All Forum Posts by: Dave Van Horn

Depends on what hat I'm wearing, but speaking as an investor buying SFRs or REOs I'm looking at everything from walkability score and school rankings to heat indexes and flood maps.

Tax data is something to look at too. And not just property tax trends, but also state income tax which could tie into population growth and new housing starts.

Lastly, on more of a macro level as a business owner and employer it's important to keep an eye on employment data. It's no secret we're dealing with a massive flux with job migration right now (aka the Great Resignation) so it's something to be mindful of not only in regards to construction/renovation labor but also with attracting new hires and employee retention at the back office as well.

We're excited for 2022 with a lot of scaling opportunities in both Notes and Real Estate! Have some interesting partnerships in the works that I think are really going to take our business to the next level.

In terms of planning and process, we took a note from Dan Sullivan the author of "Who Not How" and "the Gap and the Gain", utilizing his idea of the impact filter - which is really a tool to help organize and rank your goals and projects based on their desired outcomes.

This has improved our decision making so much already and I'm excited to see the results of the process down the road.

If anyone is looking for a strategy that works both personally and in their business, I'd have to recommend the book "Profit First" by Mike Michalowicz.

It's sort of like the envelope system but on steroids. In essence you're doing something similar but with separate bank accounts and automatic transfers. The book takes a somewhat radical approach to business where instead of employing the age old formula of Sales - Expenses = Profit, it's: Sales - Profit = Expenses.

It really helps put into perspective the necessity of spending and how we choose to categorize our money in terms of allocation.

And what's savings after all, if not the true profits of your hard work?

@Brian Kempler

Don't completely hold me to quotes from 12 years ago lol! But let me try to answer this in our current situation:

First and foremost, what happens here is going to depend on the capital needs of the seller. But there's other factors behind the scenes going on. It's correct that in the current market the 1st lien holder is less likely to agree to a discount but there are situations that they will but to give you an idea beforehand, you'll have to have answers to some of these questions:

1.) Is the 1st lien current? (If you aren't sure you can pull credit or check Pacer for legal status.)

2.) Is it occupied?

If the answer is "yes" to both of those, they could probably care less about the 2nd lien. But if it's not current, how deep of a discount are you asking for?

Consider there's legal fees for foreclosure attorneys ($3k to $10k depending on the state) and carrying cost of capital, so it ends up being a math equation for them. If I'm the 1st lien holder, do I want to take a short train to a payoff? Or a long train to a foreclosure sale especially with moratoriums?/Or a possible fix and flip?

But at the end of the day, if you don't ask you won't find out. We would not be apposed to discounting a 1st if the math made sense for us.

Like @Brian Burke, I also have very similar memories from way back when. Little did I know back then when I agreed how much of an honor it would become having been one of those first guests, and how much the podcast would have changed my life. And not only my life, but the lives of those in my business, my network, and all the listeners who gave it a chance.

After 30+ years in the business I still listen to new episodes, learning new things to this day! Which truly is a testament to @Brandon Turner and the team's excellent work. I can't thank him enough for the many years of service to the community and I'm excited for what's to come :)

Thanks for the mention @Jay Hinrichs!

And hello @Bee Snider, I've been investing in notes for many years now and started my current business in 2007. Happy to connect and answer any questions you may have.

 Travel and arrangements are all booked, can't wait to present and see you all there! And @Joe Splitrock We'll have to connect!

To my knowledge, there's not much of a secondary market for these types of assets. At least not much of a public or institutional one. In the past, the company I worked for had originated notes on newly purchased mobile homes but the key here was we serviced the note, managed the parks, and would assist with renovations, any turnovers, etc. so the note owner could resell the mobile home again more easily (thus keeping the lots full and increasing the value of our parks). So the big question here is, what kind of servicing, if any, is provided by the owner of the parks?

Depending on that, I'm not sure what the discount would be in this instance but it may be comparable to a junior lien on a residential property, if not more favorable.

Also something to keep in mind, these assets depreciate much more rapidly than a residential property, almost like a car would (since these are motor vehicle titles) which would effect the terms of the note.

Hi @Harry Das, good question. Both funds have the ability to purchase a variety of residential and commercial assets (which is outlined in the PPM) and what they invest in can change over time but currently the Liquidity fund is predominantly 2nd mortgages and the majority of the capital in the Income Fund is predominantly invested in 1st mortgages.

Feel free to private message me direct any time if you have any other questions.

1.) Junior (moved onto Senior liens a few years later, now almost exclusively work in them)

2.) NPNs as a business, Performers as an individual

3.) Partnered with the founders of PPR using a little bit of our own cash for the first handful of notes, then raised private capital for the rest.

4.) Educated ourselves mostly since there wasn't much education out there at the time, but learned a bit from our first note seller

Hard to pick just one thing to do over! The business is also very different today from when we started. I suppose having an endgame from the outset would have saved us a lot of time. That and working more "on the business" instead of working actively in it.