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All right. Welcome back to the Paperstac podcast. Doing another great series, one of the series today out of my first note purchase, Bob repass back here at note expo live, which is really good. We don't do these too often live. So, so excited to be here, Bob. Well, we're excited to have you, especially since you missed last year, not to give you a hard time or anything, but how do you remember that? Hey, you know, there's certain guys I always remember. Right. And, um, we appreciate paper stack always being a huge sponsor for us and, uh, being a friend of yours and Brett's is always great to hang out. Yeah, man. Last year, for the record, I had a trip planned and I moved that trip this year to make sure I was here. So I thought you were deer hunting. I was. That was the trip. And so I'm actually, I fly back in on Saturday. I spend Sunday with my kids and my family. And then I fly out on Monday to go deer hunting in Ohio. So, um, so we're going to talk today on this episode, uh, we're talking about Bob's first note purchase. Do you remember it? Can you tell us, what can you tell us about your first note purchase? Cause you've been in the, I mean, you've been a veteran in the industry. You've taught me a lot when I went through note school and I've learned a lot from you. And I know you've just, I mean, you've your, your history and time in the industry, it's long and vast. What can you tell me about it? Tell us a little bit about where you came from. Well, I started in the business in 1990. And for those of you that have either been around or like to read history books, uh, the big buyer at that time was metropolitan mortgage out of Spokane, yes. And I went to work for them. I left a job at a bank. I went to work for them. Did you, did you move to Washington? No. They wanted to open up an office on the East Coast at the time I was living in Raleigh, North Carolina. Oh, beautiful. So I went to work for them. Um, so I've bought literally tens of thousands of notes over the last 30 plus years. When I worked at Metropolitan back in the early 90s, the company policy was if you worked for them, you couldn't buy notes for yourself. Okay. Wow. So I didn't personally buy any, any notes for myself. Just because they didn't want you competing or? Right. Conflict. You take the good ones, sell the other one to the company, you know, things like that. Gotcha. What I would like to tell you about is the first note I bought in, uh, my self directed IRA. Okay. I'd love to hear this because we actually have a lot of the investors on Paperstack and a lot of our listeners are self directed retirement investors. They're taking their retirement accounts, buying notes that they bought in. And so this is going to be good for those who are doing it. So for those who have never done and are interested about it. So tell me about it. Well, that's a little bit of background working for various institutional investors, like Metropolitan. Then I worked for the associates that I worked for baby financial and now at colonial funding, we really would buy loans anywhere. Okay. As long as the numbers made sense, whether performing, re performing, not performing, we were not geographic specific. Okay. Um, personally. I like to buy notes in areas that either I've been to, I know people that live there, I've lived there. Okay. It's maybe one of those destination spots, like who wouldn't like to own a note in Myrtle Beach or, you know, someplace like that. So I use that filter. Okay. So we had a loan come across our trade desk and it was a small loan, I think 80, 000. And um, it was located in Kingsport, Tennessee. Okay, so if you look at Kingsport, Tennessee, it's up in the, I guess that would be the northeast corner, right by Bristol and all that, okay? And looking at the picture, it's just a little white house, rural area, and you would say out in the middle of nowhere. Okay. So, if you had the eyeball test, a lot of people say, well, it's too rural, too remote, I don't want to do it. Well, it just so happened that. My dad grew up about 10 miles from there, and one of his sisters still lives in Kingsport, like right down the road from this house. So you know, I had that emotional attachment that it's like, what could go wrong? I can rent it to my cousin or something, right, if I ever got the note back. Well, it was a short term note. Uh, payment's like 880, a borrower always pays a thousand bucks a month. Yes. Right, so he's paying it down more. Perfect loan to go in your IRA. Yeah, perfect. Um, for years at Colonial, we had a company 401k, so we would buy loans for a 401k. Well, we liquidated that and each set up our own. Self directed IRAs. So this was the first note I put in that self directed IRA and it's been spinning off a thousand bucks a month. Um, it's just, just a little rural country house. If you saw one of those, you know, Chip and Joanna houses, this is, this is it. Listen, I know, I know so much about what you're talking about because I purchased a note in Kingsport, Tennessee. It was from, it was the, Oh, was it the TM property solutions trade? That big one, you know, the big one. And that was, that was a while ago. That was 2013, 2014. Ended up having to, it was a non performer foreclosed on it, fixed it up, put a renter in there, and, or put a, uh, owner finance to somebody. Okay. And just, Got a Performing note out of it, and kept it for so long, and we actually ended up selling it a couple years ago. Um, just, Yeah, but I think, you know, if you can find a lot of people, what about, what about that note? Like, so it came across your desk, what you look at it, what about it was like, okay, I'm interested other than the Kingsport, Tennessee. What was like, step one is obviously, Hey, I know the area, you know, the area and you're comfortable with it. Right. And then number one to me is probably just The propensity to pay from the borrower, right? We call it seasoning a lot of times. How long has the person been in there? And that can be offset if they put a huge down payment and they've only made six payments. But this guy's been paying for like four or five years. Perfect. Right. So it's paying a thousand bucks instead of the hundred. Exactly. A 15 year node and there's like 11 years left on it, you know, probably less cause he's been paying 120 bucks more, you know, so the answer was coming. So the money's not going to be out there forever. Right. I mean, technically I could already do a withdrawal from my IRA. I think I'll pass the age. So, you know, I could take a distribution, uh, but I'm still wanting to add some money to it. Yeah. Um, and the other exciting part was my wife, Angie. We've been married 41 years and she works with us at Colonial, you know, uh, as needed basis, but she was, she handles a lot of the post closing. Okay. Aspects. And she works directly with IRA custodians. Well, now she had to work with our IRA, even though it's my IRA, to her it's our IRA. Yeah. So. She knew all the details about what we had to get this form filled out. We got to do the direction of investment, you know, so she was like, I didn't have to worry about it, but she was more like interested. She's usually the backend, like he buttoned it up, but now she was like, uh, tell me about the numbers. How does that work? So he's gonna give us a thousand dollars a month. Then we're going to buy that discount. And, you know, she knew all this over the years, but now all of a sudden you get to apply it. Exactly. So that was an exciting part because I could see her getting like, well, she was counting numbers in her head, you know, how much money we were going to make and everything. Yeah. It's so cool though, to see, um, sometimes when, you know, like with Brad, Brad works with me and. He's been, he's been, he's been around, he's been around the note space for what is his marketing is, or his background is marketing. He's been just, he lives, breathes it, does it business development. So he just bought his first note. We actually, he, he was the last person we did this with was just last week. Fred, um, did my first note purchase, but it's really cool to see somebody who's. Been around it for so long, then they're like, okay, I'm buying one. I'm applying it. I'm looking, I'm seeing, I'm getting it. No, it's good. So, okay. So this one was pretty easy. It was pretty like, Hey, this is a cut and dry. Did you do BPO title? All that stuff? Yeah. I mean, we did, obviously we did BPO and again, years and years of experience in my. opinion, and this is just my opinion, I look at a BPO as a property inspection. Yes. Right. Product ownership, good condition. Yeah. You know, you can learn more than just the numbers. Right. You know, so we call it the eyeball test, you know, the 10 carat or property, you know, is there any indication that Either the house is in disrepair or they don't really care. So we do that and then obviously title, you want to be in first position, you want to make sure that there's no other liens, taxes, all that current, that kind of stuff. So we do that. And then we have. Pay history. Um, and you know, it's a little different because throughout my career, I've bought a lot of mom and pop seller finance, which this was, but I've also bought a lot of institutional paper. Okay. Right. So when you buy institutional paper, as you know, you've got third party loan servicing records, collection comments, all that. When you buy a mom and pop seller finance, you may have a receipt, you may have a chopped off schedule. You know, you may, you know, so you've got to kind of, we do. like that. So before we bought them, I actually had Angie call the borrower and say, you know, we're going to buy your notes. Is there anything wrong with the house? You're making your payments on time, you know, and that kind of thing. So, um, that was good, but we got comfortable with the pay history. So. The ability to repay and the property's in good condition and clear title. Did you onboard it with a professional third party servicer? We did. Yeah. We did. I always tell people I recommend it to everybody. Oh yeah. And again, going all the way back to my days at Metropolitan, I worked with Sheila and Melissa who now own Allied, so I've known them for 30 plus years, so guess who I boarded the loan with? Of course. Perfect. Right? So they made it easy on us. They know us. And, you know. We just put it over there. And one thing I like about that, if we ever did want to sell a partial, Ally can service the partial as well. So I could just leave it there. And the transition period from the borrower paying the former note holder and now sending payments to Ally to be smooth. That's perfect. Yep. Oh, it sounds like it was a home run deal then it's just don't jinx me easy. I won't speaking of home runs You know, I do have to rep the texas ranger Shirt here as we won the world series. There it is. Well, congrats. I was I was telling bob earlier I was really hoping for you guys to lose yesterday so we could come and see, um, as we're here in Dallas, we go right over to Arlington and see game six, uh, potentially tomorrow. But nevertheless, you guys were forced to be reckoned with. The disappointing part on top of that, if there could be one winning the world series, they picked. Tomorrow, Friday afternoon at 1215 for the Victory Parade. What? Yes. I was like, didn't you know Note Expo was going on tomorrow? I thought I was hoping for Sunday. The Cowboys are out of town. I thought, let's do it on Sunday. So we'll miss the parade. Oh man, that's a bummer. So, okay. We always close this out with a piece of advice. You've been in it for a while. What would be a piece of advice right now that you'd give to somebody who's in the space or somebody who's really getting into the note space? Well. They should be at Node Expo, and if they're not at Node Expo 2023, which starts tomorrow, they should go ahead and register now for Node Expo 2024, because you are going to have the ability to hear great content, speakers. Meet 30 plus vendors and exhibitors in our trade hall and connect with 400 plus real estate and note investors and just grow your business. It's like jumpstarting. It's just a, it's an environment that's conducive to growth. And so I'd always tell people, educate yourself as a first thing. But you can, you can educate yourself here. You can learn, you can start bringing in, um, like you said, connect with vendors. Everything you need is right here. Yeah. You can run your business just for being here. The history of that note, we're going to have loan services here, IRA companies here, BPO vendors here, first place insurance, title, title company. So everything you Right. And, um, all in one spot. And, you know, especially since the pandemic, but even before it was, you know, no business from anywhere, a lot of virtual stuff, right. And now anybody who can work from home works from home, but every once in a while, once, twice a year, you need to get out and meet those people face to face. Absolutely. And, you know, connect or reconnect. Like I could see you once or twice a year and decide trade shows. Yeah, it's perfect. Yeah. Yeah. Cause any more than that, I don't know if I can handle it. Ha ha ha. Well, on that note, Bob, I appreciate it. Um, this has been another episode of the Paperstack podcast, my first note series. He said it really, you need to be at that note expo. If you're not, um, check us out. We will have a discount codes at some point next year to get you guys in or get you guys registered. This is Rick Allen, Bob Repast coming to you live. We appreciate it. We'll catch you on the next episode. See ya.