BiggerPockets Podcast 028 with Dave Van Horn Transcript
Josh: This is the BiggerPockets Podcast, Show 28.
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Josh: Hey what’s going on everyone, this is the BiggerPockets Podcast Show 28 and I’m your host, Joshua Dorkin, here with, my cohost, Brandon Turner. What’s doing Brandon? You’re in vacation huh?
Brandon: I guess you could say that. I am in Chelan, Washington right now, Lake Chelan, beautiful area. It’s like 99 degrees today and I’m going jet skiing later.
Josh: Nice. Nice, so Chelan, is that, where in Washington is that?
Brandon: Kind of eastern Washington, maybe central eastern. It’s over the mountains so hot and deserty and beautiful.
Josh: Nice, nice, any good real estate opportunities in Chelan?
Brandon: I don’t know, but actually I know a guy who is a hard moneylender and he took back like a hundred acre property out here for like millions of dollars so I think it’s like spendy, but.
Josh: Nice. Nice.
Brandon: I don’t know. As much as I—I try to resist the urge to go look at houses on vacation, but.
Brandon: I always like drive by anyway and I’m constantly checking out—my wife and I joke about that all the time. I’m sure our listeners probably do the same thing. It’s a habit, but.
Josh: Yes, yes, yes. It’s an addiction, man.
Brandon: It is.
Josh: The real estate game is an addiction for sure. Well, let’s jump really quick to our Quick Tip.
Brandon: Quick Tip.
Josh: Well, today’s Quick Tip is, check out our Youtube channel at Youtube.com/BiggerPockets to learn more about real estate investing. We got lots of great videos, some old ones that I shot back in the day when, yes, they’re not that good.
Brandon: No, they’re good.
Josh: The quality is good, the content.
Brandon: Yes, you don’t have my fancy camera that I use today with the blurry background and the hi-def 720p.
Brandon: Yes, you know, but that’s fine.
Josh: You don’t have to show off. Yes, seriously, like it’s not a competition.
Brandon: Oh it is my camera is way better than yours.
Josh: Wow. It’s a pissing contest people.
Brandon: Alright, moving on.
Josh: Moving on, so today we’ve got, we’ve got a really great guest. We’ve got Dave Van Horn, I’ll talk about him in a second, but we’re doing something a little bit different with today’s show. We thought that we would. We kind of raised the game a little bit. We’ve done a ton a lot of really good shows about getting started and introductory topics. Today, we thought we would kind of jump out of our comfort zone and hopefully put a lot of you out of your comfort zones and talk about some other things, in particular we’ll talk about notes today. I’ll get to that in a moment. Dave is an experienced investor from Pennsylvania and he’s done pretty much everything that you can do in real estate including property management, buy and hold, a lot more, but he currently focuses heavily on something that I know I personally want to learn a lot more about and I know you also want to learn about and I know you also want to learn about, correct, Brandon?
Brandon: Definitely. Definitely, cause it’s kind of like the idea is to eventually transition to notes. I think a lot of the investors, that’s kind of the end game so, yes, I’m excited to learn more.
Josh: We’re going to learn more about the topics of notes. That’s right and so David is the president of PPR Note company and he also writes on the BiggerPockets blog weekly he puts out some really, really great content. I definitely recommend checking his posts and of course all the other parts we put out on the BiggerPockets blog everyday. Today, we’re going to cover the topic of raising money, which is going to be valuable for both the new investors and the experienced investors and we’re also going to get into some in depth conversations on notes as well.
Josh: Along with a lot of random other interesting topics so why don't we jump in really quickly. This is show 28 of the BiggerPockets Podcast and you can check out the show notes at BiggerPockets.com/Show28. With that, Mr. Dave, welcome to the show, good to have you.
Dave: Thanks Josh. Glad to be here.
Brandon: Awesome, yes.
Josh: Definitely, definitely. Well why don't we jump right in onto this. Why don't you tell us your story. How did you how did you get started in real estate?
Dave: Actually, my mom, convinced me—I—after college, I couldn't get a job and I moved in with my mother with my wife and kid and you know how that goes.
Josh: Oh geez.
Dave: I was working in construction and my Mom said, “Why don't you try real estate.” I was putting that at night and on weekends and went and got my license and you know, fast forward a few years, I was taking real estate classes on investing in real estate and the guy said, “Who in here owns a credit and how come you're not buying houses with them?” Back then this is you know back in the1989 and they were like credit cards didn't have the cash advance fees like they do today so it was like, it was really easy to get cash so I started out literally buying houses with credit cards. I would write myself two cash advance checks and go buy a house. I think the first house I bought was 13 like grand.
Dave: I’d go buy the house, fix it up with a credit card and I think was all in for about 18 grand and then I moved to Tenenen and I went down to the bank and they'd go it's worth like 41 or something and they gave me.
Dave: They gave me a loan for 25 grand and I got the 25 grand paid off the 18 grand on the credit cards and then pocketed difference because it was tax free I was still cashing on couple hundred a month, 300 a month I think. Up until a few years ago, I just sold that property so you know I kept it for about a good long period of time. The market jumped up and I sold a few of my rentals
Josh: Nice. Nice. Well, let me ask you.
Dave: I went out and repeated that too and you know I just kept doing that over and over I actually got my first I’d say nine or ten properties that way.
Josh: How do you find a property for what was it 18 or 14 the original price? Where is that? Is that in?
Dave: I actually, I’m outside Philadelphia and actually found that in a for sale by owner in the newspaper. It was just a guy, I was reading the ads and even though I was a realtor, that particular house I found out on a paper. The guy was asking like 20 and I offered, I remember offering him $8,000 and I thought he was going to choke. After I revived him, what is that old saying, “If you're offer is not too low, if they’re not screaming your offer is too high.”
Dave: Now, he we ended up meeting in the middle and I actually got the house for 13.
Josh: Wow. Wow.
Brandon: That’s low.
Dave: That was one of my first, you know official really gutting the house pretty well and all that kind of stuff. It went on from there and then fast forward several years, I actually had gotten up to 40 units and along the way I started to utilize lines of credit. I started putting lines of credit on my apartment buildings and my houses, I actually got up to about 11 lines of credit.
Dave: How I started in note business was I having trouble getting money. I got to a certain point, you know could buy, if you have 20 mortgages in your own name back then well now it’s four.
Dave: At one time it was ten and at one time it was 20. You could actually have 20 mortgages in your name and I got to a point where I couldn't get financing so I joined a local REA group and up until that point, I didn't really network very well and then once I joined the REA group I actually got, not only did I get money, I got into note business because I found out I could use private money and people would lend me private money to acquire my deals. Then I started lending other people money so I would lend fellow rehabbers, we'd lend each other money from our lines of credit or from our IRA accounts.
Dave: I started out with first mortgages, very safe deals, you know 65% loan value that kind of thing. I was lending money to my friends. I was lending money in county where I bought real estate all the time so I knew the market value, I knew the properties and I also had my own crew so if I had to take a property back not that I ever did, I was ready to go jump in there and finish the project or something so I was like a we called it soft hard money.
Brandon: Okay, yeah.
Dave: The rates were not as high as the hard money guy and me and my buddies would lend each other money to do our deals and some of my real good friends have maybe a hundred houses.
Dave: I was on the same path. I got up to like 40 units like I was saying, but then I was like I like this hard money thing, I like these mortgages, I like these notes because I was doing both. I was a property manager at Remax and I was going to court all the time bimonthly, once or twice a month, I’d be in court because I was managing about a hundred units for other people and just from going to court all the time and things like that. I liked the idea of owning the mortgages versus the properties because I was well on my way to have a hundred houses, you know.
Dave: I liked the idea of doing the private money and it seemed easier to me without tenants and contractors and things.
Brandon: Yes, well let’s dive a little bit deeper on the note investing cause honestly, like not a lot of people know a whole lot about exactly what note investing is. Can you kind of explain like, I guess, what is it exactly? What is a note deal? How do you do it? What do you start with those kind of you know, the details.
Dave: Well, for me in the beginning it was easy because I was originating the note so I would call all the terms I was lending the money so I was calling the terms. I was a partner in a title company so I ran everything through my title company. Really, it comes down to when you’re buying an existing loan. Most of the time it’s self financed world where you’re buying a private mortgage off somebody and you’re hopefully getting that at a discount, but a lot of times when people start out in the note business, I ask them are you an active investor or are you passive? You know, do you want to be the guy that collects payments or do you want to buy, you know, delinquent loans. Those kinds of things so it depends on how much time people have and how much capital they have that kind of thing.
Josh: Why do people, I mean why—you said most of the notes come from like the seller financed world why would somebody sell a note I mean if I were to do a mortgage for somebody, you know, I owned a house free and clear and I were to sell that property to somebody and carry the note why would I then sell it to a guy like you for a discount?
Dave: Well, it’s a function, they just want the money or they need the money. Most of those folks that are in the soft finance phase do a lot of marketing to acquire those notes off people who might need the money. They might have held the mortgage just to sell the property, maybe it was a challenging property to sell and because they offered financing it was more palatable so they offered financing or they might have held a second mortgage. They might have held a first just to sell the property, so now they sell the property and they go I really don’t want this mortgage. I really wanted the money, you know, and they’ll sell the mortgage and sometimes they’ll sell part of the mortgage too, like a partial.
Josh: Oh got you, alright so let’s jump into that a little bit, I mean, so they’re selling a note, what’s kind of an average discount, obviously, you’re not paying full price for notes so, you now, let’s say a note cost $10,000 what do you pay for that note?
Dave: To be honest with you, it’s not a space that I play in today, but most from what I do know, most first mortgages today are probably trading at around 70 to 80 cents on the dollar. They usually want equity too so they’re looking at equity, they’re looking at pay history. They’re looking at jobs. They’re looking at—sort of like the originator of a loan would look at it. They’re looking at all the criteria.
Josh: Got you and you had mentioned terms earlier can you explain kind of what that is for anybody listening and of course what are the key terms that typically you would want in your favor versus the other party?
Dave: Well, most of the time it’s you know, how many years do you want the mortgage if you’re doing a private mortgage, a lot of times you’ll see them where they have a balloon in five or seven or ten years because the person giving the mortgage really doesn’t want to hold the mortgage a long period of time so sometimes it’s quite you know, easy to see a five year balloon. I actually sold a property I had to a buddy of mine and I carried a second mortgage and it was, if I can remember, a 12% with a five year balloon interest only. He was able to buy my property with no money out of pocket, no settlement cost because the second mortgage covered the cost of the official down payment that, you know, the first mortgage required. He basically walked in, took the keys, walked out, cash flowed with no money into the deal because I held the second mortgage and I actually still hold it today and I had a balloon on it. You know, in five years, he’s supposed to take me out so.
Josh: Got you.
Dave: You know it’s a great way to sell property with no money down.
Josh: Alright, so what do you do to—what are you doing today? You said you’re not buying those notes on—the notes that we’re talking about just on the secondary market. What do you do? What’s your strategy in the notes phase.
Dave: Well, today, I buy mostly delinquent mortgages in bulk from banks and I got into that area by accident. I was actually running a mastermind group and I would interview speakers and one of the speakers was a gentleman out in Manhattan and he came down to speak to our group and he was doing a cash call to raise capital to buy pools of delinquent mortgages and of course I didn’t do anything for two or three years. My partner John did. My partner invested some money in this note fund and this guy always paid a nice return and then a couple years went by and then we said, hey, why don’t you teach us this collection side of the delinquent mortgage business and we’ll buy loans from you. He agreed to do it he taught about a dozen of us the business and the rest is kind of history. We started in 2007 with four mortgages, mostly second mortgages and they were all delinquent. Today, we own several thousand and we actually are just under a half a billion dollars in pay offs.
Dave: Which is pretty significant.
Brandon: You said earlier, you’re buying delinquent notes. I’m assuming that like—is that the same as non-performing?
Dave: Yes, yes.
Dave: Yes, you buy. The first and second of.
Brandon: The other people behind.
Dave: Predominantly second, we buy so.
Brandon: Okay, they are people that are behind in their mortgages then.
Dave: We do buy first too. Yes. They’re trading at pretty good discounts, to give you a little perspective, first mortgages, mostly are trading between 45 and 65 cents on the dollar.
Dave: Second mortgages will trade most of what we buy today is between three cents and 20 cents.
Josh: On the dollar, wow.
Dave: [Inaudible][15:47] so it’s pretty significant, but we also see a lot of upside down mortgages and—but we do have ways of generating revenue from those so.
Dave: It’s pretty interesting.
Brandon: What do you do when you have a bad—I mean you have a bad note that you buy. How do you make off that? I mean if they’re not paying are they—they’re not paying you either I’m assuming, do you just, you know, kick them out, foreclose, how does that work?
Dave: It’s funny that you say that, my partner always has it a line, “There’s no such thing as a bad note, just a bad price right?”
Brandon: Oh yeah.
Josh: Absolutely, well you’re paying for the risk right?
Dave: Yes, you are and it becomes more statistical and you know—a lot of real estate guys, myself included, you’re always buying, you know, they like first mortgages, they like to be in first position, they like equity. They like the property to be occupied if they can get it. Then they like geography too. They’re geographic buyers, a lot of people that buy commercial notes or who buy first mortgages are geographic buyers because a lot of times they don’t mind getting the property. When we buy second mortgages, we buy in all fifty states. We’re in all over the country and we probably own 20 or 30 houses at any given time through like REO, not that we want them, but we end up with them. That’s our worst case scenario so it’s kind of the opposite of a real estate investor, just trying to get a property, we’re trying to not to get the property, but we get them anyway.
Dave: That makes sense.
Dave: Whether we want them or not right?
Brandon: Yes, exactly, so let’s I want to go into it deeper than this cause I’m really fascinated by this. You buy a property, let’s just say, you buy okay, a consumer takes out a loan for a hundred thousand dollars on a house then they stop paying and the bank, you know, is it before the foreclosure or after the foreclosure do they sell it? I mean at what point to the settle on?
Dave: Usually, it’s before the foreclosure and we’re buying them from the trade desk. Like we don’t buy from loss mitigation, we’re buying from the loss—from the trade desk and they package up those loans in bulk. You know like, we just had a package of 1,400 loans and some packages we can cherry pick and buy a couple hundred of those assets or we might have to take the baby in the bathwater and buy the whole pool. Then, but so we do analytics and we know statically what the outcomes will be before we buy just from past history. Part of what you’re saying is why does the bank—well think about this way, if I had a $40,000 second mortgage say and then bank originated that—they’re into the loan for the full amount right?
Dave: They sell to me at a fraction, say I buy that for five or ten grand, well I can do a lot of things with that borrower that the bank kind of couldn’t do. The bank’s conversation with the borrower might be pay up or get out whereas my conversation is, hey what happened? Where are you at now? What would you like to do? I’m you’re advocate. Let’s try to craft a plan whether you want to stay or go, meanwhile legals move it forward so the bad guy down the hall, legals, push them forward so you have to make a decision of what you want to do and we like tell them stories of people we help. Then we go down a series of options because we wanted to be their plan. It’s really not about what I want because I need their buy in if it’s going to be successful, if that makes sense.
Josh: Well, let me ask this, I mean, so at that point, if you’re paying, you know $5,000 on a $40,000 note, you have the option of dropping their payments significantly and still being ahead of the game.
Dave: Absolutely, yes, let me give you a couple examples of what we would do.
Brandon: Yes, yes.
Dave: Once our hardest thing is getting a hold of them so we do a mail campaign, a phone campaign, we even send a door knocks to them. It’ll be somebody at the other end, you know.
Dave: Yes, so it’ll be, hey, we’ve been trying to reach you and the interesting thing is once we do get a hold of them and we have that conversation, what happened? Where are you at now? What would you like to do? We start to tell them stories, you know, like hey I helped this family out in Oregon.
They were able to access their 401K and I saw a corporate accept the discounted pay off. Is that something that would interest you?
Like, if corporate accepted 20 grand to make the 40 go away, you know, you can access your 401K penalty free while you’re in foreclosure. They might go, “Oh wow I didn’t know that” or they might say, “I don’t have a retirement account.” Then we would come to the next stage and we’d go, “Well great, maybe you’re qualified for friends and family program.”
You know, we had an uncle of a borrower in Delaware lend his niece the money and we ST PR sold the loan to him. You could see where—would the uncle be more inclined to lend the money to his niece if he got a secured lien, which and that’s something a bank would never do because it’s an arms length transaction. We’re not as regulated as a bank. We can do those types of creative transactions and you know, Uncle Louie, he might have lent his niece some money anyway, but he might be more inclined to lend her the money if he has a lien on her house.
Now, the borrower might say, “I don’t have any friends or family, everybody hates me.” Well great, maybe you’re qualified for our discounted areers program, you know where we can, you know, they might have not have made a payment for three years or five years and they might have $10,000, their reers and a lot of times we can discount those areers and usually the more cash they can put towards the areers the lower we can lower their payment or interest rate or lengthen their term. A lot people have income tax checks or something like that where they can put it towards the areers. Now, they might say, “I don’t have anything to put towards areers.” Then we start to go down the path of you know cash for keys, sellers assist deeded low. Those other options don’t look so bad right, if they want to stay there.
Dave: Especially, if they’re current on their first mortgage. If they’re current on their first mortgage, they’re telling you two things. They’re telling you they have a source of income and that they want to stay. To us, senior lien status is more important than equity when you’re dealing a second mortgage.
Brandon: Do you deal?
Dave: Which is kind of.
Brandon: I was going to say, do you deal mostly with second mortgages?
Dave: Mostly we do because well, it’s the space we started out in and we just learned it and it’s a lower prices point and more upside once you learn to manage the risk.
Dave: There’s something wrong with first mortgages, they’re actually easier they just take more capital.
Josh: Hey, so you know, you just said hey you’re going and you’re going to buy this pool of 1,200-1,400 from the bank, that’s a lot of inventory to instantly start managing. I mean you must have a fairly significant team to be able to manage that many notes.
Dave: You are correct. I mean we have 23 people right now.
Dave: 21 are full time. You’re right, but we didn’t start out that way. I started out with a computer and a magic jack, worked out of my house so it was—it wasn’t that I always had this big staff that I do today.
Josh: Of course.
Josh: Of course. Of course. Well, can we, yes, I was going to say, can we jump back to the very beginning because you know we’ve definitely talked about a couple things that I think are fairly sophisticated and I’d like to say, take a guy like me who’s never in invested in notes or you know, one of our many many listeners who probably are thinking, wow well this is scary now this is it could be cool I don’t have to manage tenants. How do I get involved? Right, so you know somebody wants to get started in investing in notes, what does that look like where do they go how do they find notes what’s kind of the process from alright I want to be a note investor to, cool I just got my first, I’m going to target performing or non-performing. I got my first one now. What, just sit back and collect the cash? Walk us through a little bit of that.
Dave: Well, there’s you know, I think of about three different ways someone could get started right.
Dave: They could originate their own loan doing a private mortgage for a rehab loan like I did or you know, which is tough right the second way would be to market for a loan, like soft finance guys do and then the third way is to buy a loan from a servicing company like my company or there’s a million servicers out there that sell loans or they have a trading platform for loans. Even on a one off basis there’s places that sell individual loans and you can have someone manage that loan, like I have a servicer that manages my personal loans because I buy loans too.
Dave: Well, my 80-year-old mother has loans that she owns and would size about having a servicer manage your loans like the servicer I use is only $15 a month, they wire the money, the payment into your account every month or into your IRA account every month and it’s very hands off and you know, I think about my own wife who says don’t you die and leave me all that junk property you own. Besides she never says that about my notes and she sees the money getting wired into the account every month, ACH and she never complains about that.
Dave: It’s all on how you look at it I guess.
Brandon: I have kind of a general question that about that like and then isn’t really easy to answer, but how like how much money do you make, I mean not personally how do you make money off notes. I mean, like what percentage do you make what kind of returns do you get what can a person expect versus flipping or wholesaling.
Dave: Well, I can tell you just from most of the performing notes that we sell. Most of them are in a range between 15% to 20% return plus they have a kicker so could I give you a little example maybe.
Josh: Yes, please.
Brandon: That would be awesome.
Dave: If we bought a loan for five or ten grand that had a pay off of 25 or 30 grand and we would smile and dial and do our routine and get that reperforming say and then we would turn around and sell that loan for about 17 or 18 grand. It would have a payment of maybe 275-300 a month on that. That would generate that into the 15% to 20% return in that range. The kicker would come in as the difference between the pay off and what you bought the loan for so if the payoff was 25 grand and you bought the loan for 18 grand, that difference would be what we call a kicker because you never know when a borrow is going to take you out, refinance, sell the property, whatever that is. You’re making nice return while you’re waiting to get you know full payment. You know, some of these go for 20 and 30 years and you know, it’s just a nice investment. Now, one of the things my company does is we warranty that investment principal so if you bought a loan for 18 grand from us and you collected three grand in payments and then it hiccupped and stopped we would actually step back and try to get a reperforming again and if we couldn’t we would replace you with a no credit towards another note. We would give you no credit in that case for like 15 grand.
Josh: Like an insurance policy essential.
Dave: Like an insur—it’s the best marketing we ever did.
Dave: To you know sell notes because think about what we’re selling. Sure, it’s a little bit of outside the box trade right? It’s a reperforming second mortgage that a lot of people would not be interested in investing in. Well, when you provide a warranty or something, they’re more inclined to say, hey, yes, I might try that and go it and do it that way. It’s a very passive way to invest in a reperforming mortgage. We also warranty our first mortgages too so it’s a nice piece of mind that people don’t have to worry about because I don’t think you can buy the perfect mortgage or create the perfect mortgage because bad things happen to good people. When you think about the four main reasons people default, it’s job loss, health, divorce, what’s the other one, medical.
Dave: You know, unless it’s a strategic default or something, but you get the idea.
Josh: Well, so I’m coming in here. I’m interested in buying notes, you know, I’ve got you know, 5,000 bucks saved up. Is that enough or do I need—what do you—pressumably your company has some sort of minimum. What does somebody need to start investing in notes with? How much money?
Dave: Most reperforming mortgages that we sell are between ten and 30 grand but then again I’ve bought loans for $80 too, but they we’re dangerous loans.
Dave: It’s all relative, but yes, you can buy loans pretty cheap. You can even buy first cheap because the lower—so I’ll give you an example, first mortgages over 150,000 tend to trade at a premium, mortgages under that, trade less, so if you get below 75,000 they discount them, if you get below 45,000 they discount them even more so it’s almost like the market sets the pricing not so much what do I want to go buy a note at, you know, although we bid on them. The market kind of gives you color as to what they’re trading at.
Josh: Do you think it’s a bad idea to just buy one note? Since I mean, notes are a little bit—it sounds like maybe a little bit risky, is it bad to buy only one or do you get your security by having dozens and dozens of them?
Dave: You know, it’s great that you say that because sometimes I’ll joke with folks who say why don’t you buy more first mortgages? I’ll make the comment well they’re too risky and they start laughing. They go well it’s first mortgages why are they risky and it’s because I have more exposure in one deal.
Dave: So byebye a delinquent first mortgage for 50 to a hundred grand to your point. I can go buy between about eight and 20 second mortgages so I can spread my risk among many deals. You know, my average loan might be five grand as opposed to a large amount. You know what I mean? And then I don’t have that much risk in any one deal.
Josh: Got you. Got you. Alright and so what happens then if you’ve got one of the seconds or first and they do—they stop paying and they don’t want to go through any of your secondary channels for getting out and you have to foreclose. Then you actually have to go through the whole process and deal with all the headaches that come with that and essentially the note just stops paying off correct?
Dave: Yes and no, I mean, there’s a lot of strategies. We actually have about 40 law firms throughout the country that work for us so we initiate foreclosure probably kind on close to half our portfolio, but we actually foreclose on less than 10%, it’s around 8% so we’re really foreclosing on a small number when you consider how many loans we buy.
Brandon: Yes, that’s surprising.
Dave: So it’s.
Brandon: I would imagine a lot higher than that so that’s cool.
Dave: We even get, a lot of times we even get a work out done with a borrower post foreclosure sale. Especially in second mortgage world. They just can’t believe you can foreclose from second position and a lot times when we’re, it comes to the point when we’re putting a sale sign in the loan or sheriff going there to eject. That they realize, oh my gosh they can foreclose and we get a work out done and deed it back to them a lot of times.
Brandon: I—so when you foreclose on a second mortgage then and you go to the county or whatever and you do all the work, you have to pay off the first mortgage them right? Or how does that work?
Dave: No, we don’t. We’re typically, we would get a sheriff’s deed and the first mortgage is still there so we took over subject to that first so the first mortgage is still it’s in the original borrowers name. We have a couple options where we could—if the first started to foreclose against us, we could reinstate it, we could pay it off, or we could just let them go. Sometimes, there are some state where we would rent the property out and just wait on the first. Like if you’re in a long state you could you know, just turn around and rent it out and recoup your note money. There’s a couple ways sometimes we’ll reinstate the first and just keep making payments and keep it as a rental.
Josh: Who owns, at that point, who actually who’s the owner of the property?
Dave: We are. We’re the owner after the foreclosure sale. Yes.
Josh: You, the second holders the owner after the foreclosure sale.
Dave: Yes. Yes.
Josh:Now that would trigger.
Dave: We would we have certain rights in those states too because we’re secured lien holder. We have like reinstatement rights and things like that. A lot of people aren’t aware this. A lot of people think you have to pay that first off in full. We very rarely pay a first and we very rarely make a payment to the first to be honest with you. Occasionally we’ll bring a first current so they have to start their foreclosure over again to give us time to solve the property or fix it up and sell it. That kind of thing.
Brandon: Interesting, so when you’re—I’m just kind of showing my ignorance here with all this stuff but so.
Josh: Hey man, I’m with you.
Dave: You’re a funny guy.
Josh: I mean this is, I mean this is it’s a fairly complicated if it’s something you’re not familiar with.
Brandon: Yes, so when you buy a—you buy this property a second mortgage, you foreclose, you take over, there’s still a first that’s there and let’s say. Especially, like in today’s market where the things are lower than they used to be, what do you do if you’re underwater then at that point? What if the first mortgage is higher than—you know, what are your options?
Dave: Well, you’re bringing up a good point like the cheapest—like a lot of people don’t realize in second mortgage world there’s more than one categories right and they’re prized accordingly. The cheapest most dangerous category is where the first mortgage is delinquent, 120 plus days and they’re not paying the second mortgage. We typically buy that for two and a half or three cents in quantity so it’s a cheap note to begin with. Now there’s three ways people make money on that note, one is through insured sale. They’ll call you up to just get you to up to sign off and you can easily get 2,500 to 8,500. We usually average about 10% of our face value of that note for assured sale. The second way is the reporting of false negative to credit on the senior lien because they’ve done a loan mod so there’s a lot of loan mod’s going on out there, but the credit report shows that they’re late and they’re really not late [Inaudible][34:23] so they—the first mortgage won’t report to credit for maybe a year or two and the whole time that people are making a payment. It’s almost a good note you know that they’re current on the first so they’re good deals. The third option is you would take the property in foreclosure and then you would have an option of do I pay or the first or don’t meanwhile you’re renting.
Brandon: You’re not renting it to the original people that were living there right?
Dave: No, not normally no.
Brandon: Alright, can the first bank then—cause you said they can foreclose on you because—where does the—what’s that called the—what’s the word I’m looking for where they foreclose because the title is transferred.
Dave: Oh do a sale clause?
Brandon: So what do they do on a sale clause?
Dave: We laugh at those. No, well, I mean, it’s sure they can exercise to do a sale clause, but then they got to start the foreclosure, which they could do anyway so it’s okay foreclose because it’s on their credit. They’re just coming after the property and then we can usually stop them. The only time it’s I think I had one case in six years where it was difficult to stop the first from allowing us to reinstate and that was because the borrower was deceased.
Dave: Usually, as long as that borrower you know, because think about it, they don’t care who’s paying them or who’s bringing their loan current because now they have a good loan on their books as opposed to a delinquent asset.
Josh: Got you.
Brandon: Can I as an individual investor, let’s say I find a second mortgage for I don’t know let’s say $10,000 that I can buy it for and the first is for like 50 let’s say so we have a total of 60 into it. Can I then foreclose on that person, kick them out of the house, and then rent it out to somebody else and just cash flow and just rock that loan for the next you know 10-20 years of my life?
Dave: Yes, you can.
Dave: In fact, we call that the Southern California model, where you’ll see—you see it more—everybody has a different model right. Our model is one way. There’s other models, but here’s the common model where they’ll buy a high and second for a low price, so I’ll give you a quick example. It was a million dollar property in the heyday, but now it’s worth 700 hundred grand and the first mortgage is 600 hundred grand. You know and you have the capability of buying that second mortgage say it’s say 300,000 for 25 grand so now the second mortgage is in your back pocket and then you’re able to try to get assured sale done on the first or just go in and you know sell the property that way and now you got a great deal. I’ve seen guys make a couple hundred on a flip like that, so.
Brandon: Wow. Cool.
Dave: You could do really well with that. Yes.
Brandon: Okay, yes, I feel like I’m getting kind of a better grasp on how the hold note thing works, so. Last question on that I got is when you buy notes, do you have to have all of your own cash or do you, I mean like can you partners can you raise money how does that all work?
Dave: You bring up a good point. We started out in the beginning when we started our company with our own money and then quickly didn’t have enough money to keep going right and we would use our savings and key locks and IRA account and then we formed an LLC and bought that way. Then we started raising other people’s money and really most of the loans we buy are with other people’s money today and it literally built this whole monster of a company with other people’s money and the turns are pretty well, they’re pretty good returns and you’re able to pay them nice return and keep things moving. Keep the velocity going you know.
Dave: We’ve done really well with that so.
Brandon: Let’s talk about that.
Dave: It’s just like commercial real estate like when I firtst started raising money it was for commercial real estate and you know how many deals could you do if you had an unlimited supply of money is really what it comes down to.
Josh: Well, and that’s the problem most investors get to at a certain point.
Josh: Is, you know, hey, I’ve run out of money now what and I think we definitely want to talk about that from here on if you could do that Dave.
Dave: Sure, sure.
Josh: Why would, you know, obviously, that’s why somebody would raise capital right? They’ve expended all their available working capital either into deals or they don’t have it right? Where do they get the capital from?
Dave: Well, I mean, you know, I think when I first started raising capital, it was mostly through networking groups. It was really from the people in my cell phone. Literally, you know I would do, you know I used to, well there’s a couple ways one is to teach it. Teach raising capital or teach the kind of investing you’re doing and then when people see what you’re doing they go, oh I want to get involved and I would I would tag team off a lot IRA companies because about, I’d say over 30% of the capital we raise is from retirement account. Then I used to do a lot of charity work you know, if you volunteer in some charities a lot of the investors are credited, donate to charities.
Josh: That’s a good idea.
Dave: It’s a unique way to—and it’s a good cause right and when I first started raising capital for commercial deals I was doing it for another company so I actually learned their techniques by working for them. I went to work for a company to raise money I mean that’s how I did it. I’m not saying it’s the only way, but they’re just some ideas, but when I look at where my investors come from today I think like 46% is from referral, maybe 11% family, I think 3.5% are friends and most of it close to 30% was networking.
Brandon: Yes. That’s cool.
Dave: It’s just you know.
Dave: You got to have a good reputation too. If you’re some slimy investor no one is going to invest with so you have to have a decent reputation and things like that.
Brandon: You said something interesting earlier that you can teach like if you want to raise money a good way to do it is to teach what you know to local people. Chris Clothier talked about that on his podcast episode. I think it was a couple weeks ago and he just talked about how when, I think he was his dad started it out, they had seven guys in the conference room and he just started a local REA and you know a few year later they had 300 some people going there. It was one of their main lead generators so yes. I think that’s awesome.
Dave: Well, the other thing is if you start the group, it’s a great way cause you’re considered somewhat of an expert because you run in a group or we used to hold investor Q&A sessions. We would invite people out to you know the local restaurant and hold a meeting and answer questions, you know buy some drinks and h’orderves and talk about the real estate project or the note project that we were working on and raise money that way. You’re right, if you’re teaching it, you’re not soliciting money.
Dave: Like from the SCC point of view where you’re after with unaccredited investors and you’re soliciting money and you get yourself in trouble it’s a great way to do it through teaching like you said.
Josh: Well, let’s talk about accredited investors a little bit. There’s a little bit about that out in the news lately and I think a lot of people don’t fully understand what an accredited investor is. What’s the definition? Who’s an accredited investor?
Dave: Well, an accredited investor is basically a high net worth individual. The IRS definition is someone who makes $200,000 a year if they’re single, $300,000 a year if you’re married, or you have a million dollars in net assets, not counting your primary residence and that you’ve done it for the last two years and you plan on doing it for the next year or two.
Josh: You’ve done what?
Dave: That you’ve made that kind of money.
Brandon: Got you.
Dave: It’s—you’re pretty well off and make, well, they consider that well off.
Dave: That if you invest in this particular investment. This private placement then you’re at your own risk and if you lost your money. They don’t feel too bad for you. Right?
Josh: Because rich people could lose their money and it’s okay.
Dave: Well, the irony is anybody can have a securities license and they could sell you, I don’t know GM stock and you can lose all your money, but that’s okay.
Josh: Yes, no.
Dave: I don’t know how much sense that makes, but that’s the rules that I play in the game, right?
Josh:Yes, yes, of course. Alright, so we’ve got these accredited investors and essentially, the advantage of being an accredited investor besides the fact you’ve got more cash than the rest of the world is that you, that companies can now market to and solicit you and essentially sell these services to you that they couldn’t sell to the average Joe because, again like you said, the government assumes that these guys have a high risk tolerance. They’re smarter because they’re richer. Is that a good way of putting it?
Dave: That’s exactly what they think. They’re there to protect the little guy. Thats what DSCC is for to protect the small time investor, but you know, you just brought up a point about the recent changes where you can actually do advertising and market to the general public now for your investment, but they did make it a little cumbersome so they’re making, if I do general solicitation to an audience of mixed company and by mix company I mean accredited and unaccredited. If I bring in an investor from that event, I have to screen that investor a lot more diligently now I have to actually have to have proof that they have that kind of income. Whereas if I just went to a room full of accredited, I don’t have to do that, so not much has changed really.
Josh: Well, let me ask you this because you know, I know. You’ll see a lot of people come out who don’t know anything about anything and you know, usually, they just come out of some guru class or some kind of none sense and suddenly they’re advertising all over the web and all over the place, seeking financing for this. They’re just doing a general solicitation. That’s not okay, correct?
Dave: That’s taboo. Yes and in fact, years ago, I had—I didn’t have that on a website. I just had—I forget what I had and it literally cost us $10,000 in Ohio to take down our website because the regulators on the state level are more strict than the federal level because most of us are too small.
Dave: Going after the big fish, but you’re right. Websites are one of the most dangerous places. I wasn’t even soliciting anybody. It just it—it mentioned investor somewhere on my website and that was just enough to do it.
Josh: Yes, yes, well I mean and that exists in the start up space and the notes and in fund raising space of any type, for example if BiggerPockets were to go out and raise money for, say we needed venture money. I couldn’t just start advertising that on BiggerPockets because.
Dave: No, well, now they’re changing the rule that you can advertise today, but even though you advertise, if someone comes in, now it’s the duties on you to be diligent in the screening of that person to see if they’re accredited or not and that they’re qualified so the marketing has changed, but you know what, the rules, there’s no case history right yet you know so. We’re treading you know dangerous ground in some ways because do you want to be the first case?
Dave: I’m kind of sticking to my old ways of raising money because if I deal with just the accredited, which I’ve gotten used to doing I don’t have those issues. I don’t have to verify their incomes, I don’t have to say let me see tax returns because for a lot of accredited investors, that’s cumbersome.
Dave: To have to produce you know my tax my 60 page tax return to you to invest in your $25,000 project that you know. It’s over burdensome sometimes.
Dave: So I don’t know it’s going to work the way they think it is.
Josh: Oh, I’m a real cynic of what the government is planning and what everybody thinks. Brandon and I talk a lot about this. You know, there’s all these companies popping up that are all the crowd funding and raising money. Everybody thinks that the government is going to allow grandma to go out and be solicited and jump in and buy shares of somebody’s real estate deal. I kind of think the government is going to put a clamp on that because you know there’s so much screening that needs to be done. I think I see it at as they allow it on the stock market because there’s so much more information about these companies on the market.
Josh: When it’s an individual property if it’s just you know you’re trying to sell shares in an office building down the block who’s going to vet that deal.
Dave: You bring up a great point there’s no prospectus that’s drawn up by a risk attorney.
Dave: For your little project you know like it is on the stock market so it is a different vibe as far as what that investment is, but I think people are better off focusing on the accredited investors. One thing that’s worked well for me is I’m members of a couple CEO groups. Where outside my real estate, I know this is counter intuitive because I’ve always been in a million real estate groups, but I actually joined a group where all the other CEOs aren’t in real estate and they’re all well to do. They all have like five to ten million dollar companies.
Josh: It’s like EEO and stuff like that.
Dave: Yes and you can meet some really interesting people and get new ideas for your business and but you also build relationships with people that are accredited and next thing you know they’re investing in your projects so.
Josh: Yes. Absolutely. Absolutely.
Dave: It’s another good strategy for raising capital and meeting new people.
Josh: Right on. Right. Well, we’re starting to run out of a little time here. Why don’t we jump to our favorite new feature of the show here, our Fire Round.
Brandon: Fire Round.
Josh: Fire Round. Yes so let’s something you’re got lots of experience across, you were an agent, you were a property manager you’ve been there, you’re the note guy now. I’m going to start with shooting real estate investor be an agent.
Dave: I don’t see any harm it. I was an investor and agent for years in fact most of the clients that I dealt with were relieved that I had knowledge of the business and the paperwork they actually like the idea. As long as you disclose it I think it’s disclosed, it’s disclosed, disclosed, disclosed. It’s never been a problem for me in over 25 years that I was an agent, so.
Brandon: Yes, makes sense so that one was actually my question I was curious—the rest of these all come from. Well, those who’ve heard my story. I think I’ve said my story before I’ve taken the class twice and I haven’t actually gotten my license yet. I still kick myself for that. I will get my license.
Josh: We’re holding you accountable Brandon.
Brandon: I know, you are.
Dave: It will save you money that’s for sure.
Brandon: It will save me money. I know that. I spend a lot. I give a lot of money to my realtor.
Dave: You know what the biggest advantage for me today with being a realtor?
Brandon: What’s that?
Dave: Taxes. I can have unlimited losses.
Dave: A normal person can only have up to $25,000 of losses so if you have a lot of rental property and you exceed that $25,000 in losses and in my note business today my biggest problem is I generate too much revenue so I love still being an agent to take advantage of unlimited real estate losses to offset my earned income.
Brandon: That’s because of the professional status.
Dave: Yes. Yes.
Brandon: Okay, cool.
Dave: I’ve been through audits and they do want to see that you’re professional and that real estate investor. They do want proof they were very big on that through my audit.
Brandon: That’s good to know.
Dave: Keep that in mind.
Josh: Alright, you came out alive.
Dave: Came out alive. Yes.
Brandon: Alright, all the rest of these came from the BiggerPockets forums so.
Josh: At BiggerPockets.com
Brandon: Slash forums. Alright, so can you invest in notes from overseas?
Dave: Yes, yes, and no. There are anti-money laundering laws and if we have a couple rules that we deal with. Like I have a gentleman out of Australia that buys notes from us and what he does is he has a Florida LLC and he has some type of exchange bank that’s located in New York and California that will transfer his money from Australia to the states through a US bank and if the money is coming through a US bank, it gets through that anti-money laundering thing whereas if you’re taking money from the note—like we don’t sell notes to someone in like in Nigeria or Libya who doesn’t have an entity or it comes through a US bank.
Josh: That entity we would need to be in the states.
Dave: Yes, that’s our company rule. That’s not necessarily. Will there be companies that would sell to a foreign entity or person. I’m sure there is, but we’re dealing with people socials and we feel a moral obligation not to give a borrower, I don’t want to give the US borrower’s info to a foreign person or entity without being able to vet them. Without being able to know that their money is coming through the states, through the proper channels. That’s our company policy.
Josh: Got you. Got you.
Dave: I don’t know that that’s a rule nationally, but there are anti-money laundering rules.
Josh: Okay and to anybody listening, these are the reasons why you want a very good attorney and a very good accountant when you do anything in real estate. You know, a lot of people think you could just jump in and you know, hey I’m going to start being an investor and it’s going to cost me nothing. If you don’t put the money up for a good lawyer and a good accountant to CYA, you can get yourself in a lot of trouble.
Dave: That’s correct.
Josh: Yes. Alright, so what is, what’s considered normal wear and tear on a rental? What’s norm?
Dave: I’ve never had a rental like that.
Josh: There’s no such thing as normal right?
Dave: I’m usually putting three kitchens in, in ten years. Now a normal where in tear? I think if it’s more than three to five years and you need paint and carpet. I think that’s normal. I mean. If you get to where it’s—they live there a year and you need to replace the carpet and you need to paint the place. I think that, that’s abnormal.
Dave: What do you guys think?
Brandon: I think I agree. I have—I repaint way too much. A lot of my tenants are just, I don’t know what it is, but I repaint way too much.
Josh: You shouldn’t be painting every year. That’s not.
Brandon: That’s what I feel like I do. On some of my units, I paint every year.
Josh: You are a sucker.
Dave: Well, I will tell you this. Sometimes, if a tenants there are more than five years. I’ll send a painter in.
Dave: To paint—to repaint for them. I think I get retention out of that. I do.
Josh: Yes, I think that and replacing carpets after x number of years is reasonable, but you know, if your tenant’s staying there and I can’t imagine repainting a unit that’s somebody’s been sitting in unless it’s been quite a few years.
Brandon: I wonder though how much that has to do with because I live in a rainiest part of the country and so maybe it’s naturally dirty here. I don’t know because everything is wet and kids are touching the walls. I don’t know. I should find out if my—if that’s normal.
Josh: Your tenants need to get a sponge and put it on the walls and clean, instead of you painting.
Brandon: That’s true. I do clean the walls.
Dave: It’s the cheap paint.
Brandon: That actually leads into the next Fire Round question is what is your favorite brand of paint to use on rentals?
Dave: Well, I used to be a painting contractor and my oldest son is and we used mostly Sherwin Williams products and it’s—they kind of have the monopoly on the market. It’s between them and Home Depot, typically. Where we get some of our products these days.
Josh: Right on. How do you find a good handyman?
Dave: Wow. Most of the time through my property management company today. They usually refer one to me so that’s the easy way out, but a good handyman is probably one of the toughest hires there is.
Dave: Usually, I would start out with someone who was a carpenter that was pretty good with painting and things like, spot cling and dry wall because then he can do the bulk of it. How do get somebody that can be a good plumber, electrician, all in one. It’s tough.
Brandon: Yes, yes. I agree. Very tough. What’s your favorite kind of flooring to put in a rental?
Dave: My favorite type of flooring? Oh geez. Probably Mexican tile with a drain in the floor so I can just power wash the inside.
Josh: I like [Inaudible][55:13].
Dave: Don’t you wish you can be like a restaurant right? Just go in and squeegee and then next. I guess, you know what, I do like the hardwood sometimes like in, well, in the Philadelphia area we have a lot of the older rail homes that have hardwood and you can go in and refinish them and then people put area rugs and you don’t get into that much carpet you know, but we do have ones with a lot of carpet. They tend to beat them to death.
Brandon: I like the hardwood. When you can refinish it. It’s awesome, so.
Josh: Alright, so here’s a fun one, bed bugs, who’s responsible? You or your dirty, disgusting tenant?
Dave: Wow. Well, I know my management company puts a clause in for bed bugs that it’s on them. That there were no bed bugs when they moved in, but I also have a—I run a drug and alcohol recovery house where we do get bed bugs occasionally. We actually just routinely go in and treat the place.
Dave: We just continuously treat it, you know.
Josh: I mean now insult to all the New Yorkers who are putting up with the bed bug plague that is striking back home. No disrespect to everybody.
Dave: Well, I will give you a tip, they have these bed bug covers that work very well on protecting the box spring and mattresses. They’re not cheap. They’re like $60 to $80, but we put them on all the beds, that’s where they live you know. It cuts down a lot.
Josh: They live inside the covers so you’re sleeping on top of this bed with the bugs that’s festering in this cover below. That’s kind of nasty.
Dave: Sure, but the cover keeps them from being able to live in the box springs and it keeps it—it protects the box spring from having to throw it out or burn it or whatever.
Josh: Right. There’s just nothing pleasant about bed bugs and.
Josh: No good answers I guess.
Dave: They’re definitely the toughest—they’re one of the toughest things I’ve ever encountered. I’ve had everything from bats to raccoons to you name it?
Josh: Nice. That’s awesome. Well, listen, as we come to the close of this one. We’re going to jump right into our. Famous four.
Brandon: Famous Four. I was trying really hard to harmonize.
Josh: Ironically, Brandon plays the guitar and sings. I’m not quite sure why he’s incapable of—you know sounding.
Brandon: Be careful I’ll bust out my guitar on one of these podcasts. You watch out.
Josh: Nice. Nice.
Brandon: We’ll do it. Punk rock. Alright, Josh, you want to take the first one.
Josh: Yes, yes so here’s famous four. Why don’t we start with your favorite real estate book?
Dave: Gosh, is it okay to have a famous real estate book that’s not just about real estate?
Josh: A favorite? Sure, absolutely.
Dave: One of my favorite books was Misfortune 101 by Doug Andrew, which is more of a planning, you know, wealth building, but it involves. He talks a lot about real estate in it too, but it’s about releveraging and being your own bank and things like that.
Josh: Will that qualify as your favorite non-real estate business book as well?
Dave: I think my favorite non-real estate book would be like Mastering the Rockeffeller habits which is like growing your business is what that’s what that book is about. It’s by Verne Harnish. It’s sort of like an E-Myth type book where building a business, but are you looking for another real estate book.
Josh: No, we’re perfect Ben, we’re just—we’re always trying to expose the listeners to new ideas and new books and new things for them to check and ironically, most of the recommendations over our shows are they tend to come back up and it’s cool you’ve got a couple new suggestions. I think people will—yeah—interested to check those out.
Dave: Okay, cool.
Josh: What about hobbies?
Dave: Hobbies? I’m a weird guy. I like to play chess.
Dave: I like to play table tennis and I like to play a round with LendingClub.com. It’s like my new Facebook. It’s like you can trade loans on there on this website. I don’t know. I’m just a weird guy.
Josh: Table tennis, table toys, table games, and Lending Club. Got it.
Brandon: Nice. We’re going to be actually talking to somebody in one of the upcoming podcasts about Lending Club. We’re going to talk about how to use that.
Dave: It’s phenomenal.
Dave: A lot of my staff do it. Yes.
Josh: Wow, cool. We’ll post the link on the show notes as well, to Lending Club so people can check that out. Brandon, you want to take the last one here?
Brandon: What sets apart successful investors, in your opinion, from those who just come and go.
Dave: I think it’s got be that I’ve seen over the years just studying successful people. I think it’s goal setting and taking action. You know, being able to take a risk, not being afraid of failure, being creative. Being resilient. You know, that kind of thing.
Brandon: Yes. Good. Awesome.
Josh: Nice, awesome, well Dave, listen I definitely appreciate you coming on the show. I think we certainly got into a few topics that might require additional assistance and I want to encourage our listeners to jump on our show notes at BiggerPockets.com/Show28 and if they’ve got any questions, they can ask you them there and of course you’ll jump in and be there to help out. Otherwise, anybody listening, you guys can find Dave on BiggerPockets. He’s got a profile, connect with him. Definitely be sure to check out his company, PPR Note Company and we want to thank everybody for listening and of course, Dave, thanks for being on the show.
Dave: Thanks guys, it’s been fun.
Josh: Alright, everybody and that was our show with Dave Van Horn. I know that there was a ton of new stuff in this episode and your mind is probably running at a hundred miles an hour like mine is and I know Brandon’s is because he can’t quite keep up, but it’s all good.
Josh: Yes, you like that? No, there was a lot there. I know, I’m going to have to go back and listen again to pick up some stuff so don’t feel bad there’s definitely a lot of content and some fairly sophisticated topics there. Thank you for listening. Really quick before we go, I just want to mention that we’re now up to 338 ratings on iTunes for the show, 328 five stars and 212 customer reviews. If you haven’t left on yet, please, please take the time to leave us a review on iTunes and share a rating, an honest rating. Hopefully, five stars is honest, but leave an honest rating for us and that would be eternally helpful to us in spreading the word about this show and what we’re doing here. Otherwise, if you’re interested in the topic of notes or raising money or anything like that, definitely make sure you jump on BiggerPockets, check out the BiggerPockets blog or forums and get involved and get active there because that’s so key.
Of course, if you have any questions for Dave, make sure to leave your questions in the show notes at BiggerPockets.com/Show28. Dave will be there to take all of your questions and answer them or you could connect with him on the site. That’s really about it, makes sure you are following us on Facebook at Facebook.com/BiggerPockets and if you don’t have an account on our site, you’re definitely missing out. Make sure you join us at BiggerPockets.com. Come get involved. Join up. There’s so much cool stuff happening there so much great people that you can connect with and we hope you’ll join us and be a part of the community. I know that Brandon, you are one of our success stories and just being involved.
Josh: It was so valuable to you, wasn’t it?
Brandon: It definitely was. I always encourage people like just jump in and engage. The ones that engage are the ones that succeed so do it.
Josh: The last quick thing here. Just a reminder for those of you who haven’t had a chance to learn about it, we actually just released this amazing fix and flip, house flipping calculator analysis tool. It’s unbelievable. The thing is so valuable and you can learn more about at BiggerPockets.com/flip-analysis. Flip-analysis. There, you’ll see a video with a tutorial. You’ll learn all about it, see the report it produces and as a new investor or advanced investor, this thing will really help you to evaluate your house flips. Brandon was fundamental in it’s creation. He’s done a phenomenal job and we’ve had great feedback from many of our house flippers about their thoughts on it. Definitely be sure to check that out. That’s it. Enough announcements. I am Josh Dorkin, signing off.
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