009 - Podcast Journey w/ Q&A

Embark on a transformative journey with me, Justin Bogard, as I pull back the curtain on building wealth through the mesmerizing world of real estate note investing. Imagine the possibilities as I share the lessons and strategies that have propelled my career, and how you too can wield the power of 'the bank' to create a stream of passive income. Relive the nostalgic moments from the early days of my podcasting adventures with Elizabeth Sickles, and get a front-row seat to the evolution of our show - from the first casual conversations to the dynamic, educational powerhouse it has become.

Navigating the waters of real estate notes can be complex, but I'm here to guide you through the storm, answering those burning questions that keep investors up at night. We'll dissect the common red flags and provide a roadmap for beginners to follow, steering clear of pitfalls and finding the right mentor to illuminate the path to success. Whether you're starting with a shoestring budget or looking to elevate your existing portfolio, this episode is your compass to the treasures that lie in note investing.

Lastly, let's get real about the risks and rewards that come with being your own boss in the real estate sphere. With a focus on striking the perfect balance within your investments, I emphasize the critical nature of risk management and the savvy art of table funding. From the influence of creative financing maestros like Eddie Speed to the practical tips for budding investors, this chapter is the treasury of secrets you need for a flourishing financial future in real estate.

Resources and links discussed:
- Videocast on our YouTube Channel
- ANB Funds Website - https://anbfunds.com

About the Host:
Justin Bogard – Note Investor specializing in performing Residential Real Estate Debt. He finds deals and acquires them for his own portfolio as well as educates investors while walking them through the process of owning a Real Estate Note!

Connect with the Host:
Facebook - bethebank
Twitter - bethebank1
Instagram - bethebankpodcast
American Note Buyers - https://anbfunds.com/
Monthly Broadcast - https://youtube.com/playlist?list=PLzc944w1xydt5aLDrrEPHJhdJeDkBjjD4

Transcript

Narrator: 0:19

Thank you. Real estate to create real wealth and passive income for you and your family. He'll share stories of real estate investments done right, walk you through the process of owning a real estate note and, most importantly, educate you so you can be the bank. This is Be the Bank brought to you by American Notebuyers. Now here's your host, justin Bogard.

Justin Bogard: 0:46

Here's your host, justin Bogard. Hi there, listener, how are you? If you'd like to check out the video stream of this Season 6, episode 9 on our YouTube channel, you can certainly do that. You can just go to our YouTube channel, which is American Notebuyers, and you can search us up on Google or whatever searching platform that you use. That'd be awesome.

Justin Bogard: 1:05

Today I have no guests. Today it's just me. You have me all to yourself. Today I have your undivided attention, because if you're listening to this, you probably had nothing better to do.

Justin Bogard: 1:15

Anyways, right, I thought I would answer some questions, some common questions that I see in the note industry today, and I also kind of wanted to give you guys a kind of a background in history throughout my kind of podcast journey here. So let's just get into that first. And today I am on season six. Like I mentioned, this is episode number nine of our podcast. I go by seasons because I just keep track of how many years I've been doing this. So a lot of people that do podcasts, they just count from episode one all the way, episode you know, to 500 or whatnot. They keep track of it that way. I just I don't know, that's just me, I guess I just wanted to keep track of it through seasons, and so I've obviously been doing this for about six years now.

Justin Bogard: 2:00

And it started back in 2018 with a really good friend of mine. Her name is Elizabeth Sickles and her nickname is Super E, which she prefers to be called that, and we had a podcast called the Super E&J Podcast. So Elizabeth came into real estate investing from about 2016,. I think she lived up in Michigan and she worked for a um, basically uh, like the phone for a Ford motor company up there I think it was Ford and so then she was in that industry for a long time and then she just got sick of it and she wanted to learn real estate and do stuff. So then she came down here and moved to Indy and then she just started investing in real estate with her own money and then she started learning about stuff and we became friends because I went to a women's only subgroup of our local Rio club and I was giving kind of a talk about what I do and investing and stuff. This was definitely early 2016, 2017 timeframe, and so we just became friends. After that she kind of was asking me more questions offline and then we just kind of kept up with each other and I was following her and what she did and she really got into the short-term Airbnb type of stuff and she'd become an expert here locally because no one else really was an expert here in Indy on this stuff and so she is a very intelligent person and so that's kind of how we started this podcast and we would have conversations and we just both said, man, it'd be interesting for somebody to hear these conversations if they were a fly on the wall, and that's kind of how things stuck and went into the podcasting.

Justin Bogard: 3:28

I always kind of wanted to do some sort of podcast or some sort of short form audio thing like that, and so that's kind of how we got into it. So I had to learn a lot about doing a podcast and it's interesting because you think you know how to do it, just watching and listening to other people that have theirs, and it's just uh, there's a whole quite a bit to it than than you actually think. So I had worked at a shared uh office space here in the Fishers Indiana area and with this shared office space there was a lot of other people that work there from different companies, different business verticals and one particular company that was close to where I typically sit at this shared office space and this was before. Covid was a company that basically runs shows for podcasts and it's usually bigger podcasts. So I got to kind of befriending her, the owner of the company, and just explaining to her what I do and stuff. She's like oh yeah, if you need some help, just let me know. I'm like, well, you know, we don't have a lot of money to put into this and you know, if what I really need is just get some basic education on kind of what to do and stuff, and so she put together a little package for elizabeth and I and kind of set us up and then, um, when she was looking at what we did, she kind of got a chuckle out of it because she's like oh, that, that's, that's not a podcast. So I got a quick definition on what a podcast is versus something else.

Justin Bogard: 4:52

So what we were doing was just basically doing like zoom recordings of what we were doing, talking back and forth, and didn't really have a format, didn't really have a structure. It was just her and I just kind of bantering back and forth. And then so after we took this lady's training and I can't remember her name and her company and I wish I'd. I want to give her a plug because she was very helpful. She taught us how to do the whole podcast routine and how to set things up for interviews and how to do show notes and how to, you know, grab people for interviews and, you know, get them to want to come on the show and stuff like that.

Justin Bogard: 5:23

And then shortly after that pilot season, elizabeth and I just changed the show to the To Wealth Show. That's when we got really creative with it and just ran it like we were supposed to, and so I think we were just naming the show just To Wealth in general and we were talking mainly about real estate investing and we would dive into notes and dive into other sort of real estate stuff. And so we did that for another couple of seasons and then I changed the iteration of it to what it is now called Be the Bank Podcast, and I changed that because Elizabeth kind of reached the point in her career to where she was just really busy. She had bought a cleaning company, she was running an Airbnb property management business, she had her own short-term and long-term rentals and stuff. So she just became overwhelmed with stuff. She actually had her own educational course as well and she was really successful with that. So this was kind of like, you know, an off project for her. This wasn't by any means a money generator for either one of us. I just like to do it and she'd like to do it as well, but she just got too busy. So then, after she decided to leave the show, I just kind of converted this into just primarily a note investing type of podcast, and that's kind of where it's landed ever since.

Justin Bogard: 6:30

So my business partner, richard Thornton, and I just kind of took it over and just ran with it and he was kind of the guy on the show with me and we would interview people every now and then, but mainly it was just him and I talking about different things that we see that go on. We try to keep it relevant to the current times. When we were doing the podcast episodes and we would, you know, if we'd hear like a news article or something going on in the market, or maybe it was an investment that him and I did separately or together that we want to talk about. Be like man, this was kind of interesting, or I fumbled my way through this or I found a really cool little shortcut and then we'd also bring the business aspect to it and try to educate our audience on that. So that's kind of where it is today.

Justin Bogard: 7:10

Richard has since retired, at the end of season five last year, and so he is kind of moving on to what he likes to do now. A little fun fact Richard is actually taking some cooking classes right now. So he is keeping himself quite busy with his investments and learning this cooking class stuff. So I get a chuckle out of it because I just don't see him cooking Not that he can't cook or anything, and trying not to be judgmental, but it's just funny. So Richard and I still stay connected. He's a great friend. He's been a great mentor for me on things in real estate that I had never done before. He has definitely a wealth of experience, you know, things in real estate that I had never done before. He has, you know, definitely a wealth of experience behind him on building up very large businesses and doing very creative deals out in California and very large, you know, in dollar amount deals that he did in California.

Justin Bogard: 7:57

So now this Be the Bank podcast is now focused on more interview type stuff and I really wouldn't say interview, it's more of. You know, I have somebody to have a conversation or discussion with on a certain topic, or maybe they are an expert in certain certain thing about real estate notes, and so I try to bring people on that are more relevant in the business, and obviously they're you know, they're primarily my friends and also people that I respect in the business as well. So you'll see more of those interviews slash discussions in the future, but today I just kind of wanted to share with you guys, you know, kind of my adventure and all this. It's been really fun. There's, there's, obviously, technical aspects to it. There's, you know, we have somebody that does the post-production of this. As far as leveling out our audio channels, we have guests on that may not have, you know, a really nice microphone or a good setup. You know, like I try to have nice equipment so that things sound good and things look good as well.

Justin Bogard: 8:55

We run this on a platform called StreamYard in that way that we can record this or we can actually live stream this stuff too, which is what we do for our monthly broadcast, and so it's a cool little little thing we got to. We got to pay like an annual fee. I want to say it's like three, four $500 a year for it to have it. But it's really slick. You could upload graphics to it, which, if you're on our YouTube channel right now and you look at the Be the Bank playlist, you'll see the graphics that I have in the background and I usually have animations that run across or I have little video transitions that go from you know 10 seconds, 7 seconds to a minute long, depending on what we need to do for stuff. So that stuff's kind of cool. We don't have to put a lot of money into this. Really it's kind of the post-production and the time that you put into it. So that's kind of nice with this form that we do. So there you have it.

Justin Bogard: 9:42

So that's the secret to the podcast here. We do try to keep it within 20 to 30 minutes. I just figure that's a car ride for somebody and people like to listen to the stuff that you know 1.5 or two X anyways, just to speed it up on some of the podcast episodes that get longer and stuff. And then you know people you know, like myself, sometimes try to talk a lot as well, and so that can get kind of irritating to the listener sometimes, but it's fun. Anyways, you guys can share your comments about the experience or how long you've been following me and what I've done with this iteration on all these podcasts and stuff, and I'd just love to hear back from you. Last time I checked, I think I had probably 10 or 12,000 downloads by now on just the podcast part of this, which was pretty cool to see. I'm glad to see people are out there downloading it and hopefully getting education from it as well.

Justin Bogard: 10:30

So, moving on, I also said I would talk about some Q&A and more or less some new questions that I see, or common questions I guess that I see often in the note business. I'm a part of many different Facebook groups that I've got asked to be in or I tried to get a part of. I do see a lot of feeds come through. It's hard to keep up with all of it, but I do see a common theme with people trying to get into this space in general, and so let me share some of the ones that I see and maybe answer those questions. If you're newer listener today to this part of real estate note investing, and maybe I can help you answer some of these. So obviously, one of the first questions that I see commonly or get asked is where do I start with note investing?

Justin Bogard: 11:19

So this is a great question and the first thing that I always tell someone is you really just need to find a mentor, and that mentor should be somebody that is currently doing the business today. That mentor should be somebody that is currently doing the business today. In all of note investing maybe not just one aspect of it Make sure they have a long tenure in the business. Make sure that they are well respected in the business. So you should actually do your due diligence on that mentor as well, to see if they have any lawsuits against them. Believe me, these things are real and you want to make sure that they are respected by other peers.

Justin Bogard: 11:59

So talk to other people that you know, that are in the business, that you trust, and be like hey, who do you know, who are people that stand out to you that you feel like are extremely knowledgeable based on your experience and stuff, and you can find a good mentor. I have a mentor and I'll mention who that is later on in the show today their track record. You want to make sure they have a mentor and I'll mention who that is later on in the show today their track record. You want to make sure they have a good track record of doing deals and maybe you want to talk to people that do deals with that person before they become your mentor, because you just you honestly want to find just a good, good person, a good natured person that's not going to you know, that doesn't want to screw anybody over, that tries to make a fair deal, that does things honestly and they and they abide by the rules and regulations that we all have to follow with the state and federal mandates. So how do I get in the business without any money? So this is another really common one.

Justin Bogard: 12:48

As you can imagine, a lot of new people get into this business and they don't have a big bankroll. In fact, probably a very small percentage of people get into this space actually have a large bankroll, and I'm talking about, you know, half million to a million plus in their bank, whether it's retirement or whether it's cash because they sold a business. You're not going to find those people too often. They're typically pretty sophisticated if they have that big of a bankroll to begin with. So they might not need some of this more basic level of learning how to invest and stuff.

Justin Bogard: 13:22

But when you don't have any money, you really can't offer anything to anyone except a hustle. So there's three things that my mentor taught me. And you got to find somebody that has the experience. You got to find somebody that has the money. And you got to find somebody that has the experience. You got to find somebody that has the money. And you got to have somebody that has the hustle. And you, as the person involved in any part of a transaction, you want to have at least one of those characteristics so you can help add value to the transaction. And so typically, what people do just in real estate in general, they become a wholesaler or what they call a bird dog, someone that just says hey, there's this deal here. I don't know what to do with it because I'm inexperienced, but I want to put it in front of you and I'd like to make a fee for it. And oh, by the way, I'd like to learn along the way, and so that's a good thing to do.

Justin Bogard: 14:03

So, if you don't have any money in this business, first of all, don't quit your day job. That's number one. You want to make sure you have some money coming in from like a W-2 and stuff like that and then do this on the side until you can build up enough money really to kind of replace your job and do this full time. When I did this, I was married at the time and my wife was making enough income to support us and our kids to where I could do this and take a plunge. And I got into real estate and kind of learned all this stuff and eventually got into notes shortly after that. So don't quit your day job.

Justin Bogard: 14:39

You definitely want to research, educate yourself online. There's tons of free stuff out there. You do want to be mindful of who you're learning from. I wouldn't learn from Facebook groups. I wouldn't go out there and do that. I would learn, like, specifically from people. That's why I say you should really do research about this topic in general, just to get an idea of what it is, and note investing and buying and selling loans and creating loans and then find that mentor after that.

Justin Bogard: 15:05

So that's how you do it without any money. You can do deals without any money and make a good amount of money. It's typically called like brokering or flipping a loan. That's where you find a deal and you're you're turning it over to someone else that has money and looking for a deal, or somebody that's you know has you know has money and looking for a deal. You're kind of doing one or the other with people and you're trying to make a fee in between. That's called brokering deal.

Justin Bogard: 15:31

Which brings me up to another point, is that a common question I get asked is if you have to have a license to do this stuff, and you really don't. So when you sell real property, you have to have a real estate broker's license Right, that makes sense. But notes or loans are considered personal property and so you don't need like a special license for that to be able to sell a loan that you don't own to somebody else and be kind of a broker in between. So should I invest in a performing or non-performing loan is a common question when someone first gets into the business, and that question is really up to the investor. And really, what is their goal or what is your goal in this? Do you just want to make passive income, you want to be kind of active in it but just mainly make passive income, or do you want to take more risks and you want to have a longer timeline to get paid and do non-performing.

Justin Bogard: 16:24

Non-performing can become a full-time job, especially if you have several of them going off at the same time. Keep in mind on a non-performing loan, you don't get any cashflow. That's why it's non-performing. You'll get any cash flow until you figure out the resolution, whether that's working with the borrower, whether it's getting the property back and reselling it or hopefully not having to go through foreclosure. It takes a little bit longer, a little more time and money into that, and so those are really the three exits for it. Within those exits there are multiple facets you can run down that I talked about, but mainly non-performing. It's not cash flowing but you could have potential to get larger payday.

Justin Bogard: 16:58

Believe me, I've had non-performing go wrong and I've not made money. I've actually lost money and stuff before. To be truthful, you just have to be very careful with your diligence. So I always tell people just start off with performing. If you don't want to invest a lot, you can find loans out there. You know, as small as like 10, 15, 20,000. And you can spend up to 100, 200, half million dollars on a loan pretty easily if you want to. No-transcript. So that's kind of like the basic Q&A or the basic questions that I see that get asked very commonly, so hopefully that helps you out.

Justin Bogard: 17:51

Another thing I want to talk about is warning signs out. The other thing I want to talk about is warning signs, and so those of you that are in the business and you are not what I consider an amateur note investor, you're more of a seasoned investor, you're starting to become a seasoned investor, and so these are the kind of the things that I've learned along the way, and no particular order here. I just kind of wrote some things down on my little sheet over here that I'm looking at, and slick salespeople will push you into deals that you normally wouldn't do, and so you would just want to be mindful of someone that's trying to, you know, put that information in front of you and make everything sound like uh, it's great, it's wonderful, it's amazing, it's awesome, you should definitely do this deal. Uh, maybe you should ask them why has no one else bought this deal? If it's so awesome and so amazing, don't feel pressured into purchasing something with your own money that you normally wouldn't buy. And it's kind of outside the scope of what you do when you want to do those types of investments when it's outside the scope of what you do. You definitely want to have some more seasoning underneath you because you can also learn from other people that do those types of deals and ask them questions. Say, hey, would you help me with the due diligence on this? Like I've never done a second lien non-performing mortgage before, can you kind of help me with this part of it? You know I understand a first lien non-performing but the second lien, you know I haven't done that before. So don't be afraid to ask questions to other people in the business that you know, that you know like and trust that can help you with that sort of thing.

Justin Bogard: 19:30

No-transcript. You also shouldn't keep your money on the sidelines forever waiting for that perfect deal, because that money is just going to stay on the sidelines and you're probably never going to fund a deal. You want to have some sort of what we call a buy box. You want to understand your parameters that you're trying to reach and make sure they're reasonable parameters. Don't be like I'm only getting a certain yield, because the yield investors are the ones that don't make good decisions. And I say that because logically you think okay, I just want to get an X amount of return for my portfolio. Yeah, I guess that makes sense mathematically.

Justin Bogard: 20:04

But there's a whole other thing to the business called risk, and risk is a major part of the decision. And sometimes I buy loans that are single digit returns, but they are really really low risk deals and so in my portfolio I have very low risk deals. I have very high risk deals and I got deals that are kind of in the middle and kind of on different sides of that spectrum as well, because I have a blended portfolio like that and that's how I keep things going, keep things moving. Now that's for me personally, for the fund that I manage, for our investors. I don't go to that extreme of high risk deals. I have very low risk deals and I have moderate risk deals and that's where we stay with our fund. I keep it performing. Right now we don't have any non-performing loans. We have some loans that you know a little bit of late payers and they might be behind 30 or 60 days, maybe one or two out of 15. But you know it's a very strong portfolio. So that's how I handle that. So I don't tell people you should focus on a yield. I would say what are your parameters as far as like what type of risk are you taking on these deals? And I would keep it to that. You can have somebody help you with your parameters as well.

Justin Bogard: 21:18

Investors out there and there are a lot of them right now, especially on Facebook they're looking for note buyers like me and you, if you're listening in your note buyer that want to table fund deals. So what they're trying to do now is they realize that the banks are not lending as well as they have been or as freely as they have been, and a lot of people are not fitting the bank's lending box, and so their only other option to get property is to have the owner of that property sell it to them and carry back financing with them. So we call this owner financing or seller financing. So you'll find these real estate investors whether they're wholesalers or fix and flippers and they get these deals under contract and they find a buyer, and then they create a note and they want to sell that note and they want to sell it for a hundred cents on the dollar. They don't understand what we do, they don't understand our business and they don't understand creative financing and seller financing to the extent that we do they just they think it's simple and they think it's basic and they think that there's no need for, you know, education on that, and so they make a lot of errors. They also sell these properties erroneously at a lot higher value than what they're actually worth.

Justin Bogard: 22:30

So if you are in a position to where you're looking to table fund some deals caution flag, warning sign, right you want to make sure that you do due diligence on that investor and you want to make sure you really understand and scrutinize that deal so that it's a good deal. We do table fund deals and there are good deals out there and there are good operators out there. I'm just telling you the warning sign comes up that you know more than likely they're not experienced in doing this and it's very less likely that they are experienced in doing this. So what you're looking for is large down payments, and I'm talking about 25 plus percent down payments. You're talking about really good credit scores because you're buying into something that's not seasoned and you want to make sure the property value is at sales price or higher. That's a good level that you need to be at as far as your buy box on table funding deals. And then you want to make sure everything goes through a title company so that you have all the proper paperwork, you have all the proper policies in place and insurance policies and stuff like that.

Justin Bogard: 23:35

If you need help with that, obviously you reach out to me. Info at ambfundscom Glad to help you with it. I may be the potential buyer or partner in that loan that you're looking at anyways, but anyways, if you see someone asking for the table fund deals and they act like it's all great, wonderful and amazing, I'm putting my radar up and saying they probably aren't an experienced operator. If they're advertising in different Facebook groups the ones that are experienced operators they already know the people in the business and they're already got conversations going with me or other hedge fund managers out there that they know that buy these loans and know what the heck they're doing. So let's be careful of that. Along those lines, everybody thinks that they are experienced and an expert in creative financing and seller financing. Until they actually learn from the legends in this space.

Justin Bogard: 24:25

Okay, my mentor is Eddie Speed with NoteSchool, the country right now that have 40 years experience and 50,000 deals under their belts, whether it's buying portfolios, whether it's creating loans, whether it's buying and selling loans from different hedge funds, whether it's doing partials, eddie has done it all. That's what I learned from Eddie and I continue to this day to learn from Eddie, and he's a good friend of mine. He's also my mentor, so there are very few people out there that can hold a candle to him. Mine's also my mentor, so, there, there are very few people out there that can hold a candle to him. And so when I see people out there educating and teaching this space and they and they are not as experienced as him I don't. I don't listen to them a whole lot. I always listen to Eddie and what he has to say first, unless there's a new strategy out there that somebody is doing that makes a lot of sense, that makes a lot of sense. So just be careful out there on who you're getting education from and make sure they actually do this business and make sure they have a good track record and make sure other people in the industry respect them and have worked with them before.

Justin Bogard: 25:26

Okay, working with experienced investors and working with amateurs it can be challenging. So when you're working with experienced investors, obviously you want to make sure that you do your due diligence on them when you're in a deal with them, working with amateur investors, you really have to be careful, because if you are not the expert or the professional, or if you feel like you don't have the expertise to be called the professional, you want to pull someone in that is a professional that can help you through the deal, because a lot of mistakes happen not to the fault of any one particular party or person, it's just you don't know what you don't know, especially in this industry, and you can't be afraid to ask questions because we're all learning. No two deals are the same in the industry and no two closings are the same either. Excuse me, so I say that's another warning sign. You just want to make sure who you're working with, if they're professional, if they have experience and stuff, and don't be afraid to ask those questions. At the end of this day, it's your money and it's your investment, so you want to make smart decisions and you don't want to make a lot of mistakes mistakes.

Justin Bogard: 26:36

I have definitely made some mistakes in my day and I have learned from them, and so that's why I feel very confident, when I started a fund last year with Richard, that I knew what I was doing and if I knew that I didn't know something very well. I knew who to go ask to find out on how to either get resolution or how to buy something or how to do due diligence on something that I hadn't done before. So I have that confidence going forward today. And I've been in the business, you know, eight years now, so I definitely have a little bit of experience behind me Not as much as some of the other people in this business, but, like my mentor, eddie, he's got, you know, 40 some years in the business and he grew up in this stuff and he was educated by guys that were pioneers in the business before he got into it, you know in the 60s and 70s, that have been doing this for a while. So it's all good stuff. So hopefully today's episode answered some of the basic questions that you had. Some of the more advanced investors. Hopefully my warning signs helps you guys out to what to look out for today and kind of what I see going on across the industry.

Justin Bogard: 27:31

So I'm Justin Bogard. My company is American Notebuyers. This episode is sponsored by American Notebuyers, don. So I'm Justin Bogard, my company is American Notebuyers. This episode is sponsored by American Notebuyers. Don't forget to check out our YouTube channel. It's called American Notebuyers on YouTube and you can look at the playlist here for the Be the Bank podcast.

Justin Bogard: 27:44

This is our short form. Our long form, more educational format, is called our Be the Bank Real Estate Note Investing Be the Bank broadcast. That comes out monthly and we got Mr Chris 70 J ready and Mr Jamie Bateman get on there as well. We usually have another guest on there If one of us can't be on, so you can check that out monthly as well. We do that live on our YouTube channel. Second Wednesday at 6 PM Eastern time. Again, I'm Justin Bogart with American note buyers. This is season six, episode number nine. I hope you enjoyed this one today. Feel free to reach out in the comments on whatever platform you're watching this on and let me know what you think. I'd appreciate that Until the next episode. We'll see you guys.

Narrator: 28:28

Thanks for listening to Be the Bank. We hope you learned something from today's show. If you enjoyed this episode, please rate and review us. Plus, check out our channel on YouTube and follow us on Facebook and Twitter at Be the Bank, and on Instagram at Be the Bank Podcast. Be the Bank is sponsored by American Notebuyers. Thanks again for listening.