The Real Estate Preacher Podcast

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Transcription

Randy (00:02):

All right. Hey, I want to welcome you to today’s show. I am super excited. I’m ready to jump up out of my chair and run around the building. I’ve got a great friend of mine, Eddie Speed with us here today. He is literally the grandfather of the note space, buying distressed notes for over 40 years. He’s bought over 40,000 notes, almost $4 billion. I said that with a ‘B’ billion dollars’ worth of notes, he’s in the Small Balance Real Estate Hall of Fame, 2003. Now he’s like me, but a little bit more senior–17 years ago, he founded the note space. And I know you’ve heard about us with our 17 year track record and all that, but like Eddie’s right there in it too in the hall of fame for God’s sake. So, he’s got more wisdom in this arena than most people. And just to be honest, a lot of people that are out there have been birthed out of experience of having been connected to Eddie and his group that’s been around for over 20 years. So hey, welcome to the show. I know our audience and our listeners are going to be blessed today and it is awesome to count you as a great friend and then to be able to introduce you to our listeners as well.

Eddie (01:16):

Thank you, Randy. I really am glad to be here this morning, indeed.

Randy (01:19):

Folks, you don’t hear me get that excited, but I’m excited because Eddie’s the real deal. He is the guy that has done this. Let’s talk a little bit about your background — give a picture of what you guys do. I know you do a lot of things, but let’s help them to understand what Eddie Speed’s group does.

Eddie (01:45):

Okay. Well, I got started in 1980. Martha’s dad (my wife, Martha) was one of the founders of buying seller finance notes, really in all of the United States. And he was a retired fireman in Hattiesburg, Mississippi, and he, and a partner who was an ex savings and loan guy got together. They both had real estate investing, heavy real estate investing backgrounds, and they started buying seller finance notes. So I show up 1980, 20 years old, a kid, I mean, clueless as to really anything. And, the one thing I did though, Randy, is he’s he pointed me in a direction and I did take action. Now I’ve learned as an entrepreneur that IMO sometimes people are too smart. Sometimes people out-think a deal, so does faith, right. For sure. Me, I’m not that smart.

Eddie (02:45):

So, they pointed me in a direction and, it sounded better than wiping sweat, so to speak. So I did that and Martha and I married in 1982 and, we moved to Dallas Fort Worth. And, of course this wherever we’ve raised our family and we’ve lived here all this time, but, I’ve moved from different aspects of the note business. So the first, 10 years I primarily bought just one-off seller finance notes, perfected some marketing, know how to do it, that nobody had really figured it out in anything. Right. What they have in the industry. So just sort of blindly trying things. And then about that time, I met a guy and, he was a real estate investor in Dallas Fort Worth and, bought some notes from him.

Eddie (03:33):

He was a real estate investor. He’d bought houses, fixed them up, sold them an owner, financed him that guy’s name was D’Angelo. And he founded home investors. Yup. So I set up the note system for home investors. Okay. Yeah. So then I can’t, I’ve sort of mechanized the business where I was showing real estate investors, a recipe of how to make seller finance notes so that I could buy them. And that went from buying one note at a time to dozens of notes at a time. And I’ve now closed over a thousand portfolios of seller finance notes.

Randy (04:08):

Hey, let me interject here. There’s so much wisdom that’s just coming through this thing. And I want to just hit a couple of notes here real quick. So one, Hattiesburg, Mississippi, so you can generate success no matter where you’re at for regardless, whether you’re an attorney, doctor, an employee, whatever, no matter where you’re at size of market, whatever the case may be. If you’ve got the right skills, tools and mentorship, you can generate success to Eddie as a 20 year old young man, green, green to the thing connects with a mentor. So again, connecting with people who have knowledge that you want, just like you’re doing here, listening to the podcast, and then three taking action, not out thinking it good Lord almighty. Sometimes people will triple think it quadruple think it. I mean, Jeff Bezos, Amazon, one of the most successful companies on the planet, whether you like it, or don’t like, it’s not material their threshold for making a decision is a 70% Mark. Boom. And take action. So what Eddie just said is you’ve got to take action. So listening to the podcast is great, but there’s a call to action. So I want you to take that action in your business. So Eddie let’s keep rocking. I mean like good Lord. We’re only two minutes in and there’s like four points of gold.

Eddie (05:24):

Well, I didn’t know anything back then, except, that I did realize that her father was really a smart guy and he was successful. I never will forget in the initial meeting with him, he kept talking about buying notes and buying notes. And, his name was Mr. Shumaker and he was real Southern, right. Hattiesburg, Mississippi,

Randy (05:54):

Mississippi. Right.

Eddie (05:58):

And finally I said, Mr. Shumaker, this all sounds really great, but I was living in a 10’ by 40’ mobile home. I was working for the Mississippi board of animal health as a horse inspector, making a thousand dollars. And, I leaned up and I said, Mr. Shumaker, this sounds really awesome, but I don’t know that I have any money to buy notes. And Mr. Shumaker always wore reading glasses. And, he had a long forehead anyway, in, in those reading glasses sit down in him, his forehead, it looked like his forehead was three feet long. He looked down in those reading glasses and he looked at me and he says, boy, let me tell you something. He said, you’re worrying about that. He said, you don’t have to worry about that.

Eddie (06:42):

He said, you’re worrying about where you get the money. You’re going to fund these deals with other people’s money. And that’s the first time I’d ever heard that OPM. Right. Other people. And of course the other thing he told me, Randy was, and, and this is, this is so classic is we have a strategy that we really developed. We’ve done it over 25,000 times. It’s a leveraging technique with meds. Right. So I didn’t understand even what a note was. I didn’t know how interest accrued. I didn’t know what a mortgage really even meant. Right. So I was so green, there were so many things that didn’t make any sense to me. So this is my first week meeting with Mr. Shumaker and he says ‘you know how to make a lot of money in this business?’ And I lean way up. Yeah. Tell me, tell me.

Eddie (07:34):

And he said, you’re ‘buy long sell short.’ And I’m like, I don’t know what that means, but it must be good. And of course later you get the punch line. Of course, they had perfected a technique and buying notes. These are paying notes. I bought nonperforming notes and all kinds of different notes, right? Help real estate investors create notes so that I could be their secondary market to sell those notes. So I’ve figured out different ways to build scale in the business so people could provide me good business. Right. But Mr. Shumaker and his partner had developed a technique. What happened was this…they opened up a consumer finance company, the first institutional investor to ever buy seller finance notes. This is in 1980. Now this is like, I mean, you you’re talking about blazing the trail. I mean the curve, for sure.

Eddie (08:35):

And so what happened was is this consumer finance company calls Finance America and (my father-in-law was Gene) his partner was Ed, so Ed and Gene took 50 notes. They had bought, and they put the underwriting criteria together and gave it to them. It wasn’t on a spreadsheet back then, but it was a something, right. It was an intake sheet or something. Right. And so they gave it to them and they looked at him and said, “50 deals. We would buy from you guys. We would buy like 45 of these deals.” So we’re on the same page. They said, but we could only now buy 22 of them. And they were sort of puzzled. And they said, what do you mean? You only get about 22. You said you could buy 45. And they said, well, we can’t buy anything where the maturity is past 15 years.

Eddie (09:24):

And they had this puzzled look on their face, Ed and Gene. And they said, what do you mean you couldn’t buy anything past 15 years? It won’t go in the computer system. So it goes to show you how quick a thinkers they were it. And Gene instantly said, don’t worry. We won’t sell you more than 15 years of a note. So they took a 30 year note. And so 15 years of payments and paid for the note plus made a profit upfront. And then if after 15 years, that note was reassigned back to them. Now, Randy, that is now what you fully recognize is called a partial. Right. But that was strategy was figured out to solve a computer problem. Yeah. Wow.

Randy (10:13):

Well, and that’s the thing, too, that even too, and again, I know some of y’all listen that he’s going to unpack this a little further, may not understand it. But the very thing that I would say is the understanding of all of us are going to face challenges of various natures. And the key is you’ve got to be able to figure out the solution. The truth of the matter is we talk about this in our team meetings all the time, there is a solution to every challenge. Now you may not like the solution, but that’s not material. There is a solution. My, my, my favorite book says that there’s nothing new under the sun. And so, even though the challenge may be new to you or me, it’s not a new challenge because there is a solution. And so, Gene and Ed just, they sat down and maybe they’re sharper than most. And so they figured it out quicker. But the bottom line is they came up with a solution that now is part of the norm of the industry that you do.

Eddie (11:12):

Exactly. And it changed my life probably more than any single thing, because it allowed me with a concept of how to start out with nothing and go build a bank. Yeah. Right now I have learned that most people can’t, they don’t have wealth and the people can have high income and not high wealth for sure. But I didn’t have high income. Right. So I had to figure out how to go start straight to the wealth method. And you’ve heard it’s Randy, some of our mutual friends, we call it being a deal architect. Right. You take, you, you can figure, and you’re a deal architect, Randy, you, you, you buy a multi-million dollar apartment complex and you use a lot of the bank’s money and then you use investor’s money and they’re not either one of them don’t go put the deal together the way you do or manage it the way you do. Yeah. So everybody brings something to the table, right? Yup. Absolutely. So I, I started using this leveraging strategy. I did it literally over 20,000 times. I mean, I had done it a lot. Now I’m going to tell you about, because it seems fairly innovative, right? Yeah. Yeah. So let me just tell you how I laugh at myself sometimes as how you can go along a long time and the next idea really changes your life.

Randy (12:45):

Mm wow. That’s that that’s gold right there. Right? The one idea can change your entire life, but you’ve got to keep going, keep persisting, keep moving forward too. Oftentimes too many people quit before that real breakthrough element.

Eddie (13:05):

So what happens is I, over 20,000 times I had either bought or sold a stream of payments of a note and not the entire note, a partial right. 20 year note. And we would buy 10 years or sell 10 years. Yep. And in the way the math works is this right. I don’t want to get into some deep math lesson, but let’s just take a 20 year note. The payment hypothetically is a thousand dollars a month, every month for 20 years, 240 months. Yup. Now that’s about a hundred thousand dollar note, just round figures. Right? So you buy that note now in my business, you buy them at a discount. Okay. Now how much the notes worth and how much it’s discounted and stuff. There’s sort of a, there’s a building math process to learn what is an a grade node. And is it more valuable than a B grade note and so forth and so on?

Eddie (13:59):

And naturally it is right. Yeah. But let’s just say for conversation purposes, I buy that note for $80,000. Okay. So I buy it for $80,000, but I’m entitled to collect back the hundred thousand plus interest. That’s a discounted note. Yep. Right. If you went to a check cashing service and you handed the check cashing service a thousand-dollar check, they’re not going to give you a thousand bucks. Are they know they’re going to give you 900 bucks, right? 50, right? Yep. Well, they bought your note at a discount because they bought it. It didn’t mean they were fully entitled to collect whatever was owed on the note. But that didn’t mean they had to pay that amount for the note. That’s when the check cashing service took your check, they technically bought your note. Yup. Checks nothing but a note. It’s not an installment note with interest in the mortgage, but it’s still a note yep.

Eddie (14:51):

Practice to pay. That’s the concept. That’s a discounted note. Yep. Okay. Very simple. So we buy this note for 80 grand we’re in total collected back then I would turn around and immediately have the money stack in place with another investor where they would buy, they would fund $85,000 for that note, but they weren’t going to buy 20 years. They were only going to buy say 12 or 13 years. Yeah. I would make $5,000 profit upfront and then keep the residual interest. Right. I would just sell them the best part of the note, sort of the heart of the watermelon, so to speak the first payments. But I would get the note back and I had didn’t have anything invested. And that became residual income. Right? I’ve done this a lot. All of a sudden, I’m at an event teaching with a guy that is a, probably the granddaddy of knowledge about self-directed retirement.

Eddie (15:52):

And so Quincy owns a company called Quest Trust, and they’re an IRA administration company, Randy, you know him well, he’s a good, brilliant guy. And he, Quincy is an encyclopedia of how much he knows. So we’re teaching. And I, and I had to, I had never considered doing this in a, in a IRA account, never considered it done at 20,000 times in my company. And Quincy starts talking about, and I said, Hey, Quincy, could you do this? And of course I had like spreadsheets and graphs and my computer. I could quickly pop them up and pull up some numbers and show them what it looked like. And you’ve seen me do that. And, and I mean, I say, Quincy, can you do this? And I said, could you like buy this note for $80,000? And then for $79,000, if I sold the front 10 years, wouldn’t, wouldn’t it be for a thousand dollar investment in my retirement account that I could own the back 10 years of that note, the back 10 years’ worth of payments awards, could you turn out a thousand dollars into $120,000 worth of income?

Eddie (17:06):

And he said, you could.

Randy (17:09):

Hold on a second here, listen here, did you hear that? Don’t miss that point. Could you take a thousand dollars and turn it into $120,000 income stream? And the answer to that was, yes.

Randy (17:23):

You could Roth. Never pay tax on it in a Roth IRA. Now, even too, I want to just highlight a thing here too. Now, again, this came about out of a, a meeting of the minds or a mastermind or a networking together, you and him both speaking at event. And so part of that is, some of the best fruits don’t come from just being a lone ranger. They come from being connected together with other like-minded high quality individuals. And again, then bears out where two minds don’t equal. One plus one equals two, it equals 10. And, a thousand equaling 120,000 is not normal math. And so praise the Lord. That’s, that’s part of what you got to continue to put yourself around the right people invest with the right people, spend time with them to get that fruit praise. God. So awesome. And then, so what did you do with that? All right. So bam, here it is. You, you see this, moment, this epiphany, what was the next step? What did you do with it?

Eddie (18:23):

So I run a number of businesses, right? We, I run note school, a training business. We have a capital fund–we’ve got around 2000 assets under management on any given day. So let’s just say like you, Randy, my day job is fairly full. Yeah. But my wife who had worked with me in the business, she stayed at home with the kids for a while, and then she got bored and then she became an active fix and flip investor for a while, but always had worked around the note business and understood this transaction very well. I came home from this event and I said, sweetie, we’re fortunate enough right now. I don’t need you to go make money. I need you to go grow wealth. And at our age, putting it in a retirement account made the most sense.

Eddie (19:14):

Now, some people wouldn’t be at the right age to do a hundred percent focus on retirement. If you could do this in anything, Coverdale, educational accounts, health savings accounts, you can do it in your corporate entity, which I’d done lots of times. So there’s lots of other ways we could do it. I said, but this is a really slick strategy. And I said, I want you to focus on this. And she did. And she, she really, she would buy the whole note by the whole 20 years’ worth of payments, sell about half of it. And we would have investment in it, but not a giant investment. We would have an investment in it. Right. That’s a, that’s a requirement of the IRS that sometimes we’d have 20,000 in it. And sometimes we’d have a thousand in it. Yeah. Okay. So I don’t want to tell anybody, you can do this for a dime and go do it.

Eddie (20:03):

Trouble with the IRS if you could do it. But we, I think we teach this accurately and we’ve had a lot of guidance from really smart people that understand the laws, right. That taught us how to do this. So she really became a pro at this. And this Randy, it’s got like a reputation.

Randy (20:20):

He Oh yeah. A hundred percent.

Eddie (20:22):

But it’s just that she did this strategy. Now. She has to know how to look at a note and determine, is this a good note? Is this not likely going to pay? Right. So you have to evaluate the underwriting elements, this isn’t brain surgery. Yeah. But I wouldn’t do it without training, but, she evaluates that and then she buys it. And then what she does is fine. And you’re going to laugh. She finds a burnout landlord, right. Because there’s this crazy amount of landlords out there we’re talking, Randy, statistically, that there is eleven and a half million property owners that own one to five units.

Randy (21:04):

Oh yeah. It’s in there. They’re dealing with the tenants, the toilets, the headaches, the phone calls, the they’re getting the crap beat out of themselves oftentimes. And that’s exactly what happens is after a period of time, they’re like, man, I’m just, I’m sick of this stuff.

Eddie (21:20):

I watch that HGTV and they make it look so doggone fun. Yeah.

Randy (21:24):

For sure. Yeah. Yeah. I was talking, I was talking to somebody that is, the celebrity status person and their spouse wanted to be involved in the hands-on elements of real estate. And, and part of that is because of what you just said, this appeal of, how it’s designed and this, that, and the other. And it’s like, man, there is a lot uglier stuff under the hood than what you see on, on HGTV. I mean, now God bless you. You want to go do it, go try. There’s been plenty of people that do it. And then after a year or two, they’re like, Oh, this ain’t cracked up.

Eddie (22:08):

So it’s sort of funny. None of these things that we woke up and said, we’re going to go look in this direction. It just was sort of people that showed up. We started saying, Hey, we’ve got a great note. We’ve bought it. We’ve put all the paperwork together. We’ve assembled it. Yeah. You’re going to buy the first 10 years of the note. You’re not going to earn the return that Martha earned, but you don’t have to do the work that Martha does.

Randy (22:34):

That’s a great point. Let’s consider no doubt. People are thinking, well, how is it? You’re buying a 20 year. And in you’re selling a 10 year, there’s a couple things, right. There is like one, Martha has gone out and done all the groundwork, define the burnt-out landlord or whoever it may be define that 20 year note, that’s a quality investment. She’s been in, been able to properly underwrite it, negotiate it to purchase it, edit appropriate and proper discount to make it a good investment. And then, then finding a person who is then maybe their timeline is not 20 years, but 10 years. So a different financial objective. And then now, is saying, Hey, I’d like to make that investment for 10 years. And if I’m getting whatever it is, six, seven, 8%, whatever the numbers are, I’m happy with that because it is stable. And it provides for my timeline and I’m still able to run my law practice or my plumbing business or whatever it is. And so she’s providing that value to them,

Eddie (23:38):

Right. She’s giving them a consistent return, a dependable return, but not the return she makes. So let’s just look, let’s look back. Our bank makes money. I just use some simple math here. Okay. A bank takes your money, Randy. And they pay 2% interest to the depositor. You turn around and loan it to me. And they charged me 4%. Okay. They paid you to, I know this is it’s even worse than that. Right. But just saying like zero, now they paid you 2% interest and they loan your money to me and charged me 4%. Yeah. Now that sounds like a good business. Doesn’t it? For sure. So here’s what Martha does. Martha’s retirement account buys a note at about a 10% yield. Yeah. Okay. But let’s understand we’re in the business, right. We’re I mean, we’re making it happen.

Randy (24:36):

She’s working. It’s not just falling into her lap. There’s, 20 plus years of work involved in it. There’s daily exercise of working it out. It’s like, it doesn’t just happen by osmosis. I, I get that with people. Oh, maybe I’ll go out and buy a complex, like you do. It’s like, yeah. Good luck. Yeah. Yeah.

Eddie (24:57):

Yeah. Now we teach people to do this part time. So I don’t want to make you sound like you got to go work 12 hours a day and all that stuff, but it’s certainly taking it deeper than just being passively for sure. Well, Martha finds this burned-out landlord who’s usually very busy. They’re either are at retirement or they’re building retirement and they’re a doctor, lawyer, Indian chief concept. Right. Then she buys that note at about a 10% yield and sells it at about a five or 6% yield. Yeah. But they get their money first because of the way the arbitrage in the yield works. She’s able to sell the first half of that note for about what she paid for it. Now there’s some investment in, as we say it. Yeah. So it’s a great deal for her investors.

Eddie (25:46):

And by the way, once she like you, Randy, once Martha finds somebody that ever funds a deal, they always find more money there. They never tell you they have all your money, but they, they go find them the next piece of money because they like to deal so much. So sure. So what happened was, is this became the premise for me to build a school, right? Because Martha is only one person and Martha can only do so many transactions a year. In fact, the IRS says she can only do so many transactions a year without calling it a business. So all of a sudden you’re looking at thousands. It was a hundred thousand seller finance notes created every year, a hundred thousand. Right. So what are you going to do with all these notes and all these people that would sell the notes and all these burnout landlords. So all of a sudden I started assembling the components to just show, no, this isn’t all that note school teaches, but it’s probably the most focused to have an interest to your audience. Right. Absolutely. And that is, do you mean that I could, on a part-time basis go take money and use a bank leveraging strategy. Like we’ve been discussing and wake up one day and turn that into multiple 10 times of what my investment was and the answer is you can.

Randy (27:08):

Yeah, absolutely. It’s well, and I think, part of the thing that people say, well, how is that possible? It’s like, well, one of the things you look at is the focus with which you and Martha have approached this thing over the last, 30, 40 years. It’s like, even though there’s different nuances, it’s in the same focus, right? It’s like, and that’s the thing I want people to hear and understand. It’s like, that’s part of really scaling to a great level of success is by not being a ‘Jack of all trades,’ but being a master. And that’s really what you guys have become. And then even now in node school, good Lord, it’s 17 years running that you’re teaching from a point of mastery to other people so that they can understand these concepts and then also benefit from them as well.

Randy (27:59):

And it’s not like, and again, Eddie and I talk, it’s like, how’s it going? He’s telling me about the good things going on in, in the note world. And he’s a Randy, how’s it going? I’m telling him about the good things going on in the apartment world. Neither of us have come up and said, Oh, by the way, we’ve got this great storage project in Europe, we’re doing, what I mean? It’s like, that’s not the thing. It’s like the focus and the mastery yields, master level success. And so that, that’s phenomenal. So now what are the mechanisms with how people connect together? Let’s break down. Like, I know you mentioned you got the note school, the fun, let’s talk about how do people participate in benefit from investing in the notes and or with you, what does that look like?

Eddie (28:47):

Well, what I’ve learned is is whatever level of activity somebody wants in this business, it can be very passive or it can be like Martha and be a lot more active or let’s just say active brain, right. Active, creative thinking. So the first thing I’ve learned is you got to show them some examples. You got to lay some numbers out, quite boarded out so they can see the numbers and follow the numbers, describing it, describing it without the white board makes me think sometimes, right, because I’m so used to like laying it out and showing you the numbers in circle in that first 10 years and say, boom, it’s this money. And you can see it. And you’ve seen me do that, Randy. So for sure, that’s the thing. I think it would help the audience. And I came today prepared to say, if you’re not utilizing some really creative strategies with your retirement account, let me challenge you to think about that.

Eddie (29:44):

Yeah, absolutely. And so we, we did a white paper about that topic in particular, we’re also talking about not just IRA accounts, but, but you can do self-directed 401ks. You can do Coverdale educational accounts, which are crazy advantage for your, for paying for education strategy. And then also you can do the health savings. So there’s, and then along with that, I’m fully prepared. People say, okay, I need to see this a little bit. Right. So we’ll do a, like a little quick workshop, like less than 90 minutes. And we’ll lay out some case studies like here’s, here’s a real deal. And here’s how we did it. And here’s how we carved it up. And then all of a sudden, the question then somebody becomes then is I want to be the guy that does that first 10 years, or I want to be the guy that does what Martha does and buy the whole note and then sell the first 10 years deciding what level they want to be involved in the business. And of course our job then at note school is to figure out, okay, if you’re this in what lane would you go down to go learn how to properly do this? And once again, all of it, virtually everybody comes to note school. It’s a part-time thing. I’m not, I mean, people are adding this to their life. They’re not changing their entire life to add it.

Randy (31:03):

Yeah, for sure. No. And that’s, we have a lot of folks like that where an attorney that they love the practice of law, but they recognize that the stock, market’s not their bread and butter. So they’ll invest 300,000 a year. That’s excess cashflow that, Hey, I want to, I love multi-family. I want to invest in this space, but they’re not going to give up being an attorney. They, they like the practice of law. They enjoy it. They built a quality business. And then this is also something where for folks that see the value of real estate, like the concept of being the bank, I mean, good God who wouldn’t want to be the bank. Right. And that can learn these techniques, not have to change their life, but still then augment supplement or increase the returns that they’re getting in their recount.

Randy (31:55):

And, and, and I love the fact that, one of the things too, let’s not miss, even in this strategy, you’re given the first 10 years, like, as Martha’s done that, you’re giving the best portion to them really. And, and it’s a principle like, and again, everybody learned this in Sunday school, right? It’s like give, and it shall be given to you like the golden rule. And quite frankly, most oftentimes as adults, we struggle with that because we’re trying to get for ourself. And then, but recognizing as I give to others, that’s where I’m going to receive. And the more that I’m able to give the greater my success becomes. And that’s really a hallmark of what it’s been here for you guys, Martha’s

Eddie (32:40):

Passive investors love her. Oh, they don’t want it. They don’t want to go do what she does every day, but they love the fact that she does it. And she has her knock on wood. Her investors have never lost money with her. Right. They never lost their money. So in, in the, in, she puts them in a very safe position. Right. They’re getting, as you said, they’re getting all of their money for, she really gets any of that residual income. And, and once again, we’re not mad at the bank that they use an arbitrage strategy, right. We’re not mad at the bank that they take your money and pay you 2% in loan. Right. I’m not mad about that.

Randy (33:17):

Yeah. So nobody’s mad at Martha that she uses an arbitrage. Yeah, no, exactly. It’s I mean, that’s just, that’s part of the process of how the financial system works and the buy here’s the key by being a participant in the system on the right side, you’re able to grow and increase. If you are on the wrong side of that in a consistent way, you end up in the wrong place at 65. I remember good Lord. I had a doctor client that came to us that their strategy is evidenced to them by their broker was like, stay in this. And if you die by 90, you’re going to be okay. And it’s like, what strategy is that? You’re on the wrong side of the equation. And thankfully they have a joined to understanding real estate and investing in real estate versus just the market.

Randy (34:06):

And then now they’ve got enough income to fund their retirement. They’ve got enough income to fund the Boy Scouts or Girl Scouts camp down the road, the mission that their church supports in Brazil and plus travel and not be praying to die at 90. Right. They’re going to have money left over. And so that’s so key about being on the right side of the equation. And so that’s something that even at note school, that’s part of your given as well too, that you’re teaching people how to be on the right side of the equation. What does that look like –let’s talk about that for a second. What does note school look like? How much of a commitment is that for somebody? Are they there for days or weeks? Or what does it look like?

Eddie (34:49):

So usually it progress is like this, Randy will, will the, the I’m going to give your audience a white paper. Okay. And then I’m going to give them an online course. It’s a live course, right. It’s not, it’s not taped, it’s live and I’m gonna give them a live course for about 90 minutes. Right. And, and that then tells them, okay, I want to progress. Now, what I would love to, for them to do is to move from that to move to more of like, okay, I’ll come to like a three-day event. Right. But it’s virtual. You don’t have to come. Right.

Randy (35:24):

Oh, wow. Yeah. That’s the benefit of COVID nowadays, right?

Eddie (35:28):

Yeah. I mean, we’ve put over 500 people in note schools on a three-day class, since the virus, over 500 people. So we, we, we can do it real efficiently. They’re not so big that, that somebody lost. Right. We, we have staff that makes sure that we can touch people and engage with them and help them blueprint what this might look like in their lives. So we try to, we try to take, we try to hear their story and say, okay, you could do this. Or with this situation, you could do this. So we try to like, we show them, I love case studies. Randy, I love teaching with case studies because they’re real. And the, and the thing about the case, the value in the case study, what is that? You can remember it. People can’t remember formulas. No. Yeah. If people remember one thing about this story today, it’s not going to be the math we gave them, it’s going to be Martha story. Yeah.

Randy (36:25):

Or Mr. Shumaker, you didn’t forget him. Yeah, exactly. Right.

Eddie (36:29):

And it works. And so we’ve just learned that that is a very effective tool that people can remember the house or the story about Martha’s partial investor that burnt out landlord, or, but the, the, the people that sold the note, why did somebody sell a note at a discount and on and on and on, right. Yeah. And all of those are the things that way we try to make it as real as we can. And then they can just decide what they want to be. I mean, I trained a lot of professional people, accountants, engineers, doctors, attorneys, realtors, I’ve trained a lot that have a busy day job and say, I want to do this. How can I do this legitimately part-time and do it. And so then that becomes a big task for us. So figuring out how to get around people’s life issues has been part of developing note school.

Randy (37:25):

Absolutely. And that’s it, it’s an awesome venue because again, I know we have folks that even they invest with us, they enter into retirement phase, maybe they’ve sold their law practice or their doctor sold their business. They want to be a little bit active, meaning, they’re actively engaged with us in making decisions, but they’re not hands-on and the management of a complex, but Hey, I love real estate. And I’d like to be a little bit more involved. This is a great Avenue to have involvement, but not be at a place where you’re having to manage contractors on some flip and having to deal with that, or buying a one-off or two-off rental where you’re having tenant issues. It’s a great avenue to engage your mind in your hands, but not go down the rabbit hole where you’re stuck in creating a job for yourself. That’s a job that sucks.

Eddie (38:19):

The passive factor is a big thing. Safety is great, but safety and passive is really great

Randy (38:28):

For sure. Absolutely. Well, so how would the folks want to find out more, what’s the best to connect together with you guys to get the white paper? I mean, that’s a great starting point because then it can be that on their timetable, they can digest the information. I know you’ve got some great examples in there to break down further this process of how you can become the bank.

Eddie (38:53):

So we built you a special link in note school, and you just go to noteschool.com/growwealth. That’s going to take you to a landing page. There’s a short little registration, and then we’re going to immediately give you the white paper, and then we’re going to schedule you because these are live. We’re going to schedule them for a live training. And a lot of the questions that you asked Randy, great questions, like, how does this work? And, what is a discounted net? We go through some of these concepts, this lay them out over again, and then we can come quickly, then take those basics and put them into applying them to, okay, what if you found this deal? What if you were Martha and found this deal, or what if you were Martha’s partial investor, what would be your risk or what happens, who services the loan, who sends out the proper IRS forms, all of those questions that people are going to have.

Randy (40:18):

Absolutely. Well, I think it’s key that you’re learning from top-notch people and no doubt Eddie and Martha are the gold standard in this arena. And then two, again, I cannot stress this enough. Like you hear Eddie’s story of learning from Mr. Shumaker who was an expert, and that’s created 40 years, 40 years, and almost $4 billion of success. That’s how you do it. And I know you folks that are listening have connected together with us and benefited through that, but this is part of that process where you connect together with people that have the success that you want, you can learn from them so that you can participate or create that same success for yourself. And that, I mean, no doubt, that’s been one of the greatest things for me over the last 20 years in real estate.

Randy (41:12):

And then even 15 years in, in money management prior to that was connecting with the right people in learning, Hey, this guy’s doing what I want to do, learning from him, and then being able to implement it myself. And so, that’s awesome. Well let me ask you just a couple of questions again. I want to encourage you folks, noteschool.com/growwealth, right? Okay. So go there. You can get the white paper. I’ve seen the stuff that Eddie’s talking about before, and it’s just really a great tool to give you understanding. So again, those of you who are like, wow, this sounds interesting. Definitely take that next step and do it. You’ve got so much wisdom that’s accumulated in these years. What has been the biggest challenge you you’ve been through in this business? And then what would say what’s the, the greatest singular point you learned from that?

Eddie (42:12):

There was a point in the business where I really grew a big business and I didn’t have the business components in place. Well, and so I had, I had some setbacks, so I had, this was a long time ago. Yeah. But I grew too fast. I was too good at selling it, not note school, but their actual business. I was too good at doing business. And then I lacked some operational skills. So I, I have feel like I’ve developed a discipline for it, and I’ve developed a heart for it. And you, and I’ve talked about that, Randy, where I see young smart guys and they get over their skis a little bit. And I’m just saying, I don’t want you to have to go through some of the pain I went through. So I I’ve made mistakes from getting too big, too fast.

Randy (42:57):

That’s a great point — wisdom teaches that often by experience. And so we’re trying to give this as an experience, so you don’t have to go through it. It’s like, Hey, it’s great to grow your business, your law, practice, your dental practice, whatever it is, it’s great to grow it, but do it in a measured way where the systems supported along the way or otherwise there’s going to be pain. And I’ve been there with you. And I understand that. What would be the number one thing that you’ve learned this year, and then what was the trigger for that learning point this year? And I know there’s a lot that’s going on this year.

Eddie (43:31):

We had never done a three-day virtual class. Now this weekend, we start our 17th virtual class. We put over 500 people in a three-day virtual class. We’ve grown note school. We’ve shown people, all kinds of different lanes to grow and stuff. And we, we, we just didn’t believe that we could do it virtually well. And now we’ve really, I believe, excelled at it amongst people that offer training. Right. We’ve come top of the heap and, I give my team credit for that. I am, I’m good at what you’ve seen us do for the last 30 minutes. Right. I’m a storyteller. I love this. I have passion for it. I’m fairly good at structuring deals, but I’ve had a team that was committed to making sure that our students got the same deliverable that we could do live.

Randy (44:28):

Wow. And so there’s so much gold right there. Right. So being able to make the adjustment, given the changes that have gone on with this COVID-19 and the shutdowns and all that, I taught with somebody that’s in the financial business and I’m not a tech person. So they’ve really not embraced the zoom thing and that’s hurt their business. It’s like, wow, this is taking what was in the future and brought it to today. And so even though Eddie, Hey, I like this portion of the business, but maybe not that surrounds himself with a team, people that can help facilitate those things. And then also third little nugget in there is making sure that the quality of it is being delivered as the same as what they would experience in person. That’s you always have to look out for the end user, look out for your client, look out for your customer to make sure that they’re getting the value. So, man, that is awesome. One last thing. What are you planning for over the next six to 12 months? What do you see for you guys? What are you focused on?

Eddie (45:34):

Well, I think that our industry is in for a reset. There are 7 million people that didn’t make a mortgage payment last month. Yeah. And, there’s another small, this is on the residential side. So we’re not talking about apartments or anything, but on the residential side, there’s a lot of burnout landlords that didn’t collect rent. There’s, that’s estimated between 2 and 3 million. And I don’t know why it’s such a gap, but 2.6 million that didn’t pay rent. And wait a minute, you have three and a half million people in forbearance, three and a half million people that are 90 days, plus delinquent say 3 million that didn’t make a mortgage payment. And in 2008, Randy, they would’ve called that shadow inventory. Right. So this thing that real estate can’t go wrong. Like every, because there’s such a shortage of listings right now. And everybody that knows a realtor knows that they get eight offers every time they put a house on the market. Yeah. I’m just going to say from a veteran and with some guys with some fairly long scars down my back, I’m going to say, operate with facts and data. Not with emotion.

Randy (46:48):

Absolutely.

Eddie (46:50):

School has made a high focus of that.

Randy (46:54):

That’s awesome. Yeah. And that’s, I mean, you can’t get better than that. Right there. It’s like facts and data being pragmatic that you’re looking at it from a non-emotionally driven place. And ultimately all of us have emotions, but this arena here, that’s not the place that you want to use them or let them drive you. It’s facts and data. So. Awesome. Awesome. Well, Eddie, again, I want to thank you so much for coming on and folks, I want to invite you to, again, check out noteschool.com/growwealth. Eddie, thank you so much for coming on and just being a blessing and sharing with our audience today. What, what a tremendous blessing brother. Thank you so much. Thank you. Awesome. Hey folks, thank you so much for tuning in today. Have a blessed and victorious week four. This is the week God has ordained for you.