Eddie Speed April 2015

I appreciate it I had the privilege of meeting Eddie a little over two years ago right here in Charlotte he is absolutely the premier note guy he’s been doing this for over 35 years and you heard me talk a little bit about what I’m doing with the veterans initiatives I say that at least in my real estate career all roads go back to Eddie I would not be doing what I’m doing now if it wasn’t for Eddie all of the investments that I put in with the veterans right now we’re funded by self-directed iras about 80 to 90 percent of them the other 10% are cash investors but they’re all created in the vehicle of notes not selling the real estate creating notes from it I have bought non-performing notes I’ve bought Reaper forming notes from Florida to Maryland and without Eddie’s education I wouldn’t have non-performing notes that are now performing notes and I’m not going to keep talking Eddie is the guy the information that you’re going to get is just a tidbit of what is at your disposal he has a network of experts across the nation and the relationships and the networking that I’ve gotten from those organizations I have investors from Tucson to Kansas to Orlando to Virginia that I would not have met without Eddie and his great mentorship so without further ado please welcome Eddie speed all right I think I got one here hello everybody I’m glad you’re here I really appreciate that I’ve know several of you because I’ve been to Charlotte and spoke many times and I’ve got some long-term students that are in the audience tonight and I appreciate all you guys coming and supporting this so let’s get started we have first of all let me let me tell you a little bit about what my purpose is here tonight okay so my purpose here tonight is not just to show you how that you can enter the note business on a very part-time basis bolt on the note business to your existing real estate business and that’d be it Eddie can you earn a full time living on a part-time basis yes you can you can keep your day job keep your real estate investing and bolt on the note business to it and the income potential is we’ll talk about tonight it’s phenomenal but I got a bigger purpose here tonight let me ask you a question if you could make all the money that you needed in nine months out of the year would you be willing to spend three months out of the year betting on your future building your retirement building well I’m just asking you would you be willing to do that well my purpose here tonight is to show you how you can do that before we leave here tonight I’m gonna show you how you can take a very very small amount of money in a self-directed retirement account and turn it into a huge amount of money in fact I’m going to show you how to take a hundred bucks and turn it into a hundred thousand tax-free so there’s a lot of techniques with notes that’s unlike real estate as you heard Ken say it’s just when somebody pulls back the curtains and shows you this business you’re going to go WOW and we’re and you’re going to find out particularly on Saturday when you come how to change a lot of your current real estate investing techniques involving using note strategies on properties that you’re already dealing with okay all right so a lot of you’re going to have questions I realize that I only have about a hundred and twenty slides to get through in about 90 minutes okay so I’m just going to say to you right now if we can make a deal if we can make a deal I will answer questions at the end if you let me get back there to the signup table I’ll go back to the signup table and answer questions at the end but I’m going to ask you to hold your questions because trust me will be midnight if I don’t and and and this is sort of a story I’m just going to kind of unveil a story and and then Saturday will unveil a story and as you come to these three day classes that we have it’s it’s just it’s part of you’re kind of building this thought process and how all this works so will will answer questions in the back of the room at the end and then the other thing I’m going to say to you is stay to the end because I will tell you that there is a lot of different topics that we’re going to cover over this hour and a half and and you’re not going to want to miss all that we’re gonna say about that so core

things that we’re going to talk about understanding the discount note business and how that works and what I think that we’ve worked really hard at as part of note school is to make people understand how to do this business and apply this business with very simple techniques and techniques that a lot of which you’re already familiar with and we’re going to talk a little bit about that tonight now that can work so an unprecedented market opportunity inventories dam foreclosures our dam but inventory of defaulted notes is up unprecedented market opportunity greatest market opportunity that I’ve ever seen the note space since I started doing this full time in 1980 so we’re gonna talk about how notes are priced and why you would pursue buying notes and essentially a simple reason why you would by default chase defaulted notes versus properties the notes are going to be about half of the price of the property it’s pretty good pretty good incentive to go figure that out so we’re going to talk about how notes are priced and one of the things that that you’re going to talk about and Ken alluded to this tonight as you progress in the notes face I’m gonna teach you how to do this where you are higher basically a Power Team to do things for you so I’m gonna give you a little bit of a sliver of that tonight and as you progress in this training the one thing that I’m gonna say to you is I don’t have to be an attorney to own a note in hire an attorney do you get the concept and so there’s a lot of things about this business that if I hire out the right talent I don’t have to physically go do it all myself and so those are critical aspects of the business and we’ll we’ll cover a little bit of that tonight so I’ve been buying notes I started when I was 20 years old in 1980 buying discounted notes and just to raise your hand how many of you have ever owned a note just just so I can get a sense of the audience okay so first so a good many of you 15 20 people raise your hand again just so we could all see you all of these people have owned a note now I’m gonna ask you one more time has anybody that did not raise their hand ever owned a note the well there there’s JC so some of you just aren’t gonna vote like JC is anybody else other than JC ever owned a note and you just didn’t tell us about it what’s a note that’s a note that’s a note that’s a note on a car and that’s a note on a house how many of you have ever owned a note so one of the things that you’re going to find that we have done as part of what we had developed in training is we’ve made things to where you can understand them because a lot of people say I can’t I can understand fix and flips and I can understand rentals but I can’t understand the paper business the note business and the answer is yes you can you haven’t had anybody explain it to you correctly because everybody in this room has owned a note now let’s go back to the fact that we buy mortgage notes and we buy mortgage notes at a discount okay so I’m gonna give you a quick little analogy of how a discounted mortgage note works okay so what’s a note one of the things that’s a note is what a check if I make that check out to John Doe for $1000 and I sign that check what does John Doe own a note everybody agree with that John Doe owns a note so if I if I give that check to John Doe thousand bucks oops he doesn’t have a checking account now what are we gonna do what’s he gonna do with it my bank my bank you go to Chase or B of A or any of those corporate offices or over here in Charlotte North Carolina they’re not gonna let you go into my bank and cash your check right for no fee the big banks not going to let you do it okay so I can go to a check cashing service hold back don’t say it I know you’re tempted I can take it to the check cashing service and I can get cash for my check whoops don’t say it it’s not a fee that’s a misnomer it is not a fee when John Doe gets cash for his check eight hundred and fifty dollars for his thousand dollar check John Doe sells his note at a discount I buy discounted notes let me ask you a question what if the bank what if the check cashing service paid fifty dollars for that check that legal how much does Eddy Oh

how much does Eddy oh the whatever who buys that note at whatever price is irrelevant they bought the right to receive $1,000 promise to pay that is a discounted note now we buy loans secured by real estate so here’s a pretty simple real estate kind of a trail of events buyer conveys ownership to the UM excuse me the seller conveys ownership to the buyer via a deed a bill of sale of real estate the buyer doesn’t have all cash what does he do the buyer signs a note and gives it to the bank who holds the note let’s pretend that note was $100,000 and the bank was willing to sell and the buyer like me was willing to buy could I buy that note for $50,000 could i how much does the borrower oh that’s a discounted real estate secured loan that’s what I do i buy real estate secured notes at a discount and there’s the biggest pile of distressed notes that it’s ever been in the history of America and they are reeling these babies out right now at lightning speed facts specifically they’ve pushed out seven billion dollars in non-performing note tapes already this year according to the press so on Saturday I’m gonna go show you this tape and this tape in this tape I’m not gonna spend all that time tonight if you won’t do your own Google research you can do just like us and figure it out but the bottom line is what broke the dikes and forced the government in the banks to sell these assets was the municipalities because what was the municipalities problems blighted properties aren’t paying what and paying city services they’re not paying water bills and sewer bills cost more money to have the police department cover vacant as it does occupied houses so you’re not going to read this in the Wall Street Journal but the reality is the deal has been made with the top 50 banks and in Washington and they’ve agreed we’re going to dump these assets not as REO properties not as bank foreclosed properties but is what defaulted notes that’s what we’re doing here



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okay in the last five years because 50% of everybody that made a mortgage application or turned down reaper forming notes or lungs that were had a blip weren’t paying have modified and now paying again successfully we’re not talking about HAMP and harp loans which had a ridiculous Reda fault rate of over 50% but we’re talking about hedge funds that bought these loans and got skin in the game and got these customers paying again and those loans can also be bought at a discount and then obviously we have non-performing notes the average delinquency of an AMA for me note we buy is what is it can three years that’s about right the customer has been dark and hadn’t made a payment in three to four years so seller finance notes can be bought at a discount and they’re in the for performing note bucket Reaper forming notes we’re in default now they’ve modified and they’re paying again and they’re in the performing bucket and non-performing notes are still in the non-performing bucket obviously we don’t pray pay the same price for non-performing that we do performing so what do we pay what are these assets cost okay re performing a non-performing notes cost seventy to ninety cents on the dollar you can easily earn a double-digit return with a very safe passive investment buying performing notes and i would tell you that more ira administration companies are chasing me like i’m the prettiest girl that could go to the prom because they are sitting on about one third that industry is sitting on about one third of all the money that is already self-directed in a retirement account is sitting in what cash uninvested funds and so that industry has woke up and said oh man we got to show our people how to go buy alternative investments other than real estate and private lending when that inventory is strength right a lot from where it was and notes has a massive inventory so I do a ton of training with self-directed retirement account companies because of this very specific market fact non-performing notes these are loans that these are loans that are paying every month as agreed and these notes the non-performing notes are not paying as agreed they’re in default and they are paying zero every month now why would you buy a loan that is a payin huh because this loan is bought at a deep discount with the hope of getting them to pay or the hope of getting to deed it to us but plenty of economics to go through a foreclosure process and repossess the property it’s a backdoor way to buy real estate although there’s other good things that can happen in the interim so we’re going to focus on non forming notes first in this room him out of your buying property is ladies five years ago and before how many have you been doing at least five years okay so for the last five years if you’ve been driving down the opportunity Highway you’ve been going left at this fork buying REO properties and you should have been because real estate was on sale it it’s not hard for somebody to say to me Eddie I started buying these properties four years ago three years ago and man was that a great decision because they have I’ve had a big lift in values and

occupancy because uh if it man this real estate is good but the reason that real estate story is so good is because there was an abundant supply of property at a low price in fact specifically five million houses sold in a five year period about a million houses a year okay so in that process that was the biggest dump in real estate opportunities we’ve ever seen so that big inventory in non-performing notes herein lies our next biggest frontier so as we said there’s about 9 million defaulted notes and about 300,000 bank foreclosed properties and so you’re saying is the inventory really thirty to one and the answer is yes and it’s been a pent up inventory that let me ask you a question how many of you have ever seen something in life that you saw and you saw a glimmer of it and you look back five years later and it was the mother lode right if anything have you ever seen something like that buying Apple stock buying REO properties five years ago whatever it was how many of you have seen uh something that five years ago it was an idea and it turned into a crazy story that’s the one you’ll tell your grandkids about with a thousand percent integrity I believe in all my heart the next story is going to be what I’m talking about tonight you just can’t you just can’t deny the numbers you’ve got a crazy inventory imbalance that it’s going to get dumped out as a non-performing notes you just can’t deny that you can’t deny the numbers so dawn forming notes we said these assets trade at about twenty to fifty cents on the dollar so a defaulted note trades at about twenty to fifty percent of what the customer owes now how do you figure out what to pay so the first of all when you buy this note you got a defaulted note there’s really about three things you can do with the customer first is you can modify the customer and get them paying again the government passed this program back in the tarp days of 2008 they passed this program that expires January excuse me December 31st 2017 it is what very very very few people know about and this program is to help working-class families bring their delinquent mortgage current it’s called hardest hit funds how many I’ve you’ve heard of it well that’s great we’ve got three people in the room that have heard of it and by the way you are the heart is it fun States there’s only 16 left and you are a grand prize winner and if you go read all the press about hardest hit funds they are under an incredible amount of scrutiny because they haven’t put the money out and they got two years three years maybe of ten years to get all the money out because they’re still holding about 70% of all the money that was designated for hardest hit funds so if you buy a delinquent note and you buy that note for 20 cents on the dollar the borrower gets hardest hit funds the government pays the customer enough money to bring their loan current in most cases it’s more than it took to buy the note and you still have a note on the property now it’s just current so one of the things Wendy I’m teaching about it that I am in conference which you know is a very sophisticated conference as hard as hit funds because I can tell you that I speak to very sophisticated audiences on a regular basis and know in this your percentage in the room is just normal 3 to 5 percent of a room every time as hardest hit funds meaning 95% around goes I didn’t know they existed so this

is the greatest window of opportunity it is targeted for low-income families in certain states there 16 states left predominantly circled up the assets that we buyer is or in the Rust Belt in the southeast and and in North Carolina is right in the middle of them you can get a deed in lieu of foreclosures the mortgage companies servicing companies didn’t do a good job of getting deed and losing foreclosures and I think they were financially motivated not to because heart because the truth matter is short sales were a lot more profitable for them they just were a lot of brain damage for everybody else let me tell you something I got a customer who wants to walk away from this deal with dignity I just get them to deed it over to me I own the house and I don’t bother them anymore that’s a fix and in every workout strategy we’ve ever done in my whole career doing this we commonly did didn’t lose and I have no idea why the servicing companies or the banks didn’t figure this out but it’s not brain surgery right if I owned this loan I’m going to strut my servicer to try to reach our settlement with a customer I may give them some cash for keys I may give them money to go move out and making a deposit on an apartment I’m gonna do something and I’m gonna try to avoid having to go through the foreclosure process now the assets that I buy I have the legal right to foreclose so we have a filtering process to make sure that I’m not buying something with nasty title issues that says I can’t foreclose the assets that we’re teaching you to buy you have the absolute legal right to repossess the property and what we refer to as a foreclosure so if I can’t get a deed if I can’t modify the customer I’m back to a deed-in-lieu or foreclose what business am i back in I’m back in the real estate business and the reason I’m in the real estate business in this manner is the property’s going to be about half the price I would normally have to pay that’s why you do it okay so there’s really three things that can happen modify deed-in-lieu or foreclose and what I got to understand is that my business is so simple because all I am is a pawn shop for real estate how many have you seen that show on the History Channel about the family that owns the pawn shop out in Las Vegas okay what does the old man do anyway huh the guy that really owns it is the son Rick the old man this doesn’t really own it I’ve seen Rick on several TV shows and Rick laughs and says they make me look like a cool guy with my shaved head my sunglasses my jacked up pickup truck but he said the truth of matter is I’m a research nerd he said so people brought me all this weird stuff and I figured out if it was price of all and what price to price it at and he said and that’s what I built the business around is Rick a smart guy what makes Rick smart huh Rick is very good at evaluating the as is value for unique collateral and that’s what I do I evaluate the as is value for unique collateral and what I pay for a note has nothing to do with what the borrower owes or what my legal right is to collect back because I buy notes at deep discounts at way less than what the borrower owes so here’s a pretty easy philosophical way of showing it to you established value the property is from the roof to this foundation right we’re gonna say that’s whatever number that is and we buy that property at a percentage of the value of the property no this is a core principle so those are you’re writing things down here’s your core principle it is called investment to value ratio the investment we pay for the note compared to the value to property it’s not loan to value it’s what you invest in the note compared to the value of the property investment to value ratio now this scale is going to move down or up depending on whether I’m buying performing or non performing and let’s just be fair about it how much hair the deals got on and there’s going to be times that I wouldn’t put a dime in that deal I’ll pass so I’m not saying I buy every non-performing note I’m just saying to you there’s a big enough pile of non-performing notes I can buy at a good price that there is a huge amount of opportunity in the deal some of them the property is not worth fixing up the taxes already lost to taxes there’s some goofy crazy title problems that I might get legally fixed but I probably don’t want to fool with it I say there’s three reasons that that you would not want to buy a non-performing note blighted

property tax and title blighted property tax in title those are the three reasons that you could make a bad buy in buying non-performing notes now guess what we teach at note school take a wild guess how to evaluate blighted property tax in title ok so here is the way that distressed assets have been disseminated in the marketplace since the subprime debacle blew up ok and what’s happened is this represents the price band of the value of the property and the percentage of the collateral value that these assets are traded for in the secondary market so the higher priced band houses better in the form of non-performing notes honestly they’re trading for a lot of money in fact our calculator won’t work well at these percentages what the what the hedge funds that by these massive packages of notes do not want to keep or assets that the house is worth less than 125,000 so Blackstone Carrington The Colony waterfall Roosevelt there’s about 16 capital firms all can write a check for a billion dollars that buy these assets but the low price band they only buy it at a salvage price knowing they’re going to immediately resell it and I’m the I raise in my hand and the reason I’m raising my hand is because these assets traded 20 to 50 cents on the dollar so I buy low price band now you’re saying Eddie I sing some listen there’s ugly in some of this stuff and you wouldn’t touch it and I wouldn’t touch it but let me tell you something I’m gonna melt way down to a number we believe there’s two and a half million defaulted notes in this price band that are solid viable assets two and a half million assets and in the biggest mother lode of REO property that we’ve ever seen in our lifetime they only sold five million houses in five years you can’t wrap your mind around how much inventory this is and that’s Immie skunking all the stuff did I say hey I agree with you it’s blighted it’s lost to taxes they got a screwed-up child chain all the ugly I’m not I’ve already dumped that off in the Grand Canyon I believe my power pile looks like about two and a half million assets so I buy the lowest price band because by far it is the best buy and buy and to tell you this the big hedge funds are going to buy most of this bigger price band assets and they’re going to pay prices that you and I can’t wrap our mind around and we’ve seen them do it with rental properties and they’re doing it with this and the reason they are is because they have pent up cash they need to invest and they’re not going to invest it in the stock market so in the low price band space we start out at about 50% and go down to about 20% so we have an AZ value the property and this is what we’re paying in this price range for these assets okay so I’ve got non-performing notes on one side and REO on the other are you trading at about 80 to 90 percent average overall some markets are a little cheaper than this some farce gets a little pricier than this I’ve done real estate investment groups in Detroit in Toledo in st. Louis all of those were top five markets of availability of properties in the last two years all of which are screaming right now windy about what inventory and so so and you want to know why it’s because these low price band assets are getting pushed out doing what selling is defaulted knows defaulted notes are trading at about this price so the reason I like this business is I can be into a property for this or I can be it to it for this I just like being into it for Less okay so I’ve kind of described an industry to you at this point why the market is what the what it is and how you’re going to buy them and kind of what you’re going to pay so let’s quickly go through a little waterfall here okay just a whole sequence of what happens in the business a buyer buys a house they get the keys to the house and they sign a note over time they pay the bank for the loan and if they pay as agreed what is the grand

prize they get a free and clear deed to the house they own it with no mortgage we’ll call that a successful loan the loans that don’t pay as agreed they get dumped into a bucket that gets sold in bulk predominantly to big investment firms some of those loans in that firm that hedge fund is not going to keep they’re going to sell those assets if the house is worth less than one hundred twenty five thousand they’re gonna sell them to a specialty group that buys those kind of assets so those assets get traded off in a group of loans it’s just a spreadsheet of these loans just an Excel spreadsheet the industry refers to that as a tape it’s just a spreadsheets all it is there’s nothing magic about I got a tape so those assets that are entreated as little as one investor at a time so our specialty is teaching people how to have their real estate investors how to add buying notes to their business as little as one note at a time now I must do a little bit of my thunder from Saturday you’re gonna say how many dollars to these notes cost a typical note in your market it’s going to cost about 20,000 bucks so a non-performing note is gonna cost about 20,000 bucks some are gonna be cheaper again I’m I’m sure you bought assets for less than 20 grand but that’s about average all the assets you bought have been less than 20 yeah I don’t want to get they’re not ready to wrap their mind around that yet because they don’t know how to use that let me tell you by Saturday afternoon we’re gonna take our fingers and we’re gonna undo our tool belt and we’re gonna lay them on the desk and we’re going to learn to make money with the pencil and not a hammer I’m gonna get you to stop thinking like a rehabber I’m gonna get you to start thinking like a business owner but but wait till Saturday so so you can keep your tool belt on right now because I know you really love it but I can assure you that you can learn to do this business where you hire out the things that you don’t want to physically do to you go pursue the things that you want to pursue so in due diligence you agree upon a price then you’re gonna wire the money to the hedge fund and you’re going to get the notes now all this box I can show you a vendor to do anything you won’t have done that you won’t don’t want to do anything that you don’t want to deal with I’ll promise you I can show you a vendor that handles these things because they just have done all of this work for all of this REO and all these banks and there’s a pile of vendors that were not available when I started the business in 1980 they’re totally available today to help me outsource the things that I don’t want to do so I can modify the loan deed-in-lieu or for clothes if I modify the loan what happens I bought a note at a deep discount and they start making their payments again and I got cash flow so I have a low investment cost in a note that starts cashflow in and I can show you several exit strategies to sell this note if I got a deed-in-lieu or foreclose I can rent it rent to own or owner finance it on Saturday I’m going to show you a technique that nobody else has ever taught you and it is the smartest way to sell a house for less than seventy five thousand bucks I’m gonna sell it to an out-of-town investor who’s already bought similar houses like this and he’s gonna buy it from me with owner financing for 120 to 140 percent of what the realtor thinks it’s worth and he’s gonna pay me half down okay so I’m gonna show you a very effective structuring technique that is a game-changer and how to sell working-class real estate lodi cashflow rentals to California investors Wow now I’ve got my own little hedge fund so I’m going to show you how to take one deal at a time and operate like you’re a hedge fund that is the second technique that I’m teaching at the I am in conference so I’m going to show you how to do that on Saturday and all of these combinations and things is the maximum way to not sell the house most houses under seventy thousand dollars what you’re looking at on the MLS the Multiple Listing Service is simply a wholesale price for real estate it is not a retail price I’m going to show you

how to get retail so the reason is is because all of these houses that sell for fifty and sixty and seventy thousand bucks tell me what the makeup of the cops is what’s the comps REO cash sales so it is just like the auto auction for real estate it is it is a it’s not it doesn’t represent retail it represents wholesale so I’m going to show you a retail technique that after buying 30,000 seller finance notes I believe that this is the best technique in the business now this ain’t your daddy’s old OHS mobile okay we’re not talking about selling to a guy with 500 down and a 500 credit score and crossing your fingers for the next several years hoping he’ll continue to pay that ain’t what we’re talking about we’re talking about selling to an investor with an 800 credit score and 50% of the sales price the property comes in the form of a down payment so so I don’t have time to go into that tonight except to say this is called a hook to make sure that you come on Saturday because everybody in the world knows you’d be foolish not to come learn this am i right can I get amen Wow JC got to get a bigger room also you can sell the property in that as his condition and there’s times obviously when we by default it note sometimes we’re just going to dump it and we’re gonna talk about dump techniques and then we usually sell those to local investors so we’re gonna talk a lot about seller financing and how that works now we’re going to talk about performing notes okay so performing notes we said trade for in the marketplace about 70 to 90 percent of the value of the note and I would tell you that the technique that I’m going to teach you right now is my secret sauce it is my formula for retiring forever and I’m gonna use it with a huge levering mechanism so let me tell you what you can do you can take very small amount of money and you can put that money in a Roth IRA account and you can then control a note that’s a thousand times bigger than the money you put up and you can control that whole transaction for a very small amount of money and this is my secret sauce I’m in a mastermind with Wendy that’s how I know Wendy so well is I’m in a mastermind with Wendy about top 85 real estate investors in the United States he’s quite expensive to be a member of this group and there’s some very sophisticated investors coast to coast and Wendy knows my wife really well because they’re one of the few girls that all pile up and go to this group and one of the things that Wendy knows is a fact that my wife Martha spends 100% of her time in this business doing this technique that I’m teaching so I am telling you with a thousand percent integrity this is my secret sauce the technique that I’m going to show you is of all the note tricks that I’ve seen this is the best are you ready for it so you might need to leave just checking so a typical little transaction would look like this this is a house and somewhere in rural America house is worth fifty six thousand bucks there’s a remaining mortgage on it for thirty four thousand six sixteen the interest rate on the note is nine percent three seventy four month is a payment there’s a hundred and fifty eight remaining this is what is commonly referred to as a seller financed land contract and there are hundreds of thousands of these assets available in the market and I happen my executive team has bought more seller financing than by the United States we’ve bought over two and a half billion dollars worth of seller financing if you looked at company-wide our executive team so this has been our space we totally get this we have a lot of experience with it and I’m just giving you a sense of what a typical deal can look like on Saturday we’ll drill down deeper into different deals I bought a student bought this note for us for thirty one thousand two thirty three so every month for their thirty one thousand two thirty three investment they get a check in the mailbox a three seventy-five a month Eddie are you telling me that buying a performing note is like rent house without tenants and toilets

yes and so over a hundred and fifty eight months they’re going to pay back about twice what the student paid and if I plug this in my financial calculator it will tell me that per year I’m earning eleven percent on my dollars invested now I was doing pretty good up until that last little staying and then all of a sudden some of you disconnected with me I felt it so let me draw an analysis of how yield works okay how many of you are familiar with what is referred to as a hard money loan ah a hard money lender makes a private loan at a higher rate than the banks charge but more flexible terms and much more flexible underwriting okay so so a private lender is what is mobilized people buying distressed real estate if it weren’t for private lending buying distressed real estate would be a completely different world so they provided capital to go buy property if that hard money lender made a loan for thirty one thousand to thirty three in the terms were three seventy five a month and they gave you one hundred and fifty eight months to pay it back my question to you is what would the interest rate on the note be eleven percent that’s what my investor paid for the note that’s what the payment was and that is how long it paid back so the the investor because they bought the note at a discount earned a higher return than the interest rate on the note and if you just backed into it it would be the exact same math as a hard money loan does that make sense to you we’re going to talk about some other terrific advantages in this but let’s talk about for a second $56,000 what the house is worth the investor pays thirty one five so there and there at about sixty percent of the value the property they don’t want anything to go bad but if you if it did it could we there is an there is an inordinate supply of these types of notes I believe there’s two hundred and fifty thousand notes like this available in the market today and there is a very limited number of investors that get it and understand it and pursue it therein lies a terrific opportunity for us these loans are third party serviced so that so the collection of the payments the taxes the license the borrower work out all that is not done by necessarily who owns the note but by who the servicer so I have to make executive decisions to instruct my servicer of what they want them to do but they go have the machine that does all the work so it’s like think in terms of like me hiring the boy that mows the yard now when the i-20 when he goes in mows the yard at my rent house I’m gonna give him some very specific instructions he’s gonna mow the grass and he’s gonna do all the sweating he’s going to verify that he did the work and then I’m gonna pay him and that’s exactly how our business works you have to have some knowledge to understand what is expected of the decisions you’re gonna have to make but you’re not gonna have to go push the lawn mower and it’s very critical because outsourcing is how you operate and run your own little bank ok so every month payments going to go the servicer they’re going to charge kind of an upfront fee of about a hundred and fifty bucks one time and then they’re going to charge a small servicing fee every month and they’re just going to wire the money in to the investors account this is why the IRA accounts our administration companies love what we do because we show people how to be their own little bank instead of having a rent house on a small investment okay and this is a beautiful opportunity for people have self-directed retirement accounts about thirty five billion dollars is in cash today it’s self-directed retirement company’s dry cash uninvested funds so there is a lot to be said about how you can find a passive investor to bankroll your business now remember that part where I told you I was going to show you how to take a very small amount of money and turn it into a lot of money this is how we’re going to do it I’m going to take my little Roth piggy bank and I’m going to put a hundred dollars in it now yesterday was a sad day for me it is not fair I’m going to tell you something it is

not fair because I kill myself to do this business and the percentage of my income that I have to pay to the government and me see what they do with it I don’t like it so I’m going to taste something I have no intentions of supporting the government plans from the rest of my life and the government has provided an opportunity for me not to have to do that and it’s called a Roth retirement account and it’s as simple as this I pay the taxes up front and I will never have to pay taxes on the income and the magic potion is if you can develop a business technique that requires that allows you for phenomenal leveraging you have got the mother lode and not paying taxes and I’m not going to tell you what the number is but I will tell you there is a tier that hit my desk yesterday when I signed that check because it was a Glee and I do not want to do that for the rest of my life and I’m absolutely totally being serious with you about that some of this stuff I say I’m kind of being a little entertaining with you I’m not being entertaining about this this is absolutely a technique that every investor has the right to do I’m going to turn that money into a hundred plus thousand dollars and the magic is tax-free never again to pay taxes on all the all right so here you go the house sells for a hundred and ten thousand dollars with ten thousand dollars down that’s the buyers equity and there’s a loan on the house for one hundred thousand dollars that’s the buyers debt okay so everybody kind of got the structure of the deal I’m using nice round numbers tonight because I’m gonna start out slow and then as you progress in training I’m gonna put several wrinkles to it someone just use nice round numbers we got a hundred thousand dollar loan ten percent interest eight seventy eight a month and it’s payable over thirty years so this is a straight thirty year ten percent no typical seller finance type transaction okay I’ll have as you progress I’ll have lots of real case study so you can see what different deals look like but this was the best way I’ve learned to do it i buy this note for 70 cents on the dollar so every month for my seventy thousand dollar investment what do I get back mailbox money right 878 a month over the life of three hundred and sixty months pays back three hundred and sixteen thousand eighty bucks for seventy dollars invested so if I use my same little calculator formula I can run it through there and it says my annual return is just under 15% fourteen point eight and I can go through a lot of case studies to say this is normal this is abnormal what I’m showing you tonight is normal and doable so I buy this note it’s a hundred thousand I buy it at a discount and on paper I do it in my Roth IRA now I’m gonna take a little secret I don’t have seventy thousand dollars in my Roth account in this little story I only have a hundred bucks okay so I don’t think I’ve got to have seventy thousand dollars in my Roth account to make this happen I’m gonna find myself what I will refer to as a financial friend and I’m going to show you how to use a power leveraging technique with a financial friend and he really is going to be your friend because he has anxious money sitting on the sidelines probably in a retirement account as well that he doesn’t have invested in anything and he sure doesn’t have it in a safe investment that’s earning a double-digit return so I buy this note on paper not with real cash yet because that we hadn’t gotten to dispersing the money for $30,000 discount and that means that I’m earning a 14.8% return the interest rate on the note is 10% I earned this additional discount because I bought the note for less than what’s owed and that’s what takes my return to this so I’ll buy this note remember we said if I did a hard money loan at 70,000 that’s what I paid for it the interest rate of the note would be fourteen point eight we’ll keep doing this and saying it enough it’ll start resonating with you and you can start really learning to analyze how to carve deals up this is my favorite part of the presentation if I had a pizza shop and it costs me six bucks to make that pizza how could I

make a profit well one way it would be what I can sell the pizza for more than six bucks so if I saw that pizza for $10 or $12 I’m making a profit how about two so if I busted that pizza up and sold it for two bucks to slice how much do I have invested in the back half of that pizza if I can do it with the pizza I can do it with a note so I buy the whole stream of payments 30 years and I sell or flip off the front part of this note and I own these back payments for free well the IRS says I have to write a check for a hundred bucks the IRS says I have to make an investment with my retirement account and what is generally accepted an investment is $100 minimum investment you can do in a retirement account model so I know that the first payments are way more valuable than the back payments everybody agree with that everybody in this room would rather have $1,000 here and here and here then $1,000 back there at the back so we all get that these payments are way more valuable and we spent a little more time on Saturday I’m going to show you percentage-wise how much more valuable this is way more valuable 10 times more valuable so I buy this whole note I flip off this part and I keep this part in my Roth IRA account back specifically I sell a hundred and thirty two payments of these payments for sixty nine thousand nine hundred bucks my investor gets a 10% return on his investment and my Roth IRA gets the back two hundred and twenty eight payments of this for a hundred bucks and you don’t need a calculator to figure the yield it’s enough that is a deal architecting techni now I’m just going to ask you a question if a real estate investor understood as much about how to structure deals as they did about sticks and bricks is it possible they could double their profit I’m just asking you because that’s what I teach people I teach people how to structure deals related to real estate but how to how to finagle it in a way to make more money on Saturday I’m going to take this model I’m going to take everything we’ve talked about today and I’m going to do a significant drill down I’m going to introduce two or three ideas that I have not introduced to you debt yet because I love teaching this so much I could get so many doors open we could never shut them until I we left here to day like tomorrow morning so I’m going to open a few more doors on Saturday but my goal is is to you to learn to build your own little Bank and I’m going to show you various leveraging techniques with other investors and how to do this okay there are a few of you that cannot come on Saturday and I’m going to tell you about some classes some advanced classes you can attend because I have a 2/3 Ivy that said would you tell me just a little bit because I can’t come on Saturday so I’m gonna if you guys if you guys that are going to come on Saturday they’ll spot me just to just a couple of minutes so I’m going to tell these other guys about and then we’ll talk a little bit more about Saturday I have trained thousands of real estate investors how to buy notes okay I have I think far and away the best track record of any trainer in this business of training people how to buy real estate secured loans in those thousands of people there is a common thread the common thread is this for people to do this they have to have knowledge interest in time most people at this point in the conversation have plenty of what interest what they don’t have is knowledge in time and that’s what note school is going to show you we’re going to show you leveraging techni for your money and leveraging techniques for your time we’re going to show you what we’ve learned over 35 years I’ve personally closed over 40,000 notes my executive team has closed over three

billion dollars in discounted mortgages so one thing we have spent is a lot of this learning how to do it and we’re going to show you what we’ve learned so that you can do it really efficiently we have two classes on the subject one class is on performing notes the technique that I showed you of how to buy the whole note and so par the note to an investor and have very little money invested there are a zillion different ways to structure the deal okay so we have a class that teaches you structuring deals and buying seller finance notes and carving up cash flows and what to do with them it’s called rich rewards and real estate notes we have a live class I’m gonna so we’re gonna send you home with this book which is a home study course book so we have really two classes built into one on this subject one’s home study and one’s going to be a live class most of the live class is going to relate to case studies and real examples of deals best way for you to remember it and learn it the second class we have is going to be on buying defaulted notes and take a wild guess this is why it’s named big money from bad debts and this is a home study course again and you’re going to come to a live class and we’re just going to take real deals and bust them open and show them to you in different ways so we have two different three day classes that you can come to and we’re gonna send you home with the home study course and we’re gonna allow you to bring we’re not going to just sell it to get a discount because it’s not going to cost you two thousand bucks we’re gonna allow you to bring a legitimate business partner meaning that you have a common business and a common check and account together or a family member and I have a heart for your bringing a family member because my father-in-law taught me this business when I was 20 years old I got my dad in the business and he was 68 years old I could go on and on known about what this is meant to my family to learn this business so I have a heart for your bringing a family member in doing it these home these home based courses are broken into modules it’s just us teaching this is the live classes that I used to teach and I filmed them and then we take a whole different set of case studies and facts and then we bring those to a live event so it just lets us pour more into your head more efficiently by sending you home with some home study courses that are gonna be self paced the live classes that we do are all over the country all the time and yes there is one coming up in Charlotte North Carolina and they’re all over the country all the time about every two or three weeks they’re somewhere across the country and we have a lot of classes and you can see and as you come you will have a on Saturday we will look at these classes again and talk about them okay let’s talk about Saturday this is class that I do on Saturday I call big money excuse me cold and notes golden notes is a one-day class and what we do in this one-day class it’s it’s they get this right JC twenty nine bucks for members forty nine bucks for non-members if I say that right if you buy off the internet it’s going to be more so you it’s it’s it’s more better if you buy it here okay and what’s the deal I know there’s a special remind me of what it is the first is it the first fifteen sign up the first fifty am I saying that right JC so this is unrelated to this training it’s just other training that you’ve done okay so the first 15 that sign up are going to be able to get a bonus of some additional training that these guys have feeling that’s really good stuff what are we going to talk about on Saturday most of the things that have popped into your mind at this point I’m gonna go back and spend some time and talk about I’m gonna show you some real deals because people say I helps me to see what a real deal looks like I’m going to show you a lot of those I’m gonna show you a lot of data and facts I’m gonna show you about billing cash flows and I’m going to talk about sourcing capital and most importantly I’m going to show you the art of creative financing and I’ve given you a glimmer of what that could look like here tonight okay I’m going to talk about retirement accounts and I’m going to show you a lot of different examples of people that have bought assets in retirement accounts and I’m also going to show you a lot of ways to do this in your personal business earning up front income and all of that and what it looks like okay now I asked you to make a deal with me and here’s what I said if you will hold your questions till the end it’ll let me finish on time and as a result of that I’ll answer questions in the back now here’s I got imma ask you

to make one more deal with me because if I don’t make this part of the deal as they say in Texas ain’t my first rodeo you got to let me get back there before I start answering questions because somebody will stop me right here and I’ll have to claw my way to the back so if you’ll let me get to the back of the room I’ll answer questions you guys are fun honest I love your town I have so many friends and people that I really care about in Charlotte and you want look you live in a wonderful place and I really really thank you for letting me come and tell my story thank you guys very much