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Hello, welcome to another episode of the Paperstac Podcast. We are here with Alex Graba at the Note Expo 2023. And we're doing another one in the series for the My First Note. So his story is a little different because Alex doesn't buy them, he creates them. He's the note creator. So this kind of goes hand in hand with what we did with Nick Leguermo. He's kind of does the same type of stuff. He does it on single family, but you do it on land. And so... So I want to know kind of, how was your first, how'd you get, how'd you even come to create a note? And then second, like if you're creating a land note, what are the things that you want to know? Like, you know, to set it up correctly and, and then also too, he's one of our big sellers on the site. So he's got the land notes. He's going to describe what he's creating and then also how he's actually selling these on the site. So if you're seeing this episode, you can find his notes on the actual platform. So yeah, I'll let you go. So a short version of how. I got started, so I ended up, I was a house flipper. So I know Nick from the house flipper too. So, um, bottom line is I was a house flipper for a very long time and then later transitioned into land and land, you know, is, is a very, very, for me, and that's one of the things I'll speak about a little more later, but for me, very safe way to get into creating notes. So one thing I didn't like about creating notes with houses was the fact that when you take a house back, a lot of times there was, you have to remodel. And so as a flipper, I didn't want to go redo the house again. So I would just prefer to sell it outright and be done with it. So here, here with the, with the land, I didn't mind because I took it out. If I ever took the land back, all I had to do is go back out there, clean it up, mow it, and put it back out for sale. And luckily I've had, you know, a lot of success and haven't had to do much. I think we've only taken one back out of like 90 transactions. Wow. It's been really good. Yeah. The people we buy that buy from us are, we tend to vet them pretty good. I'll speak to that. You want me to, but ultimately, um, the first time I did a note was basically somebody showed up and says, Hey, would you, would you finance it? And the land? Yeah. Cause you were just buying and reselling the land and buying and reselling the land and I needed my money back every time. And what's funny is I ended up, uh, I have a friend who, who all creates notes. So it's actually one of Nick's friends, two friends in common. Uh, long story short, they, they, I talked to him, I said, Hey Mark, you know, I'm, this guy wants to buy the property from you. me and you know, the property, I'm selling it for 70 grand and he said he's got like 30, 000 down. He doesn't have the rest 40, 000 like, dude, finance, and that's the safest, you know, for sure. 30, 30, 000 is a big down payment. And so he talked me through it, connected me with some attorneys and that I do use attorneys for all the documents. I would say that's one of the things that I would stress, especially if you've never done one is go through an attorney to create, draft your documents. And once you have them and you could, you know, use those as a boilerplate. I know my documents were. created by attorneys up front. When was that? What year was that? Uh, man, it was COVID. Wow. Before that I was doing houses and the house market crashed. When COVID happened, we all thought the world was going to I got out of the houses as fast as I could. And so, and I ended up having a few that I ended up selling afterwards, but I was like, man, I got to pivot. I got to get into something. And so my friend that I got into land through that and, uh, I had success. I mean, another thing too, is, you know, understanding. A market. So I am my own pro. Uh, I am a consumer of my own product, so I'm, you know, for me it's real easy to sell the land because I am, I, I, I want, I live on two acres. I have horses, I have a construction company, or I had a construction company. And so the, what I sell is, you know, two, two to five acre tracks with no restrictions. So you could put a house, you could put your shop in the back or barn, you could put, you know, horse's, cattle. We're in Texas, so a lot of my houses cattle's a normal thing down here. Right? Yeah. Housing chicken. So. That's I was a consumer of the product. So I knew, understood it. I knew how to sell it. And so it was really easy. The challenge was, you know, banks don't do a lot of financing for land. So that's where also seller financing got really interesting. My biggest fear was selling the note. Oh yeah. Yeah. Selling the note. And so when I came across Paperstack, I was like, well, let me give these guys a shot. I had sold notes, a few notes. So before I went on Paperstack, I sold a few notes through investors. And, uh, and that works, still works. Um, but I need a little more velocity because, you know, we were, I think we did about, we were looking last night, I think at the 30, 30 deals a year ago. And so I needed more velocity. My, my, my private lenders or private investors couldn't consume that product at that rate. And so that's when I tried, you know, paper stack, I came across that thing goes on. Facebook. Oh, yeah. Yeah. Yeah. I think it was a podcast just like this. Are you and you and Rick talking? And so it's like, well, let me give you these guys a shot. So I put it up there and then it was, it was easy putting up there. I mean, it was a little bit of a learning curve, but I think if you're pretty techie, you can figure it out. And at the end of the day, if you know, if you know about notes and you know what the questions are and you know where to get the answers to it, you know, you just upload your, your, your note and. Yeah. Yeah. I remember when I, before I knew you, I, I was, I'd see them come across my tests on everything. You told me everything. I've got everything. So, yeah. So one of the things about it is I learned, you know, and we were talking about this last night in my ignorance. I went. To YouTube University, right? So, um, because the product that I was creating was different than every other house seller. And so the land, the land was a little bit different and kind of, I was on an island where I didn't really have a whole lot of people that did that. So I went to YouTube University and learned a little bit of, uh, how to do it. And one of the things that set, you know, Resonates to me as a 10, 10, 10, 10, 10 year note, 10 percent interest with 10 percent down. And so that's what I started creating a lot of. And so that was really consumable by, by, you know, people on paper stack buyers and paper stacks. So that's what I started with. Um, I still do some of that. I've changed the 30 year notes just because a lot of times the price point has gone up. So if I have a 10 year note instead of a 30 year note, it'd be too expensive for the borrower. So now I'm setting them up for a fail. And another thing is we use RMLO, so we qualify them. So the DTI, debt to income, Oh, it has to work. Yeah. So, you know, to create good paper, that's, you ask, you know, we sell everything. It's because we create really, really good paper. Our borrowers always bring a minimum 10 percent down, if not more. We make sure they go through an RMLO, which we don't have to as a land seller. We don't have to go through that. But I want to know that they can borrow. That they can afford it and they're going to pay. And it's not so much for me. I mean, realistically, I'll take the property back. I don't have a problem with that. Nothing happens to me. If I took the property back, I mean, like I said, I just got to go out there and get it cleaned up, and put it back out on the market and reload it. If I had a house, I'd be a little more worried, but on land, I have no issues, but I don't want them to fail. And so, that also means, like, I'm really happy with keeping the notes I have. I put them up for sale, and as they sell, I make more, you know, create more of them. At the end of the day, you know, I'm, again, a consumer of the product. I'm creating the paper that I would want to hold on to. I mentioned that when I I don't sell the notes, right? I mean, that's the goal everywhere, and that's how you get out of the rat race. Right. Keep as much as I can create, but I'm not in that place. I do it now to recapitalize and go out and buy more land. Interesting. And so we do RMLO, we do, uh, BPOs on every property. So you know, third party BPO, so that way the no buyer knows. The value of the property by someone other than just what I think, right? And of course, there's an estimate on the platform, but I think it's a little more, it gives it a little more validity, right? It's not that it's better or worse. It's good. More validity having a third party. And so we always get a, a VPO. Um, we get surveys on every property. We use a title company for every property. We have lenders insurance on every property. Wow. Transfer is over. So, that's what I think has given us a lot of success on PaperStack. Makes sense. Is, is being able to, you know, create really, really good paper. Deeds of Trust. So, we're in a Deed of Trust state. Yep. We're in Texas. So, it's a Deed of Trust and everything's filed. I mean, we have no, we don't do paperwork. So we use a third party service. That's another thing. So we have third party servicer and we get, you know, uh, payment history. So we'll use the payment history uploaded to, um, that sounds like, um, I mean, that's why you sell. That's why you sell something. And you know, a little pet peeve that I haven't. Just kind of say it out loud is when you're, uh, if you're a buyer of notes and you're on the platform, other than just going into the actual listing itself and then maybe reaching out to us or to me, you don't know the difference between mine or someone else's. So I think that's where, you know, if you, if you look at the notes and go into them and say, Hey, this guy put six files up and he's got all the BPO here and he's got a. Payment history, as opposed to someone that just puts, I got this note for sale and there's no documents uploaded. They're like, not saying there's red flags, but I'm saying like, I want to make it easy for you to consume. Right. Like a CarMax models. Like, look, here's what I want to buy. Here's what I want to sell it for. That's another thing too. I try to give a good yield to the buyer. So I think, you know, depending on the property and depending on the payment. So if it's a three month seasoning, if I had a two year seasoning, it'd be a different price, right? But, you know, we try to give a yield that's attractive to the no buyer. I like that. I like that sounds good. So for those listening that don't know what an RMO is, it's a registered mortgage loan officer. Originator. Oh, is it originator? I thought it was an officer. Yeah, it is. Originator. Yeah, so they basically set up the papers that it looks like it's written by. Legit. Like it's, well, it's basically they, they're the same people that can underwrite loans for HUD or Fatty May or Freddie Mac. Yeah. Yeah. So it's, it's good stuff. Interesting. Okay, cool, man. So that's, uh, that's good to know. That's now that that's, uh, opens my eyes as to why everything sells. Uh, so if you're, uh, so a lot of people watching are new to the space. You see, you sound like you've been in real estate for a long time. So if you have one piece of advice for somebody that's new looking to get in node space, maybe buy or create. What, what would you say if you were starting from square one, do this into the notes, buying notes matter? So obviously it's a biased answer, but it's not, it's also a very, very real one. Land is a very safe investment because if you're buying a note on a house and God forbid, you had to take it back. Unless you've been around that and realize it because having been remodeling houses. They'll, they'll come in. I mean, sometimes these people are upset. They got their home and so they'll blast the house. I mean, they'll rip up carpet, uh, you know, tell you a horror story like that. I've heard cement down the drain and all kinds of stuff because I saw that. I'm like, man, I would never find this house. Man, I find that's all I do. I don't, I sell everything on phone and financing now and the fear of, well, what happens if I take a property back because no, one's really doing our land. I mean, they move very quickly. Right. So, and then, you know, I mean, bottom line is. I, so if you're getting into notes, I think you should consider land as an easy way to get into it. Because if you don't have a lot of money and you get into a house and the house goes bad and then they mess up the house, you're going to have to remodel, you're gonna have to rehab the house. Might as well get into house flipping because that's exactly what you're going to have to To do. So that mean my easy transition into it. I'll give you another one. Partials. I mean, you never partials. So we sell partials and so if you, if you've never done a note, the beauty of having a partial is the primary note investors. Me. I wanna keep the backend. So, you know, you get, you get to get all the benefits. There's a servicing company we set up in place and I'm kind of watching over your shoulder the whole time because I wanna make sure that the borrower's, you know, in line. So that I can get the back end payments of that, right? Um, so it's not that I'm going to be your coach and I'm going to hold your hand, but I'm also going to just kind of be in the background, making sure that the borrower doesn't go too far in default. Because if you, if we foreclose or if you foreclose, it wipes me out. I'm very interested in making sure that that doesn't happen. Right. So that's, I think partial is another good way to get into the no business. Also. It's cheaper, right? Instead of buying a full notice, buy a partial notice, it's cheaper to get into it, so that'd be my advice. That's good. Yeah, there was one time that we went to this one house, Rick's asked me, he's like, Do you want to see, um, let's go check out this house, it was local. Big house, big house, I mean like a huge house. We rolled up and I was like, Whoa, what's going on here? They painted the outside, like, like just a nasty ass color just for, because they're pissed. And so, and then the windows were all black. We opened the front door and there was a pentagram on and candles and like. Like, pictures of kids, what the hell did we just walk into, Rick? He's like, don't worry, this is all fake. I was like, how do you know it's fake? He's like, look at the candles. They've only been lit once. This is what people do. They made everything black and like, they put, uh, like painted everything on the floor black and then they, they put cement down the toilet, down the jacuzzi. And they, they, the worst part, I was like, this house, they, they cut the trusses, I guess. Oh, wow. And then when we walked around the back, I was like, what was he planning on doing here? They, they had like. Gasoline tanks and, uh, they were, they wanted to blow that place up. So we kind of got it for like, still that it like 600, but that house did sell and it sold for like a couple million. But, you know, what a pain in the butt that was. Yeah, and I mean, bottom line, that same sentiment is on a 30, 000 house. Yeah. They feel powerless and that's the only way they have to release their feet or their anger. Thank you. All right. Then that one wraps up this one. Here's a podcast for my first notes. Alex Bravo. Thanks man. Thank you. Yeah. Appreciate it. Yeah. See you on the next one.