00;00;00;00 - 00;00;18;29

David Richter

So like, I don't want to own another rental and all the door stackers out there like, this guy, I'm like, no, trust me, dude, I don't want to own another rental. It takes me longer to accumulate rentals and it does notes. Notes are an easier sell to a private lender because they're in a far safer, secure position than they are funding someone's, you know, next rental or house flat.

00;00;19;00 - 00;00;29;25

David Richter

Right? You know, the real estate market crashes and now people are upside down and their flips and upside down, they owe the bank more than they're collecting it. It's just like the market has to crash 3,040% to destroy. People are getting on.

00;00;29;28 - 00;00;51;19

Patrick Franz

If you're a real estate investor who's sick and tired of living, deal the deal, then welcome home. Hear from everyday real estate investors just like you, and discover how they've completely transformed their business by taking a profit first approach. This is the profit first for real podcast. Well, we believe revenue is vanity. Profit is sanity. It's time to start making profit a habit in your business.

00;00;51;21 - 00;00;55;09

Patrick Franz

So here's your host, David Richter.

00;00;55;11 - 00;01;18;03

David Richter

And hey, welcome back to the first ROI podcast. We have Patrick Franz here today. I'm super excited because he is a note investor, but he runs the note investor. I think it's, you know, investor university right. And like the you have a school and you teach people and you're you're out there helping a lot of people that are in the real estate world really opened their mind to this other part of the real estate world.

00;01;18;03 - 00;01;25;14

David Richter

So I'm super excited about this today and learning myself and then being able to dig in and ask questions. So thanks for being on the podcast.

00;01;25;17 - 00;01;54;28

David Richter

Thank you. You know, I know we had you on our mastermind and such to you were able to provide some value to our group. So you're great. And then you said, hey, why don't you come provide some value to my audience? I said, definitely, definitely. And yeah, I mean, the note investor University obviously is pretty self-explanatory. It's a university where you can enroll as a student and learn how to be a professional note investor, but we sort of giggled about it before we started the show, and it's like, well, there's could be a lot of savvy people.

00;01;54;28 - 00;02;20;14

David Richter

And I'm not saying that you're not savvy. There's savvy people out there, even savvy real estate investors out there that still yet today don't even know that you can own someone's mortgage versus, say, owning another rental property. It's just a different a different way to think it's getting in the money business, getting yourself on the banks side of the fence versus the active real estate investor that, we all strive to be.

00;02;20;16 - 00;02;43;04

David Richter

Well, let's just do it. Let's just talk to me like I don't know what you're talking about. So let's go into it. And then how do I buy a no to like, okay, I hear node investing a lot. And obviously from what I just heard from there, it sounds like you're more of a bank and you own that note now, but like, okay, let's just say I'm a fixed and flipper or a landlord and I've dealt with houses the whole time.

00;02;43;06 - 00;02;56;00

David Richter

How do I do? I go about looking for this, you know, a seller, and then I buy it from a seller just like I've been on. I have guy, CRM full of leads or like, what do I do? And or like, who am I looking for?

00;02;56;02 - 00;03;17;27

David Richter

Well, no, it's not real estate. Right. And so it's just like sort of saying, you know, if you were going to buy stocks in the stock market, would you go to your current sources in which you work within your real estate business and you say, no, it's a totally different marketplace. That's yeah, that's the same thing. Mortgage notes, which, folks, is just a promissory note.

00;03;18;00 - 00;03;29;19

David Richter

That's what we mean by note. It's a promissory note. Promissory note is a written IOU. It spells out the terms of how borrowed money is going to be paid back to the lender. That's it's a promise, right?

00;03;29;22 - 00;03;34;27

David Richter

Where would a real estate investor have encountered a note up to this point? Like in the state.

00;03;35;00 - 00;03;54;23

David Richter

Where they pay one, they pay one, right? Like so. Here's the interesting, funny part of it that we like to talk about is that there's usually two forms of cash flow being split off of a rental property, and people don't think of it this way. Right. We're used to being the landlord, right? Landlord, landlord. We collect rent from the from the tenant.

00;03;54;23 - 00;04;16;11

David Richter

We have to deal with the terrible t's that come along with landlords. And so the the toilets and the tenants and the termites and the, you know, the trash outs and all those things that you have to deal with as a landlord. Right. And all the liability that goes along with ownership of that property and so forth. So you're here's a landlord with all that on their plate, and they're collecting rent every month from, from a tenant usually.

00;04;16;13 - 00;04;38;11

David Richter

Most likely, usually because most real estate investors that I know are leveraging into rentals, right. They're not they don't have 487,000 cash to go buy their next rental. They're usually leveraging and getting like a bank loan. Or they have a lender that they owe money to because they borrowed money to buy the rental. Right. And so here comes the piece of cash flow that gets spat off from the, tenant to the landlord.

00;04;38;14 - 00;05;03;26

David Richter

And then immediately the landlord turns right around and then spits out most of that cash flow out to his lender because they collect the mortgage payment on that property. So what I what I mean, to sort of get people's mind open to is who has it better in that scenario right there that I explained the landlord with all the headaches of being a landlord and management management of the property and liability of the property, dealing with the tenants and the trash outs and leaky toilets and the cause of it.

00;05;03;28 - 00;05;19;25

David Richter

And then they're collecting this rent and let's just say the rent payment they're collecting is, you know, $2,000 per month or collection to you. And I place rents out for two grand a month. You always hear that I've written that place out for two grand a month. Well, how much of that does the landlord turn around then and send off to his lender to pay the mortgage payment on that place?

00;05;20;01 - 00;05;46;17

David Richter

Is it 1600? So here he collects 2000 and rent, and he sends 1600 bucks a month off to his lender. And he's trying to make that 400 bucks a month cash flow. And that would be a successful rental property, right? Like, dude, I'm cashflow it, right? I'm cashflow. Well, think about the lender in that situation that did nothing, had no liability or property ownership, didn't have to get a call about a leaky toilet or manage a tenant or any of that.

00;05;46;20 - 00;06;08;09

David Richter

But they just they just collected $1,600 payment, passive cash flow off of that piece of real estate without having to act as a landlord. So being the bank or being the lender versus being the real estate investor obviously has some obvious advantages, especially if you're looking for a passive lifestyle. Yeah, yeah.

00;06;08;12 - 00;06;29;08

David Richter

That makes sense. So then if a okay, let's say they want to jump to that side is that, you know for a rental property you can use leverage. You can use that bank money, you know, to go and buy something that you couldn't be able to afford with 160. Do you have to have a 160 like to go buy that in that scenario, if you're going to go buy that note, like do you have to have the cash?

00;06;29;08 - 00;06;35;05

David Richter

Is it almost like I've got the cash to be able to now be able to buy the notes and become the lender?

00;06;35;07 - 00;06;54;26

David Richter

Yeah, there's some extreme similarities there. It's not obviously an exact parallel, but there's some extreme, some letters. It obviously if a real estate investor has enough of their own cash on hand, they can go out and buy a property, cash and then 100% of that rent is pure cash flow for them, and they don't have to send any of it off to a lender.

00;06;54;26 - 00;07;22;28

David Richter

And hallelujah. Now, most real estate investors don't have enough of their own cash to buy a whole bunch of railroad. So what do they do? They will generally go to a lender of some type. Sometimes it's a hard money lender, sometimes it's a private lender, sometimes it's a bank, sometimes it's a whoever. Right. But they'll go and say, listen, I'm buying these properties up or I'm flipping these houses or whatever your game is, but I need some money to scale my flip business or to scale my portfolio of rentals.

00;07;22;28 - 00;07;50;23

David Richter

I need to start leveraging and borrowing money from other people to do it. So not an exact parallel, but yes, if you have your own cash, can you go out there in the secondary mortgage market, find a note very easily to buy and buy it in cash 100% you can, but recommended is to utilize your skills if you can learn the niche expertise of being a node investor, right, you become pretty valuable to people that have retirement accounts.

00;07;50;23 - 00;08;06;04

David Richter

You become pretty valuable to Dennis. Doctors, lawyers, and people that don't want to be pros in our industry. But like real estate investing, because of the, security and the cash flow that gets paid off of it and that they get it. But they need an expert, right? It's like my dentist is not going to come flip a house with me.

00;08;06;06 - 00;08;26;01

David Richter

He's good at fixing my teeth and I go to him for that. But sometimes he might invest money with me in a house flip let's say. Right. Okay. Well just think about it. A mortgage note is more secure than a house flip. It's more stable because it's a contractual rate of return. The fluctuation of the real estate market prices or stock market prices don't matter.

00;08;26;01 - 00;08;47;07

David Richter

And it does spin off the passive monthly cash flow by way of mortgage payment. Every month. So it's like if I'm going to be a pro in this business, and my plan is to scale my portfolio and acquire more and more and more notes, right? I obviously can do the same thing. I would do in my real estate business, which is go out to private lenders, get them to loan me the money at a certain promised rate of return for them.

00;08;47;09 - 00;09;13;15

David Richter

Right. Then I can go out and with my expertise, buy mortgage notes that are double digit yields. You know, our notes are providing 12, 13, 14, 15% annualized returns on the money. Of course, somebody with an IRA that's making 3.5% right now annually, and it's subject to the ups and downs of the stock market managed by somebody else, of course, to provide that person a wonderful opportunity, like Zig Ziglar says, to help many people get what they want, you'll get what you want.

00;09;13;20 - 00;09;35;15

David Richter

So it's like, how can I help somebody else put their retirement on steroids? Using my expertise in the node investing industry and also me benefit as well, so that it can be a win win situation. Well, can you imagine my financial friend loaning me some money out of his self-directed IRA? That money was only earning 3% returns. Now he's earning, say, 8% returns.

00;09;35;18 - 00;10;06;21

David Richter

And it's not fluctuating and it's not subject to losing half of his value in there in the stock market crashes or any of that. It's a contractual rate of return with monthly cash flow that goes back into his IRA, steadily growing his IRA at 8% per year without much worry, with double collateral and very passive, you see. Whereas then if I pay the investor partner 8% and I have a note that I bought that's yielding, say 13%, there's a spread there that becomes mine.

00;10;06;21 - 00;10;34;28

David Richter

Right. And all the real estate investors are going out. Yeah I get that. Yeah. Right. There's an arbitrage. There's a spread there. And so if a mortgage is spinning off $1,000 a month mortgage payment, and I need to pay my lender $700 of that every month, that means I get $300 a month. Now, I just want you guys to see that, you know, now with skills and expertise and being in the notes space, to be on the bank side of the game and utilizing OPM, you're creating passive cash flow out of thin air.

00;10;35;01 - 00;10;54;29

David Richter

And when I say passive cash flow, I mean because owning someone's mortgage as the first lean lender creates a far more passive monthly cash flow situation than even being a landlord. Right. Because can we can we agree people tend to pay their mortgages? Yes. There you have it, there you have it. And people may say, well, yeah, but you know, how are you doing?

00;10;54;29 - 00;11;19;13

David Richter

Those people's interest rates are 6%, 7%, 8% on their mortgage rates. What are you saying? You're getting all these great returns and stuff? Well, this is another cool thing. How do we compare this a little bit to real estate and try to do some comparisons? Right. In real estate, generally when you buy a piece of real estate, you have to kind of wait and hope while you're waiting that it's in an up an upside market where the real estate is becoming more and more valuable, and you wait and then you have what we call equity, right?

00;11;19;15 - 00;11;36;20

David Richter

You wait in real estate, and if the price of the real estate goes up versus what you owe on it, you now have this equity, right? Yeah. Well, the coolest thing in note investing is when we buy promissory notes, when we invest in the underlying debt collateralized by that real estate, the debt is sold at a discount.

00;11;36;22 - 00;11;54;18

David Richter

And so this is the way we're getting these yields in. So let's say there's a balance. And just for easy numbers let's say somebody owes $100,000 to the bank. They owe 100 grand. And there's 20 years left until it's paid off. So that's the note right. They owe 100 grand. There's 20 years left and then it's paid off.

00;11;54;21 - 00;12;16;05

David Richter

And if that's the case, I would probably pay 85,000 for that note cash. So it's what's cool if people understand what I'm saying is that there's instant equity and note investing. So the day I enter into the deal, I'm in for $85,000 as an investor, and now I'm owed a $100,000. On paper, the balance that's owed by the borrower in that house doesn't change.

00;12;16;05 - 00;12;31;06

David Richter

They just get a transfer letter. And so people may have an moment here that have been maybe this is blowing their mind a little bit. But if anybody's had a mortgage before and you've been on the borrower side of things, paying a mortgage payment, right. More than likely at least once. And I had talked to a lady that day.

00;12;31;06 - 00;12;45;14

David Richter

She said, that's happened to me like 4 or 5 times since she's on there now. But people are people. You get what's called a transfer letter, right? It's like, it's like maybe you had your your mortgage with Wells Fargo and all of a sudden you get a letter from Wells Fargo in the mail that says, hey, Wells Fargo no longer has your mortgage.

00;12;45;19 - 00;13;04;05

David Richter

We've transferred that over to Bank of America, so don't pay us anymore. And then you'll get a letter from Bank of America that says, hey, your mortgage was transferred from Wells Fargo over to us, and so don't pay your mortgage payment to them anymore. Now, you got to pay it to us every month. Yeah, that was called the transfer of a mortgage.

00;13;04;05 - 00;13;24;10

David Richter

Right. Really. Then what it means of course, is that one bank sold your mortgage to another bank. Okay, okay. Nothing changed for you as a lender. Like how much you owe your term your interest rate. Nothing changes for you. It's just that your debt traded. Hands didn't hit who you owe your mortgage debt to. Traded hands. It was went from bank to bank.

00;13;24;12 - 00;13;51;21

David Richter

It's a transfer to a homeowner's perception because you get a letter of transfer, your debts been transferred, transferred hands and it's true, but it just means that someone sold your mortgage to somebody else. Yeah, a new person has it now. Okay. So imagine then you you and people don't even know that this is possible. A lot of folks in your audience, maybe, but you can step into the bank shoes on the secondary mortgage market where mortgages are sold just like stocks are sold on the stock market.

00;13;51;24 - 00;14;10;16

David Richter

You wouldn't go to your real estate hookups and say, hey, where can you find me? Notes. It's not the same game. It's the banker's game. But notes are sold on the secondary market. Just like stocks are sold on the stock market. You can buy notes up okay. That's amazing. So if you buy these notes, you get the passive cash flow, the security of collateral, and you get all of that with a good yield.

00;14;10;16 - 00;14;29;05

David Richter

I'm talking a double digit yields here. And guess what? Real estate investors sometimes people don't pay their mortgages. Isn't that right? Yes. And David, let me ask you a question. What happens to your house if you don't pay your mortgage foreclosure? And then who gets the house then?

00;14;29;08 - 00;14;30;07

David Richter

You. The bank.

00;14;30;09 - 00;14;51;07

David Richter

The bank. Right. Yeah. Who would be. Who would be me? If I'm the nobody. Yeah. The shoes are the bank. They owe me the first. The first mortgage debt. They owe me the mortgage amount. And so do people. Default? Yes. Well, it's not even that common. Actually. Most people pay their mortgages these days, even through Covid. I was surprised, but, in default I can do loan modifications.

00;14;51;07 - 00;15;05;09

David Richter

Deed in lieu of foreclosures, cash for keys. Now I'm speaking real estate investor language to people. I can do all these things to try to be ethical and keep somebody in their home. Because love note investing is about passive monthly cash flow. I want them living. They're paying the mortgage payment on time every month. It makes my life real easy.

00;15;05;11 - 00;15;29;05

David Richter

Okay, I can go play golf. Okay. But we have sometimes the ability, of course, to do a judicial foreclosure. That's what a bank can do. And whether it's cash for keys, deed in lieu, or judicial foreclosure, we oftentimes end up with owning real estate. Once you own that real estate, there's of course no debt because you are the lender.

00;15;29;07 - 00;15;48;00

David Richter

Right? Okay. So now you've taken back the collateral. Now for your note investment amount, which was far less than the retail value of the property. That's acting as collateral from your note investment amount. Like let's say with the idea of that, I was telling you earlier where the debt was worth 100 grand, I was able to buy that note for 85,000.

00;15;48;03 - 00;16;10;27

David Richter

But in that scenario, the underlying real estate acting as collateral maybe worth like 200,000. So I'm in for 85 grand, and if I get Ahold of the real estate, even through a judicial foreclosure at last resort, I now own a $200,000 piece of real estate that I backed into for 85,000. Now, can I, can I then if I want to turn that into a rental property, if I like having rentals in my portfolio?

00;16;11;00 - 00;16;33;18

David Richter

Yeah, yeah, I can also sell it via seller financing and be in the bank's mindset so I can sell that property to somebody else for 200 grand, take a nice 20% cash deposit, and then carry back the note again and be in the banker's position without the liability of a landlord. But I can still turn that into a cash flowing asset for myself.

00;16;33;20 - 00;16;50;01

David Richter

Just so you said, you find these on the secondary market and this is in the banker space. So like if someone was going to look for these, would they hit up their banker or like what what are the the different avenues? And if that's the secret sauce, you don't have to get the secret sauce. But like where's the where do they go for this?

00;16;50;01 - 00;17;08;20

David Richter

I tell you like it's I hate to blow people's minds, but it's not as difficult as that. Even, you know, there's paper stacked.com, and I'll give my boys Brett Berkey, and Rick shout out right. They run paper stacks spelled with a C at the end. Right. You can go to paper stack.com. There's notes for sale. So it's not like it's hard to find the notes.

00;17;08;23 - 00;17;24;22

David Richter

You're not going to have to cold call banks and credit unions. Go ahead. You got any notes available. That's not the hard. But the hard part usually is. Once somebody has the expertise in place and the confidence to to start being a note investor and go at it, of course people run out of their own liquidity very quickly.

00;17;24;22 - 00;17;56;07

David Richter

David. That's. Yeah. And so, so learning the expertise like we teach at Node Investor University where you're learning where to source these notes, how to, you know, do the due diligence, acquire asset management, all that stuff. And you get that education in confidence. But then you're going to go out and start buying notes. And even if you have $200,000 in your account right now and you're saying I'm going to get into notes, well, look, man, I could get I could help you buy four notes at 50,000 bucks apiece, or two notes at 100 K apiece, or one note at 200 K, and either way, even four notes, two notes, one.

00;17;56;07 - 00;18;25;12

David Richter

Either way, that can happen very quickly. Your money is now deployed. So, you know, you have these great notes in your portfolio spitting off a lot of cash flow, but you don't have any more money. So how are you going to buy your fifth note? Right. Because you're in the game. Right. And so the biggest thing we teach at the, at the university is not only to learn how to be a pro, an expert at this and get yourself in the game, but also how to learn how to raise private capital to continue to grow your real estate portfolio, and how to put raising private capital on automation with real systems of which, yeah, so

00;18;25;13 - 00;18;26;29

David Richter

that's one of the big things we hired by.

00;18;27;01 - 00;18;46;10

David Richter

So you help that. Okay. What if you're speaking to a real estate investor who is savvy at already getting the private lenders in the door? So they've figured out the hard part? Are you just teaching them then of like, how do I actually analyze this note? Or like, how do I know if it's good or not? And what's performing versus non-performing, you know, and like these types of things.

00;18;46;16 - 00;19;03;13

David Richter

Is that what you're teaching someone? Because I like what you just said there. I feel like that's like if someone comes off the street and they don't have real estate experience or maybe just very little real estate experience, but someone who is in the trenches and has the private lenders, it's almost like, how do I talk to the private lenders now about owning this?

00;19;03;13 - 00;19;08;18

David Richter

No, because I want to go into notes versus owning the property that right.

00;19;08;18 - 00;19;27;14

David Richter

It's 100%. I mean, it's very spot on. Right. And guys, I'm saying notes the paper side, the financing side, the debt side of real estate. Yeah. This is something that I decided to transition to fully. So like I don't want to own another rental and all the door stackers out there like, oh, this guy, I'm like, no, trust me, dude, I don't want to own another rental.

00;19;27;17 - 00;19;45;19

David Richter

It takes me longer to accumulate rentals. And it does. Notes. Notes are an easier sell to a private lender because they're in a far safer, secure position than they are funding someone's, you know, next rental or house flip, right? You know, the real estate market crashes and now people are upside down and their flips and upside down, they owe the bank more than they're collecting it.

00;19;45;22 - 00;20;03;26

David Richter

It's just like the market has to crash 3,040% to destroy people again in the game. Yeah. So I understand by my investment to value ratio, if I bought a note for 85 K and a house that's acting as my collaterals were 200 K in today's market, that real estate market could crash 50%. And the house that's my underlying collateral would be with 100 grand.

00;20;03;26 - 00;20;22;18

David Richter

And I'm still only in it for 85. So when you're looking at this, it's also easier to show the quick and easy numbers which the calculator numbers don't lie, the reality don't lie. The the security of this investment don't lie. The the, you know, reliability of the monthly cash flow don't lie and, you know, and all that stuff.

00;20;22;18 - 00;20;41;14

David Richter

And then the three possible outcomes is they either pay you as agreed, they pay you off early or they don't pay you. And when we are in note investor, if you learn the things we teach at the university about the due diligence process and how to price and those and what to look for and all that good stuff is that you're you're obviously able to back into these investments.

00;20;41;14 - 00;21;02;18

David Richter

You're not only at a discount, you can use the other people's money because it's much easier to show a clear path to the private lender. Yeah, they have much better collateral. It's more secure. It's not subject to the ups and downs of the markets. It's like, so when you start to list all this stuff and you're like, okay, dude, what's the what's the too good to be true part of it, right?

00;21;02;21 - 00;21;20;20

David Richter

And then I say, I thought the same thing with title and I'm like, I thought the same thing. Wait a minute, this has to be too good to be true. But listen, banks aren't stupid. Banks are pretty good at making money, right? When banks created 30 year amortized mortgage lending, it was to create the American dream. Or sold to us for that, right?

00;21;20;20 - 00;21;45;17

David Richter

Because now middle class people can afford homeownership and all this stuff. But banks, if they're going to start lending money out in that manner and be paid their loan back over 30 years time. Okay. Number one, the bank said, well, we're going to how do we make this a win win situation? And they created amortization. Okay. Have you ever been paying your mortgage payment on time every month for three, 4 or 5 years to the bank, and you look at your mortgage statement and you're like, dude, I've paid $70,000 of mortgage payments.

00;21;45;17 - 00;22;03;21

David Richter

My balance went down nine grand, right? Yeah. So think of all the mortgage payments in the beginning of a mortgage loan. Or the mortgage payments are mostly all profit for the bank. Yep. So think of this. The bank creates something where they start collecting monthly cash flow, which is all profit. They have your home as collateral the entire time.

00;22;03;21 - 00;22;21;26

David Richter

So if you want to mess around and not pay them okay, you see how the bank, the bank is sitting in a very powerful position and the bank is very passive and they don't have to worry about the landlord stuff. So it's like, oh, I love spreading this message to people is because you can go crazy and get into it like full time, like me, because notes is awesome and you can really build financial freedom very quickly.

00;22;21;28 - 00;22;39;22

David Richter

Really. Honestly, if you need 5 or 6 grand a month coming in to quit your 9 to 5 or whatever, you can do that within 36 months time in this game. Okay, so so financial freedom you can reach quickly in this game, which I like. It's really cool. But think of all the other people you can help that really are looking for a good place to deploy money.

00;22;39;25 - 00;22;54;25

David Richter

I just talked to a lady there today. I talked to her on the phone. She goes, do you think I should pull, my money out of the stock market? And then maybe do another deal with you? She's invested into our, fund. We run a hedge fund. She's a fund investor, but she likes the theory of rhino lending and lending.

00;22;54;25 - 00;23;06;03

David Richter

On a note, she likes it. You think I just put my money on the stock market? I go, I don't know, maybe. What's going on? She goes, well, there was 108 grand in there, and now there's 94 grand in there, and it seems like it's going down. And I just don't want to lose any more of my money.

00;23;07;03 - 00;23;29;15

David Richter

I mean, people are feeling this, right? And even if you say, well, let's just tell her not to sell, tell her to hold on, it'll always go back up. Right. But understand that there's ladies that are nearing the retirement age that she's stressed out. Right? The only reason she called me, she's feeling stress and anxiety about her financial future and retirement, because the ups and downs in the volatility of some of these investments is just enough to make people sweat or not sleep at night.

00;23;29;18 - 00;23;55;00

David Richter

Right? And so it's like for her, maybe it's smarter for her at her age to put her money in something that's very secure, with collateral that has a contractual rate of return with reliable monthly cash flow, you know, that kind of thing where she can sleep at night. So it's cool that you can provide that opportunity to people while you also are able to grow your net worth, stack your portfolio of notes, and live a super duper passive cash flow lifestyle, right?

00;23;55;00 - 00;24;00;18

David Richter

I can go on a fishing vacation for three weeks. When I come back, people still made their mortgage payments, so there's money in my account.

00;24;00;20 - 00;24;14;04

David Richter

Yeah. And none, none of those people making the mortgage payments are really calling you, you know, are like the tenants, the toilets, all that stuff. You know, that's the the beautiful thing. You don't also have a voice mail full of of crappy messages.

00;24;14;07 - 00;24;28;04

David Richter

Yeah. If your toilet leaks at your place, you definitely don't call Wells Fargo and say, hey. Okay, so I'm just saying, guys, I know, I know, it's funny too. And let me just clarify one thing so I know we're getting the time, but let me clarify one thing. Most people think this is odd and most people haven't heard of it.

00;24;28;04 - 00;24;48;19

David Richter

And it doesn't seem mainstream, of course, because in the business, no, people rarely. And I want to say never. But it's almost never. But it's rarely, I say never, is that people send their mortgage payment to another individual. So let me just clarify something, right. You say I'm a mortgage note investor. Sounds odd. Sounds cool. Too good to be true.

00;24;48;20 - 00;25;04;24

David Richter

How come if it's so good, I don't know about it? Okay, well, now we talked about the transfer letter earlier. Yeah, okay. When your mortgage is transferred from one lender to a next. And I use the scenario of like Wells Fargo bank transfer for Bank of America. Well, people would be familiar with that and totally get it right away.

00;25;04;26 - 00;25;22;12

David Richter

Just a normal homeowner would go, oh, Wells Fargo Bank transferred my mortgage over to Bank of America. Now I got to pay Bank of America. It all makes sense. It wouldn't be sketchy. Now, guys, I know that it would be really weird, and it would seem sketchy if a homeowner got a letter and it said, hey, Wells Fargo is no longer your mortgage, or now it's Patrick friend's home, right?

00;25;22;14 - 00;25;40;02

David Richter

So you got to send your mortgage to Patrick every month. Yeah, that's sketch right? It's so weird. And so that's not how it goes down. Just to clarify that you guys. So I use a company and I'll give them a shout out to because they're great. I use a company called Madison Management. Madison Management is a third party licensed mortgage loan servicer.

00;25;40;04 - 00;25;58;03

David Richter

They service the loan. Yeah. And they're very inexpensive and they're very good at what they do and what I do is when I buy one of these mortgage loans, I immediately onboard it with Madison management. So when the homeowner gets that transfer letter, even though I'm the person that the mortgage transferred to the ownership of it, right? Yeah.

00;25;58;06 - 00;26;08;16

David Richter

They get a letter from my third party servicing company that says your mortgage has gone from Bank A to. It's been transferred to Madison Management loan servicing.

00;26;08;23 - 00;26;10;27

David Richter

Yes. Which sounds better than Patrick Franz.

00;26;11;00 - 00;26;34;09

David Richter

So now pay your payment every month. So Madison management loan servicing not bank pay. Do you understand what I'm saying? Yeah. And then and then my third party loan servicing company. And you real estate investors are familiar with the property manager. I'm just making the third party in between correlation. But that servicing company only sends out the monthly statements, keeps track of the UPB, the late fees, all that stuff that we don't want to do sends out the year end statement and all that stuff to pay off balances.

00;26;34;09 - 00;26;45;28

David Richter

They take care of the servicing, the loan, and then when the person makes the mortgage payment to them every month, they gladly turn around and deposit that mortgage payment into my account. Awesome.

00;26;46;01 - 00;27;03;01

David Richter

Now, the million dollar question how do we work with you? How do I sign up? Right now I work for an for the Node Investor university. So how do I because honestly this was really good. This is I've heard notes explained before, but this was probably the probably the simplest and especially from the real estate investor point of view.

00;27;03;01 - 00;27;12;24

David Richter

So I this is really good stuff. So how do people get Ahold of you reach out if they want to go down this path. Because I this is this is really good.

00;27;12;27 - 00;27;31;11

David Richter

Yeah. And I know, I know, I don't know how you post this out there. You're welcome to use this and put it out there for people. But get on my calendar. You know, if I have availability on my calendar, it's because I'm not involved in another meeting or transaction. So I'm there to talk to people. And obviously I love helping people learn this because, look, there was 20 years of my life where I was an entrepreneur.

00;27;31;13 - 00;27;56;27

David Richter

No lack of hustle, always trying, trying, trying, trying a couple dead ends, couple tough, tough breaks with economies happening and so forth. But it was like, dude, I never got financial freedom even though I was trying anybody relate. And so I started doing this in 2019. And guys 5 or 6 years later, certainly financially free, with all sorts of big opportunities that have opened up for me as I've grown in the industry, being in the B on the bank side of the fence is a pretty nice side of the fence.

00;27;56;28 - 00;28;25;01

David Richter

Let me tell you though, it's called getting yourself away from just being in real estate. But you can also be in the money business too. And the money business is where the money's at, right? That's what we teach you at Node Investor University. And you can get me on my calendar link. It's calendly can dl y k l e n doi calendly.com/the note mentor okay so calendly.com/denote mentor.

00;28;25;04 - 00;28;43;29

David Richter

And yeah. Get on my calendar. Let's chat in the node investor university. We do this and I'll end with this. Of course we educate you. I think we have one of the top education systems when it comes to node investing expertise. That's out in the marketplace right now. It's very well done. Easy to follow. But the deliverables of the education is one thing.

00;28;43;29 - 00;29;04;23

David Richter

We really want people to start to change their lives and become financially free quickly. That's the point. And people don't want to become financially free quickly. Change gears, change their lives real quickly within 36 to 48 months. Don't come seek my help because that's all I want to help people do. Okay, You get on my calendar and let's chat, see if one of our programs is right for you.

00;29;04;23 - 00;29;35;24

David Richter

But I'll tell you this. I have a program that within the first 12 months, we, ensure and guide and help you to raise a minimum of $150,000 of private capital nets. Okay, minimum of that. We also help you by a minimum of three mortgage notes, okay. And we also ensure that you will get to a point where you're earning a minimum of $500 a month of passive cash flow, and I'm talking passive cash flow that could come in for the next 20, 25 years.

00;29;35;27 - 00;29;52;27

David Richter

But we'll get you to that point minimum. Okay. One of my students, Carlo, came in the game, and in the first 12 months he bought like 16 notes, made 56 grand up front in acquisition fees. And then is, I think, a little about five grand a month passive already now. So it's so possible. That depends on who you are.

00;29;52;27 - 00;30;15;17

David Richter

Your drive of course, your experience you have coming in. But yes, our program can do what it, what it preaches to do what it promises to do. And that is to show you a game that is definitely real estate related. So if you have real estate knowledge, even plus for you, but a game in which, is on the banker side of the fence, not the active real estate investor side of the fence.

00;30;15;20 - 00;30;29;23

David Richter

Okay. And if I started going down to it and I know we don't have enough time, but dude, we can flip notes. Okay, house flippers, we can flip notes. Okay. Hey, landlords, we can hold on to notes for cash flow. Hey, hey, hey, hey, gamblers, we can buy nonperforming vacant house notes, and we can try to go in there.

00;30;29;23 - 00;30;51;03

David Richter

And, you know, you can turn notes, you know, non-performing notes into house flips. You can turn non-performing notes and acquisitions of real estate at cheaper prices into rental properties. So it all goes together, guys. And what I teach is the money side of it, buying discounted notes that are already originated and creative financing for your real estate portfolio so that we've got to offer.

00;30;51;05 - 00;30;56;19

David Richter

Reach out to me, get on my calendar calendly.com/the note mentor I'd love to talk to you.

00;30;56;22 - 00;31;14;00

David Richter

Awesome. Well this is great stuff. Thank you so much, Patrick. And if you're listening to this like go go check the hell if this is something if you're a real estate investor, you could get into the money selling, which is what we talk about on this podcast all the time. And if you're also out there thinking like, what the heck, I have no idea where my money's going.

00;31;14;06 - 00;31;27;09

David Richter

I have no idea what's going on here. That's where you can reach out to us at Simple cfo.com and make sure you know where your money's going. And then you can start the note, invest it so you're not just like, what the heck, what am I doing? So that's where we want to help you. If you know how to make it, we help you keep it.

00;31;27;12 - 00;31;33;24

David Richter

And just remember to make profit a habit in your business. Patrick, thanks again for being on the podcast today.

00;31;33;27 - 00;31;36;14

David Richter

Awesome man. Thank you so much.

00;31;36;17 - 00;32;07;06

Patrick Franz

This episode of the Profit First for ROI 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? Schedule a discovery call at simplecfo.com right now. We'll see you next time on the Profit First for ROI podcast with David Richter.