On the show today we have… Bob Repass – Seller Finance & Note Buying Expert!
– Colonial Funding Group website
– Note School
– Bob Repass LinkedIn
– Seller Financing Coalition website
– Our podcast with Joseph Kidworth
– Our podcast with Jeff Watson
– Special Guest: Marishka Pilch of Evergreen Success
Show notes for Bob Repass – Seller Finance & Note Buying Expert!
The Vantastic Life is…
– is in Chelan WA!
Julie is feeling less stressed and feeling healthier from exercising so much. Joe is over in Chelan because the campgrounds were closing down.
On the call we have Marishka Pilch, one of our favorite people, who we’ve had on the podcast in the past, and is in Julie’s VIP real estate group.
Bob tell us as much as you can about your story and how that led you to the crazy world of real estate.
Thank you guys for having me on the podcast. I’m here in Fort Worth TX.
We back in day (1990) I got a job up in WA buying discounted mortgages. But I was able to work from North Carolina Metropolitan Morgage (Spokane WA).
From there I moved to Texas, where I met Eddie Speed. I was buying a lot of deals from Eddie when I was working for Associates.
Then, I got involved with Bay View. Where we went from 6 people to over 100, then the 2008’ish times hit. At that time we started serving loans.
From there I got involved in Colonial Capital Management with Eddie Speed.
Scratch and dent – Sub prime
How do you buy a discounted notes?
Let’s say you buy a note/loan, but you would rather have the lump sum of the money rather than holding it. You sell is at a discount.
Marishka, why don’t you takeover and ask Bob your questions.
I wanted to tell you that we were actually connected early. I worked for Associates way back.
Why do we need the Seller Finance Coalition?
Sure. When the Safe Act and Dod Frank came out, you went from zero regulations to lots of regulations. Unlimited transactions to only 3 in a year. This took a lot of private capital out of the market.
So we’ve been working with Congress to get the limit increased. Just that. The transactions. And we want to get that up to 30 in a year.
Most of the congress members that we’ve met with know that people in the sub $100k price range have trouble getting financing.
And people don’t have access to private capital.
So, people need to have access to be able to buy a home.
There is an affordable home ownership act. But a lot of times that means government housing. It’s not home ownership all the time.
We wanted to serve the underserved communities. So that’s why we wrote the bill.
The bill that we hope to get going in April (but we’ll see with Covid-19). We’ve been working with Jeff Watson to tweak the language to focus on the affordable home ownership. This gives people pride and stabilizes communities.
Shout out to Jeff Watson. We value him highly!
Jeff, you owe me dinner the next time I see you because of that shout out!
Are there any other ways that notes and sellers can be a win?
The sellers either has a money or real estate problem.
The win/win part is the seller can buy that property and the buyer who can’t qualify can get a loan. This doesn’t mean the buyer has bad credit. A lot of times self employed people don’t want the hassle, and are good borrowers.
That’s a great point. Telling story of slum lord, and buying his properties.
Before the shut down… Jeff and I had lunch with Macy Clay in Washington, and he told me that seller financing would get people out of renting to owning, and improving their houses, which would help local businesses.
Once we get someone like this onboard it will be huge.
We’ve also had very positive meetings with Denny Heck, please email him to support our bill. This is his last term and I think he would like to go out with some positive impacts.
You were talking about that trickle down effect…. how home owners go to Home Depot to improve their houses and that helps the community.
If someone could write a blog post about that… the trickle down effect… we could share that, and deploy that to all of our sources.
I will definitely take you up on that. The Seller Coalition will definitely take you up on that! We are doing a webinar with Jeff Watson here soon.
We’d be happy to help out with that!
Are there seller situations where seller financing works best? Do we need to focus on the low dollar transactions?
No, selling financing is available during any transaction with a seller and buyer. There could be a hassle factor.
There was a commercial property in Marishka’s area that I asked them to take a look at. We didn’t get it but…
It was basically a house that was converted into a tavern / pub style restaurant. It had a mom and pop feel, with families coming in.
It was a great opportunity for the owner who wanted to open her own place. We would have been happy to buy that note.
Is it true that there are going to be a lot of accidental or scared landlords right now? They might like to exchange their position.
There’s an opportunity here.
Maybe they don’t have money problems, or they didn’t intend to be a landlord in the first place.
Also there’s people that have a rental portfolio or a house that’s highly appreciated… that happens around here.
Someone that’s tired of dealing with rentals, but still want the cash flow. They can do a sellers financing deal and extend their tax burden over time.
I also think you’re going to see some frustrated hard money lenders. They are going to look for some steady returns.
Let’s back it up a little bit. What if someone has an underlying mortgage?
It’s two things. I can do a wrap on the underlying lean (in most cases). If you want to sell your loan the underlying lead would be paid off. So the person that you sell the loan to would be in first position.
Some people refer to this as a subject to mortgage.
What is an RMLO?
Residential mortgage loan originator.
If I’m going to do more than 3 notes, I have to use an RMLO or be an RMLO. But that’s what we are working on getting to 30.
And they are assessing the borrowers ability to repay.
Is this a different assessment than a traditional lender?
Yeah, an RMLO would not have the Fannie and Freddie guild lines to document income to be able to replay. We can take 12 months banks statements to show that income is coming in. With banks its tax returns or W2’s. And a lot of people don’t have those. But they can still make the payments with their debt to income ratio.
What about credit score.
Well, it depends. Since it’s your property you can have any kind of underwriting approach that you want.
An RMLO can even look at previous rental payments to see how they’ve paid the rest. But you make the terms for your underwriting.
Let’s talk about our current situation… how do you see this effecting the current Covid-19 situation?
Well, if I had a crystal ball. Hahaha!
There are a lot of people that are used to working from home. Right now us a Colonial Funding are all working from home and that’s been challenging.
3 things…. UFO… uncertainty – fear – opportunity
Some uncertainty has been solved with the stimulus package. But uncertainty usually leads to fear. And with fear, people usually make good or bad business decisions.
People have life changing events that require liquidity.
I get deals that come across our desk all the time, and people come back and say they need more money.
There are going to be people that thought they sold their house, but the mortgage of the buyer fell through.
Get plugged in, and stay connected, even though we have to keep a safe distance apart. We’ll do all we can. And do what you can to support small businesses.
Do you have recommendations for the type of sellers that people should be reaching out to?
We have a lot of WA investors that want to buy properties in the Midwest. Jennifer Beadles has an entire platform around this.
Yeah, there’s direct mail programs that you can do. But we’ve found that reaching out to people like Marishka, you’re trying to build that avatar.
You want to source people that are looking to sell, and people that can provide capital. There are a lot of people that are sitting on money in their self directed IRA’s.
Marishka and I are brokers at EXP right now, and it’s so awesome! We couldn’t be at a better place.
What an opportunity for us to continue our business as usual, and we have a nation network of real estate professionals.
We are teaching others to understand this skill set and work together, and we can teach brokers how seller financing can be a fit. That’s what we are focused on.
I think that real estate brokers should be networking as a lead source opportunity.
That’s a great idea!
Look for people that have for sale by owner properties.
Think about how many real estate brokers are reaching out to their clients and they can let them know they are available to help learn about this stuff.
We don’t want to keep you on forever here, it’s been about an hour.
We’d love to see any videos or anything that we can to our group.
We are pretty well connected here, and we want to educated everybody. Connecting with people like you can give people opportunities for note buying.
Note School https://noteschool.com/
Where can people follow along and stay connected?
Go to my LinkedIn page
SellerFinanceCoalition.org – We’ll have all of the information there.
Or reach out to Marishka, and she knows how to reach me.
Please go to meetup.com/SeattleInvestorsClub to keep getting training from us. We have an online weekly meetup at Thursday at 11:30am.
We are talking about all kinds of stuff about our market. And if you have a guest that you’d like to hear from on this podcast, just give me a shout at [email protected]
Joseph Kidworth podcast link to help people with credit and keeping it straight. You want to protect your ability to borrow money. You need to protect your borrowing power.