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Welcome back to the Paperstac podcast. My name is Rick Allen and this is my esteemed colleague, host and friend, Brett Berkey. How's it going? It's going good. It's going good. We're here at Node Expo. Two places at once. I know. It's like, almost like parallel universes, you know? It is. How did we do this? I don't know. It's some kind of quantum physics stuff. Where's your studio? Oh man. So I almost had to like change my, uh, our flight, well, not our flight out, my flight out. Oh. Because my daughter this morning, she came in and she was like, she handed me this flyer. It goes, I've got... I got, I got the honor roll, and there's an honor roll breakfast at her school, and I'm like, what day is it? And she's like, oh, November 2nd. I'm like, oh, no. I was like, well, let me see what time my flight is. I was like, oh, I fly out at 9. 30. And, you know, it's an hour from where her school is to the airport, and it's from 8. 30 to 9. And I'm like, baby, I don't think I'm going to be able to make it. And she just starts crying. I'm like, oh. That was terrible. And then she didn't think my wife was going to be able to go. So, I was like, She's like, you're never going to get straight A's again. She's like, but, my wife was like, I'm going to be able to go. I'm like, oh. Okay. So I was like, is she being dramatic or do I need to like change my flight, you know? Because it's my only daughter. Yeah. You know, I do the same for my boys, but it's just like, ugh, horrible. But, so I, still up in the air. Well, Thursday the 2nd is my wife's birthday, so I'm flying out on her, her birthday. So, as in, never good. No. It's never good. She, she, she never likes it. It's always the same thing every year. What's she say? I told her I'd take her out to dinner the night before, and where I suggested we go to dinner, she, she called me cheap, and so. I think it's good. It's Indian food. Cilantros. She said, you wouldn't take your wife there. I said, Rip would take his wife there. I mean, maybe. I don't know. Maybe. I said, we go to Cilantros and afterwards we have a couple beers and, you know, whatever. We walk around with her gardener. She didn't like that idea. So, whatever. Sounds like it's going to be expensive when I get back or before, you know. Since she doesn't want to ride out there with you. Yeah. She wouldn't. She wouldn't. Okay. Yeah, whatever, she doesn't want to do it, so. It is what it is, but, yeah, so. So, what's on the agenda for the day? What are we talking about? So, on the agenda for today is, you gotta pay off. It's a glorious day. You know, it could be glorious. Is it a good thing? Is it a bad thing? Uh, What do you mean you got a payoff? Like, they, the, the borrower paid off their loan? Yeah, you know, they refinanced, or they decided to just drop the cash, and pay off their mortgage, all in one chunk. But, all of a sudden, you get a payoff, and you're done. And so, who are you talking to? Servers are talking to you? Do you, you know, what are some of those critical things that you need to do? I mean, do you need to record something with the county? What, what happens now? You got paid off. So, first off, what could stop a payoff? Well, you don't even realize how short this podcast is about to be. Is it really? We gotta get Keep on asking, bud. We gotta get back to the conference. Yeah, we gotta get back to the conference. Go ahead. I'm going up on stage a little bit, doing a TED Talk style. Yes. Speech, talk, whatever. We'll release that next week. Yeah. Once we're back. So, uh, what happens? You got a payoff. You got a payoff. They're all paid off. You, you got your money. Is the money already in your account? No. So that you got a call from your servicer. So... Ah, so you get the call from your servicer. Servicer saying, hey, it's probably not a call. It's probably an email. Approve this payoff. That's what it's going to have. They'll send over something. Hey, you got a request for a payoff or does this payoff look good? Yes, it looks good. something along those lines. Um, or typically they'll just say, yes, it looks good for you. I guess they would say request this if it were like a different kind of payoff. But yeah, that's, you know, if it were like a short sale or something like that. But if you get a payoff, the servicer literally just approves the payoff. Hey, here, you know, somebody sends in and says, what's your payoff. They request the payoff from, you know, the borrower requested or a title company requested or another. You know, potentially another lender, and it'll say, what's the, we need a payoff for this. And then, when it closes, you're, they, either the title company or, yeah, usually it should be a title company, they will send funds and, or the borrower will send in a large chunk of money to pay it off, but you're done. Typically, your servicer will hand, can and will handle the satisfaction. They will? Mm hmm. What is the satisfaction? Satisfactional lien is what releases it. Right. What releases the... And the servicers need to get that recorded with the county. That's on the servicer, not on you. Typically the servicer will, will handle that for you. It's like a value add or something they can do. You'll have to sign the release. But it's, yeah, I mean... So let me ask you a question. When it, when it happens, does the servicer take a big, Hey, you know, is this a payout chunk that we get? Or is it just regular, just... It's just a regular thing. They don't, they don't get a big piece of it. Like, if there's, I mean, like a bonus or something. No, if there's like a loss mitigation, like, strategy involved, like, they'll get, they'll get a chunk there if they were part of it. You know, but every servicer is different. Their fees are all different. So you just have to look at it. So they'll have different fees. If it was like, hey, it's a short sale, then sometimes they get one or two percent of the, the payoff. Of the payoff, because... Of the, well, not of the payoff, of what was paid in. So it just, it varies really by servicer. Right, okay. So that's, there's not much to it. There's not a whole lot to it. No, man, what are you, who are you talking to? You're talking to somebody to start spending that money again to get it back at work. That's what you're really looking for. That's interesting. So it's pretty, you know, if you have a FPI, you probably need to cancel your FPI. Forced place. Forced place insurance. If you're, if it's not being, if that's not something included in your servicing, and you're handling it, you'll have to cancel that. But, I mean. your servicer will deboard the loan and you're done. Nice. And then you just walk away with a chunk of cash. You walk away with your, your funds. So it, I mean, those can be really cool. If you buy something that's like non performing and you get it at a really good deal, and then there's this big payoff or man, I've sold stuff and bought stuff too. I've, I've purchased performing assets and like two months after we purchased it, it paid off. That's awesome. It, it's good if you buy it at a discount, like if it's a re performer and it pays off. Oh, we did one where I bought, uh, it was an owner finance deal. We bought it for like 72 cents on the dollar, right? It was cause it was a lower price band asset. It was almost newly originated. And when we, it paid off within like two months of getting it. And it was, I was like, well, what the heck happened here? And I went back and looked and the guys, the guy who bought it, he bought it for his son. He was a, he owned a concrete block company. So, I mean, you know, the guy was, you know, making five or 600, 000. It was a 40, 000 loan. He took out just so he could do it without having, you know, owner financing 12 percent fixed it up, turn around and just paid cash for it, paid it off. So, you know, those are great because you're buying them. thinking you're going to, it's going to take, you know, 20 years, 20 years to recover your capital and you don't recover or you don't, you recover all your capital, but you don't let, like, if it goes out 20 years, you make more money. But the ROI is higher because it pays off so quickly. Interesting. Is there ever a strategy where you're honest or the yield is higher when you're like looking at notes to know, to say, Hey, look, this one looks these based off. Cause I know there's something inside of. What did I see? I saw one of the data. Servicing notes. If you look in the servicing notes, sometimes you'll see in there, uh, payoff requested, payoff requested. That'd be a nice one to find without the person selling it knowing. Right. And, believe me, it happens when they're like, payoff requested. Why wouldn't they already, so how, how would someone request a payoff and the person currently that owns it not be? Notified. I guess at that point it would be this, like the, it's not something that's being approved. You know, it would be a performing loan where they're not behind. You're not having to approve any past due fees or anything like that. You're just saying, yeah, this is the, the servicer gets the pay, uh, payoff request. They say, they look at their books, say, well, that's performing loan. Everything's up to date here. That's the payoff because they're the bookkeepers. Interesting. But So this, I might be missing a part. You're the seller. I'm the seller of the loan. Right, and you are aware that there's a payoff request. Yeah, I would never sell a loan if I knew there was a payoff request. Well, how the heck would you get it to where you're buying it? Is this to somebody that... What's that? How would someone as a buyer find something like that in the servicing notes and not have had the person that currently owns it see that? Because you have a hundred loans. Like, I don't read through the servicing notes on all the loans I own. But no, but when the person made a pay off request, wouldn't that servicer have alerted you as the asset owner? Maybe. Sometimes yes, sometimes no. I'd like to know if that was the case, man. That'd be pretty pissed if I was this person putting it on a site and saying, Hey, yeah, there's a pay off request there. Oh yeah, I forgot to tell you there's a pay off request. And then you just sold it for like... Well, the worst is when, you know, and this has happened also where, You're selling something and a payoff request comes in and they're running their due diligence. You're like, Hey man, I just got a payoff request on this. We're going to hold off on the sale. Let me pay for your, your due diligence. And most people will get that and understand it. And they'll be like, Oh, okay, I got it. Yeah. What's the fastest you've ever had a payoff request happened at two months, you say? Yeah. 60 days. What was the yield on that? Breaking the calculator type stuff? No, you don't break the calculator on it. It's just high. It was a lot, you know, so it's like, I think the payoff, it was like a 40, 000 balance. Yeah, and we, we maybe were in it for like 28, 000 or 30, 000 So, put out 30, 000, 30, 000, well, you put out 31, 000 and make 9, 000 and you, you know, you make, you get 9, 000 back in 60 days later. So it's like, well, you know. Yeah, that's that's a huge return. Those are those are great returns. Yeah I'm trying to think we had any big ones that were like really big Like what our payoff can go wrong is if you're listening to this and you're new make sure you get your documents recorded because we actually had somebody on our site that didn't get the documents recorded and The payoff came in and they said the servicer said can't do it. You're not you're not You're not recorded as the owner of this note. They ended up getting the money because they, they did, but they record, they recorded their assignment. Oh yeah. They, they hopped to it.'cause they were They wanted to get the money, but still it was a pain in the butt. Yeah, because it was like New York or something. It was something crazy state. It went back and forth, back and forth. It was, it was terrible. And the person's I've seen that happen so many times happened to us. Well, oh yeah. When we, when we first started this, we were like. We were getting the project properties and um, we were getting the notes and then getting the deed and loose so fast that it was like I was taking the assignments to the title company and they were recording it and then doing everything. I didn't really know. And then, we had a couple of them where they're like, well, where's your recorded assignment? I'm like, recorded assignment? I went and looked and I'm like, man, we missed recording these. And so we immediately set up a, set something up to where as soon as we bought an asset, the collateral file never came to us and went to a company called Edge Mac. Oh yeah. I remember Edge Mac. And so the, the collateral file went to Edge Mac. Edge Mac took it, got the file, indexed it. Um, we had a cloud service so we could always go back and we can download anything. They did a color scan copy indexed and then they recorded all the assignments as they like. As soon as they got one, we just had a workflow. So we're like, all right, we'll never not do that. That's smart. Okay. So there's really not a whole lot to it. Just make sure you're ducks in a row and that you've talked to your servicer that you read the emails that they send over to know there's a payoff request. Also making sure that that document is definitely recorded in the county so you can get your money. And then just wait for the money to come in. Yeah. Then after that, once it's in. If you're interested in like that flow. I know Casey Wilson does that. They have that flow. Casey Wilson does? Yeah. To where, have the documents turned over to them. If you're going through our system, you can say, Look, keep the documents with the auditor. That's right. Keep the documents with the auditor. Reach out to them. Set up your own flow of saying, Okay, once you have the documents. This is what I want to happen. And they'll, they'll do everything. They'll record 'em, index 'em. You can have a, uh, store 'em, you can have 'em be your dock custodian store.'em, and they're, I think they, uh, fireproof say something like that. So yeah, it's pretty simple to, it's, it's, it's a nominal cost. It's like 40 bucks or something. It's something, it's so worth it. Yeah. It's just to have them do it, keep it, and not have to worry about it. Otherwise, you got giant collateral, back file packages, or you just have to look at something. If you're doing it, you're like, well. well, if I were going to do a thousand of these things, I would have to do something because if I were buying like three or 400 at a time, I couldn't record three or 400 assignments. It would take forever. Yeah. That's all I would be doing. So it's like you have to be able to offload it onto somebody. Casey Wilson's a great one to do it and there's other companies out there that do it, but. Interesting. Okay, well I think that's pretty much Alright, you stretched that one out. I was you took that, that was supposed to be a fairly that was gonna be fairly short. It was like nothing. You just let the servicer do it all. Have you ever you know how many questions I ask? I always ask a million questions. It doesn't matter what it is. Joke's on me. We could be doing anything. I'm gonna ask a bunch of questions. Go deep, because I know some people will ask these questions in their head, and if we don't cover them... I got one for you guys. What's the over under on the amount of time that Brett spends at the booth for a two day event? I'm gonna say less than an hour and a half. Whatever! Less than an hour and a half at the booth, because... Brett is just like, in and out. He'll like, stop in to grab a mint and then he leaves. I don't even, yeah, I don't even like the mints. But, yeah, no, I, I, I, I'm the, I'm a t shirt deliverer slash meeting maker. Like, I'm networking. Mike's at the booth. He's got it. Mike likes the booth. He likes to be at the booth. Right. I mean, I, I, I sit there sometimes and then I go talk to somebody and then go talk to somebody else. But, you know, that's how you learn. You gotta network and get out there. If they're not coming to us, I'm going to come to them. So, that's it. Yeah, so, the over under is probably, two day event, probably four or five hours. Oh, I said an hour and a half. You want to take the over on that? Yeah, yeah, yeah, I think, I think it's about four hours. You know what, you could, you could wind up there at four hours because you'll sit down and then you'll get, you'll get stuck there.. Yeah, I mean, I, I definitely talked, well, last year no, expo was the only one there, so I was there pretty much the whole time. when there's other people that can actually, you know, handcuffed them to the desk last year. So you, I get you, you're due to go out and wander. Yeah. That was aimlessly. That was D dme. That was me. I was wandering a lot. You know, I Oh, I bet. Yeah, I bet. So Mike, Mike liked the booth, so that's, uh, we'll, we'll, we'll see. We'll, we'll, we'll see who won that bet. Mm-Hmm. on the next. Podcast. But the good thing is, is that... So you're gonna say four hours? Four hours. Okay. All right. Yeah., you're saying, so you're gonna say four hours or more? I'm gonna take four. I'm gonna take less than four hours. Yeah. Okay. All right. I'll take less than four. I'll take the under. All right. So we'll, uh, we'll let you know who won, and then if you have your own questions, you know where to put 'em, put'em in the comments, reach out to Hello at Paper Stack if you haven't already. Um, check out the academy. The simulations are going in. They're, they're starting to get in there, and it's, what do you think so far? You think it's, it's turned out to be pretty cool. Um, TBD, to be deter I gotta see it all come together. I gotta see it come together, cause right now I'm doing the recordings and I'm like, I wanna see one, that's why I said let's do one. We gotta see one come out, but I think it's gonna be good, it definitely, it's better than the other simulator that we put out. Put out a simulator? No, we didn't. So that's why it's better than what we've already got. So it'll be fine. Okay, yeah. Or the other simulators that are available out in the market today. There's none. So, it's, I just look at how Paperstack was when we first released it. Yeah, it'll be a building in progress. It'll be a building, it'll get better. So, I'm, who knows, it'll be knocked out of the park on this first one. We'll see. I just record, he, uh, we'll put it all together and... Make it interesting. The mad scientist. So we'll catch you on the next episode of the Paperstack podcast. Rick Allen, Brett Berkey. See ya. Ciao.