Buying Mortgage Notes Generates 15% + Returns with Brian Lauchner

Are you earning 15% on your passive investments? Would you consider buying mortgage notes if you could generate those returns?

Many investors in the real estate business routinely earn these type of returns through buying mortgage notes. Even 20%-30% or more.  During this investing podcast, Brian Lauchner and I discuss two main topics. First, how to close more deals as a real estate investor using creative financing methods powered by the use of purchase notes. Second, we discuss how to sell those performing notes and generate quick cash.

Guest: Brian Lauchner-In Just a Few Short Years, Brian Graduated from Wholesaling & Flipping Houses to Designing a Lifestyle of Freedom through Buying & Selling Mortgage Notes.  
Episode: Buying Mortgage Notes Generates 15% Returns & More with Brian Lauchner
Big Idea: “Any Cash I Put in a Deal, I Quickly Extract” The Note business is essentially originating, buying, selling, or holding mortgage notes.  Brian describes his strategy for pulling his cash out of every Note deal as soon as possible-ideally within the first week or two.  An even better scenario often occurs where a note deal is constructed and a large chunk of cash is pulled out day 1.

 

  

Episode Sponsored by the Deal Machine:

Driving for Dollars Software to Build a Team of Drivers, Manage Routes, & Even Automate Marketing.  Free Access at  http://REIDealMachine.com/

 

How to Buy Mortgage Notes

The first logical step in generating large returns on investment capital is to figure out how to buy mortgage notes. It begins with understanding the risk & return of buying the note. Think about it this way, if you were to buy a stock, you’d first like to do some due diligence on the company. Maybe find out if they’re profitable, whether they have a good business model, or even if you trust the team running the company. In the same way, you can evaluate the risk of a real estate note by determining probability that the borrow will actually repay the note. You’d then figure out your potential return by calculating the unpaid balance (UPB) and considering the interest rate.

There are quite a few types of mortgage notes. One way to categorize them would be sorting them into performing notes & non-performing notes. Performing notes would be situations where the borrower is current on their payments. Non performing notes are situations where the borrower has stopped making payments or violated the terms of the note in some other way. The other way could be an expired balloon payment.

Both performing & non-performing notes trade at a discount to UPB. The discount you can expect as a note buyer on a performing notes is smaller than you might expect on a non-performing note. The reason being that the non-performing notes require more work to realize a return. You must either work out a new payment plan with the borrower or foreclosure to recover your investment. The bigger the discount, the larger the return. Assuming you an actually get paid.

Brian and I discuss the process of buying mortgage notes in detail during the episode. Perhaps a better question: “How are these mortgage notes created? What is the source?”

Creative Financing Real Estate Methods-the Key to No Money Down Deals

Find the source, cut out the middleman, and you put yourself in the most powerful position for profit, right? So the source of mortgage notes is to be the money lender yourself. You could lend hard money to rehabbers short term and easily earn 10%-15% returns on your money. However, unless you have a contact with a rehabber who is doing volume, the returns might be inconsistent. Instead you might consider creative financing real estate deals.

Here’s how it works. You purchase the property at a lower price, then resell the property at a higher price. You collect a large down payment and arrange terms of payment for he remainder-creating a note & mortgage in the process. Of course this is a very oversimplified version of events-I suggest attending the upcoming REI Note School masterclass mentioned below for a full training.

Many note investors begin investing in real estate through the conventional route. Maybe buy a rental property or flip a few houses. Then the drag of owning rental property wears down returns. Note investing removes the investor from the day to day responsibility of owning property, such as maintenance, evictions, vacancy, you name it. Note investing allows you to set the terms, set up the payment processing and just check monthly to see that the payments are being made.

 

Interested in Attending a Live, Full Day Masterclass in Creative Financing & Trading Mortgage Notes FOR FREE?

Note School trainer, high volume note trader, & REI Diamonds Show guest, Brian Lauchner, offers a full day “Gold in Notes” training coming up. You can attend FREE, and attend virtually if you sign up through www.REINoteSchool.com

Normally $97, You Can Attend FREE by Signing up at www.REINoteSchool.com

 

Brian & I Discuss Creative Financing & Buying Mortgage Notes

  • Originating Mortgage Notes Creates More Deals

  • Paying Higher Prices Still Generates Profitable Deals

  • Transition 100% to Buying, Selling, & Holding Notes

  • How to Do No Money Down Note Deals


  

Relevant Episodes: (There are 180 Content Packed Interviews in Total)

 

The transcript of this episode can be found here.
Transcripts of all episodes can be found here.

How to Make $300K/Year Investing in Mobile Homes with No Money Down

Investing in mobile homes with no money down is possible if you execute the correct strategy. Jay Samera joins me on the show to discuss this strategy in detail. Investing in mobile homes can generate quick chunks of cash. Brand new investors often do their first deal and net anywhere from a few thousand dollars to $10,000 or more. Many real estate investors avoid this strategy because of they don’t know the strategy. They would rather do a wholesale deal or a flip because it’s more mainstream.

 

 

  

Episode Sponsored by the Deal Machine:

Driving for Dollars Software to Build a Team of Drivers, Manage Routes, & Even Automate Marketing.  Free Access at  http://REIDealMachine.com/

 

The Mobile Home Market is Prime for Making Quick Cash

There is nearly no competition in the mobile home investing market. This is because the real estate investing community largely ignores the mobile home market. This lack of competition refers to the buy side-dealing with a motivated seller.

On the other side of the deal is the buyer who will occupy the property. Normally these buyers would be in the market to rent a home, but leap at the opportunity to buy rental property instead. This “buyer” is actually only buying the manufactured home, not the land beneath. Considering that fact, the purchase price paid for the house and the monthly rent payments still provide that buyer with a home they own. These buyers now have pride of ownership. They can maintain, paint, or change their home without asking any landlord. It feels good to own a home.

This is NOT about Buying Mobile Home Parks-You do NOT own the land here…

You don’t actually “buy the property”. Park owners actually own the lot and the mobile home owner pays rent. I normally pass on these deals myself because of this fact. It’s also a reason many gravitate toward wholesaling houses instead-as you’re doing deals on fee simple (fully owned) property which most real estate investors understand. Essentially you are buying & selling the mobile home itself. It might make more sense to think of this strategy like buying & selling cars for profit. There is a title, but no deed. The Park Owner (sometimes a real estate investment trust) holds the deed to the land. Here’s why that’s important:

5 Risks that Lead to BIG Losses & How to Avoid Them

Jay and I discuss 5 big risks which could cost you big during the show. One of the biggest risks to understand is that you’re at the mercy of the land owner. That park I mentioned above? They have the ability to write the rules for their park. Every mobile home park has it’s own set of rules. Some of these rules included approving any resident. Those approval processes could take months-while you’re responsible for paying the lot rent. Check out the episode to discover the other 4 risks.

Structure of a No Money Down Mobile Home Deal

No money down real estate investing is always accomplished through creative financing. You’re simply putting together sellers and buyers. Find a motivated seller and lock in a purchase price-often by arranging to make payments. Then find a buyer, set a purchase price, collect a down payment, and hold a note (or loan) for the balance.

Be sure to collect a larger down payment than is required to pay the seller, so there is some profit left right up front in the deal. Congrats-you’re just bought & sold real estate with no money. Well, I guess in this case, it’s actually a mobile home. Along these same lines, creative financing applies to various types of real estate-land, apartment buildings, houses, and of course, mobile homes (not actually real estate).

 

You also set the terms and the interest rate for the payments you’re collecting. Even though you don’t own the land, you’re still collecting cash flow just like an investment property. Many would agree this is even better since you’re not responsible for any maintenance or upkeep on the deal.

 

Resources Mentioned in this Episode:

www.TrailerCashAcademy.com

 

Jay  & I Discuss Investing in Mobile Homes

  • Structure of a No Money Down Mobile Home Deal

  • 5 Risks that Lead to BIG Losses & How to Avoid Them

  • Most Valuable Asset-Even if You Have No Money

  • Best States for Mobile Home Investing


  

Relevant Episodes: (There are 180 Content Packed Interviews in Total)

 

The transcript of this episode can be found here.
Transcripts of all episodes can be found here.

How to Find Off Market Real Estate Deals with Zack Boothe

Zack Boothe-Salt Lake City Utah Real Estate Investor

Finding Off Market Real Estate Deals Can Lead to Untold Riches

Real Estate Investing is a transactional business. You have to have a source of deals. Better still is a source of Off Market Real Estate Deals that you can buy, renovate and make a profit. DFD Mastery founder Zack Boothe joins me on this real estate investment podcast to discuss his method of finding investment property.

Zack has a history as a long term real estate investor. His primary strategy was to buy rental property and lease to Section 8 tenants. You probably know of investors following this same strategy. He found that over time he didn’t really make much money on his portfolio. Tenants caused damage and the yearly property inspections racked up repair bills. Maybe you can relate.

Zack made the transition to becoming THE SOURCE of Real Estate Deals in his market-Salt Lake City, Utah. Since he controls the deals, he gets to set the terms and prices of his deals. Some get wholesaled to other investors and he collects a fee. Others route to fix & flip partners who step in, fund the deal, do all the work, then split the deal 50/50. Can you see how this sets you up to become rich?

Free Access to the REI Deal Machine Software Mentioned in Zack’s Strategy:

To Access the REI Deal Machine Free, go to www.REIDealMachine.com .  Many of the high volume investors around the country are using this software to develop the highest ROI Mailing List in the market.  The best part?  NO ONE has access to the list EXCEPT YOU!

 

  

 

Here’s How to Find Off-Market Real Estate Deals & Get FREE Access to his unique software for Driving for Dollars

Investing in real estate can be a great way to make money. However, it’s not a simple process. Not only does it involve buying, owning, managing and renting or selling property, but you have to compete with other people to get that property in the first place.

One of the best ways to make money through real estate investing is through off-market real estate deals. These properties aren’t listed on the market, but can still be bought and renovated to earn a profit.

You might be wondering how off-market real estate investing works. DFD Mastery founder Zack Boothe joined me on this to break down the exact process and demonstrate how you can earn big bucks from it.

Real Estate Investing

To really appreciate the advantages of off-market real estate investing, it’s helpful to look at other forms of investing, such as renting properties.

Renting properties out to tenants can be a great way to make some extra money. However, it also comes with a slew of disadvantages. These include:

  • Taxes
  • Tenant problems
  • Lots of involvement

Renting property out isn’t easy on the taxes. As the owner of that property, it’s up to you to pay property taxes, insurance and homeowner’s association fees.

Another problem with rentals is tenants; there’s no guarantee that a tenant will pay the rental fee on time, and missed payments can seriously cost you. Not to mention that tenants can inflict damage on your property and hide it to avoid paying costs. Finally, owning a rental property involves a lot of active involvement. You’ll need to make yourself available to tenants to address any issues that come up.

Wouldn’t you rather earn money through real estate without having to worry about these issues? Believe it or not, there’s a way you can do that.

Zack Boothe

Zack Boothe has been in the real estate investing game for years. He started by buying rental properties and leasing them. However, he soon discovered that this wasn’t the most lucrative method; the required property inspection bills and damage caused by tenants put a dent in any turned profits.

Zack transitioned from renting properties to becoming one of the top-earning Utah real estate investors. As the source of Salt Lake City real estate deals, he controls the terms of deals, including prices. If a property is wholesaled to other investors, he collects a fee. If it’s sent to fix & flip partners who perform all of the renovations, he still gets 50%. By now you’re probably wondering: how do I get started?

Driving For Dollars

Zack Boothe started making more money by transitioning to off-market real estate deals with driving for dollars, or DFD. This involves finding distressed properties, or properties that are about to be foreclosed or already owned by the bank. These properties can be bought for a low price, then repaired and sold for a profit.

The phrase “driving for dollars” comes from the method; it involves physically going out and looking for distressed properties. Since these properties aren’t listed on the market, there’s no easy database to help you find them. However, there are signs you can look out for, such as boarded windows, a messy yard and just a general lack of maintenance that indicates the home is not lived in.

If you’ve found a distressed property, the next step is to record the address and information about its condition. Once you’ve done that, you’re going to have to access public records to find out information about the property. This includes:

  • Who owns the property
  • If the property is set for foreclosure
  • When the property was sold
  • Owner’s mailing address

All of this information helps you determine how to contact the homeowner and whether or not you should even bother to reach out to them in the first place. For example, if a property was bought very recently, they’re probably not interested in selling.

Nobody said earning money through off-market real estate investing would be easy. Finding distressed properties that you can earn a profit off of can take ages, and that’s just the beginning of the work you’ll have to do. Fortunately, there are tools to help.

Deal Machine

With typical real estate investing, you have to sort through thousands of emails and letters before striking a deal. By driving for dollars, you can get a deal after canvassing just 200 homes, making it a more efficient way to earn money. Not to mention, canvassing is cheaper than mailing.

At this point, if you’re interested in real estate investing, then trying out the driving for dollars method is a no-brainer. Who doesn’t want to make more money faster? The problem is, it’s not the simplest or most straightforward procedure when you’re starting out. DFD requires knowledge about properties and the ability to canvass properly.

On the podcast, Zack Boothe told me all about the software he uses when driving for dollars: DealMachine CRM. This special software is what Zack uses to track, manage and market his driving for dollars strategy. It’s free up to 50,000 properties and greatly facilitates the process for you.

Learn From Experts

If you’re looking to get involved in off-market real estate investing, the first thing you should do is hear what an expert has to say on the subject. Check out my podcast to hear Salt Lake City investor Zack Boothe’s insight into dollars for driving, which includes advice on what to do and what software will help you be successful in the business.

 

This Episode of The REI Diamonds Show is Sponsored by the Deal Machine. This Software Enables Real Estate Investors to Develop a Reliable & Low Cost Source of Off Market Deals. For a Limited Time, You Get Free Access at http://REIDealMachine.com/

 

Resources Mentioned in this Episode:

www.REIDFD.com

 

Zach & I Discuss:

  • Finding Off Market Deals in Salt Lake City, Utah

  • Partnering with Flippers for a Large Piece of the Action

  • Prime U.S. Markets for Wholesaling OR Fix & Flip Deals

  • How to Get the #1 Highest R.O.I. Mailing List in YOUR Market


  

Relevant Episodes: (There are 178 Content Packed Interviews in Total)

 

The transcript of this episode can be found here.
Transcripts of all episodes can be found here.

Investing in Real Estate with No Money Down with Chris Prefontaine

real estate investing Chris Prefontaine

$75,000 Profit Per Deal-No Money Down RE Investing

You might have heard people say that investing in real estate with no money down is impossible. The first thing to understand is that investing with “no money down” does NOT mean “no money at all”. My guest, Chris Prefontaine, has developed an entire system to consistently buy property with no money down. We are NOT talking about house hacking or buying a primary residence. These no money down deals generate cash flow over the long term.

There are a few financing options to invest in real estate with no money down. The first way is by using seller financing. You find a seller willing to accept payments on the purchase price. In other words, the seller is the money lender in the deal, not a bank. For example, you agree to pay $400,000 for a house by making monthly installments of $2,000 per month.

The second way is to use a lease option where you pay the owner a certain monthly payment. Additionally, you lock in a purchase price for a certain period of time. Let’s continue using the $400,000 example. First, you lock in a monthly payment of $2,000 with the seller. Second, you lock in the purchase price of $4,000. Third, you agree to pay that $400,000 price within 36 months.

You make your profit by finding a buyer willing to pay $2,400 per month and $440,000 within that same 36 month period. Of course, this is an oversimplified set of examples. Every no money down real estate deal is unique. You can negotiate monthly payments, credits, the purchase price, & the term of the deal. Your options are endless!

Has Covid Improved the No Money Down Real Estate Market?

Covid has affected many real estate markets throughout the U.S. I’m a real estate investor and I personally buy rental property in Atlanta, Chicago, & Philadelphia. These markets have become superheated through 2020 which caused inventory levels to drop. The lack of houses for sale has caused purchase prices to rise. I imagine your market is similar.

This low inventory can make finding a deal more challenging. However, your opportunity to make money is better because the prices are rising. Any deal you make has a higher chance of selling at a profit since the market is moving up. In other words, deals are more valuable now than they have ever been. So how do you find no money down real estate deals?

Which Sellers Will Accept a No Money Down Offer?

The real estate investing business is based on making offers. Newbie investors often avoid making offers for a variety of made up reasons. They blame their credit score or interest rates. There are two reasons newbies don’t buy real estate. First, they don’t ever make offers to buy investment property. The second reason is usually the cause of the first reason. They don’t know how to make the offer. The price, the terms, the closing date. These are confusing.

To make things worse, newbies often make their offers to the wrong seller. Banks selling REO property will NOT accept a no money down offer. They expect cash. A seller who needs the cash to move to their next house cannot accept a no money down offer. They need cash.

On the other hand, a seller who is seeking to avoid paying taxes on the sale of a house is the perfect seller to offer a no money down deal. Those sellers are the perfect candidate for a no money down deal. The next challenge is finding those sellers. The best method for attracting deal flow is through marketing. All volume investors know this secret. Get good at advertising and you’ll never be without a deal. How much advertising budget is needed to succeed? Much less than you think. You’ll have to check out the episode for full details.

 

This Episode of The REI Diamonds Show is Sponsored by the Deal Machine. This Software Enables Real Estate Investors to Develop a Reliable & Low Cost Source of Off Market Deals. For a Limited Time, You Get Free Access at http://REIDealMachine.com/

For a Masterclass on Doing No Money Down Terms Deals, go to:  www.REITerms.com

Chris & I Discuss:

  • Has Covid Improved the No Money Down Market?

  • Which Sellers Will Accept a No Money Down Offer?

  • Can this Business Run on $2,000/Month Marketing?

  • 3 Steps to Dominating Any Niche


  

Relevant Episodes: (There are 177 Content Packed Interviews in Total)

The transcript of this episode can be found here.
Transcripts of all episodes can be found here.

How to Buy Land with No Money Down with Mark Podolsky

How to Invest in Land in with No Money Down-Podcast Episode Highlights

Mark Podolsky, aka, The Land Geek, has been buying and selling land for more than 20 years. On this episode Mark & I discuss how to buy land with no money down. His specialty is buying vacant land very cheap-in the $5,000-$20,000 range, closing using quit claim deeds, and then reselling to buyers on terms at nice profit spreads and strong interest rates.

In other words, buy a parcel of land for $5,000, close, then resell immediately for $20,000. The trick is the terms-to that same buyer, Mark would collect $5,000 down and accept payments of around $200 until paid in full. Oh, he also charges interest on the $15,000 balance, so there is some additional profit in the deal long term as the payments roll in.

Mark uses direct mail & software to fire off automatic offers in bulk, allowing the seller to simply sign the agreement should they accept the offer. Using his system, which he shares with his students, he’s been able to build a substantial passive income while systematizing the business to run on near automation. Mark’s goal is to do a deal per day-or somewhere around 200-300 deals per year.

Buying Raw Land is Only a Good Real Estate Investment Strategy When

The way I see it, there are really only two ways that land investors make money. The first would be to buy land at a low price and then sell at a higher price at some point in the future. This is Mark’s strategy as we discuss in depth during the episode. The second way to profit from raw land is to buy the plot of land and then develop the land to increase value-build a house, rezone, or maybe construct a commercial property. This podcast does NOT focus on development, however we have had many commercial real estate developers on the show.

How To Profit from the Current Land Bubble

Covid has superheated the land market. People have been racing to buy land as outdoor recreation, safely away from any virus danger, has become very popular in 2020. What better place to camp, ride dirtbikes, or have an RV than on your own land. There is something seductive about owning land, it always has been.

Mark’s buying and selling of land, the strategy of leaving no money in the deal long term-is the perfect way to profit from the current land market. It’s all about velocity: buy & sell as quickly as you can. In my own experience flipping houses, the good deals are those that profit. The best deals are those that profit and close quickly! The less time you actually own the land in between the purchase and sale, the lower your risk of losing money or other liability.

You Gotta Avoid the Land Losers…

Some land is simply worthless. Areas such as Pennsylvania & New Jersey are often laden with environmental clean up sites. Old industrial properties with EPA superfund sites which could place the unsuspecting buyer into a huge financial responsibility. You can do quick due diligence on a potential land deal at EPA.gov

Another issue which could make land worthless is no road access. Think about it-you’ve gotta be able to get to the land you bought without encroaching on someone else’s land. I’ve personally passed on a large number of very cheap land deals because there was no access road.

If you were focused on land that you were going to build, you’d also need to be aware of flood zones, but the deals Mark and I discuss aren’t really affected by flood zones. Most of the buyers are using the land for recreation, not development.

Cash Flow from Land Deals

The big takeaway here for Real Estate Investors is that you can take a small amount of seed capital and build your cashflow up to $100,000 or more per year in a short time. Mark has students who have done this in as little as 18 months. And Mark sees no end to this trend-with 2.43 Billion acres in the U.S., there will be no shortage of land deals anytime soon.

 

Mark & I Discuss:

  • How to Profit from the Current Bubble in Land

  • Where the Best Land Deals are Located

  • Finding the Best Buyer for Any Land Deal

  • Knowing Which Land Deals Have Little Competition


Relevant Episodes: (There are 176 Content Packed Interviews in Total)

Resources Mentioned in this Episode:

www.TheLandGeek.com

 

The transcript of this episode can be found here.
Transcripts of all episodes can be found here.