down to really, a couple of different people.

I know.

You know, Eddie Speed, all right, He's a mentor, and we've gone through note school.

And then also Fred and Tracy Rui, which I know you know, so those have really been the core of who our mentors have been.

Of course, I've learned a few things from you as well along the way, and a few other people.

So it's not just one person, but.

But that's kind of how we got started.

And the more we got into it, it's like, oh, I like this.

Okay.

I mean, I'm getting older.

All right.

And where I have one child, all right.

That Kyle's married to, so, you know where everything's going.

So it's kind of the next generation thing.

It's like, oh, this is something I can do until.

Until, you know, you put me in the grave or I lose my mental faculties.

So.

So that's basically how we really got going, so.

No, that's great.

And one thing I'll mention that you touched upon is the people who you affiliate and associate yourself with who have been around a very long time and have a very good reputation.

People don't realize how small this space is, and if you get caught up in the wrong little click, it can be very detrimental, is what I have found.

Yes, it can.

So we chose wisely, Obi Wan.

Yes.

Well, let's see here.

That wasn't exactly how I thought the question was gonna be.

Well, how would you view the question?

Well, I was thinking of what's something that someone, you know, doesn't really know about me that maybe they should?

Okay, okay, well, let's, let's rephrase it.

And I'm gonna edit the podcast.

So let me.

Yeah, let me redo this and say.

So what's something about your journey, Jay, that most people don't know, but probably should?

Very simple.

I mean, I, I, I grew up on a hog and dairy farm.

Okay.

I am a country kid.

All right?

I was a PE major in college.

All right.

Physical education.

Physical education, yeah.

Okay.

So if I can figure this out, all right, Anyone can do this is the bottom line.

I grew up on a farm.

We had 100 hogs, pigs.

Okay?

25 dairy cattle, and a 200 acre farm is what we Basically had and out in the middle of rural Indiana.

And that's how I grew up and certainly gave me good work ethic.

Okay.

Obviously in that respect.

But it's just learning through the process.

And so it doesn't matter your background.

So I'm essentially getting to.

All right, it really does not matter.

You, you, you get with good people, you learn, you got to learn the fundamentals, obviously, and you start growing from there.

So I have two spin off questions to that.

One is, did you name your hogs names?

Some of them we did, yeah.

And the saying, I guess, that a lot of people like to use is, you know, pigs get fat and happy and hogs get slaughtered.

That l probably, you know, was very true.

I know that very literally because you know where we got our meat.

Yeah.

So.

So, you know, as people invest and, you know, everyone's got, you know, different philosophies, but most people usually stick by one philosophy that they go by.

If you could boil yours down into, you know, one sentence, what would it be and where did it come from?

Okay, I, I am very conservative by nature.

All right.

And as a result, I learned this comes from the real estate side.

Always have multiple exit strategies if the deal doesn't go the way you have it planned.

All right.

On the real estate side, we always, always planned at least three exit strategies, and that has protected us unbelievably well over the years.

And the same is in nodes.

You got to figure out, okay, how am I protected?

What's the worst case scenario?

And if everything else about, you know, happens better than that, then we're good.

So it's the preservation of capital first, and then it's the return and capital second to make sure that you've got multiple exit strategies that will protect you.

I always like to look at it a little different light of when people say they're either more conservative or the more aggressive.

I look at the other way is you either truly understand risk or you kind of don't, or you do but just ignore it is really the way I look at it.

And as you get older, you understand risk more because you've been burned more.

So people will say, oh, you're more conservative.

It's like, no, I just understand risk a lot better and realize, like, do I really want to take that risk on this one or, you know, what you want to go through?

So.

Well, the other, the other thing would be as you get farther, further down the road, you don't have time to recover.

That's the thing.

Yep.

All right, you Know, someone that's of my age group, and obviously, in talking with a number of people, I mean, their concern is like, okay, if things go nuts in the market, all right, unlike with the Great recession, it took 8, 9, 10 years just to get back to zero.

I may not have that Runway.

And it's like, yeah, so you, you, you, as you do get order, your.

Your wisdom starts to come and evolve because you've gotten burned along the way.

And it's like, maybe not.

And you care more, you know, because it's the bigger consequences.

That's right.

That's right.

But, you know, as part of that, you know, what's a principle you live by in business that kind of guides away?

You treat your.

Your vendors, your borrowers, your partners, your investors.

I know you raise some capital.

You have some investors as well.

So what's kind of, you know, some.

Some.

Something you live by as a principle.

Very simple integrity.

Do what you're going to say you're going to do, and do it in a time frame that you say you're going to do.

It's as simple.

It's.

Mine's the same way.

And I literally had that same call with somebody yesterday that we are arguing over something that.

I mean, this wasn't even, like a gray area of a contract.

It was black and white, as black and white could be in regards to a specific item in the scope of work.

And the person's like, well, I didn't, you know, kept trying to rephrase their words to try and find a way so they didn't have to do the work.

And at the end of the day, thankfully, I hadn't paid them for it.

And I basically told them, like, you know what?

Fine, let's just walk away.

You go be you.

I do me, and go on our way.

And now that person is on their way, but they now kind of, I think, have some regrets and are now trying to, like, come back and save it.

And to me, it's like, no, you said you're going to do something.

You didn't, and you didn't.

That's right.

Called your bluff.

And now it's like you want to try and kiss and make up, you know, Sorry.

Yeah.

And.

And one additional thing.

Do it to the best of your ability.

Yep.

That's the other thing.

So, yeah, yeah, just do what you're going to say you're going to do.

And, yeah, sometimes, you know what hits the fan and just be honest with people and.

Exactly.

Bad news is never pleasant.

But I'd rather have Somebody know, bad news sooner rather than later.

Well, and I, you know, if something goes screwy, okay.

And it's bad news, okay, bring it.

Let's talk, let's work through it, okay?

If we, if we're on the same page, we're trying to go the same direction and something's just happened that's that screwed everything up.

There's many ways we can work through things, all right, and, and you know, things happen.

Sometimes you just have to deal with it and, but man, be honest.

So that's the bottom line.

Know who your counterparty is.

That's the other thing.

All right?

The integrity of your county counterparty.

Literally before I jumped on this call one minute late because I was actually on the call with my attorney going through a loan sale agreement that, let's just say the way the loan sale agreement is written is if you ever have to go back for them for anything, whether it's a, you know, a launch that was missed or screwed up or any type of document, my attorney's like, recognize you are not going to get it and they're not obligated to give it to you.

And I'm like, why would I sign this contract?

He's like, that's a business decision.

But based off of how you operate, I wouldn't execute this.

So.

Okay, so let's talk a little bit about paper trail conference that I was, I don't know if I was drunk when I agreed to this or what not to do.

It's been in the back of my mind at times and you know, basically kind of has formed in different circles and stuff.

But you know, a little bit about, for people listening what I was my accomplishment or what I'm trying to target is I haven't really seen a conference that focuses on the three main aspects of note investing.

Now I'm a non performing note guy.

That is what I am.

I am not a, you know, seller, finance guy.

Private lending, a little bit in my wheelhouse, but not the, I'll call it not something that I'm the expert in do as part of my entire business process.

And I've seen a lot of people over the last year or two jump around into the different avenues of that.

And I wanted to just bring everyone together to kind of let people decide what it is because I'm on bigger pockets and I see people doing, oh, I want to do this, I want to do that.

And there's not one place you can go try and talk to people and learn.

So now that's why it's important for me.

I'm curious why it's important for you to be a part of this event and a speaker.

And I know your response is going to be, because Chris is awesome and you just want to be a part of something that I'm a part of, but outside of that.

Okay, well, I, I.

First of all, I would clearly say I respect you, Chris, and you've already.

I've always known you as being a straight shooter, and you call BS when BS needs to be called, and sometimes it gets you in trouble, but that's okay.

I can live with that.

So sometimes a little too much trouble.

But not too often.

I do get sued.

But why it's important to me is I want to be associated with people who have great integrity, who have good conferences.

I like the.

I.

I am an educator at heart.

Okay.

I do have a teaching degree.

All right.

But it's now gone way, way expired a long time ago, like 50 years ago.

But I still have that at heart.

And I do like being able to teach and help people grow.

And I was also one.

I was a track and field coach also.

I had.

That's another side note.

But I coached Division 1 track and field for a few years, so.

Kent State University.

Okay.

Okay.

So.

So I guess that's in my blood to a certain degree.

So I enjoy that.

I want to be associated with great people who have great integrity and run good businesses.

And I, I'm.

I'm sure you'll put on a very good conference.

I have no question about that.

The one thing you mentioned again, about the education side is I know you provide, you know, you host, I think, you know, like a webinar.

We do, yeah, we do a note talks with Kyle and J.

We do it one time a month is what we do.

It's kind of our give back is what it is.

Yep.

And you also, I know, drop note nuggets, you know, and stuff.

Tidbits.

That's right.

Yep.

No tidbits as well.

Apologize.

But.

And again, for people who are listening and trying to, again, either gain more experience in the space or learn a specialty or skill, the more people you can connect with and learn from, the better off you are.

So, you know Jay well, all his information will be in the show notes.

So, you know, I recommend give him a.

Give him a follow.

Sure.

Okay.

So without spoiling, you know, your whole session, and, you know, what's one thing you hope attendees, you know, will either feel, learn or think differently about after hearing you speak and provide them this great content that you're going to provide them.

Well, Chris, as you say, we all come from different, different niches.

You're an NPL guy.

Okay.

I'm a seller finance guy.

Okay.

We've done a bunch ourselves.

We buy.

I'm comfortable in buying seller finance notes.

I appreciate in helping people to improve their quality of their notes so they don't have to take as big of a discount.

All right, so my goal is I hope to help people, particularly house buyers, wholesalers, fix and flippers.

I hope to be able to help them to raise their gain.

Many, many of them do not realize the value that a no investor can bring to them.

So I hope to be able to share with them.

All right.

How we can come in and help them recapitalize, but we can only help them recapitalize and go do another deal with them, keeping part of the deal on the back end that they make more money over the long term if they create a quality note.

So my hope is, is that I can show them how we can help them to recapitalize the importance of having a relationship with a note buyer and, and giving us the opportunity to help them elevate how they're creating the notes so that they don't have to take nearly as deep of a discount and help propel their business forward as well.

No, it's awesome and I know people get a lot more out of the session, but no, as a high level, that's what people look for.

Honestly.

That'S what we hope to deliver.

And I know Tracy Rui and I are, we've been talking back and forth.

She's kind of running the, the seller finance part.

So I don't know what the final, how it's going to look, but I think we're probably just going to have a discussion.

So I think we're going to do, I don't know.

So, yeah, yeah, we're trying to, you know, again, shape it where, you know, there's discussions that people can have that are real world discussions.

And then we're having some workshops too, where, you know, going to ask people, you know, break open that notebook and you know, but put on your thinking cap and stick that cell phone, you know, kind of, you know, in your pocket because there's going to be a fire hose of information getting thrown at you, especially for a few of the ones that I'm going to be doing.

It'll be good.

It'll be good.

Okay.

Now you've worked with all kinds of investors.

Good, the bad, the ugly, the indifferent.

You Know, in your mind, you know what makes a great investor, in your opinion?

Well, first of all, you got to decide whether you want to be an active investor or whether you're going to be a passive investor.

There are two profiles.

They're two totally different type of investors and personalities, etc.

If you're going to be a passive investor in one, want to leverage our skill sets.

When I say I mean mine, yours, et cetera, okay?

Our skill sets, our connections, all right?

Our sources and our knowledge.

That is great, okay?

And if you're busy with your career, you're busy with your profession, you run a business, you're retired, you just want to earn a great income, all right, and get a good return on your money.

We're handling all the heavy lifting in that respect, and let us handle it, okay?

But don't expect the same type of returns, all right, as if you're taking all the risk, all right?

That's really important to understand that difference.

Now, if you're an active investor and you're wanting to get in and develop the relationships, all right, it's going to take some work.

Takes time to develop relationships with people and with organizations that have the notes that they know that you're.

You're.

You're real and that you can perform and you're going to do what you say you're going to do, because that's absolutely the surest way of slitting your throat in this business to say, hey, I'm going to perform.

And then you then, then you back out the last second.

You just, you just kissed your credibility goodbye at that point.

So.

But that's a different.

That's a different animal in that situation, all right?

You can earn the higher yields, the higher returns, all right?

But you got to get knowledge.

You got to get knowledgeable from credible sources of people who are in the trenches is doing it and learning and be patient in learning that even be willing to mirror and not.

Not do anything but just kind of be a sponge.

I've been through fortunate to be a chrome at some pretty big tables and not, you know, just soak up the knowledge, man.

Just soak it up.

And you got to be willing to pay your dues along the way to be able to do that.

So, yeah, yeah, for me, you know, I define it kind of, you know, within one word, and I'll use authenticity.

Authenticity.

That's exactly.

Yeah, that's exactly what you just outlined is figure out what it is you want to do.

Do you want to be active?

Do you want to be Passive, you know, don't.

Just because I'm doing something or you're doing something, like what you're doing and I'm doing are very, very different because.

Yeah, but it works for you.

What you do kind of wouldn't work for me, and maybe it would, but I might.

Maybe I'd be bored.

Or you might look at what I do and say, you're nuts.

That would be boring to me.

It's going to be something that you enjoy to do, but don't try to pretend to be somebody or something you are not, because that's.

That's where this whole FOMO comes into play and kind of roll into the next question of what's one mistake you see newer investors make that you try and help them avoid?

I think there's two.

And I was.

I would say we were a little bit part of this also.

We just couldn't figure out the strategy that we wanted to use what fit us.

It took us.

You know, I like partials.

All right.

But the partial model just didn't necessarily work for what we needed to do for.

In our business, for where we were at.

So we went the hypothecation route.

Okay.

Now, hypothecation may not be for somebody.

Okay.

All right.

So get knowledgeable in enough knowledge in the different areas to figure out what fits you and what you want to accomplish.

That's the first thing.

The second thing is newbies don't do enough due diligence, period.

On everything.

Who you're buying from, who you're learning from, any part of it.

So here.

So here.

And even the experienced people don't do due diligence sometimes.

And here's a perfect example.

I'll share this.

And this was me the other day.

I saw a video on Instagram by an individual who basically says a lot of things that you think.

And what I mean by that is there was a Facebook ad I saw that had a 45% annual return on investment.

And I just laughed.

I'm like, okay, real estate.

And then I did a Google, and there's this guy who does TikTok Instagram, where he takes all these fund offerings and he basically deep dives into them and does research on them to basically find out, yeah, they're scams.

I knew three years ago that they were going to be in trouble.

Which now today, of course under investigation and all this stuff.

He knew it before then, but I posted something about him.

Hey, this guy provides some like, cool videos and just fun to entertain.

Someone's like, yeah, did you know that guy was on American Greed?

And the reason why he knows all this stuff was because he spent like 10 years in jail because he was like the fraudsters of fr.

But I'm like, well, it takes one to no one.

No one.

That's right.

I didn't do my due diligence to realize what this guy is.

But, you know, and again, it's, I would never associate myself with this person.

But he also, you know, you spent 10 years in prison doing, you know, money fraud within real estate offerings.

So basically it's like, yeah, this guy actually probably does know what he's doing.

But even goes to show that, you know, no matter what it is in the newer guys, you know, really struggle with due diligence.

And one of the things that I look at sometimes when I'll get a note accepted and then the person's like, two days later, like, okay, I'm ready to fund.

And I'm like, ray of fund.

I'm like, did you check title or bpo?

And he's like, oh, I went online and you know, I did a Zillow and basically I went on the county records and I'm like, okay, but you know, I'm the type will tell.

I'm like, hey, if you're buying a note, here's what you should be doing.

But I'm not going to tell you how to do your business.

Right, Right.

So, okay.

Oh, you've made it through the first round of interrogations.

You know, you, your score is a 96 out of 100.

I knocked you docked you four points because the last question I asked for one mistake and of course you gave me two.

Okay, that's a bonus.

That was one and a bonus.

Okay.

Okay, so I'm have to bump you back up.

So I'm 104 now.

Okay, there you go.

So a little lightning round.

And I joke because when I was putting these things together, I'm like, you know what?

Describe in one word.

And I'm like, I have never, I think ever said one word in my life.

And I'm like, how could anybody else?

But let's see if we can get there.

So the one word to describe the current market changing.

Yeah, my term would Be volatile was term I would think of.

We wanted to go into details, but people just, I think, you know, can understand.

What's one thing you've changed your mind about in the last year?

Now, this can be more than one word, of course, but.

Well, let's see here.

How to adapt.

I think that's the best thing.

Okay.

You know.

Yeah.

Both on the real estate side as well as on the note side, there are different cycles, all right.

In the market.

And you need to be able to understand where we're at in the market cycle right now, and where do we anticipate that market cycle going?

So you want to be planning for going.

You know, here is it.

I love Eddie to death.

Here is an Eddieism.

Okay.

That is apropos.

All right.

You don't swing where the ball's at.

You swing where the ball's heading.

Yeah.

All right.

And so where's the ball heading?

All right?

And so you gotta.

You gotta be.

I.

I try to do a better job of staying aware of different reports to know kind of what's happening in the market and where it's going.

I.

And anticipate.

Try to anticipate.

And it's never going to be a hundred percent, but you have a feeling for where we're at in the cycles and where the cycle's going and what changes may be coming, and then you're prepared, all right.

Both from a positive side to take advantage of those opportunities as well as protecting on the downside that that could be happening as well.

So I.

I think that I have probably been a little bit more aggressive, particularly in the last couple years, than what I was initially when I was first getting started.

No.

Great advice.

And, you know, I know you have all your accomplishments in life.

Me to thank for this, but.

You have a little bit in there.

Okay.

If there were to be one person you would thank for your success, who would that be?

I cannot name one, literally.

That's the best answer, actually, because I'm sitting here, like, I couldn't.

Like, you know, I couldn't name one person that, you know, there's so many people.

Yeah, there's so many people.

There's.

That I've picked up gold nuggets from.

All right.

Because of their experiences, and I can.

I could put it in and draw up on that.

So it's an input of multiple people.

So I just.

I'm just humble and grateful that I have the opportunity to do this, and I'm.

I'm grateful to be in the situation that we're at Right now.

And, and I gotta say that's, that's a blessing from Almighty is awesome from God, for, for me.

Great.

Well, as we wrap up this episode of the Paper Trail podcast in a little get to know your speaker with Jay Redding, who will be one of the speakers at the conference September 18th to 20th outside in Chandler, Arizona.

Any final thoughts that you'd like to add or anything in general, anything on your mind that you like?

You being a therapist now too, huh?

I would just say I.

Wherever you're at in this note cycle, maybe, maybe you've just heard about notes, you know nothing about it.

Okay, come.

Come and learn.

All right.

I like the format, Chris, that you're putting together here because there are so different, different areas of note investing that you can invest in.

And you know, what you have to be careful of is that you don't try to do them all.

Don't get the shiny object syndrome as people often get on the real estate side.

But come and learn and think, okay, what fits my personality, what fits me, what resources do I have?

All right, what can I, what can I build upon?

All right.

And help you determine what's the next steps in that respect.

And many of us would be helpful, be willing to help in that respect.

So that would, that would be all that I would say.

Yeah.

And here's a perfect example of that that I'll share just about me and my portfolio.

And you know, previously in the last several years, you know, we'd have a balance of performing and non performing loans in our portfolio and a lot of performing may have been non performing that are re performing or we would pick and choose some of the performing loans that we would buy.

And it was pretty easy because most of the paper was written between kind of like 6 and 9%.

So you could put some discount on it and still get a decent return.

But you look at the true, I'll call it like performing owner occupied type loans today, that most of them are from COVID and they're written at like 3 or 4% and you can't get the numbers to work.

No.

So I'm like, okay, what do I need to do to again go back to adapt, which we talked about and make this shift.

And you know, I was honestly, and I've, you know, it's on record so I really can't hide from it.

At times I was not the biggest proponent of seller finance.

I'd rather just sell the loan.

But now it's like, oh, things have changed.

My business has changed a little bit.

Okay.

Do I look at seller financing or buying some of those notes?

Do I look at private lending?

Do some of that aspect.

It's like, what path do I go down?

And, you know, getting to be able to speak to people in.

In the space at the same time, where I can go in the same day and go learn a little bit about this or that and then talk to people and say, what's the pros and cons with each?

And just, you know, because most conferences, again, are either strict NPL conference, seller finance conference, private lending conference, or maybe a little bit of mix, but I haven't seen any bring all three together.

So that's what, you know, that's what I'm trying to accomplish out of all this.

So I, I would encourage, regardless of where you're at in your journey to come, because your connections and Chris, I.

I know you know this.

Yeah.

You.

You're going to make connections there with vendors.

That's going to help you to move forward in your business with other people who might be a perfect match.

I mean, we've made.

We've made contacts that have elevated our business.

We have made deals with other people.

All right.

At these conferences.

All right.

To be able to strike up the relationship.

And yeah, you may know each other from emailing back and forth or talking to a Zoom call or something like that, but sitting down with someone over dinner, over a meal, talking, getting to know each other, their personality types, all that type of stuff, that's where you forge relationships and that's where you grow.

So that's the importance of being at conferences.

And I was at a conference where somebody I've known, I met them several times.

All of a sudden I was like, oh, do you know this person?

And I'm like, no.

You're like, oh, come with me.

Had me meet this person, and next thing you know, I just bought $5 million of loans from that person.

And like, oh, my Lord.

Like, you know, so there's so much opportunity to network.

And again, today's world of Zoom and everything else.

Yes, you can meet people, but still, getting face to face is still the best way to grow your business.

Totally agree.

Totally agree.

Oh, Jay, thanks for hopping on this episode of the Paper Trail Podcast.

And for people, if you want more information about the conference again, go to the Papertrail conference dot com.

Jay, thanks again.

And I'll actually be seeing you in a half hour or on our next one.

Thank you.

Make sure to leave us a like and review.

Okay, thank you all.

All right, bye.

Bye.

Take care.