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Buying and Creating Notes with Troy Fullwood
In this episode, we invited Troy Fullwood. Troy Fullwood is a real estate investor known throughout the United States for his speeches, workshops, and seminars. He has been traveling all over the country to teach people how to invest their money and get out of financial constraints.
He shared what's going on in the notes space as well as some valuable knowledge in real estate investing.
- Who Troy Fullwood is and how he started
- What NPL is
- How he developed a relationship on Wall Street
- Buying NPL
- His mantra
- What matters most to him
- All about the notes space
- Why he chose the notes space
- Some of the challenges he encountered
- Designing your note so it will be sellable
- On having a plan B
- Making sure your loan is Dodd-Frank compliant
- Finding RMLO
- Servicing laws
- “Stay hungry. Stay humble.”
- “You can never buy time.”
- "Create a note so that you have an exit strategy.”
RESOURCES AND LINKS FROM THIS SHOW:
- Good Steward Accounting Servicing
- Pinnacle Investments
- Power of Paper by Troy Fullwood
- Troy Fullwood website
Larry: Welcome to the Brain Pick-A-Pro show live from Lake Wylie, South Carolina, and all the way over in Arizona, sunny Arizona, I’m sure it’s always sunny in Arizona, is my good friend, long-time friend, man, we’ve known each other for, I don’t know, maybe twenty years or more.
Troy: Yeah, yeah, it’s been a long time.
Larry: My good friend, note expert, coach, mentor, all-around great guy, family man and got a wife, four kids, anywhere from seventeen to five years old and is just living the life and having fun and making money. Please give a good, warm welcome to Troy Fullwood. What’s going on, buddy?
Troy: Larry, thank you so much, man. It’s an honor to be here with you and your guest and I’m excited to dive in and share, you know, what’s going on on the note space. It’s a lot of moving and shaking taking place all the way from Wall Street to Main Street, so looking forward to it. Thank you so much.
Larry: That is so true. I mean, there’s – you’ve been in this space a long, long time, and just to let people know, just to start out. I mean, I can tell them all about, you know, you’ve been Wall Street’s first distressed asset fund. I mean, you know, you’ve spoken at many of these big events like this. I mean, you’re just a huge player in the space, but you know where I remember you from is when I sold my very first note, my seller finance note, not my first note, but the very first note I sold to you was way back in like the early nineties or something I believe it was, somewhere around there, like early nineties. I was building houses in a subdivision and I was buying – I bought the subdivision cleared, graded, graveled, and paved and I built houses on the lots and sold the houses, and I remember we were doing seller financing and selling you our notes. Remember that?
Troy: Oh, I do remember that. I remember those days. It was fun. I mean, it still is fun and, you know, the type of deals that you were doing back then are still very much a part of our industry today and it’s exciting to see the creativity and people, you know, living the dream, so yeah, I remember that. I remember that deal very well.
Larry: It was good stuff. So, start out and tell our listeners a little bit about yourself.
Troy: Well, Larry, I’ve been in the paper business for twenty-two years. I started out originally buying seller finance paper from people like yourselves and other investors across the country.
Troy: Where I would buy season loans, ones they already had on the books and then I would oftentimes come in alongside investors and show them how to do simultaneous closings where we could fine tune the terms of the deals so that the investor could maximize their sale price on it and we actually still do a lot of that today, even within the parameters of Dodd-Frank and showing investors how to apply that to their business model. Stay in the safety zone when it comes to that type of stuff and then liquidate. It’s really – the beauty of it is we’re able to kinda come alongside investors and kinda create their own financial segment or their own financial division within their companies and it allows them to do what they do best and to enhance their returns and then to create product that we wanna buy, and so we’ve been doing that for twenty-two years and then got into the NPL space back in 2005 where I bought a portfolio, $8.6 million portfolio for $2.7 million.
Larry: Now, Troy, you might have to explain what NPL is to some people.
Troy: Oh, okay, yeah. So, an NPL is a non-performing loan. In the first lien space is our focus so we focus on first lien performing and non-performing residential mortgages. Occasionally, we’ll buy seconds, those are few and far between, but the NPL space was at the time where we had actually kinda stumbled into it because it wasn’t our core business and this portfolio came from a mortgage company that shut down a division. Now, that sounds really weird considering if you think back at the market back in 2005, 2006, it was out of control successful, I mean it was crazy successful, and yet there were still companies that were going out of business and this one company shut it down. They were liquidating the portfolio to make the investors whole that were invested in it and we came in and bought it.
Larry: Or as whole as they could make them.
Troy: Yeah, as whole as they could make them and we bought that and that particular deal, I didn’t make a killing off of it but it opened the door to amazing opportunities, so I bought that one for 2.7, I sold it for 2.8, made a hundred grand on the deal, had no money at risk but it opened the door to relationship on Wall Street where I was asked to develop a model, a distressed fund model, that they could invest in and so I spent the next about nine months or so developing it out and doing burn ratios and all those kinds of fun things that go with funds and then they came along and said here’s $30 million, let’s test the model, and we went to work in 2007 buying non-performing loans and we were buying ’em at the time as Warren Buffet says when everybody’s selling, you start buying. We’re buying stuff at 10, 15 cents on the dollar, good quality stuff, and that was a lot of fun. We bought a lot of product for a couple of years and developed a nice 92 percent IRR on the fund and the capital people loved it so much, they wanted to own the entire pie and they bought me out and my other partners out and I went kind of into a semi-retirement kinda model, just kind of keeping to myself and being a family guy and raising my boys and spending a lot of time doing that and loved it, absolutely loved it. So, still in the space, still doing the performing notes and the non-performing notes and got a few education trainings but right now our big focus is we are in negotiations with attorneys and stuff on a new fund model that we’ve developed which is more of a velocity model and we’ve got two out of the largest three financial institutions that are gonna play ball with us. So, very exciting times. Yeah, just very exciting times, so just doing our thing.
Larry: That’s awesome, man. That’s awesome. I love, even though, like, you know, you wouldn’t have to show up every day, you don’t have to do all this, you know, I mean, you’re living the good life, you got a great family, you got to enjoy them, have fun. We were talking before we started recording about, you know, what we’re doing this weekend and stuff with the family, so that’s pretty cool, but I love that sign right behind you, “Stay hungry, stay humble.”
Troy: Yeah, that’s – that’s my office model, my only guess –
Larry: Monitor, yeah.
Troy: Monitor, thank you. You know, because in our space, you know, it’s easy to get puffy, I guess, at life. You know, like, “Look at me, I did this,” and that’s great but really at the end of the day what do we really want out of this, you know? As a father – I mean, you and I do this because it’s almost like second nature to us. It’s just what we’ve been doing for so long and so we get to a point where it’s like, “Okay, I can do these things and they’re great and we impact people’s lives, but really at the end of the day, what matters most?” Me, personally, it’s about my kids, it’s about my beautiful wife, it’s about, you know, getting them up for school and sending them off to school with, you know, a kiss and a hug and letting them know that they’re loved and then when they come home, you know, taking some time and doing those things. So, we really created a business around what I call life by design. I don’t wanna grind it out eighty hours a week. I don’t wanna grind it out even forty hours a week, to be honest with you, and there are times where I have to because they’re temporary and they’re commitments that I have to keep but it’s imperative. It just is imperative because I love what Warren Buffet says. He says out of all the things in the world he can spend his money on and buying, he can never buy more time, so he can literally buy an entirely new body but he can’t buy more time and so that’s always been something that hits me really, you know, kind of right between the eyes, especially at my age being fifty-two, you know? I love what we do, I love the people we help but, you know, I love being around the family and, you know, keeping humble is part of it.
Larry: That’s really, really important. So, tell us a little bit about the note business, as you do it, as you teach it, and that sort of thing. I mean, there’s a lot of people out there using the note business because deals are hard to find right now. They’re using the note business to find deals or they’re using the note business to sell deals, creating notes and selling them to people like you. You know, note out of a deal to make money. I’ve done that many times when I couldn’t sell a house. I would note out of it. You know, sell it with seller financing and then sell the note because I couldn’t sell it to a cash buyer or a finance buyer. You know, so, tell us a little bit about the note space and why people need to be interested in the note space.
Troy: Well, so to give you kind of a scalable view, the institutional space, meaning the house that you live in, the house that I live in, you know, we bought those houses, we borrowed money from a bank or an institution if in fact, you know, that’s what we did outside of paying cash. That industry alone is a $10 trillion industry and you can go on the government website and you can Google, you know, a number of loans and residential loans that are owned by the government and created and it operates anywhere between $9.5 to $10.5 trillion pretty consistently, and that’s just in the SFR space. You’ve got the HELOC space, the commercial space as well. Then, you’ve got the seller finance space which is what you’ve mentioned here. That’s a $1.7 to $1.9 trillion industry as a whole so about 17 to 18 percent of all of the real estate sold across the country is sold with seller financing, whether that’s a private seller to private buyer or it’s somebody in your space that’s selling a house, meaning, you know, from your company to a private buyer. And then you’ve got, just below that you’ve got the NPL space, so the non-performing loan space, and this is all the stuff that went stock and that right now is hovering around $450 billion, plus or minus, and then you’ve got the REO space which is hovering around a billion as a whole so that’s the gamut of opportunity. For me, what always attracted me about the paper space was one, it’s a big pond with a lot of fish in it, a lot of opportunity. Number two, it’s a financial model that typically was reserved primarily for the wealthiest in the country as well as the world. Debt buyers are extremely wealthy people and that’s proven, AKA because you can just look at any bank and they’re typically doing fairly well.
Larry: And have the biggest buildings.
Troy: Yeah, they always have the tallest and biggest buildings. In your neck of the woods, just the Carolina area, you got BofA right there with some pretty big buildings, so, that being said, it’s like, okay, well, if that’s what these guys are doing, how can I learn what they’re doing and apply it to street level model where I can impact my personal house, my world? And when I say my world, I’m talking about myself, my wife, my children. How can I create a better future for them, and that’s usually what most people are looking for. They’re looking like how can I be a better husband, how can I be a better father, how can I be a better business leader or business person or better investor, and how can I take care of my family? So, that was a driving force for me getting involved in it. With that being said, I went into that space because, one, I can do it nationwide, so I can do it anywhere in the country even though I’m here in Chandler, Arizona, and it’s just the paper side of it, so I don’t have to do the fix and flip thing, I don’t have to run down to Home Depot and do those types of things. Not that I’m anti or against those things, but there’s only one of me. There’s only one Troy, there’s only one Larry, and my question to myself was how do I use my talent to accomplish the most in a given time, and being that given time like the time I invest in the business as well as my time here on earth. And that’s what got me involved in the space, so with that being said over that twenty-two-year time period, I got involved in helping out fix and flip investors primarily because they were the ones creating it. I learned very early on they were the guys and gals that were creating them across the country as an exit strategy to deals like you had mentioned. Now, it’s a little more popular. It’s more talked about, I should say. It’s more – it used to be kind of a secret conversation but now it’s a much more of an open conversation, and that’s great, that’s fantastic. The challenge that I see with it, you know, I’ll tell you the good and the bad. The good part is there’s a lot more of it being created. The bad part is there’s a lot more of it being created, and what I mean by that is a lot of it is created with very poor parameters. So, people are going out there and they’re being creative because they can and they’re putting together deals between two parties and that’s good, but then they want to sell it and so I oftentimes look at it saying, hey, if you’re gonna rehab a house, you’re gonna put all this energy into picking out beautiful tile and countertops and cabinetry. Don’t paint the outside of the house hot pink ’cause there probably isn’t a lot of buyers for a hot pink house and so the same thing is true with a note. If you’re gonna create a note, create a note so that you have an exit strategy even if that’s not your original term. So, if your original term is, I’m gonna create this note for cash flow which is a popular conversation. Fantastic, that’s great but also, that will be plan A but also create a plan B that says, hey, I may want to sell this someday. Even if that conversation is not today, look at it as a possibility so design it so that it is saleable down the road. So, I’ll give you a couple of just parameters to kind of play in that typically will cover about 95 percent of the deals out there and create some good outline for anybody. So, I would highly recommend that any buyer buying a house and this is from an owner-occupied notes, so, Larry, if you are selling a property to Mr. Smith. You would want Mr. Smith to put down 10 percent minimum. By the way, if Mr. Smith has got 20 percent to put down, take his 20 percent. Don’t lock it into just 10 percent and the reason is is ’cause that’s less money that you have to take a discount on down the road if you choose to sell. So, minimum 10 percent. You wanna make sure that you’ve got a decent credit score. Ideally, 575 and above, even better would be 600 and above. You wanna do it on an interest rate anywhere between 7 and 9 percent, that keeps you within the Dodd-Frank guidelines and then the terms, you know, ten-, twenty- or thirty-year terms and then on top of that, so you got 10 percent down, 575 or better credit score, 7, 8, 9 percent interest rate which is typically very affordable for most people and then a ten-, twenty-, thirty-year term. No balloon, no pre-payment penalty, and then make sure you income qualify that because no matter who that person is, whether the payments are $300 payment or $3,000 payment, it’s relative to his or her earning ability and, with that being said, you’ll create a solid note that will keep performing for years to come, and that’s what you want. What you want in the cash flow idea is you want cash flow and the only way that that happens is if you keep receiving it.
Larry: That’s true.
Troy: So, you wanna make sure that that happens and you wanna set this – the home buyer up for success. Now, the good part about using those parameters is, institutionally speaking, the rate today is around 4 percent on a thirty-year term, so even having about an 8 percent, there’s a pain threshold there that would incentivize them to go out and clean up their credit or fix whatever issues are keeping them from getting and obtaining institutional financing. Sometimes, it’s just the price point of the house but oftentimes it’s credit, down payment, job, history, things like that. Taxes, they don’t have taxes ready to go, those are very common factors, but that is an incentive for them to go out and clean those things up and then they can re-fi out of it. The beauty of that is if you play in that parameter and this is the second part, this is plan B, so you got plan A cash flow, plan B is, hey, my life changed. Now, I don’t know about you, Larry, so I’m just gonna speak for myself. My life has gone through a few changes in my fifty-two years. So – and some of them have been phenomenal changes and some of them have been less than ideal, but at the end of the day, that’s one given for all of us, that life will change. In a perfect world, we’d hope that it would only get better but the truth is that’s not always the way the ball bounces, so when that happens, you’ll have a product that you can sell to the marketplace and you’ll be able to sell it very quickly in kind of a wrapped package/silver platter-type model to a buyer like myself or some institution and it will alleviate a lot of hassles. The caveat I would put on it is if you’re gonna do seller financing and carry back the paper, spend the $10 or $12 a month and have it serviced by a third-party servicer. That way, it really is kind of a residual income model. It does create the cash flow and that you are legally operating within the parameters of the servicing laws and regulations across the country. Not to mention, it just makes your life so much easier. It really does. I mean, we’ve all wasted $10, you know, $12 from time to time so – and to me it’s just part of being in business, at the end of the day it’s just the cost of business.
Larry: That’s so true, that’s so true. You’ve mentioned a few things here that’s very important, 575 to 600 plus credit scores, 7 to 9 percent interest, you stay in the parameters of Dodd-Frank, ten, twenty, thirty years, of course the way I like to do ’em is the shorter the term the better which means the higher the payment which means the less discount you have to take if you have to sell it. You gotta stay in line with the debt ratio which is also a Dodd-Frank requirement if you’re doing more than a few of these in a twelve-month period of time. So, how does a person make sure their loan is Dodd-Frank compliant?
Troy: Well, the general rule of thumb is you can only do – you can’t do more than three a year with owner-occupied properties. Now, if you’re selling to investors, you know, Katy, bar the door. You can do as many as you want but in the owner finance space, it’s three a year per firm so that’s that. Number two is I highly recommend you use an RMLO or an attorney to draft all the paperwork when it comes time for that but before you even get to that space, I would do an income qualification aspect and your RMLO will typically do that for you upfront which is great so that’s a positive thing but if you wanna kind of do some quick numbers, you can download a debt to income calculator, they’re all over the internet and you can just plug in some numbers right at the front and get a rough idea. Ideally, you wanna stay below 35 percent debt to income on post-closing numbers so after the loan is done, you wanna make sure that borrower is at 35 percent or less. You can go a little bit above it but that’s more of a judgment call at the end of the day. What you don’t want is you don’t wanna put somebody into a $1,000 a month mortgage payment when their income is $2,000 a month income. That’s a recipe for disaster and I know that there’s probably some people out there listening. I’m sure there are a lot of people listening to this podcast and one of the things that is oftentimes a conversation with investors is, “Well, you know, if they quit paying, I’ll just foreclose on the property and take it back,” and that is a model, that is a solution, that is an option but what they often forget when they say those kinds of thing is the cost of that overall foreclosure because there are certain things that they don’t calculate. Number one is you have your legal fees then you’ve got typically property taxes, either back or soon to be, and you got force-placed insurance that you’ve gotta kick in on and then you’ve got your loss of return so that monthly payment that you now lost that calculates into it. And then you’ve got any upgrades, repairs, and issues once you get the property back, clean out property preservation and everything else, so when you add up all those numbers, is it really worthwhile to take that deal and just go get it back at the end of the day? And I found that eight out of ten times the answer is no, so my advice on those kinds of things is this: If you have a borrower and you’ve done your deal and you’re twelve months, eighteen months into it, and this is how we’ve only had nine foreclosures at Pinnacle in the last twenty-two years. This is our secret, this is a little secret sauce. The thing that you wanna do is when that happens, and it will happen, because that’s called life and people will lose their jobs, people will get hurt, people will get divorced, people will pass away, and that affects the whole household. Whatever the issue is, sit down with the borrower and figure out a solution. If it’s a lost job, I’ve had people that come to me and they’re like, “Hey, Troy, I lost my job, I can’t make my payment next week, you know, can you do this? Can you do that?” I’ll go and get their resume rewritten for them. I’m like send me your resume, I’ll take your resume, I’ll go over to Fiverr, I’ll hire somebody for $20 to rewrite their resume and send it back to them and say, now we’ll get a job and I wanna you know go get this job not because I want them to pay me but because they have electric bill, food bill, kids to take care of, car payments, insurances, cable bills. All of these things that are part of life that still have to paid as well. I may be the biggest bill in their monthly expenses but I’m not the only bill.
Larry: You’re showing you care too.
Troy: Yeah, absolutely, and I’ll tell them, you know, just give me like weekly updates. Like tell me how many resumes you’re putting out or how many interviews you’ve done there. You know, let’s – you know, as long as they’re giving in at 110 percent and they’re focused on it, I’ll take that payment. I may even take two payments and just push them to the back of the loan and give them some grace and let them get back on track because they’ll typically have a little bit of money saved up or a little bit of money in savings and that will get their electric bills paid and stuff like that and that’s fine. I’m not here to kick over the applecart because of a set of scenario that happened to them. Whether it’s their fault or not, I’m not a judge, I’m not here to investigate those things. I just wanna make sure they’re back on track. That helps people. That helps people, like you said, you care and just showing that one ounce of caring creates loyalty between you and that borrower. Now they know that you’re on their team and you’re not treating them like a loan number. Like the big banks, they treat everybody – like they don’t know Larry and Troy by first names. They know us by a loan number. You know, they only know us by first names if we pop up on their radar –
Troy: I hate to say that but how else would you? I mean, you’ve got, you know, a million plus loans on your books. It’s a different animal, so, at our level, we’re able to do those kinds of things which I think creates a better product, which creates a better relationship which creates a better environment and we’re able to alleviate stress because that’s one of the things that you and I do. We have a gift, we have a talent, we have insight and we can fix problems for people and that’s why we get paid what we do because we’re problem solvers and most people don’t know how to solve the problems but we can do those things.
Larry: That’s awesome, man. That’s really, really good. You mentioned about RMLO, you probably – if you’re gonna buy a note, you probably want that note originated by an RMLO, anyway, which, by the way, if you guys aren’t familiar with the term, Residential Mortgage Loan Originator, or officer, sometimes called, and there’s RMLOs that specialize in nothing but seller financing, right, Troy?
Troy: There are. There’s a couple of them across the country that do, that do that, yeah, absolutely.
Larry: That’s awesome. How would a person find one if they’re not familiar?
Troy: The easiest way to do it is actually just jump on Google and type in RMLOs in your area, like North Carolina, South Carolina, Phoenix, and there’s a couple hundred of them nationwide. The great thing about all of them is that they have to follow Section 32 in RESPA is what they’re following so they’re basically, what they’re doing is they’re saying, “Okay, we originate loan docs for BofA, Wells Fargo, all of these major firms and we also have a division that will cater to seller financing and so the same thing we do for these big guys, we’re gonna do for you,” and so they’re following those guidelines which puts you in the safety zone.
Larry: That’s awesome. In fact, there’s an RMLO that I really like that specializes in seller financing, Good Steward, I’m sure you’ve heard of those guys.
Troy: Great guys, great guys.
Larry: Yeah, and they’re out there in Tucson close to you.
Troy: Yeah, just down the road here about a hundred miles.
Larry: Yeah, so they’ll originate the deal for you and if I’m not mistaken, they do it nationwide so that’s a source right there. You also mentioned about servicing. It’s very, very important that people understand. Yes, I might be able to collect the payments every month just like I collect rent, but just like landlord/tenant laws, there’s also servicing laws in every state and every state can be different, right?
Larry: So, explain a little bit about why they want a servicer, you know, besides the fact that, you know, hey, if I’m servicing alone, I might call them up at 11:30 at night, where’s my payment, right? And I’m sure there’s a law somewhere against that.
Troy: Yeah, there is and so the best of using a servicer are kind of twofold. Number one is it streamlines your business at a very affordable price and even if you just have two or three notes, one of the things that oftentimes happens when we’re buying notes from sellers is I’ll go, “Hey, what’s your pay history? Can you show me pay history?” And they’re like, “Yeah, yeah, no problem.” Okay great. Well, what does that look like? “Well, I deposited the checks in the bank.” Okay, did you take photocopies of them? “Well, no.” Did you keep the envelopes? “No.” Okay, where did you deposit these checks? “Well, I put it in this bank account.” Okay, so here’s what we need to do. We need to go back for two years or twelve months or six months, whatever the length is, and you need to go get those copies of those bank statements or savings account statements or wherever you deposited it from and show me that you actually got that check, had it cashed and it cleared. You know, when we hear something like that, you and me being business owners, it’s like, “Oh, man, another project,” and it’s a project, so, you know, we gotta go pull the file, we gotta go do this, we gotta go do that, and that takes time whereas if you have a servicer doing it, oftentimes servicers are internet-based so you can log in to your portal, you pull up the account, you push print, it prints out the servicing on it and your file is complete. If they don’t have a portal-type environment, you can call them up and they’ll do it for you and fax it or scan it to you and then it’s done. It’s like a five-minute process versus it being a five-hour process at the end of the day. So, that’s number one. Number two is you can and I can, as a lien holder, we can’t just call up borrowers and hassle them and do those kinds of things. That puts us in a very litigious-type environment and we run the risk of litigation and things like that so that doesn’t favor us at all. So, you got the easibility of the servicing so keeping your records nice and clean and to a T. The only thing about also having a servicer is it’s third-party verification, okay, it’s third-party verification meaning I can’t manipulate them, you can’t manipulate them and they’re collecting the payments, whenever they come in, they’re posting it and they’re keeping track of it and that’s what brings quality to the note deal as a whole. So, you go and say, “Hey, all my payments are on time,” this borrower’s payments are on time I mean, and you show pay history, it’s like, “Yeah, you’re right,” and it was verified by a third party, so that’s a positive. Last but not the least is end of the year, so issuing your earned income to you as a business owner and then sending out the 1098 to the borrower’s interest pay, they handle those things. So, that’s a good thing because as a borrower, as a homeowner, I wanna make sure that I’m getting every tax deduction that I’m legally entitled to and the servicing companies make that happen for your borrowers. That makes a happy borrower, makes for a happy borrower. If you don’t do those things which is oftentimes the case when people are collecting on one or two notes because, “Oh, it’s just one or two deals, no big deal, I’ll just do it myself.” Well, if you don’t issue that 1098 by January 31st of every year, you’re in violation of IRS law, so that could open up a can of worms that you really don’t wanna open up, not saying that it will happen but you’re in violation of IRS law. So, it’s just – yeah, there’s a lot of shortcuts in business, in any business, I think, and our business is no different, but my advice to professional investors out there is adapt really healthy habits in the beginning and just make them as part of a cost of doing business and by doing so your business will scale versus trying to pinch pennies at every corner of the deal. If that makes sense.
Larry: You know, that’s so true, it really is. I mean, investing, whether it’s in real estate or in notes, it’s a team sport. You gotta have other people on your team, right? You know, if you’re a fix and flipper, you gotta have a contractor, you gotta have a realtor, you gotta have a private money lender or a hard money lender. You know, just like in the note space. You gotta have an RMLO, you gotta have a servicer, you gotta have somebody like yourself to sell your notes to. I’m sure you as a note buyer, right, you look a lot more favorable on a note if they use an RMLO, if they structured it like you said a minute ago, right, and if the borrower’s got some skin in the game and if they hired a professional servicer for third-party verification about the pay history. I’m sure you’ll look much more favorable in those kind of notes, don’t you?
Troy: Well, absolutely, because instead of it being you know – one of the number questions we get when we sign a contract with somebody is, “How fast can you close?”
Larry: Yeah, that’s the first question.
Troy: Yeah, that’s the first question and my response to that is, “How fast can you move?” ’Cause I can move really fast and what oftentimes happen is the seller of the note is disorganized. Their files are in disarray. They don’t have the right paperwork. They’re missing pages. They kept the pay history, you know, they’ve been putting it in their bank account so they’ve got to put all this stuff together and then give it to me as a package so that I can do what I need to do which is my due diligence and title and all those other things. So, if they’ve done the right steps in the beginning, then it’s like it’s a thirty-minute process versus it being a thirty-day process as a whole and oftentimes, you know, I mean the longest – we did a note deal and it took us just shy of two years to get it done on one note deal and it was by a very, very sweet lady who sold her house, private financing, to a friend of hers. They didn’t keep very good records. The paperwork was in disarray. It just – she can only work on it part-time and when she got around to it things like that so we were kinda moving at her pace and had she organized it a little bit better in the beginning, it wouldn’t have taken two years. Frankly, she was wanting to buy another house. She was wanting to use this money to go pay cash for another house. That home seller stayed in the game. I was surprised they stayed in the game that long but they did and they eventually got it done, but, yeah, absolutely, having third-party support only makes your team stronger. Yes, there’s an investment to it but when you look around, you see people like Larry succeeding, me succeeding, or anybody else out there, we’re succeeding because we’re doing those things. That’s – and ’cause we – I’ll just speak for myself, Larry, you can aim at it if you want it, but I did it the other way early on and I found it very cumbersome and clunky and time consuming and stressful and I just surrendered to the fact of having great people around me was a whole lot better than trying to be, you know, everywhere, a lot of hats, now I don’t wear all those hats, like I don’t get involved in like servicing laws in all fifty states. People will ask me those questions and I’m like, “I don’t know, call this servicer,” because that’s really what their expertise is. Same thing with foreclosure laws in various states. I don’t get involved in those things because if I have a foreclosure, I have to do something in a legal basis in another state, I’ll hire an attorney in that state to handle that matter for me. And that way, it keeps me in my safe zone or in within the rails of our business.
Larry: And not only that but it lets you focus on your unique ability which is putting deals together.
Troy: Absolutely. You know, we all have a strength and I love using the analogy of football. You know, you look at that team. You know, if the quarterback had to hike the ball and then throw the ball and then run the ball, you know, do all these things and some of that he’ll do but it’s not a common occurrence. You know, he surrounded himself with the best that he can. He’s got a phenomenal center, he’s got a great right tackle, left tackle, right end, left end, wide receivers, running backs, and his job is to call the play, hike the ball, and hand the ball to whomever or throw the ball to whomever.
Troy: And that’s what moves the ball down the field, whether it’s two yards or twenty yards, that’s the goal to work as a team to move the ball down the field.
Larry: Awesome, awesome. Troy, man, this has been some great, great stuff. We’ve been on here almost forty-five minutes now. This is awesome. Really, really. So, man, this is good stuff. If somebody wanted to reach out to you, maybe they wanted a little bit of help on structuring a seller finance deal or maybe they wanted to sell a note or you sell notes to people as well, maybe they wanna buy a note, right? So, tell our listeners how you can help them and how they can reach out to you.
Troy: So, the easiest way to get a hold of us is you can go up to our website, our corporate website which is pinnacle-investments.com, that’s our corporate website and it’s got all of our contact information, my e-mail, our phone numbers, so if you’ve got questions, you can call. Also, if you wanna submit a deal and you wanna sell one, there’s a quote page there and that as well, but the other thing is if you go to Troyfullwood.com/book you can get our new Amazon book. This is a free book. All you can do is pay for shipping and handling. It’s at $10.97 for shipping and handling but the cool thing about this is we were Amazon bestseller in mortgages, ethics, and real estate.
Troy: The three categories that we were bestsellers in.
Larry: That’s great. I love it.
Troy: Yeah, it was a lot of fun when it came out but here’s this little medallion, you kinda see it there, free investing tools included. At the back of the book, after you read the book, at the back of the book, there’s a link where you can get an entire training. It’s like fifty videos of notes and how to structure notes and note wholesaling if you’re interested in that. It’s a great introductory course. It’s free at no cost and there’s some fun tools in there and resources that you can use to introduce yourself to the space but, like I said, we’re always here to buy notes and oftentimes we have notes for sale as well so let us know who you are and looking forward to meeting everybody. It’s fun. I love doing these things and thank you, Larry, so much for having me here today. I truly appreciate it.
Larry: That’s awesome, man. Thank you so much for being on. I appreciate the offer for the free book. I’m on the website right now. Looks like an awesome book and I’m gonna have to get my copy as well. That’s great.
Troy: I’ll sign a copy for you. Well, by the way, everyone that orders from the site, I sign them. So, you get a signed edition, so we’ll send you one, buddy.
Larry: That’s cool, man, and I’m telling you guys, everybody listening right now, you better get it while he is willing to sign it. I used to do the same thing and then we were ordering books a thousand at a time and I was sitting in the conference room signing a thousand books at a time. I finally said, “Forget it, I can’t sign any more books. We’re gonna send them out without being signed,” so, we don’t do that anymore. So, take advantage of it while you can when he just released the book, so, Troy, that’ll get old after a while, I promise you.
Troy: Writer’s friend.
Larry: Exactly, exactly, exactly. That’s funny. Thanks so much for being on, man. I really appreciate it.
Troy: Thank you, Larry. It’s been an honor being here and thanks so much for having me here today as well.
Larry: Awesome. Thanks a lot.