Eddie Speed Note School

[Brandon Brock]

I attended a 3 day seminar this weekend promoting noteschool. Noteschool is a mentorship and training program for notes performing and non performing. It seems very expensive starting at 16k depending on the level your at. I understand the value in education and mentorship but this is allot of money and I am wanting to start investing in notes. Has anyone heard anything good or bad about eddie speed and note school.

[Bill Gulley]

Originally posted by @Brandon Brock:

Yes Mr. Harmon I think you are making since. I need to get more experience under my belt.

And Brandon, I agree as well.

Most here on BP, believe that buying notes is some other aspect of RE investing, it's not really, I don't even know why it's on a real estate site. RE is related only to the extent that RE is the collateral, note investing is an area of finance.

You don't need an MBA in finance, but you do need to understand the financial arena and mostly it's about laws relating to both finance and real estate.

Doug, sorry I missed mentioning you. I was agreeing about your comment as to having a mentor, then I realized I didn't have a mentor when I started.

Brandon, there were books, I skimmed the "Paper Game" don't recall the author but it was conceptual and a little too fluffy for me, I didn't really start by using anything in that book, if I did, it was by accident. I really didn't start by using any "how to book".

My first was during college, I had already done RE deals, but honestly I didn't have a clue compared to where I am today. I woke up too early, I won't ramble.

It only took one note purchase to see the contracts, representation, warranties, disclaimers, endorsements, settlement, accounting and notices required. While there are some rather light legal and tax aspects, buying or selling a note is not rocket science.

The hard part is selecting the right note and obtaining the right or an acceptable price. That is where RE comes into the picture. You aren't buying the property but you need to value it for collateral purposes as it can become the means by which you get your money back.

You need to know RE valuations as well as the best Realtor you've ever met. Study appraisal techniques and valuation methods.

I like to say you need a crystal ball of sorts, need to look at the history of the note, payments made, see where and why the note was created, understand the borrowers position, look at their ability to pay and find out as much as you can about the borrower, getting in their head so to speak. I do this and I believe it makes a big difference. Much of this is loan underwriting and it can identify a quality note.

Today, you should turn over any note you buy to a mortgage servicer, for about $300 +/- a year you'll avoid tons of regulatory issues, tax filings, notices required and collections with a performing note. Just work the cost into the price aspect. Otherwise, you just doubled your learning curve as loan servicing and portfolio management is another field. Small investors just can't go there today and be compliant or economical so get a servicer.

Funds required: You need your own money or borrow money by using your own assets, you can not borrow or use funds of others, that gets into brokering. You need to know your state laws and brokerage requirements so that you don't get into doing any brokerage activities unless you have the proper license. There is a real risk here as to brokering as you can lose the entire note and be fined, get involved with others using their money and screw up, you can go to jail. There may be a few who may make smart azz comments about this, but they have no clue, this is a very serious side of finance.

You need enough to enforce collections, pay for an attorney to foreclose, fees are often limited by law for a trustee to 10%, so a 60K note could be 6K to the trustee and there are other costs. You may need to safeguard the collateral, make emergency repairs, pay for legal notices and filings. Costs vary state to state. So does the time to secure a property for sale, insurance and taxes will accrue. It's like being a landlord without a tenant. So, you need cash reserves or be able, without any doubt, to acquire funds, in this aspect you can borrow money to carry out a foreclosure as this is not the note purchase side.

So, I can't really say you need XX dollars to buy a note or a portfolio of notes, but besides the note purchase you'll need reserves and the ability to carry out the necessary functions to safeguard your investment. And, while the real risk of getting sued is rather low, especially if you use a servicer, you can be, so consider the ability to finance legal work. Brokers can get insurance but small investors will not be able to obtain the same types of coverage.

Hope that answered Jenkins' question as well. How much? Enough and then the ability to get twice that. If you can get your hand on twice the note purchase price I'd think you'd be fine. As you add more notes, you don't need reserves like that for each note, but that depends too on the type of note, a good performing note won't need the reserves of a NPN requiring modification of foreclosure actions.

Well, that's enough. Brandon, I see you're in OK, I'm in MO, you might connect with me and I'll be happy to assist or answer questions. I'm not a broker now, retired, so this is not a business solicitation. Good luck :)