Eddie Speed Note School
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.
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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 :)
Thanks Jackie for sharing PaperSourceOnline site. I've just attended Eddie Speed's one-day intro workshop sponsored by REAPS in Bellevue, WA. He seems pretty legit and honest, but I did not sign up for his two 3-day workshops event. I believe I could get information from other sources or network with local note investors in my area.
I got a like for my earlier post on this and thought it was worth updating my status. We started about three years ago with non performing notes. Some worked out and some didn't be a friend and I invested about 100k toal in equity and 60k in debt (mostly to fund rehabs) The rehabs were more expensive then we expected but that was mostly driven by a few vacant properties we bought. We no longer buy two bedrooms or vacant properties without a solid rehab estimate. While we still have some debt the portfolio is worth @ 330k, net of debt @260k. Starting with 100k two years ago I would say I am happy with the results. Our gross cashflow is going to be around 4k a month after we sell our current flip and reinvest the proceeds (under contract for the sale with a purchase already identified).
We never would have gotten started without Eddie Speed and his education and it has created an amazing business for us. A lot of it is basic stuff but we knew nothing about notes. It was all new and we avoided the worst mistakes and were able to minimize the rest.
During the second year we saw pricing go up and supply go down on the non performing notes so, as our loans resolved we hung onto the property for most of the second year as cash-flowing rentals. We used the rental cashflow to pay for some of the rehabs, taxes insurance and debt pay down.
As year three started we completed the long foreclosures and rehabs (yes some foreclosures took close to two years) and started selling with owner financing. So far we have found good borrowers who have paid and we have started selling the notes to other investors to free up cash. Our current model is Buy, Rehab, Sell with financing, and Sell the note, BUY AGAIN. So far this is working very well.
About Eddies program- I still listen to calls or submit a question for a call when I have something come up (like when one of my land contracts had an offer for the mineral rights). We never would have gotten started or built this business without his help and guidance and we still use tools and techniques we learned in our early training.
Was it worth 25k? For us it was, we had enough money that we were able to both buy an education and build a portfolio. We had enough kahunas to spend it. We had enough reserves to weather some rehabs that were much more then expected.
Folks 3 years ago on this thread were saying they were paying $16k for Eddie's program, Bob at LDFundingLLC.com 2 months ago is speaking of 25k that he paid some years back. I get there were different levels, perhaps still are, one person mentioned a Titanium level 3 years ago.
Anyone know where the price stands today for their workshop?
I'm curious from those who have been in the note business for years, how the supply/demand and pricing is now vs some years ago as probably a great deal more people have become buyers of notes than were involved some years back. Still really good high profit margin deals available?
I ask because you all know the margins on properties to rehab has tightened significantly to around 73% where I am, from 50% purchase to ARV some years back unless one can get directly to the distressed properties, but everyone and their mother is today into the wholesale business, making it more difficult for the rehabber to get those same properties. Thanks.
@Marc Mitchell Most of what I am seeing on the NPN side is overpriced. NPNs that would have been 10-15k 3 years ago are now 45k and the sellers are stuck on their pricing.
@Marc Mitchell What I'm seeing on the NPN side has increased some but there are good deals to be had as there is still plenty of NPN's out there. You just have to develop new sources. We've been buying CFD's along with reaching out to more banks for direct deals. Most of the "traditional sources" have been flooded with buyers who are overpaying for assets.
I found this thread very helpful when I was trying to decide whether to attend the 3-day note school, figured I'd give back and provide some comments. I decided to go to the 3-day course for $1000, brought my wife because you can bring a guest for free, and we enjoyed the weekend away from kids. :)
First, the positives. I'm a newbie to notes, and got tons of great info in the 3-day course. To me, it was totally worth the $1k. I feel I now know enough about the business to decide which investment option I want to choose. If I quit my day job tomorrow, I'd seriously consider getting into this and paying for membership. Given that I'm looking for a less time-intensive investment option for now and we are accredited investors, the Colonial note fund they offer is a better option for us.
Now, the negatives. First, the adviser assigned to us, Ben, was a real prick. Unlike the friendly instructors, he had a real attitude problem towards my wife and I. Not a good way to win over customers. Second, the notes are tied to properties from all over the U.S., and I question the service level I'd get from the local service provider partners working on cheap houses that need a lot of work for little commission.Third, the membership tiers are now $20k (2yrs, either performing or non-performing, pick one), $30k (3yrs, both performing and non-performing), and $40k (4yrs Titanium, extra access to the team). You'd need to be fully dedicated to this effort in order to justify this price tag. Between my day job and all our rental properties, I don't have enough time to dedicate 10+ hours/wk on this, so it's not worth it for me. The note fund they offer, on the other hand, seems quite good. We are accredited investors, and the note fund they offer is quite passive and has good returns, so we might invest in that one. We already invested in one note fund from another company and are evaluating several other ones for our next note fund investment.
This is not to say that the membership isn't worth it for everyone. If I quite my job today, I'd be interested in spending time on notes and paying for the membership. Sure, there are lots of info available online, but there's no substitute for on-demand mentoring from experts. If there was, the Stanford and Harvard students would all start dropping out because everything they learn in school is already available online. Good luck to those who jumped in, hope you make a fortune!
I am curious what made that adviser, Ben - a prick.
I am also curious if you let him know what a prick he was being.
I attended his conference before. I also met him personally at another event.
On the positive, he's knowledgeable and you can get a few things out of this.
On the negative, you'll hear some information that is simply not true. Distressed notes have been on the decline for a few years, as we have dug ourselves out of the real estate crash. I think the opportunities have dried up. There were a few groups around that conference that were selling notes in my region. They were of the lowest quality.
Next, I thought 75% of the attendees were complete R.E. investment amateurs.
The materials they teach are certainly biased, as expected. They're selling the membership, of course they will present materials in a way that justifies the membership and the investment opportunities. You just have to apply your own filters. For example, in the math they show on returns of each deal, they often don't include legal consultation fee, agent fees, and a bunch of service fees. They also don't account for sweat equity and time value of money when money is tied up. This is to be expected, they specialize in the low price-range properties because these are the ones the hedge funds deem as not worth their time. The note school calculation assumes your time and your sweat equity is free, and your willingness to carry the risk is free, so the numbers look great. For example, house flippers can buy houses at a discount because they take the risk of issues with the house, and the more labor they put in themselves, the better the returns are, since their labor is "free". The note school is teaching people how to flip bad notes. I still think it can pay off nicely for people who are willing to bear some risks and put in sweat equity, and if I were to do this full time, I'm confident I can make it work. Just like flipping houses is a great business for some but not for everyone, and the more work you do yourself, the better the payoff for the flipper. The math they show are certainly biased (as several students pointed out), and while they tell people not to expect every deal to be homerns, every example they show was a homerun. So you really need to apply your own filters to the info they show. They also don't talk much about the risks of things going wrong. But the concepts they teach are real and valuable. For me, I had two goals for the course: (1) Learn how to do due diligence on notes, and (2) Where to find notes with properties in Southern California (where I have a good network of service providers if things don't go well). I got lots of great info on (1), none on (2) (they offer their own notes to sell but don't cover California), so I'm still having trouble buying individual notes in SoCal. I believe in investing in education and knowledge, so while the materials are biased as expected, I learned a lot and felt it was totally worth the price.
I didn't want to get into the specifics of why I thought Ben was a prick because it's not that valuable for the readers, but since someone asked... We were scheduled to talk to Ben at the end of the 2nd day when class ends. The class rang long, and we went to find Ben right after class ended, he was with other folks. Another lady said he'll be done in 10 minutes and asked us to wait. 20 minutes later, we interrupted them to let them know we had to leave and to ask if we can reschedule, he gave us a bad attitude, just said he was there at 5pm at our scheduled time, indicating it was our fault that we missed our slot. Were we wrong to assume the appointment time got pushed out when class ended late? Perhaps. But the attitude was totally uncalled for. We went back the next day to meet with him at our scheduled 2nd meeting, tried to forget about bad experience from the previous day, but just felt that he had no interest in talking to us and couldn't wait to get us out of there.
Just want to elaborate more on the due diligence part, since that was the part I found most valuable of the course. I made a goal at the beginning of the year to get into notes. I looked up tons of websites, also read the "Performance Anxiety" book that someone mentioned, I read it cover-to-cover. Got a good grasp of the concept, with very little info on the step-by-step actions I can take. All the experts love talking about concepts and theories and home-run stories. What most people don't provide are the actual references. No step-by-step directions, just concepts. I felt stuck. I understood the concept, knew what I should look into in due diligence phase, but I didn't know HOW. I had no path forward. This is where Note School truly shined. They first tell you everything you need to check in due diligence stage, then they give you the tools, the specific websites and resources, to perform each task. How do you find out which states are judicial vs. non-judicial? Go to this website or google it. Which states have access to Hardest-Hit-Fund and how much money is left, and what are their conditions? Go to this website, look in this section. How do you get a sense of if people are living there so you can plot out your preliminary exit strategy of whether to modify the loan or do foreclosure or something else? Order BPO and look for clues, here's how you do it. If property is vacant, what are the codes to meet for vacant properties? Go to this website. How do you determine the expected rent value of a property? Here's the website. They even tell you their service provider partners for rehabbing and property listing. These were the actionable knowledge I was craving for, and they delivered. I was glad I got a head start with the online research and reading through some books, but Note School is what got me to be un-stuck. I decided to go the note-fund route, but if a good note comes my way, I now feel I have enough tools under my belt to try buying a note and continue learning by doing. I can't comment on the mentoring packages they offer because I decided not to enroll, they're not worth it for my current goals. But someone suggested that the 3-day course is like paying money to sit through a long sales pitch, I don't see it that way. I saw it as a very valuable 3-day course that was well worth the $1000 I paid for.
This was just my attempt at contributing back to the forum that benefited me earlier, take it with a grain of salt. I'm not trying to change people's minds, not trying to sell anything, people are entitled to their own opinions and there are no right or wrong. Just wanted to share my 2 cents in hopes that someone might find it helpful. Cheers.
@Ivan Lai - Yes sire, the due diligence (DD) part is the key for the Notes business - either 1st or 2nd NPN. This is where you make or break the business. As you might already know, the guru might teach or give you an outline on what need to be done for DD - but that might not have enough meats on it. Of course, there is an up sale for membership and coaching. I got it, education is a cash cow. Only if, the content is valuable.
FYI, I have not take any classes from Eddie Speed. But, I was invited to one of "exclusive" meeting with him with about 10 others people in San Diego about 4 years ago. But, at that time, he only invest and teaching 1st lien which I am not interest. But, a person invited me is a student of his and he seems legit.
But, frankly, you need to develop the DD based on what they teach, Google it then expand and align with your "buying criteria" as these "criteria" are difference for everyone.
I am "only" investing in 2nd NPN for the last 4 years. Because I LOVE to be the Bank! I have a cheat sheet for my DD. Well, I am an Engineer by day so I need to break down the processed and have a step-by-step so my kids can do it! Why not, it's a FREE labor and they know the Internet better than we, I do, seriously!
I believed in continuing education and learn the new "things" as the business keep involving or keeping up - need to spend money to make "more" money. As you already know, the 2nd NPN is "dry-out" for the last two years and the price keep going up. But, there are still a few good ones out there and you need to dig deep.
For example, Ivan if you want to buy CA 2nd NPN notes, you expect to pay at least 50% on a dollar. In which, the property might have some equity over the 1st lien. CA notes are very high on demand and frankly overate it as everyone love "Sunny California". But a good deal is a good deal regardless where it located. Check out FCI exchange website to find out what they want for CA notes. You in shock!
Cheers,
Wow, epic post. I did not intend to go down this rabbit hole but glad I did. Thanks for all the inquiry, info, banter, education.
Question...Is the live Note training event just an Infomercial for mentorship/ additional training? Or is it enough to get started in the performing notes?
Love to hear feedback...
I believe his training is now $1000. That in and of itself is curious.
I suppose after reading some of this dissertation on Speed and notes, it seems like a big hill to climb. Lots of talk of compexities that seem beyond mere lending on a fix and flip. It's going to cost $2,500 to fly there and take that class, and I'm not sure my wife would even be interested in supporting me in that arena.
Back to the drawing board.
The $1,000 is just a starter. We did it 4 years ago and found that it was worth it, there were a lot of websites and specifics on DD that were helpful. Latter we signed up for the full mentorship and we able to catch the tail end of the NPN business. I can honestly say that we made back all our money from that class several times over, but I do think it is harder now as the note business has gotten more popular.
When I started I partnered with a college friend of mine. That had several advantages.
- It split the cost of the overview and latter the mentorship, in half - 12.5k each at the time.
- By pooling our money we were able to buy a bigger portfolio to spread our risk.
- It split the overhead so that, in the event of failure, each of our losses would be smaller.
I know now they have a partnership program..really cheap price of a pair of jordans lol. I do business in over 30 markets and i know people in half post they have notes and the owner finance part all over the place .lots of money to be made .was thinking about is strongly..I know a few that was charging thousands before now charging next to nothing. Guess a way for them to rope more in later ..better for people cause at a lower price if things don't work not out so much if so chances are if they do promote more people will bite
Don't ever ever ever ever ask a question about a guru on any platform.! 99.9999999% against them. Yeah some take money and run not all the same .
Here is some advice, do not buy any notes from any note guru.
8 Years latter..... An update for anyone that is interested. As our non performing notes reached resolution only one of our buyers wanted to stay in the property. The rest either we either did a cash for keys or we foreclosure on. As these were resolving it was very clear to us that the sale on NPN's was over so we rehabbed most of the properties and turned them into rentals.
Since our original plan was to sell the property when we got it back we needed funds to do the rehabs. During this time either my business partner, myself, or both of us were out of work so we used what amounted to credit card debt. At one point we had our bank CC and LOC maxed out, along with 2 other credit cards and a prosper loan, all over 10%. We then did a Dave Ramsey debt snowball and while things were tight for the first couple of years we paid off first one, then another of the lines and things suddenly got easier. It's amazing how paying off an extra 2-3k a month makes debt melt away.
Today both my partner and I each have less than 50k in the business and own a portfolio with a total value over 500k. This year, as we were a few months away from paying off our last CC, we bought a new SFR in Milwaukee with a combination of our LOC, and a couple of private loans and some seller financing. We will pay the bulk of this off in the next three years and then look to add more properties. The current portfolio would, if we were taking distributions, pay out 1-1.5k to each of us every month. Since we don't need to money right now we continue to reinvest.
Although I don't do a lot of work with notes right I am still using what I learned to structure win / win seller financing deals and can honestly say that non of this would have happened without the knowledge I picked up from Note School.
Note smarts can be learned through studying available books and online resources. Being successful in note investing requires proper due diligence, note selection and pricing as well as having the right relationships with service providers like attorneys, note servicing companies, local brokers, note buyers and sellers. I’ve heard that Eddie provides his students with attractively priced partially pre-vetted note opportunities, advice and access to his relationships. If true it would be these additional benefits that would make $16K a bargain. Developing these on your own could take both a number of years and a few costly mistakes along the way.
I would say that Eddies program more than paid for itself. We used wheat we learn to buy non performing notes, and wound up turning them into rentals. My partner and I used what we learned to buy non performing notes, sell property with owner financing, and buy property with owner financing. I am very grateful for what we learned from Eddie 10 years ago, I started us on a great path and we are in a position to grow even more over the next decade.
Is what I’ve heard true:along with the training as a student you also get access to his vendors and preferred pricing on notes through his platform?
Sorry for the delayed response. Note School does maintain relationships with industry vendors and provide referrals. I have not been very active in the note side of things but they did have a bulletin board where they posted notes that could be purchased.
If you are looking for education on creating, buying, selling notes I think that you can get this mostly for free on other online platforms. They do offer a lot of training about notes, but again you can get this info. much cheaper elsewhere. If you are joining NS to get access to existing notes - performing, non-performing or REO - from my experience I am not at all sure that they actually have them to sell. Let the buyer be aware.