00;00;00;00 - 00;00;22;08

Unknown

Got any speed. The note keen on today. He is the owner of Node School and he talks about if you're feeling like a burnt out landlord or if you like looking for a different way to be in real estate other than just having tenants in toilets like this is a great way for you. I think this is a very timely episode, so please listen, enjoy and take something away from here.

00;00;22;10 - 00;00;42;18

Unknown

Now, learning from someone who's has done over 50,000 notes and been teaching this for over 25 years and is still actively buying 750 to 1000 notes a year, was daddy speed and gain that knowledge and take action. Welcome back to the first I podcast. We have Eddie Speed back on here today. A good friend of mine excited to have him on.

00;00;42;18 - 00;00;58;11

Unknown

And he's he is the note keen eye. He has gone out there and made himself a name in that industry for years and years now, and he's going to give us good information on that. And Eddie, thanks for being on the podcast again. I'm so glad to be here. How are you? Yeah, I'm doing well, doing very well.

00;00;58;11 - 00;01;17;25

Unknown

And I want to ask you now, how are you doing? Because, you know, you know, when we're recording this, elections are still like a month away. And like, we've had crazy stuff going on. So I just want to get an update on you and how the business is going and everything and like, you know, then we can dive into some of the questions that'll help the listeners hear.

00;01;17;27 - 00;01;46;09

Unknown

Well, David, our business is up. A most quite honestly, most real estate training business is not up because people are training, you know, people have to flip houses. Yeah. And somebody that's somewhat aware knows that there's an issue in that rent houses are not good. You're you're the math man. I may be the no king, but you're the math man.

00;01;46;12 - 00;02;22;03

Unknown

Most people show up at no school today are people that are that are frustrated with their rentals because they're not making any cash flow. And they're very nervous, either what they hear about Syndications are they're what they're spirits in, in Syndications. Right. Okay. So we had a over promoted business, seemingly. Yeah. And, now all of a sudden, the, the effects of that or kind of over, all over the place, that's it's arguable most people are that are investing in Syndications.

00;02;22;03 - 00;03;06;21

Unknown

Now there's an issue. Right. Yeah. And so that's, that's who shows up at notes. Cool. They say and look, can I do something that takes a lot less time but has a lot better reward than my rental property investing? And usually I say absolutely. That's awesome. So do you want to give the actionable steps there the actual insights of node investing versus traditional real estate investing, just so people don't know, or this is the first time they're getting an introduction to you would love to give the so I teach I teach people how to buy real estate, secured mortgages first mortgages.

00;03;06;23 - 00;03;29;09

Unknown

And so you're the bank. You're receiving payments every month, principal and interest secured by piece of property. So so the people say, well is that a lot. Is that easier than than dealing in rentals? And the answer is I have I've kind of had a saying and I've said it to a lot of really seasoned investors, many of which are mutual friends of yours and ours, and nobody ever corrects me.

00;03;29;09 - 00;03;37;23

Unknown

This is inaccurate. I can own a thousand notes or 55 rentals.

00;03;37;26 - 00;04;06;24

Unknown

So there's a lot less aggravation involved in owning a note. And right now I can get a lot higher reward than I can in rentals. Reward as in cash flow or percentage, you know. Right. Yeah. So so let's just do some simple math. Yeah. Okay. I have $250,000. Okay. I like real estate. I can go to my town, Dallas, Texas 250,000.

00;04;06;24 - 00;04;40;06

Unknown

Buys me a house that will rent for $1,800 a month. 900 of that 50% is going to go out. And expenses, it may not go at the end of every month, but it will. And you and I know that. So for a 250,000 investment, I'm going to net $900, 20 $250,000 investment in notes today is averaging a monthly cash flow, a $2,700 a month and no payments.

00;04;40;08 - 00;05;14;14

Unknown

Wow. Okay, that may be two notes. Maybe it's not one. Maybe it's two. Okay, I figure 65 bucks towards that loan servicer that nets me 2635 bucks. So I got 900 or 2635. That is real math that we run literally every day for folks on real examples of real deals. And people say, wow. And all the arguments that go along with rental properties.

00;05;14;17 - 00;05;27;28

Unknown

All right, well, I'm going to I'm going to I'm going to get appreciation and I'm going to get this and I'm gonna get that. And I'm like, you are getting appreciation. You're just getting it now. You don't have to wait.

00;05;28;00 - 00;05;54;11

Unknown

That's really good. You able to cash in today? We're a lot of people are waiting for the the someday. I have had more students. I have had more students. Yeah. In the past 18 months that have converted their rentals to seller financing than I've ever seen. I started doing this in 1980. Right? Yeah. I've had more students in the last 18 months convert their rentals to seller financing.

00;05;54;11 - 00;06;16;20

Unknown

And, I mean, and I think, you know, this, David, like people that are like operators, like not little guys with three houses necessarily. I've had that too. But I mean, guys with 250 houses that have converted their whole portfolio to seller financing, and they kind of got down the road with me on theirs and they started realize it.

00;06;16;20 - 00;06;38;10

Unknown

And, and, and I've said this to you before, David, there are there are rental cycles and there are no cycles. And the only thing that I think we have to remember, no market is going to be absolutely the same for ten straight years, right? There's going to be a disruptive time. There's going to be this there's going to be that.

00;06;38;10 - 00;07;00;08

Unknown

And I'm not saying it's never happened in notes. It of course it has. But I'm saying to you we're in a note cycle. And as long as we have inflation that is impacted the the income of rentals, which is about 60% increase in expenses, right, compared to about 20% increase in rents. Right? Yeah. Well that's not good math.

00;07;00;14 - 00;07;03;17

Unknown

So.

00;07;03;20 - 00;07;36;02

Unknown

And so for that reason it it's that and on the same $250,000 house people's mortgage payment will be excessively more than their gross rent payment. And gross rent means if you're the landlord you're netting half of that, right? Yeah. So all of a sudden easily the cat the number are two and a half, three times net income of rent versus owning a net two and a half to three times more income from notes.

00;07;36;04 - 00;07;39;07

Unknown

And so.

00;07;39;10 - 00;08;02;14

Unknown

Yeah, it's easy to be the note king when things are like this. Right? Right. Yeah. And and I've been doing it a long time and I've seen it. But but you know, you and I have discussed this. I could see this cycle coming. Experience does matter when you're trying to read a market. So we weren't shock when we got here.

00;08;02;19 - 00;08;12;13

Unknown

Now all of a sudden you've got bigger pockets and John Burns and all these people essentially say in the same thing that I'm saying.

00;08;12;15 - 00;08;36;04

Unknown

But we knew it before they wrote it, and I'm not disrespecting them or their knowledge or their vision. I'm just saying, this is what we've done for a long time. And we're at we're kind of we're in the middle of these deals and we see what the results are. How have you stayed in note so long when there are different time periods, like rental time periods and note time periods, but you've stayed, so you've stuck with notes.

00;08;36;06 - 00;08;52;14

Unknown

I feel like the entire time, well, I have, but once again, I've used real estate and creative finance in certain cycles. And right now I don't want you couldn't pour a rental on me right now.

00;08;52;16 - 00;09;10;00

Unknown

Like for the reasons that I just said. Yeah. And you know there is a, there's a, there's kind of a funny say and you may have heard this real estate investor says, I want to be a note guy when I grow up.

00;09;10;03 - 00;09;34;05

Unknown

It's I didn't make up the say in. It's been said back to me many times. And you know, look at look at what most hard money lenders background is. What were they before? They were hard money lender usually a real estate investor lands Zachary. Yeah, but I like my business better because my notes get better in six months.

00;09;34;07 - 00;09;53;10

Unknown

If you're a hard money lender, you get paid off in six months and now you got to go find the next perfect deal, right? My ideal lasts for a long time, so once I make a good decision and find a good note, I just put it to bed. Yeah. So, so I like I like that better. Yeah.

00;09;53;13 - 00;10;21;04

Unknown

No, that's that's good. So you say when you find a good note, what makes a good note to you? Here's here's the, here's definitely the pattern. Good properties create attract good buyers which create good notes. Good properties to good buyers is equal sticky payments. You cannot sell a crappy piece of property. Somebody and expect to have a good note.

00;10;21;06 - 00;10;50;08

Unknown

Yeah, right. Oh believe me, there's there's there's lots of them that tried right. And the land gurus haven't necessarily helped us in that regard in this industry. Right, right. Because not all land that they're dealing in is really useful, valuable and. Right. Yeah. But, but but I start out with good properties and land, then houses, and I've bought tens of thousands of notes on both.

00;10;50;10 - 00;11;10;27

Unknown

And then that lets me attract a good buyer. And when I sell them that property, David or I or whoever, I've kind of help configure and make a note to sell them that land, that property, their dreams are going to become true on that property. Where do they have their family, their whether it's their weekend places, land, whatever that may be?

00;11;11;00 - 00;11;50;29

Unknown

There's a use, there's a value to that land. And then I can attract people with a good track record and the ability to pay a loan back. Right. So, you know, I have helped a lot of real estate investors manufacture notes, right? Had the formula of how to make good notes. Right. And then from there, then now all of a sudden, once they've kind of followed, you know, an underwriting box, then all of a sudden they can bring that note to, to someone like me, and I can buy the note and buy it at a way less or discount than a loan that they may have tried to configure on their own, without

00;11;50;29 - 00;12;23;06

Unknown

any guidance. Right. Yeah. Kind of like your book, right? It's kind of a formula, right? Yeah, it's a formula I did. So yeah. And so that's how I that's how I find inventory. That's how I find the notes. Then I go help somebody that doesn't want to be in that grind every day. And then I say, I can help you find notes because I've built a marketplace of people manufacturing notes to my specifications.

00;12;23;09 - 00;12;45;20

Unknown

That's kind of my ultimate desire. Yeah. So that's how you get a beginner into it. It's you've built a marketplace and you're teaching them the first steps, especially if they have a portfolio already. Because like you said, it doesn't mean you've got three deals. If you got 250 houses in your portfolio, it's like you can start taking those first steps and you've built a community even, you know, to help people on that route.

00;12;45;20 - 00;13;08;12

Unknown

And to help with the whole process. Notes go. I've kind of figured out notes school is a home for burnout landlords, They come to you and they they're able to convert a lot of their rentals into these, into the notes. Or they've had rentals and they now they have some cash and they're saying, I don't want to go do that again.

00;13;08;15 - 00;13;35;09

Unknown

And so they're investing in notes because it's a lot less aggravation. They have a lot better cash flow. And oh, by the way, and note in investing in notes has a cushion that rental properties don't have. Yeah. You say a cushion. Yeah. So if you invest in that $250,000 in a rent house, the rent house is worth 250,000 and you invested 250,000.

00;13;35;11 - 00;14;02;07

Unknown

That's not a cushion. No. There's not your stride on the concrete. Right, right. Yeah. Okay. But when I invest $250,000 in notes my collateral is worth far more than 250,000. What I paid for the notes. Yeah. So I have a baked in cushion that maybe the collateral is worth 350. Right. I have a cushion on top of what I paid for the notes.

00;14;02;07 - 00;14;34;07

Unknown

God forbid something goes wrong, you know, then I'm not likely to go lose my principal. So aggravation, you know, of rentals, not good cash flow and rentals and no cushion of rentals compared to what I like. Which are better cash flow, way less work. And by the way, catastrophically there's cushion. Yeah. And then you've created that marketplace where you can also bring people that are looking to sell the notes too.

00;14;34;07 - 00;14;52;28

Unknown

So if you've got a burnt out landlord, then they've got that cash. Then because they I feel like that would be one of the biggest questions is where do I find these people or where do I, you know, find a good note. Yeah, we know in having this look, we've we've had a school for 25 years. We know what people want.

00;14;53;00 - 00;15;16;01

Unknown

They want. They want us to tell them what we've learned. A compression of time. They want us to give them a risk management blueprint. Like what? Like what decisions do I make? That's the most likely chance not to cause a problem they want to do. They want their time back. And then then they're like, oh, Eddie, what if you helped us find those?

00;15;16;04 - 00;15;35;28

Unknown

What if you helped us evaluate notes like, that's what people want and that's what we've morphed into. We didn't always have that. I didn't I wasn't always, I thought forever. If I've been doing something for 20 or 30 years, surely if I just told you what I knew and a condensed version of explained it to you, you'd say, that's great, and go run off and go do it.

00;15;36;00 - 00;16;00;14

Unknown

But let's be honest about it. That's that's not that's not what most people want. And you'd be shocked, David, at some people that you and I mutually know that have come into our cycle. And, and it's not that they're not experienced. They're crazy experienced. Yeah. They just want their time back.

00;16;00;16 - 00;16;05;12

Unknown

So then this helps them get their time back.

00;16;05;14 - 00;16;17;11

Unknown

That's what people want. Yeah I mean listen where is the sunset in the landlord.

00;16;17;13 - 00;16;40;07

Unknown

Right. That never ends well I mean you've been around it much as I have in that regard. You you and I know all these hot shot folks and and and and so when so when the market was going up in 2020 and 21, quite honestly, people would just put up with anything because their real estate was going up so much in that.

00;16;40;07 - 00;16;56;19

Unknown

Yeah. Now our market's flat essentially, and they're not going up and they're not cashflow. And and the tenants didn't start calling them because they weren't making the dent. Landlord wasn't making any money. So those are the reasons that.

00;16;56;21 - 00;17;20;10

Unknown

You know, what becomes the best thing to do in the market changes. Probably. Right. No, not like that. That you've built this community and especially how you've identified, you know, it's the usually the burnout landlords that we're working with because they've got either the problems or the market dips, and they're looking for a different place to either put their money or to convert their portfolio or do things like that.

00;17;20;10 - 00;17;37;00

Unknown

So it sounds like you've really honed in on who you're able to help and really help you know, and help them in their in their investing journey. And like you said, grow up in their investing journey. Go from real estate investor. When I grow up, I want to be a note you know out investor and a note holder.

00;17;37;00 - 00;17;55;20

Unknown

So I like that you've kind of help them on their journey and you know exactly what they're going through. And you've been doing this a long time, 25 years and no school and helping people like you said, you know exactly what's going on on not just both sides, but like, you know, like a 21 sided dice, you know, like you've you've seen everything.

00;17;55;22 - 00;18;19;13

Unknown

And, you know, David, we we train all the time. Yeah. Live virtual all kind of stuff. Right. The people that are on here today, if they want to come to a masterclass, which we do charge for masterclasses, but we're going to give them a ticket to a masterclass, you know, and we'll talk about that at the end. But yeah, we'll give them a ticket to the masterclass.

00;18;19;13 - 00;18;40;03

Unknown

And then on there guess what we're going to ask them. We're going to ask them some questions. Yeah. In the masterclass to give us a sense of what life looks like for them. We're not just sitting in the ivory towers thinking about how life affects us. We want to know how life affects them. That's how we figured this stuff out.

00;18;40;05 - 00;19;00;22

Unknown

If you have a class or if you're if you're working with people, trying to help them, you know, David, you got to ask them all the time, what's your world look like? Right. That's how we that's how we figure it out. We know what the market is. We know what notes, notes can do. But we needed to know what was, because let's be honest about it.

00;19;00;25 - 00;19;23;05

Unknown

When do people change? Who when the pain is greater of not changing, you know, so that's a well that's good. And I like how you do that. You set them up for success for themselves and not the ivory tower. And just here, let's force feed you. You know everything. I know it's more of like collaborative. Where are you now and what's going on?

00;19;23;05 - 00;19;42;27

Unknown

And how can this help you get to where you want to go? That's so. Yeah. No, I like that a lot. What else about notes did I not ask you that we should know about before we go into the masterclass and how people can, you know, take those next steps of learning this, especially in this market? I feel like anyone who's on this podcast would probably be a great candidate.

00;19;43;02 - 00;20;15;25

Unknown

If you're listening to this, to at least get into Eddie Speed's world and know about notes and go to a masterclass and figure this out. So you've got a great tool in your tool belt that could maybe overshadow every other tool you've got. But first, what have I not asked you, or what would you like to get across that I haven't asked what we're really good at at a second level is showing people how to use leveraging techniques with mortgages so that when you run out of money and you will when you run out of money, how do you how do you go stretch your dollar out?

00;20;15;25 - 00;20;43;09

Unknown

How do you go be able to continue to buy when you are going to need some leveraging techniques. And so we're really we've gotten really good at that is something that we've practiced a lot. And we show people techniques with pretty amazing leveraging strategies with what that that bill wealth and and it can also bill cash flow. And so you know, the thing is, you know, that's all because that's what's going through their head.

00;20;43;09 - 00;21;01;00

Unknown

Well, I mean, if it is going to teach me how to buy 100,000 or mortgages, I'm going to run out of money. And the answer is, yeah, you likely are, but we've already figured that out, too. You know, I bought 50,000 notes, right? Right. Yes. This what I figured out buying 50,000 owner finance nuts. What have you figured out?

00;21;01;01 - 00;21;07;04

Unknown

Everybody runs out of money. That's a good one.

00;21;07;06 - 00;21;27;02

Unknown

So? So then you help them with that. So then what are the what are the best strategies once you run out of money to not just go give up my future like, I mean, okay, I created cash flow and notes. Now I'm just going to go sell it at a discount. Right. Well, is there another way to do it that you don't get clobbered?

00;21;27;04 - 00;21;54;20

Unknown

And the answer is there are some of those techniques. And the reason I bought 50,000 notes is I became really good at helping real estate investors with those type things. Right. That's why I created an environment where people would come back to us over and over because we became good at financial modeling, showing them how to go, not how to go recapitalize their portfolio without getting clobbered.

00;21;54;22 - 00;22;17;19

Unknown

Okay, now of that, because you've thought of all the different things are going to run into. And here here's how you combat this, or here's the workaround, or here's the next step, you know, to get to where you want to be. That's why someone like, if you're listening to someone like Eddie, someone he need to fall because he's not only teaching this, but he's got the experience of 50,000 notes teaching for, you know, several decades here.

00;22;17;19 - 00;22;34;11

Unknown

It's like that's where the real education comes in from someone who's been in the trenches who is actually doing this, and you still do this. This isn't like you've stopped doing this, and now you just teach it full time. You're still buying notes and you're still out there in the game yourself. Correct. We have a very active note buying business.

00;22;34;11 - 00;22;53;23

Unknown

If you're creating notes, then we would love to connect with you and see if we can work with you and buy your notes. So, our goal is to buy, you know, 750 to 1000 notes, you know, this year. And. Yeah, you know, so we're we're very active in the business. We're not, what do they call me?

00;22;53;23 - 00;23;13;13

Unknown

A Duru. A dancer versus a guru, right? Yeah. You're right. You're doing the thing, not just teaching the thing. So now I love that. That's really good. So then talk about the master class. How could someone get signed up if they want to at least learn and understand if they're a burnt out landlord, how do they how do they get in there so they can understand what the next steps are.

00;23;13;16 - 00;23;42;24

Unknown

So yeah, we I want to give them I'm going to give him a special lane to go down, so that your, your audience can, can just, join the master class with this. I'm going to give it to to them. Oh, wow. Note school.com/profit first. Right. Yep. So that's that's the uniqueness. And it's going to take you to a landing page and you're going to register and for that and it's about two hours.

00;23;42;27 - 00;24;17;10

Unknown

And I teach it along with the guy that runs by marketing who you know very well. Max. Yep. And he is a very inquisitive soul. And he has really, really helped us develop training that answers the pain that our customers feel. Yeah, he has a real heart for that really good guy. And, so it's fun teaching it with him because yes, I'm a note gone or whatever and stuff, but he knows like he has a real connection with the emotional side, like how they're feeling.

00;24;17;15 - 00;24;43;22

Unknown

Yeah. Like, you know, like and there's some spooky stuff out there, man. Yeah. We're kind of in the spooky time. Yeah, 100%. And, so I think it's really good. It's about two hours. It's, it is like really informative masterclass. Like, it's, it's it's very packed for two hours, like, I'm not sure we could literally pack much more into it, but.

00;24;43;25 - 00;25;07;22

Unknown

Yeah. And so there they learn the foundation of notes, the front lawn, you know, how to get into this. And next step from there we show them examples of different things. We show them the financial modeling and notes. Yeah, we apply it to, you know, you know, different areas in the business. And then we really talk about, you know, because what we want to do help somebody figure out is, are notes a fit for you?

00;25;07;24 - 00;25;26;04

Unknown

Yeah. Right. And if they're not a fit for you, it's not good for us to go try to train you into doing something that that's not that's not suitable for you. Right. And then but we talk about if it is a good fit for you, like how would you do it and would you give up all your real estate investing this, which is no right?

00;25;26;04 - 00;25;47;04

Unknown

Or do you not want to do real estate investing? Do you do you not want to grind as much? You want a more passive thing like so. It lets us kind of catch different people in different life situations. You know, it's not just one door to go through, so to speak. Right? Yeah. Well that's really good. Now is node school.com/profit.

00;25;47;04 - 00;26;02;22

Unknown

First that are you. If you want to go there you can get into that masterclass and see what it's all about. See if it's for you. Especially if you're a burned out landlord that resonates with you. Go there and at least see what, see if he can help you, get you to that next level and become a note investor.

00;26;02;29 - 00;26;32;22

Unknown

And learning about that from the master himself and Max. I highly recommend Max to. I know Max very well personally. He's a good human being, just like you said. So highly endorse both those guys teaching you about that. Now, Eddie has a last question. What's just best advice that you give a real estate investor, someone listening to this that you'd want to get out there in this, you know, this time, David, if I when I answer this, I did not know you were going to ask me this question.

00;26;32;24 - 00;26;55;00

Unknown

When I answer this, I answer this every time I'm ask. And that has nothing to do with the guy that's a fractional CFO. Like nothing. The biggest, the biggest stress to my business and the biggest loss to my business has been poor accounting.

00;26;55;02 - 00;27;19;15

Unknown

And I am a gigantic fan, as you well know, of what you do today, because I now feel like I'm squared away with my numbers and I, I would I think most real estate investors start out not squared away and nope, guys included. And then all of a sudden we get a bunch of accounting stuff. It messes us up and we can finally dig our way through it.

00;27;19;17 - 00;27;39;20

Unknown

But man, get your accounting straight. There's nothing more important than that as you start making money. Well, there we go. That was I definitely endorse that message. So that was good stuff. Get your numbers in order. You don't know your business if you don't know your numbers. So I really like that. It's good stuff. Andy, that's been awesome.

00;27;39;20 - 00;27;58;14

Unknown

Thank you for sharing your wisdom. And if you're listening to this number one go to note school.com/profit first to see if go to notes. Go like go and learn from the master and then see if that's right for you. I think for a lot of you, if you're in this turbulent time, it is right for you. We're in the note period, you know, not the rental period.

00;27;58;14 - 00;28;21;22

Unknown

So I really like that. Number two, if you're just if you resonate with what Eddie just said about what the heck are my numbers doing, I have no idea what's going on on my finances, the accounting. That's all messed up. We can help you with that. It's simple. Cfo.com. We'd love to help you get all that squared away and have you just going out there and buying the deals and buying the notes, and we'd love to make sure that you're actually making money on the back end and then keeping it as well too.

00;28;21;25 - 00;28;39;14

Unknown

Eddie, thank you again for sharing your wisdom, your knowledge, and for coming on and being a great guest. Great to see you. This episode of the Profit First for RBI podcast is over, but there are plenty more where that came from. Are you ready to learn how David and his team can help implement the profit first system in your business?

00;28;39;16 - 00;29;00;04

Unknown

Schedule a discovery call at simple cfo.com right now. We'll see you next time on the Profit First for RBI podcast with David Richter.