EP 379 – Notes Direct with Tracy Z

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NCS 379 | Notes Direct

NCS 379 | Notes Direct

 

Scott interviews Tracy Z Rewey from Notes Direct about her 30 plus years of experience as a note investor along with what investors can look for at Notes Direct. Tracy Z shares how leveraging BiggerPockets has helped her out with a number of things, giving some of the key points to those looking to buy or sell an owner-financed note. Bringing up her product, she talks about the importance of an independent third-party servicer to the notes business, especially in the market nowadays. Tracy Z also points out some of the biggest mistakes investors tend to do out there when marketing deals and gives her take on where she sees the market going.

Listen to the podcast here:

Notes Direct with Tracy Z

I’m excited to be here and I’m even more excited because we’ve got an amazing guest for you who has been doing the note business for a little while and we are honored to have her. We have been connected online but we haven’t spoken that much because she’s busy doing her thing. I’m busy doing my thing but always admire what she’s been rock and rolling out there. We’ve got somebody who’s a twenty-year veteran in the note business. She got started when she was like five years old. We’re honored to have direct from Notes Direct, Tracy Z. How’s it going?

Thanks for that introduction. I started when I was twelve, but I’m going with five. That’s even better. I started at twenty plus. 1988 was when I first started buying notes and so it was my 30-year anniversary in the note business this 2018, so I was like, “Wow.” I remember when I was a young buck and now, I’m the old timer.

30 years in the note industry, why don’t you talk a little bit how you got started into it and some of the things you’ve seen over time?

I’m excited to be here because we talk to a lot of people that watch the Note Closers Show and say great things about their knowledge that they’re gaining. You’ve done an awesome job of going on that line and getting that platform which is something over the years that we’ve all needed to learn how to do and gravitate toward. Much of the note business is online now, which is great because it gives us so much freedom and flexibility. When we started out everything was old school. The mail and fax but now everything’s modern. When I started buying notes, I started out working with the investment company that bought them with insurance funds. I did that ten years with them, but they wouldn’t allow people to work for them to buy notes. It was hard to watch all those deals getting made and not get to be part of one.

In ’97 I left there and started my own company, Diversified Investment Services and started a NoteInvestor.com blog not too long after that. Through the years I bought and sold notes in my retirement account out of our company. We refer notes and got involved with Notes Direct because it’s an online platform. I saw that being the next wave of where the business was going and I was excited to get involved with that. It’s like the MLS is to real estate, we’re doing to real estate notes. I’ve been always in the note business, but I had my hands in and out a variety of pieces of it. My core has always been buying and selling seller finance notes. That’s my true love, my true passion and so I’m happy to be here.

One of the things that people may recognize you from is you are definitely leveraging BiggerPockets on a regular basis. It’s a great platform for raising capital, finding buyers, finding sellers and stuff like that but I love it. You’re constantly going on there posting individual deals in the marketplace. Let’s talk a little about what’s your opinion of how successful that has been. Has that helped you out with a lot of things? Talk about maybe some of the key points when somebody is looking to buy or sell an owner financed note.

It is great exposure. People aren’t using that to its full extent. I don’t want to give away secrets but definitely, I don’t do it. No, I’m teasing. I don’t mind sharing secrets. People have been asking me and I’m like, “If it wasn’t working, I wouldn’t be spending my time here.” There’s your answer because we all have a finite amount of time. I found LinkedIn to be great, but then it started to get overrun. I still use LinkedIn, but BiggerPockets has been a higher level of involvement, the type of person, they have more background in real estate. It’s easy for someone who has a background in real estate to transition over into looking at real estate notes. It’s a little bit more of a crap shoot on LinkedIn.

I’m sure you probably are tired of all the wannabe joker brokers, the wholesalers or as I’d like to say the no salers. They don’t do due diligence. They’re just throwing stuff against the wall trying to see what sticks. You have to fill out my LOI, my POF, so I can use your proof of funds to go find some deals that I can show you versus having anything out there. You’re consistently on there. It’s one of the great things that anybody has to realize is consistency is one of the most important things. If you post something on there, great but just follow back up, make it a habit. Do you have a regular day that you’re posting to BiggerPockets?

Daily, Monday through Friday. I’m not as active on the weekends because I’m a little stingy with my time on the weekends.

Let’s talk a little about that. What are some keys that you think help you move assets more so than anybody else? A lot of people just throw something up there a little bit of information. If you’re going to buy a note, what are some of the things that you would want to see from the seller online?

We just did a whole session on due diligence. First of all, the Notes Direct platform is designed for someone who wants to buy a note and they don’t want to have to go out and source their deals directly. All the other ways of going directly to the source and you go directly to the seller through direct mail or you network with professional referrals or you work with the banks. Those things all work and they are great resources. It’s just they take a lot of time. You have to be in the business and work on that. What we see is there’s this part of the market that wants to buy one or two notes out of their self-directed retirement accounts and they don’t have the time and the energy. They’ve got a full-time job. They don’t want to go source deals direct wholesale. They want a retail option. It’s like Amazon for notes. You can go in there and you can log in. You can pick what kind of note you want to purchase and it’s all served up.

One of the great things is all the due diligence package is there. One of the things that differentiates the platform that got me excited to get involved is there’s a full collateral package that you can download and view before you ever say you want to buy it. We’re talking things like we require a BPO to list, the prior one, prior title, copy of the note, the mortgage, the assignment. They have to be a third-party service. We’ve got a third party, verifiable payment history and that’s true for the non-performing and the performing. All of that data is there as well so that people can download it and view it before they say, “I’m interested in buying subject to me getting a new BPO and a new title report.” That’s what I normally recommend people get. That’s what I get when I’m buying a note. I like to get my own updated title and my own updated BPO to make sure the numbers are validated.

NCS 379 | Notes Direct

Notes Direct: Consistency is one of the most important things in the notes business.

 

Funds have a tendency to fudge the BPO if they can. I’m not saying it’s direct as that, but we’ve all experienced that in the past where they’ve got one BPO and the comps are a little changed off. I love what you said about trust but verify. Take the time. It’s worth the extra $150 if you need to get paid for an external BPO. It’s worth the extra money to pull an updated title or an O&E report, it’s not a full title report. Pro Title USA can help out with that easy as well too. I want to come back to what you said, an independent third-party servicer. Let’s talk about why that is so important, especially in this market and things like that versus going out and buying notes from somebody who’s been self-servicing for years. Let’s talk about the pros and cons of that.

If you buy seller financed notes which I still do, a lot of sellers do not use a third-party servicer. They let that buyer send them payments direct. Some of them even collect cash. I’ve had people take pictures of cash and send it to me.

The fact is that there’s no proof. Yes, a photo great, but that’s not the same thing as having an electronic proof from like Madison or FCI or anybody else out there as a servicer.

If a seller is truly collecting payments directly, then we go the step further and say, “Can you get copies of the canceled checks front and back?” Now with online banking, if they’re depositing it into account, they can go in there and usually get a copy of the front and the back of the checks that were deposited. If they don’t have that ability, we’re like, “Give us your twelve months of bank statements, blackout that stuff that doesn’t relate to that payment on the note. Then we’re trying to match up that the payment on the note matches that deposit. There are some methods that we have used for when there’s not a third-party servicer to get comfortable.

However, it’s wrapped up in a bow and presented to you on a silver platter when there’s a third-party servicer because they are licensed. They are independent. Their verification of payment history is similar to what banks do on mortgage loans. That is definitely the best way to verify it. There are still third-party escrow servicing companies out West that’s big. We have to buy from some of those. They’re also not as sophisticated as the Madisons and the SN Servicing and the NAA, but they still get the job done and are a third party. If you don’t have a third-party verified payment history and you’re taking the seller’s word for it, you might as well consider yourself buying non-performing notes. You better render write it that way as far as investment to value.

It’s easy. You can go buy software now. You can go buy the Mortgage Office and things like that. We’re working on a big trade right now where it’s a couple of hundred assets. The seller has their mortgage office or some software where they track everything. They’ve got three people that service their whole portfolio and it’s easy to go into the office and see where everything is at and download everything and see the cancelled payments. That works out well, but let’s just face it, most of us as entrepreneurs or note investors aren’t the most detail-oriented when it comes to paperwork a lot of time. That’s why you want to have a third party that’s collecting and distributing the checks.

If you’re buying it into your self-directed retirement account, then you don’t want to be handling that money either. You don’t want to be providing a service to your retirement account. There are some restrictions against that. Keeping a third-party servicer keeps the hands off. With Notes Direct, you’re welcome to keep it with the existing third-party servicer or you are welcome to transfer it over to the servicer of your choice. We don’t dictate what servicing agent to use. I do like to suggest to people to wait four to six months before they transfer the servicing. The reason is that buyers, borrowers, payers love any excuse to not make a payment.

If you transfer servicing, you’ve got to send them letters or the servicing agent will send them letters and say, “Here’s where you make your payment.” First of all, they’re a little confused and second of all, some of them are savvy enough to read that they’ve got the whole 60 days under RESPA and will use that to their advantage. There’s nothing worse than buying a note that’s been performing like clockwork and then transferring the servicing at closing. Then your next payment doesn’t come in on the right day and you’re like, “Did I make a mistake?” You can take that little element of worry out because it is normal to talk to anybody when you transfer servicing and there’s a delay in that buyer making their payments. Let yourself rest at night. Keep it at that licensed third-party servicer for four to six months and then if you want to move it over, do it then.

That’s a great advice out there, especially if you can retain it with the existing servicing company as well because we’ve used that as a way to help us buy assets. It is reaching out to business development guys with servicing companies and say, “Who do you know who’s got stuff? We want you to retain the servicing.” We don’t need to tell them it’s for a period, but we’d love to have you keep the business within the house there and then see how we work out with working together and stuff like that. What would you say are some of the biggest mistakes you’re seeing from investors out there marketing deals?

Marketing deals that need to come in or to get them sold?

Let’s talk a little about both.

They think it’s easier than it is. They don’t realize how much of a relationship business it is and they get frustrated. They don’t realize how it does take consistent action. They want it to be easy and it’s like anything, if it was easy, everybody will be doing it. We have to be successful by being consistent and building relations. If you’re going direct to sellers, if you’re doing the seller finance route rather than the bank hedge fund route, then you’ve got to be consistent in your direct mail and calling and following up. It’s that seven to ten pitch, times or points before somebody takes action and that’s no different in your business. I wish there was a shortcut because I would use it, but consistent action over time and not getting discouraged.

NCS 379 | Notes Direct

Notes Direct: We get successful by being consistent and building relations; so get out and make those connections because you never know when you’ll run into somebody.

 

It’s okay to reach out to banks and to reach out to the smaller banks, institutions, hedge funds and things like that, but you can’t just throw one dart and expect it to hit the home run out of the park to get sources. It takes consistency. As I always like to say you hit it anywhere. I had five to seven touches, 80% of sales are made after the fifth contact. It’s just got to be consistency, whether it’s once every week or a letter or a follow-up or a phone call after an email. If you’re going to be in this business long-term, which a lot of people want to be, start planting those trees now and making those relationships, whether it’s over the phone or via LinkedIn or email or an event like the Note Expo or IMN or Note CAMP or something like that. Get out and make those connections because you never know when you’ll run into somebody. I’m a big believer that everybody is a buyer, a seller and a funding source at some point.

That’s a great way to say it. I’ve been all of those things myself, so you never know. You keep your eyes and ears open and keep your relationship strong. One of the things that frustrate most of us in the industry is because email makes it so easy just the regurgitating of the tapes and the packages. You almost get to a point where if you don’t know the person, sometimes just don’t even pursue it and that’s frustrating. I know for the person trying to get their foot in the door. How do you make yourself look different? You do a little homework, you get a little elbow grease.

The person who sends me a package and they said, “I headed over to the tax assessor’s office and pulled down the assessor’s records and assess for this. I see the taxes are paid through 2017, but they owe ’18.” They’ve grabbed a Google photo and maybe they pulled some Mentimeter or crime score. None of that does cost anybody, any money, but they’ve gone out and they’ve put a little bit of information together to give me a little analysis or summary. I see that they’ve made an effort. They just haven’t got an email pressed forward and suck it in there with a 100 other email addresses which they show me. I feel so special when they show 100 people. It’s like if you’re going to date around, maybe you should not let the other person know that.

The thing that I love is when somebody carbon copies me on email in their whole database, I’m like, “Thank you for giving me 100 new emails to add to my note buyers to my database.” Years ago, when I first was calling banks, after three weeks of phone calls and sending phone calls to Capital One, I finally got ahold of their distressed note department. They sent me out a spreadsheet individually. About 60 days later, the assistant for the asset managers sent out the spreadsheet back to me, but she carbon-copied their entire note buyer’s email list on it. It was 448 other note investment companies and I was like, “Oh my gosh.” Somebody even responded back and said, “Maybe we should start a note meetup group.” That’s an opportunity there because everybody is a buyer, everybody’s a seller. Everybody has something to either buy or sell at some point throughout the year. Especially right now the fourth quarter is when we see a lot of stuff that’s in the market.

We accept any kind of sellers that we vet on Notes Direct. We’re seeing people reaching out not wanting to lease more notes on Notes Direct for that reason. We do the same sort of vetting process for full collateral file, BPO, third-party service, title report, all those things that still have to be there in that package. We are seeing more people reach out in this third quarter.

Somebody owns a note, not brokering the note.

They own it, yes. Thank you for clarifying.

They’ve got to own it and then it’s a pretty easy process to go in on and get everything boarded on there and get vetted.

They contact me, I give them the list of items I’m sure that most people, if they’re buying and selling notes, they’re familiar with that list. The main thing is this full collateral file, PDF format, third-party service, the updated title report and the updated BPO. We’d like to list with all those things. Then we take a transaction fee when it closes. There’s no fee to look and there’s no fee to list. We make our money when the transaction closes. We bill separately for that transaction fee so that you can feel comfortable that the amount you’re paying is going all to the seller. Our transaction fee is 1.5% or a minimum of $750. Most of our notes are under $100,000 that we trade. It’s normally the $750 transaction fee.

A lot of people don’t realize that they can set up a free account to look. We welcome and encourage people to do that. I tell them it’s like a great way to perform due diligence. It’s just like practice due diligence files. The one thing we ask is that you are truly the buyer, you’re truly the seller. We’re not a broker platform. I respect and honor brokers. I’ve been a broker myself on deals. There’s definitely a place in this business for brokers, but that’s not what the platform is for. It’s for connecting sellers with buyers. One of the things that I don’t like about some of the other exchanges, which we can just say we don’t have to name them but is that you don’t know who you’re dealing with when you’re on there. You don’t know if it’s a broker and you don’t see the collateral file up front. We’re trying to be a true trading platform, peer-to-peer ready to buy, ready to purchase and ready to sell.

I’m so glad you brought that up being direct to the buyers, direct to the sellers. There are too many joker brokers are getting on there, going to exchanges, downloading the list and then sending that list out like it’s a list to sell. It happens. It’s a bad policy to do to just slap a list together and try to send it out. You made a great point about taking some time to pull some due diligence on stuff. Going and checking the taxes because that’s valuable for due diligence. It’s also valuable if you’re going to be making an offer back or countering an offering to prove up that you’ve done some work to the seller that, “There is $3,000 in taxes, not $300” or “Here are the numbers we pulled as far as crime in the area. It’s a high crime area” or “Here are the rent rates, which is lower than the area.” Providing that kind of stuff is so valuable to a seller that maybe has 400, 500 assets that are trying to move in a portfolio, they don’t have the time or a lot of times to dig down individually into the numbers when they’re trying to move stuff. 

It just shows you’ve done a little homework, you’ve made a little effort and so you’re bringing something to the table. A funny story on people sending around tapes. I’ve had people download notes off of Notes Direct and then sends it to somebody who then sends it to me to see if I’ll buy them. That doesn’t work. They are place for brokers, no doubt about it, but it’s not on those exchanges. It’s by developing relationships, sourcing product, working with the private investors and maybe buying a note and then selling it to them. Maybe selling them a partial. I realized that there’s a little barrier in those exchanges for brokering, but that’s where you’ll get. That’s where you’re working to be the investor to buy the note and sell it off a piece to some private investors. It’s not just insert yourself into these buyers and sellers that already know each other because they’re going to figure it out. We’re sort of a small, close-knit group if you haven’t already figured that out.

NCS 379 | Notes Direct

Notes Direct: People have to start balancing their expectations with what the market will bear.

 

Where do you see the market going? I always like to ask people about where they see the note market going here in the next months?

I see that we are a little more balanced and people who got in 2009, ’10, ’11, ’12, ’13 who saw some great notes that they could snatch up at low values or non-performing notes at low values. Unfortunately, those types of deals aren’t out there and if they are, you start to wonder what the quality really is, if you’re buying it for $0.20 on the dollar. It’s interesting because everybody loves that the real estate values have gone up and all of their notes are worth more. They’re reperforming and they can sell them at great rates. Investors will buy an eight instead of twelve. They’d love that, but they hate that they can’t buy at $0.20 on the dollar in twenty yields. You don’t get both at the same time. What happens is the market starts to balance out. It’s the whole scale thing.

We’re reaching more of a balanced market. Still I saw a note and I was like, “That’s a nice little note for my retirement account.” It’s only a nine and a half, ten yields. Do I prefer fifteen yields? If I got a 50 ITV on a nice property and they’ve been making their payments for fifteen years. They’ve got 50% equity and I’m in it 35%, 40% investment to value. That’s a nice little retirement account note for nine and a half. Am I knocking it out of the ballpark? No, but where else am I going to get that on my retirement account that’s backed by real estate. Also, the rounded hope that’s happening on that deal that they won’t. People have to start balancing their expectations with what the market will bear.

The pricing has gone up since 2008 when we’re buying stuff for pennies on the dollar, $0.20 at the dollar with high at that point. I remember when I wouldn’t buy anything more than $0.35 of value in Florida based on the foreclosure timeframe. Now, I’ll pay up in the mid-50s depending on where the asset is at. On a non-performing side or performing side, it’s a different number on that, but you’re exactly right. If somebody’s been paying on time, they’ve got a ton of equity, they’ve got a lot of emotional equity tied to the asset there. Many have been paying for a while at 9%, 10% return out. If you’re using your own money, it’s a great nugget to put it in there to keep paying. A lot of investors love the returns of non-performing. They get into the business and they’re doing this business for a while but it does take a lot of moving parts, a lot of work into it then they transition hopefully because they’re non-performing portfolio has turned into performing notes is a little bit easier. Then they’ve made enough cash off in that they can reinvest it into performing notes and then chill out, have fun and not work so hard.

We just have to be careful now, people who’ve only been through this boom cycle haven’t been through the bust cycle. Having been doing it for 30 years, I’ve seen the markets go up and down. You have to start being careful. I’m not being doom and gloom, but there is cyclical patterns that we can watch. If there is a correction in the real estate market because it’s been going, going, going up, are we protected by our investment to value and are we being careful about where we invest? That system, the other side of it, we hope that there wouldn’t be some crash like in ’08 as far as the subprime mortgage meltdown, but we still have to be careful and keep an eye out for that. We have to keep on looking for the long term.

I’m a big believer that we’re going to see a correction. I don’t think it’s going to be a small one, but I don’t think it’s going to be nearly as extreme as it was 2008 to 2010. When I start seeing more and more of lending firms or banks getting into the 100% financing or they’re zero down. I had a conference with a mortgage company here in my office. I was talking with them about their stuff and they do a lot of VA loans. I was like, “Greg, what are you doing? What kind of?” He was like, “We’ll go down to 500.” I was like, “What kind of LTV? Are you doing like 70%?” He goes, “No, 100%.” I was like, “Here’s my card. Are you guys retaining those or selling?” He was like, “We don’t know. We portfolio it together.”

Their portfolio was like when they go south, you need to come to knock on my door because we’re going to see that happen again. I’m not trying to be doom and gloom here, but it’s just a reality of thing. We’re going to have some uptakes and stuff like that. It’s going to slow down a little bit. We already see that in some of the higher end markets out there. The days on market are dragging. Default rates are going up a little bit. Part of that is Florida and Texas leading the way as part of the hurricane effect up there. These non-prime borrowers aren’t good at paying on time. They may pay for a while, but you can look at their credit reports is getting where its ugly head. They’re going to stop paying at some point when they have a hiccup come through. 

Then you just have to be prepared to do a deed in lieu, cash for keys, or going through one right now that if you’d asked me ten years ago, I thought they would’ve never stopped paying 800 plus credit scores. They bought it as a second home for the wife’s dad. He lived there, but then something happened, the dad passed away. They just had no motivation anymore to keep that property up and it was in some disrepair. You never know that I’m going to come out of it okay because I’m doing a deed in lieu, cash for keys. That’s because my investment to values is protecting me. That’s why I’m going to come out okay on it. Even on the good deals that are seemingly good with good credit, you still have to always know what’s my out, what’s my worst-case scenario? You have to be comfortable with that. That’s part of the business.

You’ve got to be prepared with performing. Get prepared at some point, if it goes non-performing. If you’re buying non-performing, know the performing side of the business too and where to find that stuff out there and stick to your numbers. If it doesn’t make sense, don’t overpay.

120% of zero, you can take anything times zero is still zero. In my early investing days when I left the corporate and I was like, “I’m going to buy notes.” I would set my pricing, I had my major slips. I was good about that but then the seller would go, “I do it for this.” Those are the ones that always came back and like, “I shouldn’t have done that. I should have stick to my gun.” It only takes once or twice to figure that out. Know what kind of investor you are and stick to your numbers. There will be other deals along. Notes are like streetcars. There will be another one along.

Have you bought any other type of distress paper besides the residential or commercial notes?

I buy my notes on mobile homes. That’s a nice little niche. If you’re tired of all of the competition out there in the big world of tapes, I find that mobile home notes are very niche investment in your own area. Same with land deals. You’ve got to be careful. I prefer mobile home and land, but I have done some mobile home only on rented lots and parks. That’s definitely a lucrative little area. We used to do a lot of things with lottery payments and structured settlements when I worked at the insurance company. I don’t do those myself individually because they take pretty big dollars and all that. You have to have pretty low cost of funds to buy those but those have been most of the areas. I’ve often been fascinated by the whole auto loan, buy here, pay here paper.

NCS 379 | Notes Direct

Notes Direct: There are all kinds of ways to apply the discounted cashflow to your life that isn’t just notes.

 

You’d have to definitely use your Vegas money, not your grocery money to buy those kinds of notes because some will go bad. There are big profits in those as well. When you talk about cashflow, it’s all the same concept. It’s just the security is different. We’ve done a lot of business only notes. I do not buy those again myself. I refer them to an investor that loves them. He’s paying up like fourteen yield on some business only notes right now, which surprises me because I want fourteen on real estate notes. They’re out there. The other types of cashflows, it’s all the same concept. If you understand how to use the HP-12C or any type of time value money calculator, you can apply it to all sorts of things. You can offer to pay ten months of rent early if you’re a renter, ten for twelve and that’s a great way. There are all kinds of ways to apply the discounted cashflow to your life that isn’t just notes.

You say ten for twelve, it makes me think of Tom Henderson. He would always do that for payments through a partial. “I’ll pay you ten months for twelve months and we’ll go from there.”

When buying at a 10% yield, if there’s a private investor, they’ll buy the next five years at seven. You’re still making money off the spread.

The power of Math and the power of knowing how to use your calculator to structure deals to squeeze the yield out of there. There are two sides. The structure of a deal is great, but also the value, knowing the percentage and things like that. That’s the beautiful thing, as the market gets a little tighter. You’re seeing a little higher price deal, knowing how to structure deals, looking a little bit different in other areas versus just trying to do the same thing over and over and over again. You’ve got to be flexible. You’ve got to change or be willing to adjust or shape shift and do a little different asset class, whether it’s locally with a paper or mobile homes or land like you’re talking about or going a car or auto loan or other. It’s just paper and knowing how to shift to that. That’s one of the things that I love about what you guys are doing over at Notes Direct there, you’ve adjusted it. You found a solid platform. It’s full disclosure. There’s no, “We’re going to tag you,” or “You’ve got to wait to pay,” because there are too many exchanges after that. They have a price on there. You make an offer and it comes back and it’s 20%, 30% higher than what it is. You guys are showing the right numbers on there and provide all the collaterals so people can see it’s a clean transaction.

We are a non-option format. Lots of people are like, “What? I can’t just make an offer?” I’m like, “This is the market price for the note. If you’re not comfortable with that price, it’s okay. There are street car deals. There will be another one along that will fit your parameters later.” If you’ve done all of your due diligence and performed all of that and for some reason your BPO comes back low or you think there’s some valid reason to readdress things, yes, we will have that conversation but it’s not just because you want to low ball an offer. You’ve got something to back up on why you think that that price might be different. We even have a few REOs on there. Some of the note investors that will list their REOs on there as well. Definitely, it’s a great platform. We definitely are non-auction format though, but you get to see it. You’ve got to realize there’s no guarantees backing knees. You’re truly buying the note. It’s one note to one investor. You’re not buying into a fund or any kind of securities offering or anything like that. It’s just a third-party exchange. It’s a place that people can buy and sell notes as long as they’re buyers and sellers.

The website is NotesDirect.com for you to check it out there. Tracy, what’s the best way for people to reach out to you, to touch base with you?

You can email me if you want. Tracy@NotesDirect.com or if you’re on the seller finance world, Tracy@NoteInvestor.com. We have a blog on there with 300 free articles. There’s some great good information out there. Not enough to get people an introduction to the note business. We love social media. Check us out on Twitter, Facebook and BiggerPockets. I challenge everyone to get out there and get active on BiggerPockets. They have a free membership and then if you want to post in the marketplace, you’ve got to get the pro membership, but it’s not super expensive. They should pay me to promote them but it’s like under $300 a year to have that pro account. There’s a lot of activity out there.

If you watch or listen to any webinar that they do, they offer you a discount code for half off or something at the very end. BiggerPockets is great, but you want to be able to communicate. You want to be able to talk to people. You want to use your keywords. When you log into BiggerPockets anybody has mentioned notes or mentioned 401(k) or SDRA or performing or non-performing, owner finance. Those are all great keywords to have so that it helps you identify those people that are making conversations or communicating back and forth in a great way to move assets like you’re doing some great way to raise capital. It’s a phenomenal way to do things.

I’ve seen you out at a couple of the self-directed retirement account forums and live events. They’ve done an amazing job this year. Quest IRA had over 500 equity trust or had around 400. I was out at one at NuView IRA here in Orlando. It was a local one and they had a couple of hundred. I would encourage people, that’s more an in-person interaction, but that’s a great way to network as well. We’ve had good response from that. How about you? I’ve seen you out a lot of those events, so I would assume yes.

Yes. It’s one of the best places to get out and network with people but go prepared, go with plenty of business cards and go with plenty of blank cards. When you’re dealing with IRA investors, they may not always be in the business of marketing themselves. Go and have some information, take some business cards that they can fill out or collect their information. I like to take the big postcard with me and having the back where I can hand that where they can put their information to turn it back into me. It helps you stand out from the crowd when a guy hands you postcard the size of a melon. Tracy, I want to say thank you so much for coming on the show. I look forward to hearing some more great information from you, connecting with you and working together in the future.

Thanks a lot, Scott. I appreciate it.

Go out and check out their website. It’s a great way for you to take a look at what’s available. Get a great look at what a clean file looks like. When you’re looking at assets, you know what you’re looking at. You know what an O&E looks like, you know what a BPO looks like and you know what the notes look like on that aspect of things. It’s so important to help you when you’re buying because not everybody is going to give you a clean file. Some people like to hide stuff until the very end. I’ve even had brokers tell me, “You’ll get the collateral file after you find them.” That would be a big “No” out there. Go out, take some action, check out the website, check out Tracy Z on BiggerPockets as well. Take action and we’ll see you all at the top.

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About Tracy Rewey

NCS 379 | Notes Direct

Tracy Z has handled millions of dollars in owner financed real estate notes and alternative cash flow purchases since 1988, becoming a well-known industry expert.

Why make expensive mistakes when you can gain priceless insights? Tracy shares her 20+ years of insider secrets with real life examples that help you realize profits today and build cash flow for the future.

Tracy began her career in real estate closings and title searches leading to a position with Metropolitan Mortgage & Securities. During her 10 years with Metropolitan she mastered a variety of positions including broker relations, investment analysis, closing management, underwriting, and BrokerNet™ software development.

Tracy left her position as Vice President of Metropolitan in 1997 to open Diversified Investment Services, Inc, with her husband and business partner, Fred Rewey. From start-up note broker to corporate officers for the nation’s largest note buyer, their experience covers all aspect of marketing, closing, underwriting and servicing cash flow notes.

Co-author of Finding Cash Flow Notes and the acclaimed Personal Profit Series, Tracy specializes in the use of tax advantaged retirement funds to purchase both notes and real estate.


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