NIME 49 | Note Investing Hustle

 

Note investing requires hustle as you will be in charge of various roles in the business. You’ve got to track the people, the pricing, the loan sourcing, among many things. You also have the option to diversify beyond the note space. Joe Robert, the Co-Founder, and CEO of Silver Bay Capital talks about his beginnings when he made his first investment at 19 years old to raise a capital of $1M with his own company. Joe shares nuggets of wisdom on starting your business in this space and how you can adapt to the changes in note investing so you can stay on top of your game.

Listen to the podcast here:

Note Investing Hustle: Staying On Top Of The Game with Joe Robert

I want to welcome Joe Robert. He probably has about five different titles and companies and everything. Joe Robert, welcome to the program 

Thank you. It’s a pleasure to be here.  

I’m honored by that, to pull you out of the closet, under the rock. 

Sometimes you get a little focused in the day-to-day business and working it over the years where you shut off social media. You lose connection with the rest of the world.  

We will get into some of the big moves you’ve made and how you got started in the note business. I do want to say that Joe and I had a great time at Grant Cardone’s 10X Conference, his growth con in Miami. I thought it best to bring you on. I know that you’re still very much tied into the industry in different ways. Let’s start with how you stumbled upon the note industry because everyone always has an interesting story to that end.  

I started investing in residential real estate years ago. The first property I bought was at nineteen. I’m familiar with the real estate space and investing for quite a few years. This was about early 2012. I was investing in some residential flips there in the Philadelphia area. One of my friends in the community, Howard Dinetz, was a private lender on that deal. Throughout the deal, everything was going well. He’s getting paid. After I paid him back, he decided he was going to move all this money somewhere else and not have that capital available. What happened was he started attending PPRs, meetings that are planned outside of Philadelphia for a few months. At that time, I believe they were offering about 18% annual return on the fund. The good old days of the higher return. From there, he got me introduced, took me over to the meetings. I started attending the monthly meetings. I got educated around exactly what was involved in the space and decided to give it a try.  

That put us into about the fall of 2012. At that time, I also have met Bill McCafferty in going to those meetings. had purchased probably about 10 or 12 loans. I had partnered with Bill to assist me to work out those loans. After about a handful of those loans were worked out, we got some payoffs. We paid my plans. I’ve seen the proof in the pudding. I’ve seen that work. I believed in it. I shifted my focus at the time from the real estate space over to the note investing fulltime over a period of a few months. That puts us into 2013. We decided that we were going to form a partnership, Bill and I, and also another friend, Lindsay Gordon, was working with us in the note space and going to the meetings. She wants to be involved. We gave her the opportunity to join us. She had to quit her teaching job. She went to college for educational teacher and was working down at Philadelphia City. She quit that job and we formed Note Alliance. That was about the summer or spring of 2013. From there, we started Bucks Financial. It was the first fund we did. We raised a million dollars. We raised that from people that we knew within the community, from attending the meetings and relationships that we established over time.  

There are a lot of people who come into the note space and they buy onesies, twosies down the line and look for it to morph into something larger for themselves. It sounds like you saw the proof with the initial sampling, ten, twenty notes, then you went in for it, build the partnerships and raised a million dollars of funds. Tell me about what your mindset is with that in terms of how you said, I need to ramp this up quickly. 

The mindset is when you’re first getting started, I would focus on getting the first few notes purchased with your own money or partner, however you have to do thatso you could build that track record. During the time of doing those workouts, whether it’s 612 or 24 months, I would be continuously attending meetings and meeting with other investors, talking about your experience, talking about how well you are doing. This way, when you decided to go raise capitalyou already have established relationships. The note investing is a cash intensive business or investment. You can only go so far with your own cash. I would definitely look at which way you want to go to scale your business. You can keep it small and just be passive investor, whether you’re doing it through your IRA or your own cash. If you want to create a business out of it, you’re going to need to raise capital in order to acquire bigger pools, be profitable enough to carry the overhead to do the analysis, hire the right teammates and so forth.  

At some point, you shifted from Note Alliance to Silver Bay. 

After a little while we wanted a little bit more professional name that sounded a little bit better. Something in the marketplace that sounded better and looked a little sexier.  

Hence the name and still with the intention of raising funds. You were raising over a million at that point. 

We had several LLCs set up. We had raised a million through our initial offer. We also had our own capital internally that we had through LLCs. We also had other partnerships with specific investors in other LLCs.  

With multiple setups, with multiple capital raises going on and with a competent crew, Bill with doing workouts, you putting the structure, Lindsay with the structure, who handles the sourcing end of it? Who created the deal flow for the companies? 

That was my responsibility there. Most of the relationships, looking at pools, building some of the initial models there to put some pricing on it was myself and another fellow, Kyle, who came in as an intern and then was an employee when we were located there in Philadelphia. 

Keep making connections so when you decide to raise capital for your business, you already have established relationships. Click To Tweet

I assume those connections still have lasted to this day because you’ve done a lot of transaction over the course of time. 

Even between the counterparts that we’ve bought loans from and even Kyle that work for us, I still have relations with everybody. 

The note industry pretty much hasn’t changed from 2013. 

Every industry, tech, real estate, note investing, has shifted in a different fashion over the last decade. We’re coming out of one of the biggest recessions in a long time. Everything has drastically changed.  

How has the note industry changed from 2013 until now?  

I would say maybe three things that stick out the most would be compliance and regulations that they put in over the years from what happened with all the originations in the 2000s and some prime lending. State by state, they’re putting in different laws that’s changed years ago. The supply side, when it comes to sourcing loans, that’s gotten a little bit harder because most of the loans that came out are coming through either banks or through funds. Very large funds that bought the loans from the banks in 2008, 2010. We have compliance and deal flow. Those are probably the two things that changed the most. 

As a result of those two factors, there’s been price increases.  

Price increase would be number threeLower supply, more demand and compliance has definitely increased the pricing. I’d say somewhere between 3x to 5x to where they were purchased years ago. 

You would say that it’s a wise decision to have diversification with what you’re doing? I know that you’re also involved in a number of different real estate activities. What’s your thought with diversification in general? 

It depends on how much you want to scale. That is ultimately the decision. If you’re looking to invest $50,000$100,000, a couple of hundred thousand dollars, being as niche as possible is going to give you the highest ROI or the most profit. If you had to scale millions and millions of dollars, you have to be diverse into other areas based on the opportunity and deal flow in the marketplace.  

Tell us about how you’ve diversified outside the note space. 

About fall of 2014 from the Philadelphia area down to Puerto Rico. Initially when we were there, our goal was not to invest in Puerto Rico because we weren’t familiar with it. After living there for maybe about a year and a half, a deal came through, a broker out of New York that was located in Puerto Rico. At that time, finding the polls in seconds was a little bit slow. We decided to do analysis on it, worked with a local person. We were able to takedown 54 property area pool, combining industrial, commercial office, land, farms, chicken, everything around the entire island. We diversified that deal. That was one of the best deals that worked out in the last years.  

I assume when something works out, the idea is to replicate it.  

It seems like by the time you exit the deal sometimes and you realize how well it worked, to replicate it, the opportunity is gone.  

Definitely prices in Puerto Rico over the last years have also started climbing. There’s a lot of stateside money and funds coming into the space. A lot of people moving down there for the tax benefits. Therefore, it’s already driven up pricings from the bottom. The banks are less willing too now in bulk packages because the sales are executing at a higher price.  

NIME 49 | Note Investing Hustle

Note Investing Hustle: Stricter regulations, more difficult loan sourcing, and price increase are the things that have changed in note investing for the past couple of years.

 

Isn’t that the name of the game? People that are high income wage earners or independently wealthy, they move down to Puerto Rico for the tax advantages and they end up wanting to invest in their backyard. 

That’s pretty much where a lot of people, especially the real estate game, move somewhere. You usually want to have some local presence. Once you become a local down there and invest in the area, there are tax benefits of 0% capital gain right there on the island. If you’re living there and investing longterm, it makes a lot of sense. 

Do you still hold properties down there? 

All gone at the moment, but we’re always looking at other new opportunities. We have a couple of things in the pipeline that we’re looking at. The banks have been a little shy on trying to do a bulk sale. They’re willing to do one offs. For me, I try to keep a certain perched price greater now, just for a time.  

Where do you see the note industry going in the next year or two?  

I see it moving along pretty much the same as it looks now. The note industry is always a feast or famine where it comes out. There’s a deal, two or threethen all of a sudden you might not see anything for six or twelve months. I don’t see too much changing until there’s some economic change. 

It’s interesting because there’s a lot less inventory on low levels. You remember, running Silver Bay, Bucks Financial, you could sell out onesie, twosies all day long or pick up onesie, twosies all day long. Now you have to play higher levels to see any real deal flow. That perhaps won’t change any time soon until a market correction or something. 

What we’ve seen over the last year or two with some of the bigger brokers is that the billion-dollar funds are now lowering their levels of entry so they can acquire product also in the marketplace. There’s a lack of supply of deal flow there. They’re bringing their minimum criteria maybe from $50 million down to $10 million$20 million spend. Now you have those guys that have a lower cost capital or require a lower yield and bid out the other people.  

Do you care to share a story that you and I have talked about? You had courted them for a number of years and you felt like you had a deal in place.  

It’s definitely where at the time Lindsay or myself went to the MBA conferences and always to the New York one every year. We built our list there and relationships. We definitely have been told a few times that they didn’t have any product, but if something would come to the market in the seconds that they would contact us and give us first rights to bid. With a consistent followup over a year or two, there was one that when they decide to come to market, maybe from the noise of the pricing that they hear, they decided to list it direct with the broker instead of letting us see the pool or have the ability to give them their number. 

Some of those didn’t pull through, right? 

I would say there’s definitely several of them that we tried to chase down for a long period of time. You end up all of a sudden seeing it in the market and it’s with a broker. It’s a little discouraging. 

What’s the thought on that Joe? Is the thought that, I need to cast a wider net. I need more of those lending institutions if I’m going to play the numbers game and some are going to pull through as a result of playing the numbers game? Do you go the jaded route and say, “This is how the game is played,” and turn your back from it? 

All financial markets are pretty similar. When the seller decides to sell, they’re looking for the best price. They’re looking to do it a certain way or maybe they have internal controls that when they decide to sell, some of them have to free bids internally for approval. Therefore, they can’t sell it directly to you.  

How are you involved in the note space now? I know that you’re always looking at opportunities. You’re not willing to overpay for notes. You’re comfortable just sitting it out. You’re working with Bill McCafferty on a training piece. Is it going to come out this century? I’ve already written four books and I have multiple training courses, but who’s saying anything?  

Being as niched as possible is going to give you the highest ROI. Click To Tweet

The easiest way to sum up Bill is the tortoise wins the raise. Meaning he may not always be the fastest rabbit, but he’s slow and steady, does his thing, gets it done, makes money. We’re working together. We’re taking the backend marketing aspect and working with him on that. Definitely it’s close to being out next few weeks or so.  

I think the saying is you can’t whip a tortoise. 

If you look around in other people that come and go, it’s better to be the tortoise, the one that’s slow and steady, stays in the business, been in ten years, consistently does it and makes money longterm. Not someone who just comes in, goes real fast, then they just make the wrong moves and they leave. 

On the note side, I would say like you were saying. I sold most or all of my portion or ownership with the portfolio in December. I still am consistently in touch with a handful of people that I know that broker deals or so forth. If something comes along at the right price, right opportunity, we’re looking at it.  

What is it that you’re seeking now? If someone does have a few notes they want to funnel them through your program, through your system or a capital, do you need capital at this point? 

Nothing. The only thing we would need at this moment is a bank direct deal. That’s what everybody needs is that pool of fresh charge offs or something. 

Not like the broker that’s pounding everyone and then doesn’t sell off, then pounds them on the back end? 

No. They even stopped sending me the deals most of the time because they know I’m not going to even bid or get involved in the process that they’re doing.  

I do talk to some note investors. They tell me they have a challenge. The challenge is that they’re getting tapes on a regular basis, on a weekly basis, but all the tapes that they’re getting, they’re getting outbid and they’re not winning anything. My question to them was, “Are these tapes coming from institutional sellers? Are those institutional sellers sending them out to a thousand people? The answer is yes. You need to cut it and not even look at those opportunities until they get reasonable. 

Yeah, you start to learn who are the reasonable sellers, who are the reasonable brokers, where the prices go lay or who’s going to bid. Pretty much now with all the sales I go on, you could track everything, cross county records, assignments and so forth so you could keep an eye on what’s going on, who’s buying, who’s selling. If things are a little slow, the best thing to do is work on your processes, improving your business, building out your models and being patient. If you’re invested for the next 5, 10, 20, 50 years, be patient and let the deals come to you over time.  

I had a coaching call with one of me protégés. We were going through his LinkedIn profile and all the people that he’s been making connections with, all the phone calls he’s been contacting people on. He’s put together a real quality group of individuals. He’s able to source them well on LinkedIn. He’s making all the right moves. He’s only been in there a few months, doesn’t have any notes. He told me, I don’t care about buying notes right now. I am building my infrastructure. That’s what’s important. Those notes will come when they need to come. That’s interesting because most people that come in, you’re antsy. You just transact and transact.  

I had a meeting with somebody that has been in the industry for a long time and manages a pretty sizeable portfolio. I was like, “What is the deal in this space? Is it scalable? What’s going on? His advice was, I wouldn’t only focus on the seconds for scale purposes or being able to deploy capital all the time. You don’t want the conversation to go just one direction. It depends how much you’re looking to deploy. Back to that conversation, if you’re only $10,000, $15,000, $20,000, $100,000, you want the price to stay focused in one niche. If you’re looking to deploy millions or you’re going to raise a fund for $5 or $10 million, you probably do not want to be focused on seconds. Maybe you want to add first and have the ability to invest in either one depending on the deal flow.  

The advice would be if someone’s setting up a fund and getting it registered and all that, if it’s good business, they should consider a diversity of products within the fund. Not just call out at their junior lien players. 

If they want to scale, raise millions of dollars, I will definitely not be all seconds.  

Would you venture outside real estate vat notes? 

You’re talking on the consumer side? 

NIME 49 | Note Investing Hustle

Note Investing Hustle: People who moved down to Puerto Rico for the tax advantages end up wanting to invest in their backyard.

 

Consumer, business notes. 

The things that comes to my mind in which the problem across all these assets for people coming into the space or even a few years of experience is that you may not have a lot of data on recovery rage, liquidation curves and so forth. Therefore, trying to price out certain assets without the right partnerships can be very tough to do because you could buy consumer debt on $0.40 but you might only recover $0.20. Even though it sounds cheap, it doesn’t mean you’re going to make any money. If you’re going to look at other avenues or even on the seconds themselves, you need to partner up with the right servicer that can help you do that initial due diligence and analysis on it where they can compare it to other existing pools that they’ve done collections on and build out that model for you to see what your returns would be. A lot of it is trouble of coming into the industry. First lien, you could work with the property, the value and the loan to make your profitability models. When it comes to maybe seconds or underwater seconds or consumer debt, you’re pretty much more on a collection play. Maybe not the asking play. If you don’t have the kind of money you’re going to recover on a loan, it’s hard to back into your purchase price.  

Yeah, because you can’t anticipate that capital gains’ return like with the first where you’re going to flip the property. 

If you’re going to look at the consumer aspect, I definitely would look to a couple of reputable servicers, debt collectors that can work side by side with you that when you get something they could help you model that out and see what pricing works for you. 

Do you outsell your way in this industry at this point? You have a certain set of brokers, a certain set of players that do the selloffs at the mid-level range. Do you think you can do so much research, so much sourcing that you can beat that system and create your own environment for deal flow? 

Are you more or less saying, “Can you get out of the existing network everyone’s already talking to and build your own network? That definitely is out there. When you’re talking to just seconds though, I don’t know exactly what that scale looks like because I don’t know too many people that have done it yet. Occasional one or two banks, you could get here or there. A lot of the banks look to the brokers to keep the deal professional and make sure people are compliant, make sure a licensed servicer is going to be used with the buyer and manage that deal that we have and get them multiple bids because some internal controls might require more than one bid. 

That’s like a Star Trek questionGo explore the unknown. 

There’s always a private seller out there. In real estate or the notes, there are always private sellers. You got to put the time and work. Like you said about the fellow that was building out his LinkedIn rolodex there. He’s doing the work and hopefully, he has good presentation he’s putting together and stay in touch with those people. 

He’s connecting with key conferences and everything else. He’s looking for a snowball effect. When I work with someone like that and I’m talking to him, you know when you’re working with someone and you’re like, “This person is going to make it. This person has what it takes. I’d say I definitely would give this guy credit based on what I’m seeing.  

Where is he coming from, the background? 

He’s a Russian immigrant. He came here to the country with nothing, literally just his clothes that he has on. He’s worked his way without a college degree or anything. He’s worked his way to a high-level executive position in an oil company. He’s out of Houston, Texas. He works two weeks on, two weeks off shifts in Wyoming outside Gillette. He’s a private money lender. He lends to real estate investors. Now he’s cracking into the notes space and he’s not rushed. I like that about some folks. Everybody feels internal pressures, you need to get stocked on. Like you said with Bill McCafferty, he’s here for the longterm. Bill will be here in twenty years at some fish show. He’ll be here through the distance. 

Some people, they got to get their feet wet and so forth. Some people need to be honest with themselves in the best path to go. Whether that would be buying the notes or maybe partnering with the right people that have the experience or being a passive investor in a fund. A lot of people are very quick to jump into buying the notes versus maybe partnering with somebody that already has the experience they could piggyback off of or invest in a fund that has experience managers. 

Coming at it from a different angle, that’s great. Someone that has a bunch of notes they’re not managing well because it’s just not what they do. You bring in Bill McCafferty, you bring in someone and they workout.  

If you put a few years of experience in and you have some data on your collectability, your models and everything that happened, there is debt available through some New York firms and so forth where you could get that on your pools of loans that you’re going to acquire. Everyone thinks it’s their own capital. Everyone might think it’s just a fund they could do. If you’re a long-term investor, you need to track your collections and your models that you put together every time you do an acquisition. This way you have all that stuff to propose to a lender in the future if you want that to scale up. 

Let the deals come to you over time; just be patient. Click To Tweet

You collateralize your portfolio? 

Correct, there’s some guy that I spoke to maybe even up to 80% with experience, up to 80% LTB.  

Is that for a seasoned performing paper or is that MPNs? 

Whatever. Alternative lender. 

I know that Howard Tan out of LA has made a practice of lending on MPN portfolios. He’s a oneperson show. What you’re suggesting is a real powerhouse. They come with some capital. 

CorrectI’m saying if you start your own capital, you get those deals, you get that track record, then maybe go out and you raise $1 million or $2 million. You do acquisitions, you build a bigger track record. Three to five years in with a track record and all the data and everything, there are other ways to get capital for deals that allow you to scale higher. You need product to buy too. You’re always chasing one or the other. 

With product, first things first. What would you tell someone new coming into this space other than, “Buy Bill McCafferty’s training series?” What would you tell them they should do? What should be their first few moves? 

I’ll go back to partnering up with people that have the experience in some way. Maybe you can bring the capital, get somebody that has the experience. This way you can learn through the process. After you’ve learned through the process, if you think it’s the right fit for the character, of who you are, to want to be the asset manager of the loans you acquire, then you would go ahead with further purchases maybe on your own. If you deem that seeing the whole process is not your type of character that manages assets on a daily basis, you maintain a partnership or decide to invest in a fund passively. They’re all great choices. You need to know the type of person you are, the time you have available and what you’re willing to do will on an operational day-to-day basis. 

You have to know what your weaknesses are, then you can outsource that or you can partner up with someone who can offset that. 

That’s what I was leaning to. Through that partnership or whatever process, you’re going to learn where your strengths and weaknesses are. The mindset to get involved. It’s very easy to say, “I’m going to be great.” All this jumping, you start getting like, “What did I do?  

Partnerships have the checks and balances and everything. At least you can say, “What happened?” and have another person to console you. Tell me about the biggest challenge you and Lindsay had with Silver Bay. What do you do with all that money you collected from people that bought notes including myself? 

I would say some of the biggest challenges were doing business with reputable people in the space. That’s a big challenge. It’s going to take a long time maybe to get cleaned up on the transaction piece. A lot of people over the last years definitely lost money from sellers who didn’t deliver. Definitely missed some transactions. You might lose $50,000 here, $100,000 there, a couple of hundred grand there. Before you know it, you lost a few hundred thousand. 

Someone said something intriguing to me. They’re like, “It’s so easy to make money in the note business, but it’s so easy to lose money in the note business.  

No matter what you tell people, they always decide they’re going to go and do whatever they want to do anyway. They all end up learning or they go out of business. They unfortunately learn the hard way. Reputable sellers, over the next ten to fifteen years, transactions and platforms like Paperstac or so forth come into play where people can have agreeable counterparties, escrow, notary, all that digitized. It might become safer. 

What about reputable buyers? You touched on that with Silver Bay. Did you have people that came in and did the tire kicking thing? 

In all industries, that exists everywhere. Everything always comes down to a numbers game. There’s always going to be a tire kicker. There’re people that look at deals, maybe don’t fund it, don’t have the cash. That’s part of doing business. You got to keep that note in your CRM moving forward. 

NIME 49 | Note Investing Hustle

Note Investing Hustle: Keep an eye on what’s going on, who’s buying and who’s selling. If things are a little slow, just work on your processes.

 

Who is your mentor other than Grant Cardone? 

Not to be like everybody else, but I like a lot of stuff Gary Vee has been saying lately. He’s hitting it home on a lot more of his content. Being truth to lifewhat’s going on and long-term thinking. We’re not dying today. You need to think longterm. That’s important.  

You like his message where he touches on, “You need to outwork everyone else around you. It doesn’t matter if you love your job, you need to plow through it. It’s about what makes money.  

He does say that with, “Do what makes you happy.” That comes down to the character of the person again, knowing yourself and what you want. If you want to work five days a week, you can do that. If you want to work seven days a week, that’s great too.  

It’s interesting because you have a public profile like Gary Vee and Grant Cardone and some of these other guys. They can very much be mentors. 

You also got to be smart enough or know that not everything that they say is going to fit to who you are as a character. You’re only going to a conference or anything. You only take away what you believe you want to take away for yourself and utilize that.  

With the note industry, I assume Steve Lloyd has been a mentor to you in ways. 

Definitely in the beginning. Close to 2012, being locally there in Philadelphia, Dave Van Horn helped a lot of us out.  

He left you guys. 

He started building some, if you want to call it competitors or other people investing in the space. He disappeared there. 

He said, I trained you guys too well. 

Exactly. Definitely in the beginning, he was a big influence on usespecially a lot of people that all started in the Philadelphia area. 

Then Fuquan in Jersey, he also was with Dave Van Horn.  

Steve’s been very good. He’s been a partner over the years and I’m glad to have that relationship with him.  

He talks about the three pillars his Stone Bay has. The first pillar being the notes and what he does with lending in the note space.  

Technology, laws, or compliance fields are always evolving. You can't always be the expert no matter what field you are in. Click To Tweet

I mentioned to Steve one thing there is he’s built his funds to be a little bit flexible too depending on the deal flow. The thing about what he does for those people raising money, for note purchases or second liens, maybe they want to be able to have in their offer in that alternative to be able to do some lending on the side for real estate deals or whatever. If they have cash that’s sitting idle or way per deal flow, they maybe could do those six-month bridge loans for the real estate investors. It’s worked well with Steve being invested in noteslendingthe apartments and so forth to allow that flexibility. That’s smart. 

Those are the three pillars: notes, apartments and private lending. His advice is to put it all in one fund and do all three things well. When one’s slow, the other two might pick up some momentum. 

He’s played that very well the last years. He picked up a lot of his notes years ago when PPR was handing out handsome returns and selling portfolios that are a lot higher yield. They picked up a big portfolio there. Then along the way, he’s been doing the lending and the real estate deals. The last few years, he’s been doing the apartments and keeps hitting the area at the right time.  

I’m not just saying this because Fuquan’s on, but the same with Fuquan, just everything. You see him because he puts his life out there on social media. You see that he transitions into what’s working and he goes all in with it. He knows what he’s doing in all things real estate. If he doesn’t like the tax lien certificates, you’ll see him at the tax lien certificate auction block in Jersey and he’s like, I’m figuring this thing out. He does it live. That’s great because everybody on Facebook, everyone on social media, they’re expertsEveryone’s a genius. Everyone’s a PhD. To be there and say, I don’t know this fullyI’m going to learn it now and you are going to join in with me,” is good.  

To the expert area, no matter what field you’re in, the fields are always evolving whether it be with technology laws, compliance or whatever. I don’t think you can always be the expert. Meaning know everything around the field. Even if you’re in 20, 30 years, things keep changing and evolving. There are always things to learn. It’s always a point to have multiple experts because people bring things to the table differently. You got to pick the mentors in your life in the areas that you need to focus on the most at that time. There’s nothing wrong with. One person might work for six months because you got to fix that area. Then you find another person where you need to start working on the other area.  

That’s good words of wisdom here. What you need out of a mentor will change over time. The type of mentor you’ll need will change as a result. 

I’m not saying the notes. There might be different people out there mentoring. Some people might have better skillset in one area. Some might have another area. It’s okay to have more than one if they’re focusing on certain areas and not the same thing.  

Where you’re at is you have the training piece coming out with Bill. That will do very well. There’s always need in the space. There’s always need for good, solid training and helping people avoid a costly learning curve. You can make one mistake and get burnt on a $40,000 note and that’s it. What’s the price of putting time and some money into training? It’s definitely worth it. I’m glad you guys are doing that. Are you still actively putting bids in? Are you waiting for good ones to come to you? 

I’m actively making phone calls with people I know and staying on the radar if something comes across the desk. I’m actively looking at stuff, keeping my eyes on Puerto Rico now. There’s still more opportunity there. For the next few years, there are still more distress assets coming through the foreclosure pipeline. Outside of that, over the last few years, start investing in the blockchain technology and the crypto space a little bit with a couple of people and working on that also. I named that group as boat flag group. it’s not very clear, but I see how the emerging tech will come in with the real estate and the note buying together over the next ten or twenty years. At the highest level, you should be able to buy notes instantly. You should be able to use hand money. You should be able to get your loans through a smart contract. Change your name on public record. That’s far 20, 30 years out, but it will happen.  

Like anything else, if the counties feel they can make more money by doing it a certain way, if buyers and sellers can make more money, if everyone can make more money, then it will change as a result.  

Those are the areas of focus now, looking for deal flow, working on early stage investments and working on social media aspects. 

Do you feel like you have a clear strategy in mind for how you’re moving forward in 2019? Do you feel like you’re setting the foundation with advancing in the areas that you’re looking to grow into? 

Right now, it’s not quite clear or decided on, but we’re maybe going into a fund route again but more on the tech side. Still working on deal flow as it comes at the right price and just being patient in the marketplace. 

I know you want to sell to the federal government. You and I have had those conversations. That’s my past life. I still have some involvement in that area. We all come from different walks of life into the note space. That’s why I always ask everyone how they got here because it’s not like you read a Robert Kiyosaki book and he’s like, “Go check out the note investing space. You always take twists and turns to get into note investing.  

With everything, just be patient. Take baby steps, take six to twelve months, get in, know that it’s passive, it’s on the side. Look at it at a five, ten-year outlook.  

NIME 49 | Note Investing Hustle

Note Investing Hustle: You can do business in notes, apartments, and private lending. When one slows down, the other two can pick up some momentum.

 

Anything else you’d like to say to the group here, Joe? 

Take your time, be patient, partner up with the right mentors, partner up with the right people in the industry. Only buy deals from reputable sellers or otherwise you’re going to have to go to court or have an empty wallet. Be patient over the long haul. Let the loans and the pricing come to you. If it’s not where it makes sense now, keep your feet in the door and keep working it. 

Thank you, Joe Robert, for joining us and we will see everyone next time. Take care and be good everyone.  

Thank you.

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