Rising Into Financial Freedom Through the Power of Notes with Sierra Davis

[0:03] Welcome back to the REI agent. I’m here Welcome back to the REI agent. I’m here Welcome back to the REI agent. I’m here with Sierra Davis. Sierra, thanks so with Sierra Davis. Sierra, thanks so with Sierra Davis. Sierra, thanks so much for joining us today. much for joining us today. much for joining us today. >> Thank you, Matias. I’m really excited to >> Thank you, Matias. I’m really excited to >> Thank you, Matias. I’m really excited to be here. be here. be here. >> Yeah. No, I I’m excited to to have you >> Yeah. No, I I’m excited to to have you >> Yeah. No, I I’m excited to to have you talk. We’ve we’ve had Well, I’ll let you talk. We’ve we’ve had Well, I’ll let you talk. We’ve we’ve had Well, I’ll let you describe what you do, but give us a describe what you do, but give us a describe what you do, but give us a bird’s eye view of your your world and bird’s eye view of your your world and bird’s eye view of your your world and how you’re involved in real estate.

[0:21] how you’re involved in real estate. how you’re involved in real estate. >> Absolutely. So, um like Tia said, I’m >> Absolutely. So, um like Tia said, I’m >> Absolutely. So, um like Tia said, I’m Sierra Davis. Um, I run Essential Sierra Davis. Um, I run Essential Sierra Davis. Um, I run Essential Investment Group LLC and essentially Investment Group LLC and essentially Investment Group LLC and essentially help people build wealth by acquiring help people build wealth by acquiring help people build wealth by acquiring performing real estate notes so they can performing real estate notes so they can performing real estate notes so they can earn passive income from real estate earn passive income from real estate earn passive income from real estate without tenants, repairs or landlord without tenants, repairs or landlord without tenants, repairs or landlord headaches. Um, basically that, you know, headaches. Um, basically that, you know, headaches. Um, basically that, you know, kind of means is I invest in mortgage kind of means is I invest in mortgage kind of means is I invest in mortgage notes because um, one at the predictable

[0:44] notes because um, one at the predictable notes because um, one at the predictable income without the unpredictable income without the unpredictable income without the unpredictable lifestyle of being a landlord. So, love lifestyle of being a landlord. So, love lifestyle of being a landlord. So, love to kind of get in that um, in the weeds to kind of get in that um, in the weeds to kind of get in that um, in the weeds of that. But um, yeah, I love it. Now, I of that. But um, yeah, I love it. Now, I of that. But um, yeah, I love it. Now, I was going to say you we’ve had uh like I was going to say you we’ve had uh like I was going to say you we’ve had uh like I think one other person on the show that think one other person on the show that think one other person on the show that that’s kind of more focused on that that’s kind of more focused on that that’s kind of more focused on that >> style of investing. And it is >> style of investing. And it is >> style of investing. And it is interesting because like you said, like interesting because like you said, like interesting because like you said, like you know, it’s definitely a different

[1:06] you know, it’s definitely a different you know, it’s definitely a different animal. Um and often when people are animal. Um and often when people are animal. Um and often when people are looking to looking to looking to >> uh promote seller financing to a >> uh promote seller financing to a >> uh promote seller financing to a potential seller, um they’re they’re potential seller, um they’re they’re potential seller, um they’re they’re like say, “Hey, you know, you could be like say, “Hey, you know, you could be like say, “Hey, you know, you could be the bank.” And that’s what everybody the bank.” And that’s what everybody the bank.” And that’s what everybody wants. Everybody wants to be the bank.

[1:20] wants. Everybody wants to be the bank. wants. Everybody wants to be the bank. And I think it’s a And I think it’s a And I think it’s a >> it’s a good topic we could talk about, >> it’s a good topic we could talk about, >> it’s a good topic we could talk about, but uh before we get into those weeds, but uh before we get into those weeds, but uh before we get into those weeds, uh what kind of got you into that space? uh what kind of got you into that space? uh what kind of got you into that space? >> Yeah, absolutely. So for me, I was >> Yeah, absolutely. So for me, I was >> Yeah, absolutely. So for me, I was looking through like what could I do to looking through like what could I do to looking through like what could I do to u get some passive income and so I u get some passive income and so I u get some passive income and so I graduated with my NBA in 2017 and graduated with my NBA in 2017 and graduated with my NBA in 2017 and student loan debts is obviously a thing.

[1:42] student loan debts is obviously a thing. student loan debts is obviously a thing. So um I was in data science and you know So um I was in data science and you know So um I was in data science and you know doing pretty well. Um, so thinking doing pretty well. Um, so thinking doing pretty well. Um, so thinking through what could I do to supplement my through what could I do to supplement my through what could I do to supplement my income and so I started going on Bigger income and so I started going on Bigger income and so I started going on Bigger Pockets. I looked at a lot of things um Pockets. I looked at a lot of things um Pockets. I looked at a lot of things um whether it was like rentals, fix and whether it was like rentals, fix and whether it was like rentals, fix and flips, creative financing, just a whole flips, creative financing, just a whole flips, creative financing, just a whole gambit of things. And so what got me gambit of things. And so what got me gambit of things. And so what got me really focused on um real estate notes really focused on um real estate notes really focused on um real estate notes was kind of the ability to like get

[2:07] was kind of the ability to like get was kind of the ability to like get this, you know, mailbox money, become this, you know, mailbox money, become this, you know, mailbox money, become the bank. Um, and so thinking through, the bank. Um, and so thinking through, the bank. Um, and so thinking through, okay, I can do this. I like numbers and okay, I can do this. I like numbers and okay, I can do this. I like numbers and spreadsheets and things like that. um spreadsheets and things like that. um spreadsheets and things like that. um how can I use that u my skills that I how can I use that u my skills that I how can I use that u my skills that I have now currently to kind of get have now currently to kind of get have now currently to kind of get through uh to that place and get some through uh to that place and get some through uh to that place and get some passive income? And so um that was the I passive income? And so um that was the I passive income? And so um that was the I thought it was the quickest way to get thought it was the quickest way to get thought it was the quickest way to get there. Um and so I’ve been in ever since

[2:31] there. Um and so I’ve been in ever since there. Um and so I’ve been in ever since and um it’s been really well. Um I I and um it’s been really well. Um I I and um it’s been really well. Um I I don’t know if I have the the guts to be don’t know if I have the the guts to be don’t know if I have the the guts to be a landlord um especially on single a landlord um especially on single a landlord um especially on single family, but um definitely like the the family, but um definitely like the the family, but um definitely like the the ability to buy real estate notes um you ability to buy real estate notes um you ability to buy real estate notes um you know at discounts and performing notes know at discounts and performing notes know at discounts and performing notes um in first position.

[2:50] um in first position. um in first position. >> Yeah. Well, I think the first question >> Yeah. Well, I think the first question >> Yeah. Well, I think the first question people might think and and ask is well people might think and and ask is well people might think and and ask is well it’s must be nice to have all that money it’s must be nice to have all that money it’s must be nice to have all that money to to lend out. So can you explain a to to lend out. So can you explain a to to lend out. So can you explain a little bit about how that that all little bit about how that that all little bit about how that that all works? works? works? Yes. So simply um basically what I kind Yes. So simply um basically what I kind Yes. So simply um basically what I kind of walk through is um working with other of walk through is um working with other of walk through is um working with other you know investors thinking through um you know investors thinking through um you know investors thinking through um first of all private private financing first of all private private financing

[3:16] first of all private private financing and so um one of the aspects is like we and so um one of the aspects is like we and so um one of the aspects is like we talked about seller financing. So talked about seller financing. So talked about seller financing. So basically carrying that note um and so basically carrying that note um and so basically carrying that note um and so what the ability um you can do is buy what the ability um you can do is buy what the ability um you can do is buy these notes um at a discount. And so I these notes um at a discount. And so I these notes um at a discount. And so I personally didn’t have a lot of money on personally didn’t have a lot of money on personally didn’t have a lot of money on my um in my in my possession. And so I my um in my in my possession. And so I my um in my in my possession. And so I worked with a private investor to secure worked with a private investor to secure worked with a private investor to secure um my first note. And then we basically um my first note. And then we basically um my first note. And then we basically like split if you will like the the

[3:44] like split if you will like the the like split if you will like the the monthly income. So I paid them, I got monthly income. So I paid them, I got monthly income. So I paid them, I got paid and then I kind of snowballed that paid and then I kind of snowballed that paid and then I kind of snowballed that into more um notes to buy. So no, it’s into more um notes to buy. So no, it’s into more um notes to buy. So no, it’s it’s a very capital intensive um it’s a very capital intensive um it’s a very capital intensive um u investment I would say. But I think u investment I would say. But I think u investment I would say. But I think the the goal for for us and um thinking the the goal for for us and um thinking the the goal for for us and um thinking through that was basically using um through that was basically using um through that was basically using um other people’s money to you know invest other people’s money to you know invest other people’s money to you know invest and making win-win situations in that and making win-win situations in that and making win-win situations in that part.

[4:10] part. part. >> Okay. So so using other people’s money >> Okay. So so using other people’s money >> Okay. So so using other people’s money to buy notes you said at a discount. Um, to buy notes you said at a discount. Um, to buy notes you said at a discount. Um, now tell me about how you’re making now tell me about how you’re making now tell me about how you’re making money in this and also tell me about how money in this and also tell me about how money in this and also tell me about how you’re acquire or what who’s motivated you’re acquire or what who’s motivated you’re acquire or what who’s motivated to give you a note at a discount. to give you a note at a discount. to give you a note at a discount. >> Yeah. So that’s a really good question.

[4:28] >> Yeah. So that’s a really good question. >> Yeah. So that’s a really good question. So in terms of the who so those who have So in terms of the who so those who have So in terms of the who so those who have seller carry. So there’s a you know in seller carry. So there’s a you know in seller carry. So there’s a you know in note investing in the I’m sorry in the note investing in the I’m sorry in the note investing in the I’m sorry in the in investing world there’s a lot of in investing world there’s a lot of in investing world there’s a lot of folks who are looking to acquire folks who are looking to acquire folks who are looking to acquire properties and creative financing properties and creative financing properties and creative financing through seller financing. So they’re through seller financing. So they’re through seller financing. So they’re looking for sellers to carry the note looking for sellers to carry the note looking for sellers to carry the note becoming the bank. And so um after a becoming the bank. And so um after a becoming the bank. And so um after a while those sellers who do carry those

[4:51] while those sellers who do carry those while those sellers who do carry those notes um they have some thing motivation notes um they have some thing motivation notes um they have some thing motivation to sell those notes um and so they might to sell those notes um and so they might to sell those notes um and so they might have retirement planning. They might be have retirement planning. They might be have retirement planning. They might be able you know paying taxes uh medical able you know paying taxes uh medical able you know paying taxes uh medical expenses um getting new investment expenses um getting new investment expenses um getting new investment opportunities covering tuition just opportunities covering tuition just opportunities covering tuition just major life events like life happens major life events like life happens major life events like life happens right and so when you’re creating these right and so when you’re creating these right and so when you’re creating these seller finance notes they’re probably 30 seller finance notes they’re probably 30 seller finance notes they’re probably 30 years. Um and so um allowing that person

[5:15] years. Um and so um allowing that person years. Um and so um allowing that person to get out of that note and so they can to get out of that note and so they can to get out of that note and so they can make a liquid um event for them. So make a liquid um event for them. So make a liquid um event for them. So that’s kind of where we kind of look that’s kind of where we kind of look that’s kind of where we kind of look through okay what is it that you’re through okay what is it that you’re through okay what is it that you’re looking for and how can we help and so looking for and how can we help and so looking for and how can we help and so they’ve probably gotten a down payment. they’ve probably gotten a down payment.

[5:29] they’ve probably gotten a down payment. They’ve probably gotten some monthly They’ve probably gotten some monthly They’ve probably gotten some monthly income and so they’re you know able to income and so they’re you know able to income and so they’re you know able to kind of like get the the note um as a kind of like get the the note um as a kind of like get the the note um as a discount. So like say for example like a discount. So like say for example like a discount. So like say for example like a you know $35,000 you know $35,000 you know $35,000 left on a note we can then purchase that left on a note we can then purchase that left on a note we can then purchase that at 30,000 and give them that um 30,000 at 30,000 and give them that um 30,000 at 30,000 and give them that um 30,000 they can go do whatever they need to do.

[5:48] they can go do whatever they need to do. they can go do whatever they need to do. Um and that basically boosts our returns Um and that basically boosts our returns Um and that basically boosts our returns um instantly. So now we get paid every um instantly. So now we get paid every um instantly. So now we get paid every single month and then the borrower just single month and then the borrower just single month and then the borrower just sends us those payments. sends us those payments. sends us those payments. >> Okay. Okay. So All right. So I’m I’m a >> Okay. Okay. So All right. So I’m I’m a >> Okay. Okay. So All right. So I’m I’m a I’m a landlord. I I bought a single I’m a landlord. I I bought a single I’m a landlord. I I bought a single family house. Um, I’ve owned this house family house. Um, I’ve owned this house family house. Um, I’ve owned this house now for uh 35 years and uh it’s free and now for uh 35 years and uh it’s free and now for uh 35 years and uh it’s free and clear. I’m thinking, okay, I’m going to clear. I’m thinking, okay, I’m going to clear. I’m thinking, okay, I’m going to save some money on capital gains. I’m

[6:14] save some money on capital gains. I’m save some money on capital gains. I’m not going to sell this right away. I’m not going to sell this right away. I’m not going to sell this right away. I’m going to uh owner finance it uh to Billy going to uh owner finance it uh to Billy going to uh owner finance it uh to Billy Bob down the street. He is a great guy Bob down the street. He is a great guy Bob down the street. He is a great guy and I really, you know, think that’s and I really, you know, think that’s and I really, you know, think that’s going to work out great. Um and so we we going to work out great. Um and so we we going to work out great. Um and so we we enter an agreement. um and everything’s enter an agreement. um and everything’s enter an agreement. um and everything’s fine, but um yeah, something happens fine, but um yeah, something happens fine, but um yeah, something happens like you said at life event. And now I I like you said at life event. And now I I like you said at life event. And now I I really just want the cash. And so at really just want the cash. And so at really just want the cash. And so at that point, you know, I might have

[6:39] that point, you know, I might have that point, you know, I might have seller financed it, sold it for 300,000, seller financed it, sold it for 300,000, seller financed it, sold it for 300,000, but what I bought it for was maybe like but what I bought it for was maybe like but what I bought it for was maybe like 60 50, right? 60 50, right? 60 50, right? >> Um 35 years ago. And so, you know, at >> Um 35 years ago. And so, you know, at >> Um 35 years ago. And so, you know, at this point, I’m like, “Okay, well, I’m this point, I’m like, “Okay, well, I’m this point, I’m like, “Okay, well, I’m not going to get all that $300,000. I’m not going to get all that $300,000. I’m not going to get all that $300,000. I’m going to like, you know, sell it to you, going to like, you know, sell it to you, going to like, you know, sell it to you, the note to you.” and, you know, get the note to you.” and, you know, get the note to you.” and, you know, get less of that $300,000 back, but it’s less of that $300,000 back, but it’s less of that $300,000 back, but it’s really not that bad. Like, I mean, maybe

[7:02] really not that bad. Like, I mean, maybe really not that bad. Like, I mean, maybe I’m getting I’m getting I’m getting >> Yeah. >> Yeah. >> Yeah. >> 270 250 or something and and it’s, you >> 270 250 or something and and it’s, you >> 270 250 or something and and it’s, you know, a lot. Yeah. I just need that know, a lot. Yeah. I just need that know, a lot. Yeah. I just need that money and it’s kind of a nice option at money and it’s kind of a nice option at money and it’s kind of a nice option at that stage. Um, okay, that makes sense. that stage. Um, okay, that makes sense. that stage. Um, okay, that makes sense. And so then, so the the note then the And so then, so the the note then the And so then, so the the note then the the details of the note that I just sold the details of the note that I just sold the details of the note that I just sold to or that I have with Billy to or that I have with Billy to or that I have with Billy >> Billy Bob down the street, they’re the >> Billy Bob down the street, they’re the >> Billy Bob down the street, they’re the same.

[7:23] same. same. >> They’re they’re like the interest rate, >> They’re they’re like the interest rate, >> They’re they’re like the interest rate, all that payment is the same. It’s just all that payment is the same. It’s just all that payment is the same. It’s just now coming to you. now coming to you. now coming to you. >> Exactly. >> Exactly. >> Exactly. >> Yeah. And I think that’s where like a >> Yeah. And I think that’s where like a >> Yeah. And I think that’s where like a lot of kind of like the misconception of lot of kind of like the misconception of lot of kind of like the misconception of some of the these deals is basically some of the these deals is basically some of the these deals is basically whatever was agreed upon at the closing whatever was agreed upon at the closing whatever was agreed upon at the closing table that still stands. Um especi table that still stands. Um especi table that still stands. Um especi especially at a performing note that’s especially at a performing note that’s especially at a performing note that’s been paying um well um you might get

[7:44] been paying um well um you might get been paying um well um you might get some modifications if it’s a some modifications if it’s a some modifications if it’s a non-performing note that may have gotten non-performing note that may have gotten non-performing note that may have gotten um some modifications to get um some modifications to get um some modifications to get reperforming. So they might have changed reperforming. So they might have changed reperforming. So they might have changed the terms, they might have changed the the terms, they might have changed the the terms, they might have changed the payment structure, but typically if payment structure, but typically if payment structure, but typically if you’re buying a performing note that’s you’re buying a performing note that’s you’re buying a performing note that’s been paying, let’s say, 10 years, that been paying, let’s say, 10 years, that been paying, let’s say, 10 years, that whatever that interest rate was at the whatever that interest rate was at the whatever that interest rate was at the time, whatever that um monthly PNI

[8:04] time, whatever that um monthly PNI time, whatever that um monthly PNI payment was at the time still remains, payment was at the time still remains, payment was at the time still remains, you know, escrow will change u based off you know, escrow will change u based off you know, escrow will change u based off of the, you know, taxes and insurance. of the, you know, taxes and insurance. of the, you know, taxes and insurance. But that’s kind of where um I I love the But that’s kind of where um I I love the But that’s kind of where um I I love the real estate note, especially when you’re real estate note, especially when you’re real estate note, especially when you’re thinking about like other investments thinking about like other investments thinking about like other investments like dividend stocks, like those could like dividend stocks, like those could like dividend stocks, like those could fluctuate and they could just stop. But fluctuate and they could just stop. But fluctuate and they could just stop. But this is like contracted agreed upon this is like contracted agreed upon this is like contracted agreed upon based off of a secure asset that

[8:25] based off of a secure asset that based off of a secure asset that typically doesn’t change um unless typically doesn’t change um unless typically doesn’t change um unless something happens again like with with a something happens again like with with a something happens again like with with a reperforming note. reperforming note. reperforming note. >> So then you could if Billy Bob stops >> So then you could if Billy Bob stops >> So then you could if Billy Bob stops paying you could then you know take over paying you could then you know take over paying you could then you know take over you could repossess that property. Um you could repossess that property. Um you could repossess that property. Um and yeah so that that would also and yeah so that that would also and yeah so that that would also obviously be a nice backing and then you obviously be a nice backing and then you obviously be a nice backing and then you mentioned also non-performing. So, I mentioned also non-performing. So, I mentioned also non-performing. So, I would imagine that’s another motivation would imagine that’s another motivation

[8:46] would imagine that’s another motivation for sellers as well or sorry, note for sellers as well or sorry, note for sellers as well or sorry, note holders as well. Um, if if they’re holders as well. Um, if if they’re holders as well. Um, if if they’re having a problem with whatever having a problem with whatever having a problem with whatever >> and they want to get it off their books. >> and they want to get it off their books. >> and they want to get it off their books. Um, is that something that you’ve done Um, is that something that you’ve done Um, is that something that you’ve done or is that something that just some or is that something that just some or is that something that just some people would also potentially buy notes?

[9:02] people would also potentially buy notes? people would also potentially buy notes? >> Yeah. Yeah, that’s a really good >> Yeah. Yeah, that’s a really good >> Yeah. Yeah, that’s a really good question. Um, I typically focus on question. Um, I typically focus on question. Um, I typically focus on performing notes and the reason why is performing notes and the reason why is performing notes and the reason why is because I wanted to replace my income. because I wanted to replace my income. because I wanted to replace my income. Um, the non-performing are really good Um, the non-performing are really good Um, the non-performing are really good um to get that really strong ROI. So, um um to get that really strong ROI. So, um um to get that really strong ROI. So, um you’re buying a non-performing note, you’re buying a non-performing note, you’re buying a non-performing note, maybe from the bank or from another maybe from the bank or from another maybe from the bank or from another investor who um has a borrower that investor who um has a borrower that investor who um has a borrower that probably, you know, hasn’t paid in, you

[9:23] probably, you know, hasn’t paid in, you probably, you know, hasn’t paid in, you know, 90 days, two years, and um you’re know, 90 days, two years, and um you’re know, 90 days, two years, and um you’re ready to either work it out with the ready to either work it out with the ready to either work it out with the borrower, get them back on track. If the borrower, get them back on track. If the borrower, get them back on track. If the borrower kind of doesn’t want to borrower kind of doesn’t want to borrower kind of doesn’t want to cooperate, then you can foreclose on cooperate, then you can foreclose on cooperate, then you can foreclose on that. And so, that takes time. that. And so, that takes time.

[9:36] that. And so, that takes time. >> So, you might not get a payment um at >> So, you might not get a payment um at >> So, you might not get a payment um at all from the borrower um especially if all from the borrower um especially if all from the borrower um especially if they haven’t been paying in years. So they haven’t been paying in years. So they haven’t been paying in years. So then you start the foreclosure process, then you start the foreclosure process, then you start the foreclosure process, you have, you know, pay attorney fees you have, you know, pay attorney fees you have, you know, pay attorney fees and um all of those force place and um all of those force place and um all of those force place insurance and cases fees and things like insurance and cases fees and things like insurance and cases fees and things like that. And so thinking through like the that. And so thinking through like the that. And so thinking through like the states, right? There’s different states, right? There’s different states, right? There’s different foreclosure processes in longer states

[9:59] foreclosure processes in longer states foreclosure processes in longer states like New York. I probably wouldn’t even like New York. I probably wouldn’t even like New York. I probably wouldn’t even touch New York. Um but there’s states touch New York. Um but there’s states touch New York. Um but there’s states that um the foreclosure processes are that um the foreclosure processes are that um the foreclosure processes are better than than others. So think you better than than others. So think you better than than others. So think you through that that’s a good strategy through that that’s a good strategy through that that’s a good strategy especially if you are one wanted to get especially if you are one wanted to get especially if you are one wanted to get a a higher ROI at the end of that. Um a a higher ROI at the end of that. Um a a higher ROI at the end of that. Um and then two um some people like to back and then two um some people like to back and then two um some people like to back into that like if they they know that into that like if they they know that into that like if they they know that they might get the property back just

[10:21] they might get the property back just they might get the property back just buy a non-performing note um in the buy a non-performing note um in the buy a non-performing note um in the foreclosure process get that note they foreclosure process get that note they foreclosure process get that note they get the property back and then resell. get the property back and then resell. get the property back and then resell. >> Yeah. >> Yeah. >> Yeah. >> Yeah. And obviously at a discount you’d >> Yeah. And obviously at a discount you’d >> Yeah. And obviously at a discount you’d be able to you’d be getting it for so y be able to you’d be getting it for so y be able to you’d be getting it for so y >> um >> um >> um >> yeah that makes sense. So like I mean so >> yeah that makes sense. So like I mean so >> yeah that makes sense. So like I mean so it’s also like you you talked about it’s also like you you talked about it’s also like you you talked about being kind of like a a bean counter, being kind of like a a bean counter, being kind of like a a bean counter, right? So like this is nice for you to

[10:44] right? So like this is nice for you to right? So like this is nice for you to kind of be able to really clearly see kind of be able to really clearly see kind of be able to really clearly see what the you know this is the payment what the you know this is the payment what the you know this is the payment like this is exactly the return. like this is exactly the return. like this is exactly the return. >> Um so if we get it for this price saying >> Um so if we get it for this price saying >> Um so if we get it for this price saying this is exact return. Um and you know this is exact return. Um and you know this is exact return. Um and you know you can then clearly define that with you can then clearly define that with you can then clearly define that with your partners etc. There’s not really your partners etc. There’s not really your partners etc. There’s not really much variables as far as, you know, much variables as far as, you know, much variables as far as, you know, you’re not having to then, you know, you’re not having to then, you know, you’re not having to then, you know, fix it up, get it rehab, get it

[11:07] fix it up, get it rehab, get it fix it up, get it rehab, get it refinanced, get it, you know, uh, out refinanced, get it, you know, uh, out refinanced, get it, you know, uh, out there to be rented or out there to be there to be rented or out there to be there to be rented or out there to be sold because there’s all the variables sold because there’s all the variables sold because there’s all the variables there. there. there. >> Exactly. And I I think the especially >> Exactly. And I I think the especially >> Exactly. And I I think the especially the performing uh, once you buy a note, the performing uh, once you buy a note, the performing uh, once you buy a note, they have to pay the next month. So, they have to pay the next month. So, they have to pay the next month. So, it’s not that waiting time is a little it’s not that waiting time is a little it’s not that waiting time is a little right right right >> less. And so, again, you don’t have to >> less. And so, again, you don’t have to >> less. And so, again, you don’t have to kind of wait through renovations. You

[11:28] kind of wait through renovations. You kind of wait through renovations. You don’t have to wait through um anything don’t have to wait through um anything don’t have to wait through um anything like that. Um as soon as that although like that. Um as soon as that although like that. Um as soon as that although get I think the closing part is like 30 get I think the closing part is like 30 get I think the closing part is like 30 day like 30 days would probably be ideal day like 30 days would probably be ideal day like 30 days would probably be ideal and after that it just starts rolling and after that it just starts rolling and after that it just starts rolling in. in. in. >> Yeah. What’s all involved with the >> Yeah. What’s all involved with the >> Yeah. What’s all involved with the closing there? So does the uh person in closing there? So does the uh person in closing there? So does the uh person in the house also have to sign a new like the house also have to sign a new like the house also have to sign a new like deed of trust then um with you?

[11:49] deed of trust then um with you? deed of trust then um with you? >> No. So that the basically that what we >> No. So that the basically that what we >> No. So that the basically that what we do is um it’s assignable. So in that do is um it’s assignable. So in that do is um it’s assignable. So in that deed of trust is that you know it’s it’s deed of trust is that you know it’s it’s deed of trust is that you know it’s it’s assigned the promisary note deed of assigned the promisary note deed of assigned the promisary note deed of trust can be assigned to another trust can be assigned to another trust can be assigned to another investor and so um the whoever holds investor and so um the whoever holds investor and so um the whoever holds that particular note at the time will that particular note at the time will that particular note at the time will then assign it to us and so then assign it to us and so then assign it to us and so >> the borrower um will get a hello and >> the borrower um will get a hello and >> the borrower um will get a hello and goodbye letter but that’s pretty much

[12:11] goodbye letter but that’s pretty much goodbye letter but that’s pretty much all that they get and then say hey all that they get and then say hey all that they get and then say hey instead of um you know giving your your instead of um you know giving your your instead of um you know giving your your payment to Matias you give it to Sierra payment to Matias you give it to Sierra payment to Matias you give it to Sierra and so um then they started making the and so um then they started making the and so um then they started making the payments to the serer um that they payments to the serer um that they payments to the serer um that they transition to. transition to. transition to. >> Yeah, there’s a I mean it’s the same >> Yeah, there’s a I mean it’s the same >> Yeah, there’s a I mean it’s the same like you know when you get a regular like you know when you get a regular like you know when you get a regular mortgage like they they get often so mortgage like they they get often so mortgage like they they get often so same kind of deal makes sense and and I same kind of deal makes sense and and I

[12:36] same kind of deal makes sense and and I know there’s a lot of times where people know there’s a lot of times where people know there’s a lot of times where people are like who the heck is Mr. Cooper? Um are like who the heck is Mr. Cooper? Um are like who the heck is Mr. Cooper? Um [laughter] [laughter] [laughter] >> yep >> yep >> yep >> and uh if you don’t know this and if >> and uh if you don’t know this and if >> and uh if you don’t know this and if you’re listening to it it is a big uh you’re listening to it it is a big uh you’re listening to it it is a big uh mortgage provider or whatever. So like mortgage provider or whatever. So like mortgage provider or whatever. So like there’s a there’s and yeah Mr. Cooper, there’s a there’s and yeah Mr. Cooper, there’s a there’s and yeah Mr. Cooper, but it see sounds like you’re like just but it see sounds like you’re like just but it see sounds like you’re like just selling it to like Yeah. Mrs. Sierra selling it to like Yeah. Mrs. Sierra selling it to like Yeah. Mrs. Sierra [laughter] [laughter] [laughter] >> that

[12:58] >> that >> that >> it’s funny, but um yeah, that makes a >> it’s funny, but um yeah, that makes a >> it’s funny, but um yeah, that makes a lot of sense and that’s cool that you um lot of sense and that’s cool that you um lot of sense and that’s cool that you um you’ve tapped into it. So, I mean, you’ve tapped into it. So, I mean, you’ve tapped into it. So, I mean, you’re you’re essentially connecting uh you’re you’re essentially connecting uh you’re you’re essentially connecting uh the the dots between money and the need, the the dots between money and the need, the the dots between money and the need, right? So like you’re finding these right? So like you’re finding these right? So like you’re finding these people that are people that are people that are >> uh in the position to needing to to >> uh in the position to needing to to >> uh in the position to needing to to get cash fast and get out of this kind get cash fast and get out of this kind get cash fast and get out of this kind of agreement.

[13:21] of agreement. of agreement. >> Yep. So basically that’s kind of where >> Yep. So basically that’s kind of where >> Yep. So basically that’s kind of where and they’re everywhere. So as thinking and they’re everywhere. So as thinking and they’re everywhere. So as thinking through like local meetups, there’s a through like local meetups, there’s a through like local meetups, there’s a lot of people who are doing seller lot of people who are doing seller lot of people who are doing seller finance deals. Um noteinvestor.com did a finance deals. Um noteinvestor.com did a finance deals. Um noteinvestor.com did a um study that 90,000 transactions were um study that 90,000 transactions were um study that 90,000 transactions were done in 2024. So it’s going to keep done in 2024. So it’s going to keep done in 2024. So it’s going to keep going. So there’s a lot of, you know, going. So there’s a lot of, you know, going. So there’s a lot of, you know, investors, not just, you know, everyday investors, not just, you know, everyday investors, not just, you know, everyday people who are carrying these notes. Um,

[13:44] people who are carrying these notes. Um, people who are carrying these notes. Um, and so looking to give them one, you and so looking to give them one, you and so looking to give them one, you know, a pain point that say maybe know, a pain point that say maybe know, a pain point that say maybe they’re want to get out of that and two, they’re want to get out of that and two, they’re want to get out of that and two, just kind of helping them do more deals just kind of helping them do more deals just kind of helping them do more deals and being able to, you know, uh, buy and being able to, you know, uh, buy and being able to, you know, uh, buy them, um, at a, you know, at a discount, them, um, at a, you know, at a discount, them, um, at a, you know, at a discount, but also getting them the opportunity to but also getting them the opportunity to but also getting them the opportunity to do other other things. Um and also do other other things. Um and also do other other things. Um and also thinking through like the the aspect of thinking through like the the aspect of thinking through like the the aspect of what really got me excited about this is

[14:07] what really got me excited about this is what really got me excited about this is that um instead of like thinking through that um instead of like thinking through that um instead of like thinking through like a being a landlord or you know like a being a landlord or you know like a being a landlord or you know selling you know having rental property selling you know having rental property selling you know having rental property um giving the opportunity for those who um giving the opportunity for those who um giving the opportunity for those who might not have um good strong credit or might not have um good strong credit or might not have um good strong credit or anything like that that kind of prevents anything like that that kind of prevents anything like that that kind of prevents them to get traditional financing. um we them to get traditional financing. um we them to get traditional financing. um we could go then and do seller financing could go then and do seller financing could go then and do seller financing and they have a home, they have equity and they have a home, they have equity

[14:29] and they have a home, they have equity in that in that deal. Um so that really in that in that deal. Um so that really in that in that deal. Um so that really kind of also motivated me to this this kind of also motivated me to this this kind of also motivated me to this this way of thinking. It’s like, you know, way of thinking. It’s like, you know, way of thinking. It’s like, you know, with a rental property, they’re not with a rental property, they’re not with a rental property, they’re not getting the equity, they’re not being getting the equity, they’re not being getting the equity, they’re not being able to borrow against that. able to borrow against that. able to borrow against that. >> Um whereas now we’re having this seller >> Um whereas now we’re having this seller >> Um whereas now we’re having this seller finance transaction for people who um finance transaction for people who um finance transaction for people who um may not have been able to get a loan may not have been able to get a loan may not have been able to get a loan from the bank that they now can get a

[14:51] from the bank that they now can get a from the bank that they now can get a home. So that’s that’s really exciting home. So that’s that’s really exciting home. So that’s that’s really exciting as well. as well. as well. Yeah. I mean it’s it’s essentially like Yeah. I mean it’s it’s essentially like Yeah. I mean it’s it’s essentially like this underground network of uh private this underground network of uh private this underground network of uh private finance, right? finance, right? finance, right? >> Yep. Yep. >> Yep. Yep. >> Yep. Yep. >> Yeah. It’s it’s really, you know, I >> Yeah. It’s it’s really, you know, I >> Yeah. It’s it’s really, you know, I think it’s growing. Like I said, it’s think it’s growing. Like I said, it’s think it’s growing. Like I said, it’s growing especially with those who are growing especially with those who are growing especially with those who are thinking through creative financing. Um thinking through creative financing. Um thinking through creative financing. Um I think the the opportunity for people I think the the opportunity for people

[15:13] I think the the opportunity for people um now is to kind of like do it um now is to kind of like do it um now is to kind of like do it correctly. And so like there’s a lot of correctly. And so like there’s a lot of correctly. And so like there’s a lot of education out there from servicesers and education out there from servicesers and education out there from servicesers and people who are saying if you’re you know people who are saying if you’re you know people who are saying if you’re you know carrying the note here’s the paperwork carrying the note here’s the paperwork carrying the note here’s the paperwork that you need cuz basically as a note that you need cuz basically as a note that you need cuz basically as a note investor I want your paperwork to be investor I want your paperwork to be investor I want your paperwork to be really really good. Um and so if you’re really really good. Um and so if you’re really really good. Um and so if you’re you know just penciling down payments if you know just penciling down payments if you know just penciling down payments if you’re not using a serer those are kind

[15:37] you’re not using a serer those are kind you’re not using a serer those are kind of factors where the the price might get of factors where the the price might get of factors where the the price might get lower because of the the paperwork isn’t lower because of the the paperwork isn’t lower because of the the paperwork isn’t you know strong. um the collateral you know strong. um the collateral you know strong. um the collateral isn’t, you know, strong. Uh that the isn’t, you know, strong. Uh that the isn’t, you know, strong. Uh that the property itself um and the borrower, you property itself um and the borrower, you property itself um and the borrower, you know, you didn’t qualify the borrower as know, you didn’t qualify the borrower as know, you didn’t qualify the borrower as well as we would like. Um so you only well as we would like. Um so you only well as we would like. Um so you only got $500 down, you know, um things like got $500 down, you know, um things like got $500 down, you know, um things like that. So really those are coming into that. So really those are coming into that. So really those are coming into play now. So because of there’s so many

[16:03] play now. So because of there’s so many play now. So because of there’s so many transactions, um making sure that people transactions, um making sure that people transactions, um making sure that people have strong paperwork is really key now. have strong paperwork is really key now. have strong paperwork is really key now. >> Yeah. So, what if somebody’s thinking >> Yeah. So, what if somebody’s thinking >> Yeah. So, what if somebody’s thinking about getting into uh just just doing a about getting into uh just just doing a about getting into uh just just doing a seller financing deal? They own a seller financing deal? They own a seller financing deal? They own a property outright, they want to seller property outright, they want to seller property outright, they want to seller finance it, what would be some of your finance it, what would be some of your finance it, what would be some of your advice to a person to to kind of protect advice to a person to to kind of protect advice to a person to to kind of protect them or do it the right way?

[16:24] them or do it the right way? them or do it the right way? >> Yeah, that’s a a good question. So, the >> Yeah, that’s a a good question. So, the >> Yeah, that’s a a good question. So, the first is like the borrower. Um if you first is like the borrower. Um if you first is like the borrower. Um if you can use a uh RMLLO um that can help can use a uh RMLLO um that can help can use a uh RMLLO um that can help qualify the borrower um as you know as a qualify the borrower um as you know as a qualify the borrower um as you know as a you know qualifying them with their work you know qualifying them with their work you know qualifying them with their work history you know their credit score and history you know their credit score and history you know their credit score and just to make sure that they can afford just to make sure that they can afford just to make sure that they can afford the payments um that you’re providing.

[16:46] the payments um that you’re providing. the payments um that you’re providing. Um and then two um thinking through like Um and then two um thinking through like Um and then two um thinking through like structuring paperwork. Um have an structuring paperwork. Um have an structuring paperwork. Um have an attorney structure your paperwork. Don’t attorney structure your paperwork. Don’t attorney structure your paperwork. Don’t have jet chat GPT. I know that’s a have jet chat GPT. I know that’s a have jet chat GPT. I know that’s a popular, but you know, just make sure popular, but you know, just make sure popular, but you know, just make sure you have very strong paperwork and it’s you have very strong paperwork and it’s you have very strong paperwork and it’s reviewed by an attorney um whether it’s reviewed by an attorney um whether it’s reviewed by an attorney um whether it’s Adita trust or a mortgage um and making Adita trust or a mortgage um and making Adita trust or a mortgage um and making sure that um you know it holds well um sure that um you know it holds well um sure that um you know it holds well um through court and things like that. And

[17:10] through court and things like that. And through court and things like that. And then the property making sure that um then the property making sure that um then the property making sure that um they get a down a good down payment. they get a down a good down payment. they get a down a good down payment. Like I mentioned, like just because Like I mentioned, like just because Like I mentioned, like just because you’re doing seller finance doesn’t mean you’re doing seller finance doesn’t mean you’re doing seller finance doesn’t mean that you can just be a little bit, you that you can just be a little bit, you that you can just be a little bit, you know, $500. You know, get a reasonable know, $500. You know, get a reasonable know, $500. You know, get a reasonable down payment. You know, 10 to 12% or down payment. You know, 10 to 12% or down payment. You know, 10 to 12% or even, you know, 15% especially um just even, you know, 15% especially um just even, you know, 15% especially um just pretend as if it’s a true in a real pretend as if it’s a true in a real pretend as if it’s a true in a real transaction that you would do at a

[17:32] transaction that you would do at a transaction that you would do at a normal bank because that’s kind of where normal bank because that’s kind of where normal bank because that’s kind of where um some people get lax on that. And so um some people get lax on that. And so um some people get lax on that. And so thinking through that and using the thinking through that and using the thinking through that and using the vendors and people in your network that vendors and people in your network that vendors and people in your network that can help you actually do this correctly. can help you actually do this correctly. can help you actually do this correctly. So then if those events happen, you can So then if those events happen, you can So then if those events happen, you can easily sell that that note.

[17:51] easily sell that that note. easily sell that that note. >> Yeah. And I I guess one other thing that >> Yeah. And I I guess one other thing that >> Yeah. And I I guess one other thing that could be considered is uh factoring in could be considered is uh factoring in could be considered is uh factoring in some balloons maybe to some balloons maybe to some balloons maybe to >> Yeah. >> Yeah. >> Yeah. >> So that you’re not locked in forever. um >> So that you’re not locked in forever. um >> So that you’re not locked in forever. um or or just really thinking through kind or or just really thinking through kind or or just really thinking through kind of what what your needs could of what what your needs could of what what your needs could potentially be and and ways to pivot potentially be and and ways to pivot potentially be and and ways to pivot which is it’s nice that you can have which is it’s nice that you can have which is it’s nice that you can have that option as well like to to be able that option as well like to to be able that option as well like to to be able to sell the note al together but

[18:12] to sell the note al together but to sell the note al together but >> um let’s say you have a balloon in 5 >> um let’s say you have a balloon in 5 >> um let’s say you have a balloon in 5 years and you tell the person hey I years and you tell the person hey I years and you tell the person hey I intend to you know renew this but you intend to you know renew this but you intend to you know renew this but you know I just want to be able to have some know I just want to be able to have some know I just want to be able to have some checkpoints along the way to make sure checkpoints along the way to make sure checkpoints along the way to make sure that I’m still still makes sense for me that I’m still still makes sense for me that I’m still still makes sense for me to do this as seller financing because to do this as seller financing because to do this as seller financing because they’re going to still be faced with a they’re going to still be faced with a they’re going to still be faced with a big capital gains hit if they sell in 5 big capital gains hit if they sell in 5 big capital gains hit if they sell in 5 years or if they they realize the rest

[18:32] years or if they they realize the rest years or if they they realize the rest of their money. So of their money. So of their money. So >> yeah, and and I and I would, you know, >> yeah, and and I and I would, you know, >> yeah, and and I and I would, you know, tell people that you don’t actually have tell people that you don’t actually have tell people that you don’t actually have to sell the whole note. So you can sell to sell the whole note. So you can sell to sell the whole note. So you can sell partials of notes. So partials of notes. So partials of notes. So >> say you only you say you have a 100,000, >> say you only you say you have a 100,000, >> say you only you say you have a 100,000, you know, unpaid balance, maybe you know, unpaid balance, maybe you know, unpaid balance, maybe >> you sell 50 payments of those or 10 >> you sell 50 payments of those or 10 >> you sell 50 payments of those or 10 payments or whatever you kind of need, payments or whatever you kind of need, payments or whatever you kind of need, you go back into that and then once

[18:54] you go back into that and then once you go back into that and then once those payments are done, you get the the those payments are done, you get the the those payments are done, you get the the note back. And so that can also help to note back. And so that can also help to note back. And so that can also help to um thinking through those capital gains um thinking through those capital gains um thinking through those capital gains tax and um yeah that that’s a strategy tax and um yeah that that’s a strategy tax and um yeah that that’s a strategy that a lot of um note investors are that a lot of um note investors are that a lot of um note investors are using is you know buying partials um for using is you know buying partials um for using is you know buying partials um for these investors that again probably these investors that again probably these investors that again probably don’t want to have that five maybe that don’t want to have that five maybe that don’t want to have that five maybe that in that fiveyear mark um they can then in that fiveyear mark um they can then in that fiveyear mark um they can then go back and then last like most of that

[19:20] go back and then last like most of that go back and then last like most of that would probably be like principal after would probably be like principal after would probably be like principal after that because you get most of the that because you get most of the that because you get most of the interest interest up front but yeah interest interest up front but yeah interest interest up front but yeah those strategies. That’s why I love it. those strategies. That’s why I love it. those strategies. That’s why I love it. It’s like you can get into it a little It’s like you can get into it a little It’s like you can get into it a little bit differently. bit differently. bit differently. >> Niche within a niche and then a niche so >> Niche within a niche and then a niche so >> Niche within a niche and then a niche so people just like buy parcels of of people just like buy parcels of of people just like buy parcels of of notes.

[19:37] notes. notes. >> Yeah. To think through that a little >> Yeah. To think through that a little >> Yeah. To think through that a little bit. You can say like uh let’s say a bit. You can say like uh let’s say a bit. You can say like uh let’s say a payment is $1,000 um a month. payment is $1,000 um a month. payment is $1,000 um a month. >> Uh 20 payments would be $20,000 >> Uh 20 payments would be $20,000 >> Uh 20 payments would be $20,000 obviously. obviously. obviously. >> Um so you would basically be saying like >> Um so you would basically be saying like >> Um so you would basically be saying like you know I’ll I’ll give you $15,000 for you know I’ll I’ll give you $15,000 for you know I’ll I’ll give you $15,000 for the next 20 payments. That kind of that the next 20 payments. That kind of that the next 20 payments. That kind of that kind of kind of kind of >> Yep. Yep. Yep. Something like that. Yep.

[19:56] >> Yep. Yep. Yep. Something like that. Yep. >> Yep. Yep. Yep. Something like that. Yep. Something like that. Yeah. Um even you Something like that. Yeah. Um even you Something like that. Yeah. Um even you can probably even get to not even a can probably even get to not even a can probably even get to not even a slimmer discount too. Like you could slimmer discount too. Like you could slimmer discount too. Like you could even get 18 and you still get, you know, even get 18 and you still get, you know, even get 18 and you still get, you know, more of your you get a good yield um as more of your you get a good yield um as more of your you get a good yield um as an investor and then an investor and then an investor and then >> they walk away and you know be able to >> they walk away and you know be able to >> they walk away and you know be able to to do whatever they need to do with that to do whatever they need to do with that to do whatever they need to do with that 18. Yeah.

[20:15] 18. Yeah. 18. Yeah. >> Yeah. Yeah. That makes sense. That’s >> Yeah. Yeah. That makes sense. That’s >> Yeah. Yeah. That makes sense. That’s cool. And yeah, like it that that is the cool. And yeah, like it that that is the cool. And yeah, like it that that is the fun thing about getting into uh one of fun thing about getting into uh one of fun thing about getting into uh one of the most fun things about real estate I the most fun things about real estate I the most fun things about real estate I think to me is is when you get creative think to me is is when you get creative think to me is is when you get creative and like when you just really every and like when you just really every and like when you just really every treat every solution or every every treat every solution or every every treat every solution or every every situation with a like you know it’s what situation with a like you know it’s what situation with a like you know it’s what tools can we bring together to to make tools can we bring together to to make tools can we bring together to to make this all work out and

[20:36] this all work out and this all work out and >> yeah I love hearing stuff like that >> yeah I love hearing stuff like that >> yeah I love hearing stuff like that because it could be perfect for somebody because it could be perfect for somebody because it could be perfect for somebody and if you don’t know about it then like and if you don’t know about it then like and if you don’t know about it then like nobody’s going to be able to nobody’s going to be able to nobody’s going to be able to >> help [snorts] them but like yeah so like >> help [snorts] them but like yeah so like >> help [snorts] them but like yeah so like maybe we just it really in a pinch, only maybe we just it really in a pinch, only maybe we just it really in a pinch, only need 18 grand.

[20:48] need 18 grand. need 18 grand. >> Uh, can you help me out? >> Uh, can you help me out? >> Uh, can you help me out? >> Yep. Exactly. Yep. That’s it. >> Yep. Exactly. Yep. That’s it. >> Yep. Exactly. Yep. That’s it. >> That’s cool. Um, so you were able to you >> That’s cool. Um, so you were able to you >> That’s cool. Um, so you were able to you I think I read that you were able to pay I think I read that you were able to pay I think I read that you were able to pay off your student loans with uh with by off your student loans with uh with by off your student loans with uh with by doing this. Walk me through that a doing this. Walk me through that a doing this. Walk me through that a little bit.

[21:03] little bit. little bit. >> Yeah. So, I purchased a note. Um I think >> Yeah. So, I purchased a note. Um I think >> Yeah. So, I purchased a note. Um I think it was my first note I I I bought um and it was my first note I I I bought um and it was my first note I I I bought um and the note was performing for 3 years and the note was performing for 3 years and the note was performing for 3 years and then it just completely stopped then it just completely stopped then it just completely stopped performing. performing. performing. >> Um so um I got a good good learning >> Um so um I got a good good learning >> Um so um I got a good good learning lesson in the first um in the first half lesson in the first um in the first half lesson in the first um in the first half of um my career. So um because of that of um my career. So um because of that of um my career. So um because of that note not performing um and I took the note not performing um and I took the note not performing um and I took the property back essentially um through the property back essentially um through the

[21:31] property back essentially um through the process uh well the property um got process uh well the property um got process uh well the property um got increased in value. So that was really increased in value. So that was really increased in value. So that was really good. So I sold it um seller financing good. So I sold it um seller financing good. So I sold it um seller financing um for the amount that it was um um for the amount that it was um um for the amount that it was um [clears throat] owed. And so, uh, I [clears throat] owed. And so, uh, I [clears throat] owed. And so, uh, I think that was really good for for me as think that was really good for for me as think that was really good for for me as an educational process, like, okay, I an educational process, like, okay, I an educational process, like, okay, I don’t have to keep this cuz I was like don’t have to keep this cuz I was like don’t have to keep this cuz I was like freaking out like, oh, what am I going freaking out like, oh, what am I going freaking out like, oh, what am I going to do with this property? Because again,

[21:54] to do with this property? Because again, to do with this property? Because again, I didn’t want to fix it up. I didn’t I didn’t want to fix it up. I didn’t I didn’t want to fix it up. I didn’t want to be a landlord. So, I’m like, want to be a landlord. So, I’m like, want to be a landlord. So, I’m like, okay, what am I going to do next? Um, so okay, what am I going to do next? Um, so okay, what am I going to do next? Um, so kind of walked through that, found a kind of walked through that, found a kind of walked through that, found a buyer. Um, and she was able to kind of buyer. Um, and she was able to kind of buyer. Um, and she was able to kind of go through I think three three years and go through I think three three years and go through I think three three years and then, um, she wanted to pay it off then, um, she wanted to pay it off then, um, she wanted to pay it off quickly. Um, and then from there I just, quickly. Um, and then from there I just, quickly. Um, and then from there I just, you know, paid off my student loans. And you know, paid off my student loans. And you know, paid off my student loans. And so that was a benefit of one having the

[22:17] so that was a benefit of one having the so that was a benefit of one having the good structure, having the good property good structure, having the good property good structure, having the good property back there, back and having a really back there, back and having a really back there, back and having a really strong uh buyer that was able to just strong uh buyer that was able to just strong uh buyer that was able to just pay me off and um that’s kind of where pay me off and um that’s kind of where pay me off and um that’s kind of where I, you know, paid off my student loans I, you know, paid off my student loans I, you know, paid off my student loans immediately. immediately. immediately. >> That’s awesome. Um, so it was performing >> That’s awesome. Um, so it was performing >> That’s awesome. Um, so it was performing when you bought it.

[22:35] when you bought it. when you bought it. >> Yeah. >> Yeah. >> Yeah. >> And then as soon as you bought it or as >> And then as soon as you bought it or as >> And then as soon as you bought it or as soon after you bought it, it stopped soon after you bought it, it stopped soon after you bought it, it stopped performing. Yep. performing. Yep. performing. Yep. >> And as your first one, you’re like, are >> And as your first one, you’re like, are >> And as your first one, you’re like, are you kidding me? you kidding me? you kidding me? >> Yep. I’m like, yes. [laughter] >> Yep. I’m like, yes. [laughter] >> Yep. I’m like, yes. [laughter] >> How long did it take to from like the >> How long did it take to from like the >> How long did it take to from like the time that they stopped performing to the time that they stopped performing to the time that they stopped performing to the time you you got it like sold seller time you you got it like sold seller time you you got it like sold seller financing?

[22:57] financing? financing? >> Yeah. So, I think that I got three >> Yeah. So, I think that I got three >> Yeah. So, I think that I got three payments. I think it took about payments. I think it took about payments. I think it took about two months. And it probably it took two months. And it probably it took two months. And it probably it took about two months. I would say I wouldn’t about two months. I would say I wouldn’t about two months. I would say I wouldn’t say it would took longer, shorter say it would took longer, shorter say it would took longer, shorter because I was trying to figure out what because I was trying to figure out what because I was trying to figure out what the heck to do. But it I would say 3 the heck to do. But it I would say 3 the heck to do. But it I would say 3 months and then months and then months and then >> two month Yeah, two months was was >> two month Yeah, two months was was >> two month Yeah, two months was was probably And the beauty of it is like um probably And the beauty of it is like um probably And the beauty of it is like um she was like, “Yeah, I I can fix this

[23:22] she was like, “Yeah, I I can fix this she was like, “Yeah, I I can fix this up. You don’t have to deal.” I was like, up. You don’t have to deal.” I was like, up. You don’t have to deal.” I was like, “Oh my god.” “Oh my god.” “Oh my god.” [laughter] [laughter] [laughter] >> So there was two months of not getting >> So there was two months of not getting >> So there was two months of not getting paid. Um in that situation, you had an paid. Um in that situation, you had an paid. Um in that situation, you had an investor that was expecting returns. investor that was expecting returns. investor that was expecting returns. Were you having to make payments to him Were you having to make payments to him Were you having to make payments to him uh to maintain it? Yeah. Yes. So, um, uh to maintain it? Yeah. Yes. So, um, uh to maintain it? Yeah. Yes. So, um, how I’ve, you know, been taught is how I’ve, you know, been taught is how I’ve, you know, been taught is basically the investor who investors, basically the investor who investors, basically the investor who investors, you know, I think that they’re they need

[23:44] you know, I think that they’re they need you know, I think that they’re they need to be made whole and communicated well. to be made whole and communicated well. to be made whole and communicated well. Um, and so that’s where, you know, if if Um, and so that’s where, you know, if if Um, and so that’s where, you know, if if the borrower doesn’t pay, that doesn’t the borrower doesn’t pay, that doesn’t the borrower doesn’t pay, that doesn’t make I I still have, you know, pay you. make I I still have, you know, pay you. make I I still have, you know, pay you. So, um, that’s kind of how I’ve been So, um, that’s kind of how I’ve been So, um, that’s kind of how I’ve been working for seven years and I continue working for seven years and I continue working for seven years and I continue to do that. Um, now to do that. Um, now to do that. Um, now >> you want them to come back. You want >> you want them to come back. You want >> you want them to come back. You want them to be with you again. Why would them to be with you again. Why would them to be with you again. Why would they?

[24:04] they? they? >> Yeah. and they’ve been doing it for >> Yeah. and they’ve been doing it for >> Yeah. and they’ve been doing it for four, you know, four times and and four, you know, four times and and four, you know, four times and and continue to do it. And so, um, I just continue to do it. And so, um, I just continue to do it. And so, um, I just think that is a really good key. So, um, think that is a really good key. So, um, think that is a really good key. So, um, I think one of the aspects, make sure I think one of the aspects, make sure I think one of the aspects, make sure you have reserves and make sure you you have reserves and make sure you you have reserves and make sure you >> can, you know, pay them. Um, because >> can, you know, pay them. Um, because >> can, you know, pay them. Um, because they because that is a relationship that they because that is a relationship that they because that is a relationship that you want to have continually. Yeah.

[24:25] you want to have continually. Yeah. you want to have continually. Yeah. >> Yeah. Okay. So I’m I’m still trying to >> Yeah. Okay. So I’m I’m still trying to >> Yeah. Okay. So I’m I’m still trying to under. So they had to when you sell under. So they had to when you sell under. So they had to when you sell finance to the new people finance to the new people finance to the new people >> they had to bring the how much cash to >> they had to bring the how much cash to >> they had to bring the how much cash to the table to make that work. They had to the table to make that work. They had to the table to make that work. They had to bring the balance or no they bring the balance or no they bring the balance or no they >> No. So the balance basically just >> No. So the balance basically just >> No. So the balance basically just cleared from the previous. So cleared from the previous. So cleared from the previous. So >> um that was just >> um that was just >> um that was just >> a you know I had to pay whatever needed

[24:50] >> a you know I had to pay whatever needed >> a you know I had to pay whatever needed to pay to cancel that and so basically to pay to cancel that and so basically to pay to cancel that and so basically just starting over. So that loan is just just starting over. So that loan is just just starting over. So that loan is just cleared out and non-existent. So now the cleared out and non-existent. So now the cleared out and non-existent. So now the new borrower had a new loan. Yeah. So new borrower had a new loan. Yeah. So new borrower had a new loan. Yeah. So they didn’t have to take over anything. they didn’t have to take over anything. they didn’t have to take over anything. >> Oh yeah. Yeah. Okay.

[25:02] >> Oh yeah. Yeah. Okay. >> Oh yeah. Yeah. Okay. >> Yep. >> Yep. >> Yep. >> Okay. That’s that’s really fascinating. >> Okay. That’s that’s really fascinating. >> Okay. That’s that’s really fascinating. And was that in your in your own like And was that in your in your own like And was that in your in your own like local market like you? local market like you? local market like you? >> Yeah. So it was in Kansas City. So um >> Yeah. So it was in Kansas City. So um >> Yeah. So it was in Kansas City. So um which was good because it was my first which was good because it was my first which was good because it was my first time. I now I invest across the country time. I now I invest across the country time. I now I invest across the country but like I could I was literally driving but like I could I was literally driving but like I could I was literally driving down the street and seeing like okay so down the street and seeing like okay so down the street and seeing like okay so they’re not here. [laughter] they’re not here. [laughter]

[25:24] they’re not here. [laughter] Um, so, um, I’m like, I don’t see Um, so, um, I’m like, I don’t see Um, so, um, I’m like, I don’t see anybody. I was calling him. I was like, anybody. I was calling him. I was like, anybody. I was calling him. I was like, I don’t know what’s going on. Um, and I don’t know what’s going on. Um, and I don’t know what’s going on. Um, and the person who sold me the note too was the person who sold me the note too was the person who sold me the note too was like, um, he was just kind of like, I like, um, he was just kind of like, I like, um, he was just kind of like, I wouldn’t have sold you this if I would wouldn’t have sold you this if I would wouldn’t have sold you this if I would have known, you know, like. So, but, you have known, you know, like. So, but, you have known, you know, like. So, but, you know, that was, like I said, it was it know, that was, like I said, it was it know, that was, like I said, it was it was a good learning experience for me.

[25:42] was a good learning experience for me. was a good learning experience for me. Um, and so it didn’t stop me from doing Um, and so it didn’t stop me from doing Um, and so it didn’t stop me from doing more deals. It’s just kind of thinking more deals. It’s just kind of thinking more deals. It’s just kind of thinking through like how do I do this um, from through like how do I do this um, from through like how do I do this um, from now? So, that’s actually happened to me now? So, that’s actually happened to me now? So, that’s actually happened to me again and going through foreclosure. So, again and going through foreclosure. So, again and going through foreclosure. So, it’s like, okay, now it’s just like, it’s like, okay, now it’s just like, it’s like, okay, now it’s just like, okay, I know what to do, so I have a okay, I know what to do, so I have a okay, I know what to do, so I have a checklist and do do those things. So, checklist and do do those things. So, checklist and do do those things. So, >> yeah, it’s a good good education for >> yeah, it’s a good good education for

[26:01] >> yeah, it’s a good good education for sure. And um sure. And um sure. And um >> yeah, like it might have cost you a >> yeah, like it might have cost you a >> yeah, like it might have cost you a little bit a couple payments um and it little bit a couple payments um and it little bit a couple payments um and it wouldn’t have been full payments, right? wouldn’t have been full payments, right? wouldn’t have been full payments, right? It would just been whatever he was owed. It would just been whatever he was owed. It would just been whatever he was owed. >> Yeah. So, it would have been payments >> Yeah. So, it would have been payments >> Yeah. So, it would have been payments plus fees. Yeah.

[26:12] plus fees. Yeah. plus fees. Yeah. >> Okay. >> Okay. >> Okay. >> Yeah. >> Yeah. >> Yeah. >> But anyway, that’s Yeah, I mean, that’s >> But anyway, that’s Yeah, I mean, that’s >> But anyway, that’s Yeah, I mean, that’s really interesting. I I’m curious if uh really interesting. I I’m curious if uh really interesting. I I’m curious if uh you have a golden nugget that would be you have a golden nugget that would be you have a golden nugget that would be related to uh note investing or just in related to uh note investing or just in related to uh note investing or just in general um yeah somebody’s looking to general um yeah somebody’s looking to general um yeah somebody’s looking to get into this space.

[26:27] get into this space. get into this space. >> Yeah. So I think for anybody I think the >> Yeah. So I think for anybody I think the >> Yeah. So I think for anybody I think the really key nugget is you don’t have to really key nugget is you don’t have to really key nugget is you don’t have to stop what you’re doing like if you’re a stop what you’re doing like if you’re a stop what you’re doing like if you’re a landlord, if you like fix and flips, I landlord, if you like fix and flips, I landlord, if you like fix and flips, I think no investing is a compliment. Um think no investing is a compliment. Um think no investing is a compliment. Um and I think it’s really really good way and I think it’s really really good way and I think it’s really really good way to build cash flow. um especially when to build cash flow. um especially when to build cash flow. um especially when you know you’re thinking about equity, you know you’re thinking about equity, you know you’re thinking about equity, you might have some appreciation in your you might have some appreciation in your you might have some appreciation in your properties or you’re you know investing

[26:51] properties or you’re you know investing properties or you’re you know investing other things. I think this is a good other things. I think this is a good other things. I think this is a good layer especially for predictable income. layer especially for predictable income. layer especially for predictable income. >> Um and so I I think it’s not hey stop >> Um and so I I think it’s not hey stop >> Um and so I I think it’s not hey stop whatever you’re doing just go all in on whatever you’re doing just go all in on whatever you’re doing just go all in on notes but it really helps especially notes but it really helps especially notes but it really helps especially when volatile um markets like um Florida when volatile um markets like um Florida when volatile um markets like um Florida your in your your insuranceances are your in your your insuranceances are your in your your insuranceances are increasing and so your cash flow is increasing and so your cash flow is increasing and so your cash flow is probably decreasing and so if you had a probably decreasing and so if you had a

[27:10] probably decreasing and so if you had a note that could probably offset some of note that could probably offset some of note that could probably offset some of that. So that’s what one of the things that. So that’s what one of the things that. So that’s what one of the things that I, you know, tell people is it’s a that I, you know, tell people is it’s a that I, you know, tell people is it’s a complement to whatever you’re you’re complement to whatever you’re you’re complement to whatever you’re you’re already doing. already doing. already doing. >> No, I do I really like that uh way of >> No, I do I really like that uh way of >> No, I do I really like that uh way of looking at it because um I do think that looking at it because um I do think that looking at it because um I do think that especially if you’re in like if you if especially if you’re in like if you if especially if you’re in like if you if you talk to an investor that’s trying to you talk to an investor that’s trying to you talk to an investor that’s trying to get started in like California. It’s get started in like California. It’s

[27:29] get started in like California. It’s like oh my god. like oh my god. like oh my god. >> Yep. >> Yep. >> Yep. >> You know, it’s it’s great like this >> You know, it’s it’s great like this >> You know, it’s it’s great like this property will be worth double like you property will be worth double like you property will be worth double like you know in a couple years probably. But know in a couple years probably. But know in a couple years probably. But like um to to make ends meet the in the like um to to make ends meet the in the like um to to make ends meet the in the meantime it’s really tough. So if you’re meantime it’s really tough. So if you’re meantime it’s really tough. So if you’re looking at your Yeah. if you look at looking at your Yeah. if you look at looking at your Yeah. if you look at your portfolio as a whole, like trying your portfolio as a whole, like trying your portfolio as a whole, like trying to have a base of cash flow to start is to have a base of cash flow to start is to have a base of cash flow to start is great. Um, it helps. Um, and then, you

[27:49] great. Um, it helps. Um, and then, you great. Um, it helps. Um, and then, you know, I think it’s also important to know, I think it’s also important to know, I think it’s also important to have some appreciation in your portfolio have some appreciation in your portfolio have some appreciation in your portfolio as well. So, that’s that’s a really good as well. So, that’s that’s a really good as well. So, that’s that’s a really good point. It can be a really good point. It can be a really good point. It can be a really good >> way to balance things out. And often >> way to balance things out. And often >> way to balance things out. And often times people will, if they are in those times people will, if they are in those times people will, if they are in those markets, they might be looking to come markets, they might be looking to come markets, they might be looking to come to Kansas City or, you know, somewhere to Kansas City or, you know, somewhere to Kansas City or, you know, somewhere in the Midwest to try to get something in the Midwest to try to get something in the Midwest to try to get something that performs a little bit better. Um,

[28:06] that performs a little bit better. Um, that performs a little bit better. Um, but, you know, that’s also a whole but, you know, that’s also a whole but, you know, that’s also a whole another bag of worms. you got to like another bag of worms. you got to like another bag of worms. you got to like learn to invest outside of your market. learn to invest outside of your market. learn to invest outside of your market. Um, so not saying that it’s bad. That’s Um, so not saying that it’s bad. That’s Um, so not saying that it’s bad. That’s still a good option, but this is another still a good option, but this is another still a good option, but this is another way where you can just be like, well, I way where you can just be like, well, I way where you can just be like, well, I don’t have to deal with the tenants don’t have to deal with the tenants don’t have to deal with the tenants either, so maybe that’s either, so maybe that’s either, so maybe that’s >> Yeah. So, like, you know, is, you know, >> Yeah. So, like, you know, is, you know, >> Yeah. So, like, you know, is, you know, out of time if you have to think about

[28:24] out of time if you have to think about out of time if you have to think about property management, boots on the property management, boots on the property management, boots on the ground, and so with notes is a little ground, and so with notes is a little ground, and so with notes is a little bit different. I mean, we do BPOS’s and bit different. I mean, we do BPOS’s and bit different. I mean, we do BPOS’s and so, you know, there’s people who do so, you know, there’s people who do so, you know, there’s people who do those, but after, you know, that unless those, but after, you know, that unless those, but after, you know, that unless I’m buying a non-performing note, typic I’m buying a non-performing note, typic I’m buying a non-performing note, typic I don’t necessarily need all of, you I don’t necessarily need all of, you I don’t necessarily need all of, you know, all of all of those things when know, all of all of those things when know, all of all of those things when I’m um investing out outside of my own I’m um investing out outside of my own I’m um investing out outside of my own market.

[28:46] market. market. >> Yeah. Yeah. It’s really true. >> Yeah. Yeah. It’s really true. >> Yeah. Yeah. It’s really true. >> Um and then what about do you have a >> Um and then what about do you have a >> Um and then what about do you have a favorite book or um you know, one that favorite book or um you know, one that favorite book or um you know, one that you think everybody should read, you think everybody should read, you think everybody should read, fundamental, or just one you’re kind of fundamental, or just one you’re kind of fundamental, or just one you’re kind of currently enjoying? currently enjoying? currently enjoying? >> Yes. So um I’m a data scientist by >> Yes. So um I’m a data scientist by >> Yes. So um I’m a data scientist by trade. So I love data. So one of the trade. So I love data. So one of the trade. So I love data. So one of the books that I like is Thinking Fast and books that I like is Thinking Fast and books that I like is Thinking Fast and Slow by Daniel Canaman. Um I hope I’m Slow by Daniel Canaman. Um I hope I’m

[29:07] Slow by Daniel Canaman. Um I hope I’m pronouncing his name uh correctly, but pronouncing his name uh correctly, but pronouncing his name uh correctly, but it just kind of helps you understand how it just kind of helps you understand how it just kind of helps you understand how um to make decisions better by slowing um to make decisions better by slowing um to make decisions better by slowing down and how we think. And so um it’s down and how we think. And so um it’s down and how we think. And so um it’s it’s basically challenges your your it’s basically challenges your your it’s basically challenges your your thought process and really kind of helps thought process and really kind of helps thought process and really kind of helps you as you’re making decisions about you as you’re making decisions about you as you’re making decisions about investing and making decisions on next investing and making decisions on next investing and making decisions on next steps. So really enjoy that book.

[29:29] steps. So really enjoy that book. steps. So really enjoy that book. >> Cool. Awesome. Uh I have not read that >> Cool. Awesome. Uh I have not read that >> Cool. Awesome. Uh I have not read that one yet. one yet. one yet. >> Y >> Y >> Y >> I’ve heard I have heard of it. Um and >> I’ve heard I have heard of it. Um and >> I’ve heard I have heard of it. Um and then if somebody wants to follow you on then if somebody wants to follow you on then if somebody wants to follow you on social media or anything, what are some social media or anything, what are some social media or anything, what are some places they could do so? places they could do so?

[29:41] places they could do so? >> Yeah. So um I’m Sierra Davis official at >> Yeah. So um I’m Sierra Davis official at >> Yeah. So um I’m Sierra Davis official at on YouTube and and Instagram. Um I have on YouTube and and Instagram. Um I have on YouTube and and Instagram. Um I have a free educational email course if you a free educational email course if you a free educational email course if you want to learn more about note investing want to learn more about note investing want to learn more about note investing at wealthnotes.com. at wealthnotes.com. at wealthnotes.com. But those are places that you can find But those are places that you can find But those are places that you can find me. and I’m just really, you know, me. and I’m just really, you know, me. and I’m just really, you know, interested in learning and networking interested in learning and networking interested in learning and networking with people. So, feel free to DM me um with people. So, feel free to DM me um with people. So, feel free to DM me um at any time.

[30:02] at any time. at any time. >> Awesome. Well, Sierra, thanks so much >> Awesome. Well, Sierra, thanks so much >> Awesome. Well, Sierra, thanks so much for being on the show. It’s been a for being on the show. It’s been a for being on the show. It’s been a really good conversation. really good conversation. really good conversation. >> Thank you so much. >> Thank you so much. >> Thank you so much. >> Thanks for listening to the REI Agent. >> Thanks for listening to the REI Agent. >> Thanks for listening to the REI Agent. >> If you enjoyed this episode, hit >> If you enjoyed this episode, hit >> If you enjoyed this episode, hit subscribe to catch new shows every week.

[30:13] subscribe to catch new shows every week. subscribe to catch new shows every week. [music] [music] [music] >> Visit reiagent.com >> Visit reiagent.com >> Visit reiagent.com for more content. for more content. for more content. >> Until next time, keep building the life >> Until next time, keep building the life >> Until next time, keep building the life you want. you want. you want. >> All content in the show is not >> All content in the show is not >> All content in the show is not investment advice or mental health investment advice or mental health investment advice or mental health therapy. It is intended for therapy. It is intended for therapy. It is intended for entertainment purposes