Hustling in the Big Easy ain’t easy. In order to conjure money out of thin air, a note investor has to have a big heart for helping people. You can’t be in the business just for the money. When you’re dealing with people who are literally facing foreclosure, sometimes days or weeks out, you can’t afford to be heartless. A lot of homeowners will appreciate it if you helped them to stay in their house in the face of inevitability. This is exactly Jonathan Burden’s mission in life as a real estate investor from New Orleans since 2007. Scott talks with Jonathan Burden, a long-time real estate and note investor, about the latter’s creative endeavors in New Orleans with distressed homeowners.
Listen to the podcast here:
Hustling in the Big Easy with Jonathan Burden
I’m always excited to be here and we’re especially excited to have somebody I’ve known for over a decade who is absolutely a hustler, freaking making money out of thin air and has a huge heart to help people. I had to reach out to this guy. I was like, “I see you posting these videos on YouTube. You’re looking like you’re helping a ton of people. Let’s get you on to talk about it.” We are honored to have Jonathan Burden join us all the way in from the Big Easy. Welcome, Jonathan. You’re an active real estate investor down the neck of the woods with a very interesting background and stuff. Why don’t you share with everybody who you are, a little bit about your background and what you’re doing in real estate?
My name is Jonathan Burden. I’ve been investing in real estate since 2007 and had been through a lot of ups and downs and everything. That’s what I do. I like anything that’s distressed.
Anything that’s distressed, notes, real estate, whatever. You call New Orleans home, correct?
Yes, New Orleans is home.
One of the great things is I see you there hustling and you’re working with a lot of homeowners. You helped them to stay in their house so you’ve got a big heart. Why don’t you talk a little about what you’re doing there in New Orleans and let’s keep it in layman’s terms because you’re dealing with people that are literally facing foreclosure sometimes days or weeks out, correct?
That is correct.
You’re mailing postcards and you’re door knocking, let’s talk a little bit about how you come across your leads.
My model basically goes like this. A lot of people like to send out the postcards and everything and that’s cool. I just think that my speed is faster than their mail. I got a decision made right there and then. I’m like, “Do you want to sell this thing? Do you want to stay? Tell me what’s going on.” I’m trying to find out everything that was going on. If they tell me that they want to stay, I’ll provide a short-term loan form so they won’t be faced with the foreclosure and I take the deed for that. That’s my collateral. If they ever miss the payments or whatever, I put the property up for $10,000, $15,000 or whatever the case maybe.
Basically, you’re out the doors knocking, talking to people that are facing foreclosure in a few weeks. Are all those conversations good? Some of them will get loud? I’ve had guns pulled on me before.
You’re not the only one. One of the craziest things that ever happened to me, I went to save a guy. I guess it was his wife and he was over there or something like that. He had a nasty attitude. I wasn’t even on the property yet because he came out. The bad thing about it was that I had my mother sitting in the car with me when I went to this particular property. The guy got crazy. He’s telling me to get off of his property. I said, “I’m not on your property. I’m at the streets.” “It’s not your property. You wait right there. I’m going to get this gun,” that’s what he said. I said, “Let me go. I’ve got my mom in the car and I’ll go.” I came back and the police made me wait down the street. I had to let them know because nobody is going to do that with my mom.
We’ve talked a little bit beforehand. You’re doing something cool. You’re going out and helping people. You’re not always into it for the property. You’re talking about options, educating these people on what they can and can’t do.
Most investors when they go, they just want to buy and sometimes they get the door slammed on their face. What I found out when I offered them, “Do you need a loan?” They’d be like, “I could use a loan if that’s the case,” and it just goes from there. I make money both ways. If it’s no more than a consultation or something, they go through it and they will pay for that. I’ll walk them through it and I’ll clean their credits. There are a few other tools that I use.
You talked beforehand that you’ll get with them and then try to get their family involved the best you can. The family can bring in money off a credit card or cash and you save them and you walk away. You’re like, “That’s good. We provided some good. You’re able to stay in your house and you’ve got everything paid up then you walk away.” Then if they don’t, you come in with your money or some of your investors’ money and you’re willing to provide the money for the arrearages and whatever. Set them up on a monthly payment where they’re paying a little bit extra each month to get you paid off. You’re obviously collecting the deed as collateral and you’re holding that unless they stopped paying you and you file the deed.
Yes, and then I’ll file it.
Have you had to evict anybody? You had to file and boot anybody out of their house?
No, but I had this lady. I’m still dealing with that file. She is an attorney and Medicare fraud specialist or something like this. We’ve got her situated, stopped it from going to sale. She said, “Thank you so much. You guys helped me in this and that.” After that, it was a bunch of excuses like, “I’m on meds. I’ve got to go to surgery.” It’s been that since day one, “You guys have an hourly rate.” She came with everything but the kitchen sink and I’m still dealing with this situation with her.
In that particular case, I didn’t do anything with the deed or did a general agreement with her. We just went from there. I explained to one of my little students, “The thing that we’ll be doing going forward, we’ll have people like her. When we’re doing this stuff at first, we’re going to do a power of attorney. We’ll come ourselves with a power of attorney to get to doing this. Then we can create the deed from there and we’ll go ahead and evict from there.” That’s it in a nutshell. I found a way to protect myself.
Have you had some people who walked around the property and then walk away from it? “I don’t want to loan. I just want to get out of the property.”
I see that too. Those are the ones that I keep for myself. I turn around and provide some type of owner-financing whether it’d be rent-to-own or buying for deeds or something of that nature.
One of the things you’re doing, you’re coming in and helping them probably paying off the rearages to avoid from going to foreclosure then, taking it over then to subject to.
I’ve been doing this in mortgage.
Then just doing a wraparound mortgage or contract for deed at that point?
That or some type of rental, something of that nature or whatever that works. I did have it before with one person and he didn’t understand rent-to-won. He said, “I would rather do a bond for deed.” They heard that before. I’m like, “Let’s do a contract for deed. We’ll do it that way.”
You’re in your attorney’s office, getting documents created, getting the loan origination docs done and going from there. The door knocking. How many door knocks do you average a week or per month?
This is how we do it. Usually, I would have my assistant go ahead and create her own list. My little student, she’s a realtor soul. She loves this type of administrative stuff. She’ll put a list together for us. We might put together five, ten properties and we’ll run through those. If we can get through those in a day, we’ll see what else is out there. We’ll keep going and just be out there every day. Some of the people that we missed, we got to go back to them and stuff like that. The normal cutoff time is about 9:00 at night. We cut off at about 9:00, but there have been times that we’ve been out there until 2:30 in the morning.
Knocking on doors?
No, because we did bid on the phone with the borrower at some part. We went, the husband wasn’t there, “You’ve got to come back when my husband’s here.” We’ve got a phone number and we’ve got some type of contact, “We’re finishing up with one client. We’re on our way to you next.” This stuff takes time. We have to go through the paperwork. We’ll be out at 2:30 in the morning, we got to get up early the next morning to make sure that we get down there so the papers can be filed. We can put everything on pause and all the rest of the stuff.
That’s one thing I wanted to bring up. You are sometimes helping people file bankruptcy so they can avoid a foreclosure.
Yes, I don’t do it myself. I consult them unless I got some type of power of attorney or something like that. Just to briefly stop it. They don’t have to go through the whole process.
You’re just trying to get a TRO, a temporary restraining order against the foreclosure auction for the most part.
What’s the TRO caution for those that don’t know what it is or how much is it?
The way we do it to keep it where everything is a healthy investment, because a lot of people don’t have the money. Sometimes we have to provide them a loan for that too. Normally, it costs $310 to file it over here, but we don’t do that. We take the installment payment route and have it filed for them for $75. It’s says $75, $75, $75 and then $85. We make it through the $75 or $75 twice and that’s it.
Are you seeing these houses as usually in pretty good condition or are you dealing with anybody that just let the house go? You’ve run across hoarders?
I’ve ran across every one of those situations. What I love about this is it’s almost like fishing to me. You never know what you’re going to get when you knock this door but I’m trying to go and I’m prepared to deal with whatever the case may be. While I’m in the field, I’m training my student because I try to have her go before me at the door. Sometimes you see this guy at the door, he goes to grab his gun or whatever. You can see the female, the guards go down. In that way, when they open the door, I’ll be behind it and I’ll start the talking or I’ll have her talk sometime or whatever the case may be. I’m like, “Your property came across our radar, we will try to see if you wanted to sell, you needed a loan or maybe before it will go to auction tomorrow or the next week or whatever the case may be.”
Have you found a lot of defaulted debt and speaking on loans besides? I know you’re dealing with foreclosures. Have you bought some stuff there in New Orleans under the distressed debt side yet or not really?
Once I find out who the lenders are, if it’s not Bank of America, Wells or anything like that, I’ll try to see if I can make the call to see if I can purchase the loan. That’s my first line of defense. Lately, what I’ve been running into is they’re not selling it or they’ve got it with some service and the servicers was like “We’ve got five vendors here.” In order for one to sell a one off or whatever I say, “Can you check and see if this one will?” They go and check and say, “This is not the one.” If it comes across my radar, I’ll be more than glad to take it down and then own the debt.
You’re working from both sides. Basically, you’re reaching out to the banks once you’ve got the homeowner on the hook there to help you out with that aspect of things like that as well. The thing is obviously taking a deed, the power of attorneys is helping out with the negotiation side to help slow things down on the foreclosure if you can. This is a great sale. Are you doing this five days a week? Are you doing this all the time, four days a week, or it varies?
I love it so much if I can do it seven days a week, I will. It just all depends on what’s going on at the time but for the majority part. I’m working every day and staying busy every day.
For those that don’t know, why don’t you share a little bit about some of the things that you’ve done in your background, some of the stuff that you did making money? I know some of the things and I’m always impressed with that. Why don’t you share a little bit out there some things you’ve done before?
I still have my artists and stuff and they’re making moves there. They signed to ROC Nation.
Before the music, what else were you doing to make money?
I did a used tires business. I did that.
Talk about that. That’s hustling to do that. How would you order used tires? How would you sell those things?
It was a couple of different things. We have all the different vendors around that did tires like the Midas, the Pep Boys, the NTB National Tire & Battery but something else. These guys would take the tires off there. They would sell them for lunch money or whatever the case maybe or they would give them to you because they would have to pay this extra money to go ahead and dispose of them. They would rather give them away or just take something small in a dollar form. In richer neighborhoods, what happens is these people change tires every eight months and they still have good rubber on them. I take them, put them on Craigslist, and sell them a whole set of tires like for $200 or $150 and people are more than glad to pay for it than having to go buy $300 a tire.
When you told me you were doing that and I was like, “That’s a hustle.” That’s working hard and that’s very commendable to you. You’re making something that people throw away and turn into something positive. One man’s trash and another man’s treasure, right?
I know that you have a work ethic like nobody else doing that. You’re out making something happen. You and I both know there’s a lot of people out there like, “You can find deals. You can’t do that. I don’t want to go knock on doors. I don’t want to do any of that work,” and you’re out there beating everybody to the punch. You’ve been recording some of these, did the borrowers know that you’re recording some of this, sharing it on videos and stuff like that?
Yes. The majority part they do but sometimes they don’t though. I use it for my marketing. That’s what it’s basically for. I can let everybody know I’m active. This is what I’m doing. If you want a piece, you want to come in and invest with me, I’m here.
That brings up a very valid question on your private money to fund these deals. Are these from people you know, other investors in the area, attorneys, where do you get your money to take these things down?
On my LinkedIn page I’ve got 10,000 connections on there. If it’s not something from there, it’s going to be somebody here locally that I know. I drove these neighborhoods. If I’ve got a property in the neighborhood and I see these two houses on the block and the lady had the one in the middle. It looked like the owner could have been out and I pulled up on it. I talked to her for a second and I said, “Is this your property? She said, “Yes.” I said, “Looking for anything else in the area?” She was like, “Yes because the stuff is beat up, they don’t fit in what I’m doing. I like the pretty stuff.” I like the pretty stuff and this beat up stuff, the ugly stuff, if it’s a good deal, I’ll take it and just sell it off or whatever. She was like, “Do you have anything on Jackson Avenue?” We talked about it a little bit.
We come to find out. She told me what her name was, it rang like some type of bigwig and then when I thought about it I’m like, “She’s somebody that works with the mayor in the mayor’s office.” She said she has fourteen Airbnbs over here in the area and she’s looking for more stuff. She likes these big old houses, historical stuff here in New Orleans. She said, “The money’s not my problem. I hate talking to people.” I said, “I love talking to people. I’m a master at that part. It would put these deals together.” She said, “I’m so glad you stopped.” I said, “Me as well, so if you’ve got anything that you’re looking at, send it over to me and I’ll put the deal together. We’ll work it out from there.”
You are definitely a master craftsman at deal making. If you’re teaching or coaching people, what is the biggest delay thing that makes people nervous about what you’re doing?
The thing that makes people nervous, they’re scared of the confrontation, of the door knocks and stuff like these. I try to get them past it because this is my attitude that I took with it. They can’t eat me and I am not going to jail. That’s the two biggest things. If all you’re going to say is no, let’s just get to it. It’s a possible $30,000, $40,000, $50,000 here at every door I knock.
A possible $20,000, $30,000, $40,000 each door knock. You’re willing to say a no and then walk away. That is a beautiful thing. You’re keeping these in your portfolio, you’ve turned them into owner-financed or contract for deed, you’re creating paper on the backend stuff there. Was it hard for you to find an attorney or somebody there to help you out with creating the loan documents for that in Louisiana?
My attorney, David Berson, he knows all about this stuff. I learned some things with him that I didn’t know. He’s a little bit deeper with it. I’m not an attorney but I know things about the law and all the rest of the stuff. He’s an investor-friendly attorney and he knows what he’s doing with this stuff.
Have an expert. You’re using creative deal-making with your experience from the decade plus of attending workshops and going there and putting them together. You mentioned earlier how you’re trying to help the borrowers improve their credit too. How are you doing that?
I’m a credit repair agent for this company called FES, Financial Education Services. That’s what I do. I’ll bring them in. If they need the credit repair, they’ll send them everything that they need to do and send it in and within six months or less or sometimes 90 days or less they’re back together. It’s all about getting it off the credit report. That doesn’t mean you don’t own a debt. That’s what the lender is going to look at when it’s time to give you a loan to get something done. They want to look at your credit report.
Basically, you’re getting stuff removed, stuff that’s incorrect and stuff like that on it. Is that correct?
Yes, incorrect stuff that didn’t belong to them. They never paid late or whatever.
They’ve got a few months of mortgages that are affecting their credit score obviously. Is it effective in the long run or are you able to still improve it with that stuff on the reports?
What used to happen in that particular case, they’ll challenge it as not my debt. They’ll do it like that. They’ll challenge it as never late and it gets pulled off there because what I learned I bought a bunch of stuff in Kansas City back in the days and I took $600,000 plus loans. I had a lot of light bills in my name, all types of stuff. I hired Lexington Law to do it at that time and what I found out later on down the line they didn’t have an A+ rating with the Better Business Bureau. They were only challenging three items on all the credit report. They charged $100 every month constantly for that. They took 51 items off of my report, but it took them eighteen months to do so. This company here, we charge everything all at one time and it makes a lot of it fall off. We send it in with return of receipt mails and this other stuff that we do. It works.
Let’s talk about some of the hiccups you’ve had in business life. I know the story. Why don’t we talk about Kansas City a little bit? What happened there and how did you overcome that? When did that happen? Let’s talk about that, Jonathan.
Back in 2007, it’s when I started investing in everything. I bought my first property here in New Orleans. It was a shell and this was the stuff that was after Katrina. I’ll never forget her. This was just my first deal. Her name was Anita Wolf. She didn’t understand what a bond for deed was. She was asking $55,000. I got it down. She wouldn’t budge for more. I wanted it cheaper than that but she said, “$51,000.” “If we got to do that, let’s do a bond for deed.” She said, “What is that like?” For those who don’t know, that’s what we call in Louisiana, everywhere else called contract for deed. “I give you so much money now and if I don’t pay you off, you get to keep your property. My intention is to go ahead and give you $10,000 down and if I don’t pay you off in six months or less, you’re $10,000 richer. You get to keep your home and sell it again.” We discussed this a lot of times and everything and she was like, “All right, cool.”
I have another attorney, his name is Rick Reagan. He’s the one that created the bond for the loss for Louisiana. Rick used the handles of all my stuff dealing with that because I know he knows a little bit extra than a lot of other people. What I did from this, I took the rest of the money that I had. I dumped it into the property and fixed it but I’m not a gambler though. Before I went into this offer, I already knew that I had the property sold before then because I built a buyer’s list before then. I already had that together with the contract and everything to go with that thing. I went in for that and I sold the property 90 days later for $179,000, something like that.
We went back and when we went to close, my attorney dispersed all the $41,000 and the rest came back to me. I took that money and I went up to Kansas City because I had somebody that knew of that I learned some real estate stuff from up there. It worked. I went to buying stuff up there that didn’t need the work that the properties in New Orleans needed because of Katrina. This was at a time when the market started to tank as well. Properties were listed for $40,000, $50,000 and I was offering $13,000 cash and it was biting like piranhas. I would have to turn them around cleaning some walls and fixing some windows or something like that.
I turnaround and reappraised it, $80,000, $90,000 and sell it. That worked for me for awhile and we built a lot of capital, like $1.6 million between me and the person that was up there. I started letting him handle all the paperwork. I didn’t know anything about liens or anything at that time. He would make out some paperwork up there and took it for $600,000. That put me on my back. It hurt me for a while. It hurt my marriage at that time, all this stuff. What I had to do is I had to figure out a way to get it off of my back and keep going because these bills keep coming every month. It’s still showing up. I called him to send me some money. He’ll send me $10,000, $15,000 here and it kept me going for a month. Then he just disappeared. He went dark. That hurt. This would make me learn about being a creative real estate investor and how to make money out of thin air. I found out all the thing I needed was this, pen and paper, some brains and you can put some stuff together. Building it back up from there.
Are you just buying in the New Orleans area now or Louisiana?
You see me building these properties. I’m trying to see about a few things while I’m over here on this end, but New Orleans or the surrounding areas, I’ll do it. When it comes, I’ll do it anyway.
You still got those notes that you’ve bought or you’ve foreclosed them out or you kept them or what?
I still had the one over Florida and the one in Campobello, South Carolina, that went to tax deed sale.
There’s a tax overage over there that’s worth more than what you paid for the note though.
Yes, absolutely. It’s $20,000 that’s sitting over there. I was just on a phone with the tax collector over in that area. He told me that the overage will be available on the 27th of next month. He said I have to file some paperwork to get us if the deed filed behind it. He has seen everything went inverse and all the rest of this stuff. I talked to an attorney. I called a couple of attorneys over there so I get the paperwork started. He told me to give him two days to try to shift through it. He’s going to see. He thinks it might be a mess to do. I don’t think so I said, “If you need something from inverse, I can get him first on the phone or whatever we need to do.”
All you’re going to need to collect that overage is the list of the assignments, the transferred documents from Harvard to us and then to you, then you used the affidavit to fill out that you have the right to claim on it. If you need help with anything on that because you bought it at a Mastermind through us with a bunch of others. You paid little for it but the tax overage and property value is there. You’re going to end up making 200% on that asset or something like that.
It’s going really good.
How is the marketing? Are you getting a lot of comments on the Facebook videos? I know the answer to this but for those that are out there scared to do a little bit of marketing, we’re just going to be honest, technology it’s not everybody’s cup of tea. Is it helping the stuff that you’re doing?
It helps me in a number of ways, even when I go see these borrowers that’s in distress. They watch too many episodes of American Greed or something and they’re thinking, “I’ve seen this.” I have lots of deals like that too because the lady, she was in the military though. She was going through some mental stuff. At first, she was going to do it and then she winds up not doing it or whatever. This is what they’ll do. They’ll take and believe in these loan mod stuff. I’ve seen this fail these people all the time. I try to explain it to them but at least what I do, I plant the seed and tell them right then and there.
Then when they do fail, I’ll get their calls back. Instead of me using the card, I have cards too but I have a flyer that I use. It’s in red, black and white so it stands out with some bold print like, “Stop foreclosure,” and all the rest of this stuff. When I give it to them I’ll tell them, “Take this and put this where you put your important papers because this is your emergency parachute, if the loan modification fails or whatever the case may be, you pull this out and you call me if you need a loan.”
That’s the good thing, “I’m going to do a loan mod or I would deal with short sales or your pre-foreclosure and stuff like that.” You’re getting applauses from people out there. They’re loving that. “Put these on the important papers and when your loan mod fails, call me. I’m your financial parachute.” That’s good stuff. I’m absolutely thrilled with what you’re doing. I’m very proud of you. You are doing an amazing job, Jonathan. Honestly, a lot of people that can’t help themselves, you’ve helped people that were in the hospital sick or their family was gone and left them. I saw one story where you were dealing with a guy whose family just completely left him. He was sick.
This stuff is hard. There have been a lot of times in my account maybe about three, four times on hand. My little student, she wasn’t prepared for it. She would break down and cry as soon as we leave them by the door. I’m like, “If you’re going to learn to get your skin a little bit tougher, we’re here to help. That’s the good thing.” We’re not taking advantage of anybody. We’re here to help and provide good health because if not, they’re drowning. They’re going to lose the property. Whether we buy it or if they need a loan and we keep them in the property, it all works out.
Do you have a website that people can reach out to you at?
Are you emailing out to your database on a pretty regular basis?
No because with what I’ve got going on, it keeps me busy.
The only reason I brought that up, I know when you came in here we were going through Fast Track awhile back. We worked with you to get through your emails, download your LinkedIn connections and get it up there. You had some great success immediately. You’re busy, you’re knocking out and the people that are around you and know you are jumping in to help you out with the funding and other things like that. Correct?
That is correct.
You get some new fans online. You can check him out at Jonathan Burden. Check him out on Facebook. He’s got his LinkedIn profile as well.
The email address is InadequateAsset@Gmail.com. The company is Zero Three Four Investment Group.
I’m glad to have you on the show, Jonathan. Check him out online. You’ll see some of his amazing Facebook stories, great stories. He’s the guy that’s got a big heart. We look forward to your continued success and we’ll see you in Dallas at the Mastermind. Is that correct?
Yes, I’ll be there. For everyone, you all should show up because I’ve got a crucial nugget. It’s going to help proud a lot of people in the note business that they never even thought about like when it comes to these notes that get you paid off a little bit quicker.
Are you going to be hanging around for the Quest Expo as well?
Yes, I want to hang around for the Quest Expo. If nothing else comes up, I should be there for that. I’m looking forward to that.
Thanks, Jonathan. Check Jonathan out online. He’s doing an amazing job. Some great stories. Just a guy who’s going out and making stuff happen and not taking no for an answer. Check him online, Jonathan Burden on Facebook and LinkedIn. It’s InadequateAsset@Gmail.com, if you want to reach to him directly. Go out and make something happen.
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About Jonathan Burden
Experienced owner with a demonstrated history of working in the real estate industry. Skilled in negotiation, luxury goods, apartments, sales, and real property. Strong entrepreneurship professional graduated to Note buying and Seller and Owner Finance!!!