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Welcome back to the Paperstack podcast. My name is Rick Allen. This is Brett Burky. How's it going? Going good. Good. We're back today for another edition of My First Note Purchase and we have an all star up today. Somebody near and dear to all of our hearts sitting right next to me. This man Brett Burky purchased his first note, and he's gonna share everything about it. Yeah. And I think it's really cool because, a lot, a lot of the people we've had on so far, who have pur have gone through purchasing their first note, they're, they're down the road. Mm hmm. I'm, I'm 12 years into this. Or a decade, a little over 11 years into this. You know, we've had Troy Fullwood on, who, man. Yeah, he's been around for a while. He's been around for a while. Not, not, love you Troy, not that you're old, but you just, you're a veteran in there. Kevin Shortell. Kevin Shortell, my goodness, forever. Chris Sevney's been doing this a while. So, we, just, a lot of the people we've had on have just been, they've been doing this for a while. Their first note was years, years, and years ago. I love the fact that you are Brand new in it, right? Yeah, you didn't purchase it that long ago. No, so tell you know, everyone Obviously we asked people along the way like hey, what's your journey into the world of notes? Well He bumped into me at a grocery store And I said some jackass comment like nice backpack and I had a froggy backpack. That was my daughter's so it was cute But, uh, running ahead at a grocery store with a froggy backpack on was probably not a good thing. Ah, whatever, it was fine. Look, it was a great thing. Yeah, it actually was, actually. Yeah, you know, it's... And here we are. What if we never bumped into each other there? Yeah, that's true. What if? Might not be a paper stack, yeah. Um, so... Yeah, I mean, for the longest time I just didn't, I didn't invest just because I did other things. You know, like, there's a lot of other stuff I put my money in and invest and... And we were busy building. Just busy building the site. That's my focus, is building the site. I think it's kind of funny because people say like, well, when you're not doing paper stack... What are you doing? And Brett's always said, sleeping. So... Yeah, we work a lot on this. So yeah, it's uh, but I love it. It's just fun. So you, you decided, you decided you wanted to start investing, but actually you started setting up, like, funding and stuff like that for this long before you ever purchased your first note. Right. I have stuff in infinite banking, which is using a life insurance policy to do investing vehicles. So I do stuff like investing in unsecured loans, like Prosper and different things. I used to have the Lending Club. Uh, and then I had all this stuff with stocks, but I don't, I don't really like stocks anymore. Uh, and then did the infinite banking for a number of years. And then I also do a thing called Tardis, where it's basically income snowballs. And so I, I, you know, I invested in a number of different funds and then. It just was like, why am I out there, like, finding all these different methods, and when I'm... The people that are on TARDIS are investing in notes as well. I mean, I've said enough episodes to know a couple things. Not to mention, if you have any questions, you can just look over your shoulder. That's right. I have one of the best mentors sitting right next to me. I just, you know, there's Bug Rick, and he'll give me the... Look and not have to Answer my funny question, but yeah, I know it said it just was like it was one of those ones I was just yeah, I set up safe searches for like what would match a TARDIS fast burning fuel note Which is what so it's more a shorter term note like eight to ten that trying to get eight to ten And usually when you're doing a fast earning. Performing or non performing? Always performing. Always performing. The goal was to create cash flow. So you're, you're, you're using your like a HELOC to pay this back with the cash flow that you already have plus the earned cash flow from the asset. And so notes are perfect for it. Notes are a great avenue for it. There's other things that work as well. That's what I had been investing in. I was just poking around and one came through and I was like, was, you know, I had sat there for a while and then. This was somebody I know, and somebody that's, you know, a friend for 70, and he had it listed there, and I was like, Yeah, what the heck, maybe I'll make him an offer and see if he bites my head off, you know, maybe I'll say, like, say, hey man, and so, And I, the payment history was perfect, like, it was like, you know, I was like, this, this, this person does not miss the payment, and it was like, Not just not missed a payment, but it was like must be on automatic payments because it was like it was like the same day So it seemed like it was pretty low risk very low risk and so smaller balance low risk short term high coupon Right, and I you know, I asked Chris. I was like, oh, why are you into me? Yeah, and I said, you know, hey What's the deal with this and why are you selling all, you know, all the standard questions and he's supposed to say, Hey, look, we're liquidating some of our lower band price assets. That's it. He's like, it's, it's a perfect asset. We're just focused on the higher stuff now. And so, all right. Which is, that's not uncommon. Mm hmm. That's the, the natural progression is when you start getting into this space. Oftentimes you... Do what you did. You buy something small that's performing, you start learning, you get your feet wet. The longer you're in it, the more capital you require, whether it's your own or take in capital partners, you start taking bigger bites of the apple and you learn that while you can take bigger bites of the apple, some of the smaller price band stuff, it's just, you just want to get, it's like, look, I'm just going to move this one off the books and we're going to Redistribute that capital in something that's you know at a higher price band, which is fine because Getting into the space or if you're somebody with a self directed retirement account a TARDIS fund This is perfect for TARDIS. The smaller price band assets are great. Yeah, you can Chunk out 10, 15, 20 grand at a time and start earning, you know, what's your yield right now? Uh, I mean, I have to adjust it based off what I paid for servicing, but... That was a kind of a shocker. So let's dive into that since you brought it up. What are some, sounds like there was some... The payment history was good, the assets good, equity in the asset, a lot of equity, but there was some, there's some downside to this that you didn't take into account when you got into it. I mean, I, I probably should have checked with the county specific and then I I I already knew. it was, it was just that it was like, what was the issue? What was the issue? Was it expensive? What's expensive? The recording. The recording. You hadn't said recording yet. Oh, I hadn't said recording yet. You said servicing. Oh, yeah, servicing is nothing. But the recording fee was, and then I, I didn't know like if it's different for the assignment of mortgages versus a deed. Like, and I put the actual amount that was the taxable amount. So that's what got it so expensive. It was like 500 or it was, it was a lot of money. And It was, it was, it was, uh, more than I expected, you know, like I knew it might have been a hundred bucks or something, but I wasn't expecting that high. It was five hundred you said? Yeah, it was around there. And I was like, golly. I, and then it was hard to do. Like, you know, I was, I remember I had to fill out all this other paperwork and stuff. And so I was like, you know, I kind of went through the process that, you know, so many have talked about. And I'm just like, you know, Pennsylvania is just a rough one. But it was like, I, I knew it was going to be rough, but I was like, I wanted to go through it so that I can understand it's better from a user's perspective, you know, if there's someone else that's MPA, like in Prince of Pennsylvania, like that, what are they, what might they deal with? Even stuff like stay with the same servicer, but what was those things with reaching out? When did I reach out? How that process went? What's needed for starting with the servicer, you know, do you need a power of attorney? Do you need this? You know, all those things like that. And it's like, huh? And so just learning the different processes of. The servicer I went with and then when in that process, do you actually start the process of reaching out to him saying, Hey, I'm a buying this alone so that it, because I had seen it so many times, I kind of knew where I was going to do it as soon as we assigned the PSA and I was like, all right, I'm going to go ahead and reach out to him because I already knew who they are and so, so I just did that already. And then, but still even that took a while by the time that the loan finally closed, everything was already there. So actually, um, yeah. I already had servicing set up, like, at the end of the transaction. Did you change servicers? No. Left it there. Smart. Why? Why? Because I don't want to upset the perfect pay history. It's perfect, you know. Yeah. I was like, no reason to screw that up. And it's a servicer that I, you know, we know him and I, you know, heard good things about him. So it's like, well, I'm not changing. Why? So that was, that was pretty much it. Now it's just, you know, the first payment comes in, um. November. You know, so, good to go. I think I even got October. Cause, uh, I think I set the cutoff date for You closed on it in September, right? Ideally, there was a a part in the process that took way longer than expected. It kind of deviated from the standard process paper stack, and it just took, I was like what's going on? It's been like but I wasn't that worried, you know, like whatever. What kind of due diligence did you run on it? Did you order a BPO? I didn't. No. Did you order a title? No. No, I mean, a lot of this is based, and this is something I wouldn't say maybe do, but like a lot of it was based on... Hey, the first note I bought, I didn't do either of those two things. Right, but it was based off relationship. There was, you know, I have a sort of trust factor with him, and I would imagine with everything else, performing and everything, and I took a look at the house, you know, from the outside, and I'm like, sure. So you did some... Yeah, I did like the cursory... Yeah, high level stuff. You just said maybe do title or BPO. But it matures and... 32? Mm hmm. So I figured, you know, they were gonna keep going. If anything, they would have a payoff. Yeah, I mean, I would hope that may happen. Once it gets closer and closer, they just might be like, pshh, and knock it out. Maybe, maybe not. But like, the whole idea was that everything kind of had like a... Mostly off trust, but that's a, you know, in this industry, that's, if I was to buy a note from Rick, I'd probably do the same thing. You know what I mean? I probably wouldn't. I thought you were going to say I'd probably order a BPO. Title search. I mean, it's been around that long. I would imagine they're doing everything else right. I'm sure there's not back taxes. So that's, that's good. What, like, what would be a piece of advice that you would give to people getting into the space? I mean, I just would say just, it's not as scary as you think. Like, I'm very systems oriented. Like, I follow a to do list on everything. And that's very much everything. I mean, it's like, I do it, my personal stuff, everything. Like, everything's, everything's a to do list. And so, like, that's just, I just need to do this, this, this, this, this, this. And then when I do that, I'm like, okay, well, everything checked off. I don't have any butterflies or funny feelings in my stomach, so I'm like, yeah, whatever. Just do it, you know, and that's it. And then, do it again. You know, just keep doing it over and over again. So system, so set up your system, like if you were, if I was going to break down that. pile of words there into a coherent thought, it would be I like to have systems. Set up your systems. Yes, just have your system. We have a, we have an article inside of the Knowledge Base that's basically his due diligence process that I, I put into a to do list. So it's already there. All you have to do is just follow that if you really want to go deep into what he, what he did. I will say that the one thing that was big Because it is an older note, it was a collateral file, I had changed hands a couple times. The thing was this thick. Oh yeah. And I was like, now I don't know where the hell to put it. I'm going to put this thing? It's still sitting on my desk. I'm like, eh, I'm going to put this somewhere. So, I don't know. Did you record your assignment? Oh, yeah. Oh, you recorded the D because it was a land contract. That's right. And so that's all done. Service writer has a copy of it. Alright man, well Brett Berkey, thank you for sharing your knowledge, uh, systems, your first thing. Remember to look at the recording costs. You can do that on the county. Just go type in, what is it, like, uh, what do you type in? County recorders office? Oh yeah, recorder of deeds, um, they call it the comptroller here, Orange County comptroller in Florida. But recorder of deeds will get you there, and just ask them what the cost is going to be. And go from there. Yeah, and if you're watching this, know that in the academy there are simulators. They're working. They're alive. The simulation part works just fine. And there will be more coming. So we've launched the first two about how to use calculators and then the second one's about understanding driving virtual drive bys. Yep. One of them works. Rick, Rick, uh... They're great. They're flawless. One of them, uh, the numbers are off, but we'll fix it. It's just, I should've... Yeah, it's all good. No, it's um, There's a lot of work I put into that and you don't realize how much I's you have to dot or how many T's you have to cross and when you get in there and you're doing setting up a simulator that could have you know, five different outcomes depending on how you run your due diligence or how you execute your arithmetic. It takes a lot. It's a lot of details. So I'm really excited about it. It's something that's really going to be good. I think it'll really help people cross that threshold of wondering if they can buy a note to actually running through the The due diligence and the process to going ahead and buying their first note. So it's going to be great Yeah, the first two are kind of basic simple Yes knows but what I have in my head the shower thoughts of where we can go with this is multiple different directions and it could be The good thing is it's going to be the wax on wax off. You can read all the theory you want With the, the Academy, see it, but then this, the assimilator. Oh, this is where the rubber hits the road. This is where you get to go through it and drive around the track and realize that if you crash, it's okay. Cause it's just fake money. Right. And the good thing is, is that's already included in the Academy. So if you have the Academy. That's it. So we are done for this episode. Come join us. Uh, this is out after, I assume, Node Expo. This is already out. Yeah. Uh, we had a good time at Node Expo. It was great. I hope everybody enjoyed my, uh, my TED Talk type. Speech up there. Uh, what if ask about dart AI, if you're not familiar with it, there was a paper stack. com forward slash dart d a r t. And that'll take you to our AI page explanation video and let you know what cool things we're doing on the cutting edge of technology. And I think that's it. Well, that's it. Get you guys on the next episode. See you.