EP5 
 

Announcer: [00:00:00] Coming to you from Sunny Orlando, Florida. Welcome to the Paperstac Podcast, where we cover current topics in the note industry, give you tactics for your note business, and talk with industry leaders to make you a better note investor. And now your hosts, Brett Burky and Rick Allen.  

Brett Burky: Hello and welcome to another episode of the Paper Stack Podcast. 

And today we have. TJ Osterman. Yeah,  

TJ Osterman: it's just in the neighborhood.  

Rick Allen: Another one of our co-founders in here with us. Yeah,  

Brett Burky: we happened to be doing some stuff here at the office, working, practicing three foot social distancing at this  

Rick Allen: time. Six foot. Six foot. We're not say is one. Almost phase two. Yeah. 

Yeah.  

Brett Burky: As TJ's one of the original co-founders of Paper Stack, and it was these two guys turning it off. Then of course, me and Mike came in a little later. But we want today to talk a little bit about what TJ's been up to recently. I guess not recently, since 2017  

Rick Allen: now. Huh? We've been tackling this for a while. 

Yeah. So  

Brett Burky: this is something that they've been working on for a while. It's a great sister company of Paper Stack. These just makes sense [00:01:00] if you're interested in mortgage notes for yourself and purchasing your own. A great thing to do once that's you have those mortgage notes, is to also look into something like a fund. 

And that's what Rick and TJ have created. It's called The Money With Meaning Fund. And I'm gonna let these two guys open it up and  

Rick Allen: tell you a little bit about it. Brett, thank you as always. Yes. We've been working on this fund for it was really a vision of ours for quite some time. 

And we decided to go from the LLC world of friends and family to a structured fund. Yeah. With the S E C and TJ really spearheaded that. Tell me a little bit about how much fun that was.  

TJ Osterman: It's very difficult. It's the hardest thing I've ever done, and I'm still going through all this stuff. 

Actually, we're going through an audit. As we speak right now. So it's a whole bunch of different things that you have to actually do, but it's definitely something you need to do to take it to that next level. When we've been first investing in notes seven years ago, we realized is sh is this thing even scalable? 

It's eight years ago now. Eight years ago. Is this thing even scalable? Is it, worth the [00:02:00] money, the hundreds of thousands of dollars to put into a. A fund like M w M Fund and actually scale this thing. And we realized, yes, it was back then, and especially in today's environment, it's needed even more so because we're dealing in distressed debt, non-performing loans, mortgages, we're dealing in real estate and there's gonna be a whole bunch of inventory being able to be picked up. 

Rick Allen: For the cheap. I think it's interesting to also think about is when we first started looking at a fund and a fund structure We were looking at a Reg D fund. Yep. Because we're like that's what was around. When we started doing this. But then something came available called  

TJ Osterman: the regulation a plus fund. 

Yeah.  

Rick Allen: What I. Do you think is the benefits? Or let's talk a little bit about why did we decide to go that route with the Reg A plus versus the Reg D? Some of the benefits of  

TJ Osterman: both. Yeah. Yeah. The Reg D is a great fund and there's certain exemptions you can get where you can actually solicit up to 35 non-accredited investors. 

Yep. But I'm [00:03:00] almost positive that you can, you have to register your securities. You're selling in every state. So if you wanted to sell outside of Florida, you better go outside of Florida. You have to register in that state with the Regulation A plus fund. We register our securities one time. And we can sell in all 50 states and and in Puerto Rico all of our securities. And  

Rick Allen: we can take. We don't have a cap on the amount of unlimited or unaccredited  

TJ Osterman: investors. That's the beauty of it. You're starting to see now the trend of, especially in today's environment, online investing. 

Yep. And it's becoming more of the common thing where people are starting to trust it now. So you see a lot of companies out there that have been raising. Hundreds of millions of dollars doing it directly online. And how many people are in this, in the United States of America?  

Rick Allen: Over 300 and million. 

Was it over 300 million? These three 40 at three 45  

TJ Osterman: million. So you think not too long ago, only 1% of those people were actually offered this type of investment in this country. I.  

Rick Allen: I think yeah, that's the key is, part of the mission of our fund is, we wanna make a profit, we want to kill it, we wanna do great for our [00:04:00] investors, but we also wanna help people out. 

Absolutely. And that was a real goal. Money with Meaning fund. We wanna connect that meaning with the money. But we looked at it, we said, wow, what an opportunity to not only help families stay in their home, but to help those same families start investing in their future. Yeah. To allow. The everyday American to come in here, mom and pops around the country really to start investing, start participating in something that honestly they would never have a chance to do. 

So to me that was really the attractive part about it. Is that why you guys put it at 200? Yeah. Yeah. We wanna make it something that's affordable for everybody  

TJ Osterman: to invest. It's a no-brainer. It's like that one site we were looking at, invest in startups for $10. Where else could you actually do that directly on nine? 

Now you can actually go online, invest in these startup companies for a minimum investment of $10. How many do you, how many investors do you think they're gonna get? Oh my gosh. For and you're gonna build a great database. Yeah. With $200,  

Rick Allen: You can. It's the dead money play, right? So with 200 bucks, you could [00:05:00] have, maybe you have rent coming in. 

From a rental that you own in your ira, maybe you're getting $800 a month. Maybe you're like I'd like to take 200 of that's just sitting there and put it into a fund. Maybe you wanna take the whole 800 and put it in the fund cuz there's no lockup period and say, I'll put it in there until it builds up  

TJ Osterman: to buy a new fund, automatically, or buy new asset. 

Right? When that money starts coming and off that rent, you should have it set up automatic where it just goes right into a fund and helps you earn money. I don't like my money in banks right now just because. It's scary what's going on with the currency in these days, but I like it actually in assets, hard assets that are, because inflation, whatever, which way it goes if inflation goes up those asset prices basically are gonna remove lockstep. 

So those are gonna go up if your money's in there, but the, your dollar's only worth 50 cents now, but you're bought in. Yeah, your money's going up with it. But if it's in  

Rick Allen: cash, it gets devalued, right? Because it's really what happens is, It's not the value of the dollar, it's the value of the assets are changing. 

Yeah. Yeah. Yeah. And it just takes more of 'em. So if your money's in the [00:06:00] asset, your money's  

TJ Osterman: growing, right? It is. It's this interesting thing. It grows lockstep and you're like yeah, that does make sense. If my dollar is only buying half a pizza now, but. Five years ago I was buying the whole pizza. 

If I owned the pizza's, the pizza. Yeah. You owned the pizza. It doesn't matter. Exactly. So that's some of the really interesting things, and especially nowadays, we didn't need to talk about this a couple years ago during this last bull market. Nobody was really talking about that. Everybody was just, it was like the glory days. 

It was just wonderful. But but, and another thing to talk about, Why we can actually generally solicit, and what's so powerful about having a lot of people in a fund is power in numbers, right? Yep. If we have 6,000 investors in this fund and 10% pull out, is the fund still gonna be able to operate? Yep. 

If you got five investors in there and something happens and the major investor pulls out those other investors are like, holy cow, this is now what happens to their exposure, their risk exposure.  

Are you new to the mortgage Note industry? Have you been wanting to learn the step-by-step process to purchase your first mortgage note? Well, you are in [00:07:00] luck. We've convinced our C E O Rick Allen to break down everything he knows about Mortgage Note investing. Through a series of 50 videos, you'll get everything from start to finish of where to purchase notes, how to purchase notes, and all of Rick's investing techniques he has developed over the many years. 

From performing note tactics to non-performing notes, Rick gives you everything he knows about investing. Bonuses include our glossary of industry terms, Rick's own proprietary calculators he created to evaluate notes, discounts from our partners, our Rolodex of vendors, a private Facebook group along with a lot more. 

We've packed so much content into the academy to take you from beginner to expert in no time to learn more about the academy. Go to academy dot paper stack.com/welcome. Again, that is academy dot paper stack.com/welcome. 

Rick Allen: Exactly. Another thing about it is when you throw. Money into a fund with a [00:08:00] bunch of other people, it gets cross collateralized. 

It. Your risk is spread 'em over Everyone's assets. Assets. As opposed to if I'm just going into it and I've got, if I've got 30 grand of my own money, I'm looking at it like I can buy one loan. Yeah. If that one loan goes bad or it doesn't go the way it's supposed  

TJ Osterman: to. And operating costs are a hundred percent yours. 

A hundred percent yours. So we have 6,000 investors operating costs on those notes are spread amongst 6,000 investors. That makes it alive. It's spread there,  

Rick Allen: but it's also, it's spread across all the assets we have. Oh, yeah. And it's just it's a great, and I can, I promise you this, there's not, I don't know of any notes out there that you can buy for 200 bucks. 

No. So maybe throw your $200 in, participate in it. That's really what it's about. And it's, it's great just to see. The look on people's face when they find out they can actually invest online for their couch. Yeah. Which is  

TJ Osterman: so relevant right now. It's actually, this is the, it's like a revolution in investing these days. 

Yeah. Because of what we're dealing with right now is because it's the tipping point I think we're sitting in now because people have no other [00:09:00] choice. They have to invest from their home, so they have to put a little bit of their foot over the cliff and say, okay, I'll be all right. You got,  

Rick Allen: You gotta dip your toe in the water and see what it is. 

It's  

TJ Osterman: So this is what we needed as somebody that we're both visionaries in a way of seeing what we kind of wanna build for the future. And we understand that digital currency, all this stuff could happen. And if you don't have the infrastructure built now you're too late. 

If you wanna get on board. When it's all happening, you're gonna, it's gonna take a lot of time. So we're trying to really build something now that is gonna flourish for the decades to come.  

Rick Allen: And I guess one of the great benefits of having a, a sister company like Paper Stack is you've got these liquidity tools that are available. It's key, it's all about, we talk about TJ and I've talked about this before. It's this industry. It's not. It's not amazingly difficult, but it's a little challenging. It's  

TJ Osterman: challenging, but you can teach people to do it. 

Absolutely. But our Rolodex,  

Rick Allen: yeah. Our knowledge, the people we know in [00:10:00] the industry and how long we've been doing it, that's what you that's what's really makes us money. The management team's Yeah. Experience combined 30 years of distressed asset buying.  

TJ Osterman: Yeah. The 6,000 hours of something that Brez has talked to people on the phone and that we've talked to people on the phone, it's. 

With just the paper stack side? Yeah. What you wanna do is you wanna develop a customer and add a lot of value to it. So a paper stack user will buy a note and we hope that they do really well in it. We have nothing to do with the management side of it or the effect of that. That's up to them. 

But if you can provide opportunity for them to say, you know what? You're gonna buy this performing note and it's going to yield you whatever percentage, and you're gonna be getting $800 a month in, what are you doing with that $800? You know what? Our sister companies right there, we were talking about it last night. 

Put it into the fund right now. You should reinvest. Those dividends. To grow your wealth. So you're providing, we're able to provide a lot of value to the Paper Stack users, to the Mwm fund users. Because I always tell people, you gotta diversify. You can get in with the Mwm fund, but [00:11:00] look at maybe investing in some performing notes. 

A nice portfolio of 25 performing notes is a beautiful. Income stream, isn't it?  

Brett Burky: Oh, it's another thing too though. Like mailbox, we're gonna have, some of that stuff where if they could dip their foot in the water with the Mwm fund, understand the process of how the actual note purchase happens, learn a little bit and then learn from some of the education that they're gonna get. 

They can take that knowledge. And then go right over to Papers Tech and actually buy one  

Rick Allen: themselves. That's what I'm, yeah. Yeah. Learn why you earn. So you put $200 in, you get the course and you're getting an investment in the fund, right? Or something along those lines. I  

TJ Osterman: think the details, yeah. There's so many cool things that we're gonna be able to come out with and that we're constantly thinking about. 

We're just not gonna sit idly. We're active managers in the fund, the same managers that. For the last eight years have past performance of 17%. And that's in the offering circular, by the way. We've had those figures done. So that same management team is on WM fund. Past performance doesn't dictate the future. 

Dictate the future, but but just saying that, we're really ready and keyed up  

Brett Burky: to take advantage. What about the so talk to me about the fact of, so [00:12:00] I'm a, I'm someone who buys on Paper Stack and I'm looking for good deals. You've mentioned before in the past, because of the buying power you'll have with the amount of Revenue you have, not the revenue, but the buying part you have, when you have a couple million dollars to buy these bigger pools, you're able to buy at a bigger discount. 

And you're talking about you don't have to take. A huge chunk of these things, you guys are just gonna be, because of volume, taking a little bit, fixing 'em and throwing with enough meat on the bones, on the paper set. So these people are gonna  

Rick Allen: be able to get deals. Sure. So as we build capital, as the capital reserves, the dry powder gets bigger and we start taking bigger bites outta the apple from people that are, honestly, they're just higher up the food chain. 

Yeah. They're the people who are higher up the food chain. We're able to buy those and they're in the Rolodex, right? We're able to buy those and we can say, look, we can go ahead and with the velocity of the fund and focusing on look, we're gonna keep some of these, but some of them we're just gonna put some money on there. 

Tax some money on and just move them. Move  

TJ Osterman: them right away. We have to make a profit. Yeah, for the fun. But you know what? Like you [00:13:00] said, we're gonna be able to put out a really good quality product. That's gonna have a lot more meat on the bone, let's just say. And maybe to some it doesn't, but that's what we're seeing is we're thinking that's really what's gonna happen. 

And  

Rick Allen: that's what's been what I've seen selling a just right now is just flying out the door. Are Reperforming assets. Yeah. Reperforming assets on Paper Stack are just, they're going and they're going quickly because that's what people are looking for. They're looking for. Yield. They're looking for cashflow, self-directed ira, people looking for something. 

Oh my gosh. The self-directed IRA people, I feel like almost like a drug dealer with them, because they're just like, oh, this is amazing.  

TJ Osterman: Yeah. We're talking to people daily and calling and saying, I have 15, $25,000 that I've just been sitting there for years. They just don't know what to do with it. 

They go on about their lives and they're like, holy cow, I have this thing. So the new things that are coming out with some of our partners that we're partnering up with, no spoilers right now, but to be able to access that money is key. Fast. How easy can I do it? Because even in today's environment, the self-directed [00:14:00] IRA space it's, there's still some burdensome things to go through, right? 

We're in the infancy stages of it. Once we make it really easy for, let's say, me, that has a self-directed IRA, to be able to utilize that money, put a little bit over here in this startup company for 20 bucks. Put a little bit into Mwm fund over here and easily access that all online. It's game over because nobody's put in that money into that. 

Into that niche yet, right? So it's gonna be a rocket ship question.  

Brett Burky: Let's switch gears a little bit. Tell me more about, cuz this is an impact fund, where you guys, are doing two things. You're providing for your investors, but also at the same time the goal is to help people. 

That's why it's called the Money with Meaning fund. Correct. What else besides the, what are you guys doing to, cause I know we, we'll go and talk on length where, there's been times you get started and you can roll. I remember one time we went to. It was just me and him at the office. 

And we had the office in Winter Garden where it was nine, from nine o'clock in the morning to we're at what a Red Robin we're eating lunch. And you finally said something like, what do you think Brett? And I was like, I think I haven't said a word since I got in the office. [00:15:00] You've been talking  

TJ Osterman: this whole time. 

That was when Rick and I were just in the office by ourselves. I had nobody to talk to. Yeah. Rick and I, he knew what I was saying before it was even out of my mouth. So I could only say so much to Rick and talk about my like passion about what's going on here. And then he's dude, I don't need to hear it again. 

I know it, dude, you don't need to. Sell me on it. And then Brett comes in, I go, oh, fresh me. I'm like, I got eight hours with this guy. I'm gonna tell him everything. Your  

Rick Allen: ears were bleeding.  

Brett Burky: I know but the thing is, it was always like the, I liked it cause it was like, wow, he's, cuz the idea is it's, it just makes sense. 

It's common sense. To help these people, when you were talking about, look, we're gonna get him with a, housing counselor, right? How can we help their kids? Can we get them back with resumes, get 'em jobs?  

TJ Osterman: You have an intimate relationship with. Somebody that own that is owning your home or your mortgage on your own. 

Yeah. How intimate of a relationship is that? It doesn't get more personal back. If you can build a good relationship with that person and then you can provide value to them through the life of that relationship, I. How much more valuable could you, what could you do? Anybody you partner up with? 

[00:16:00] I think the  

Rick Allen: key is, it's relentless when you're, when we form those relationships, it's we're being real with people. We're talking to 'em, listening to 'em, finding out really what's going on there. Cuz so many times, our borrowers have been contacted prior to us getting their loans contacted by people and it's really, there's just always these ulterior motives like, look, you just gotta perform or get out. 

And it's some horror stories we've heard, but there's really people at the end of the, at the other side of these loans and it's really like, how can  

TJ Osterman: you help them? This is another tipping point that's happening right now. Yeah. Is what are all these companies doing forbearance for a year? Not paying their rent for a year and doing these socially responsible things. 

Obviously there's a landlord that needs to get paid and things like that, and hopefully they're gonna be able to subsidize that through the government because. Let's face it, we still need to make revenue. But what it's doing is it's bringing to the forefront the importance of housing. If we're trying to rebuild the middle class, right? 

And trying to build this wealth inequality, this gap and tighten it up a little bit, you gotta have a house. To do so and [00:17:00] so we have a very important role, and I take it on as a responsibility of myself to say, This is my respon. I don't care if Joe over there that's a note. 

Investor doesn't do it. It's my responsibility to at least let people know that this is what's going on out there. This is what we can provide. This is what you can provide. This is what you're going to provide. If you invest in a note on Paper Stack or you invest in M W M Fund this is what you can do on top of just making money. 

And to me, when I tell my daughter what I do I basically say I make a big piggy bank. And people put money in that piggy bank, and I use that money and I go out and save people's homes. And then I make some more money with that by doing That's good. And she's great. So that's as simple as it is. 

It's really not. The backend stuff that we've been learning for the last seven and eight years is insane. There's a lot of stuff going on in it. Not that it can't be taught. What I'm saying is that doesn't need to be, on the forefront of what it is. It's really, that's all that. Finance has been, I think, started from the get go. 

To be confusing to most people. Yeah. For a reason. It's nowadays you can find out everything. You can learn [00:18:00] everything about it. It doesn't need to be so confusing.  

Rick Allen: No.  
 

Brett Burky: Good stuff. Thanks for the introduction. We're at 20 minutes and Anything you guys want to add? Anything, information where they can find more  

Rick Allen: stuff or go? 

How do you get started at Mwm? What's the first step? What's step one? Go to the site.  

TJ Osterman: Go to the site. Go to mwm fund.com and we've done a really good I think cliff Notes version of what we're actually doing. You can invest right there. The great thing about it is our backend is fully secure. 

It's. SOC 1 23 audited, which is basically a third party auditor that audits the technology. So whenever you put your information in there, it's very secure. And we're utilizing a huge fund administrator to do that. Like we said, this is a team. This isn't us pulling the levers here. This is like a big time thing. 

And and just go to the website and say, invest now. Reach out and intercom and ask us, or go to Paper Stack.  

Rick Allen: Or go to Paper Stack if you're looking for some properties. But yeah, I think for the fund it's go there and get started. If you have any questions, right at the bottom right hand corner on the website, point to it if you like. 

Right here, there it is. [00:19:00] Intercom. That's an intercom button. You hit that, open it up, you'll have your question, that'll pop up, or dialogue box will pop up and you can ask a question and we'll be able to get back to you pretty quickly. Yeah.  

TJ Osterman: Other than that, we look forward to having everybody on board and great. 

Year  

Rick Allen: for sure.  

TJ Osterman: Thanks for checking in on us. Thank you for letting me come in guys. Yeah, for sure. I guess we'll let you  

Rick Allen: in this office. All right, great.  

Brett Burky: That's the end of episode five of the Paper Stack podcast. Thanks for having TJ on and Rick as always. Yeah. And we'll see you guys in episode six. 

If you haven't subscribed yet though, please do so and leave us a comment cause it helps out. All right. Helps out a lot.  

Rick Allen: All right, thank you.  

Brett Burky: See ya.