Become a Lien Lord with Scott Carson, Episode 71

“Everybody’s in the paper game, most are just on the wrong side of the payments,” states Scott Carson. He's been in the mortgage, finance, and banking industry since 2001 and actively buying notes since 2005. Nicknamed, “The Note Guy,” Scott has closed on over half a billion of assets and teaches others how to become lien lords instead of landlords. On this episode he explains why he focuses on buying non-performing notes, where to buy, and key differences with commercial notes.

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Key Market Insights

Inspired by HGTV, Scott Carson started with flips, but they flopped
Flips flopped because he over-renovated the properties
He became a mortgage banker and practiced creative financing
Focused on notes by cold calling 100 asset managers and bankers daily
A 30-day trip across the country ended up being a 3-year trip
Teaches others to become a lien lord, not a landlord
Currently, 1 in 10 Americans are 30 days behind on their mortgage
Focuses on 1st position, non-performing notes (6-12 months in default)
Key is to get the borrower to start making payments
Looks for occupied properties where there is pride of ownership, have realtors drive by the property
After 12 months of performance, the note can then be sold again
Get the servicing records, call logs, collateral file, call the county to confirm taxes, utilities, pull comps on the property
Ensure you can get the right contact info for outreach within first 30 days
Where to look when buying notes: Look for inventory,
Avoids California, New York, New Jersey, Cook County and rural markets
Recommends starting out with 1 or 2 states
Commercial properties require more work to figure out the rents, leases, occupancy, etc.
Every commercial note has the right to collect rents if borrower defaults