Ep 162 – Adam Adams with AJA Realty Investments

NCS 162 | AJA Realty Investments

NCS 162 | AJA Realty Investments

Scott interviews note investor, Adam Adams, fresh off of his Tennessee and Ohio roadshow to visit his assets, vendors and fellow note investors.

Listen to the podcast here:

Adam Adams with AJA Realty Investments

We are excited to have our guest on today, a guy who’s doing some amazing stuff, his own sugar mama, who is just out kicking butt and taking names in a lot of great stuff that he’s doing. We’re honored to have our good buddy, Adam Adams, joining us. How are you doing?

I’m doing good.

Adam’s been gallivanting across the Buckeye State. How long were you going for, Adam?

We actually started in Tennessee. We met some investors. Then we went up to Ohio. Been gone for two weeks.

For those that don’t know who you are, why don’t you take a second and tell them who you are and what you do?

My name is Adam Adams. I’m with AJA Realty Investments. Awhile back, five years ago, we started with apartments and we think it’s inflated. We moved over to notes about three years ago. I met Scott last year, January 2016, and really got hard and heavy in the notes. My wife still has a job, but all I do is notes. We got our first note last August 15th. It’s been a year. We got to close notes, got a couple under contract, and it’s all working out.

What did you do before you were a real estate investor? Share a little bit about your background as well.

I actually got my degree in Maritime Administration. Business on the high seas, need a lot of river work actually. It’s always cool to be in Ohio River in a week because I know a lot of those places. Got a business degree, a lot of accounting, a lot of business. Then I moved into IT, became a database developer. I grew up the ranks on that, got my certs, I was pretty good at that. I was a consultant for about three years. One day my wife said, “Just do the real estate. We’re doing good, so let’s focus on that.”

You’ve got 37 notes in the last two years, is that correct?

One year.

One beautiful thing that’s great about your background and using your knowledge, you have a lot of automated systems in place that really feed off each other. Do you want to talk a little bit about that?

NCS 162 | AJA Realty Investments

AJA Realty Investments: Pipedrive does what I really need it to do, so I started focusing on that.

I develop CRMs and data warehouses. When I got started doing notes, I started looking around. I didn’t want to use anything complicated. I don’t want to create a job to do my job. I found Pipedrive. I tried Insightly, I tried Zoho, I tried Podio, I tried all these other guys but Pipedrive does what I really need it to do, so I started focusing on that. I’ve been building it out and it helps me do everything I need. I don’t have the aides. My wife doesn’t help. It’s just me and I can manage everything. The key is I don’t need to remember anything. The only thing I need to remember is to put my activities into the CRM and the CRM tells me what I need to do and when I need to do it. It’s helped me out quite a bit. It made me stay on top of everything.

Most people are only able to handle about twenty notes by themselves because they don’t have a system. They don’t have things in place. Then you’ve obviously developed that, because you’ve got a background. You’ve done stuff with that. Allows for you to travel because you took two weeks on the road but you also went to Aruba for a week here, not too long ago as well.

That was a true vacation. My last two weeks have been business. We’re going to go to Orange County next month so that’s another trip. Then, the Note Expo but that’s my backyard so it’s nothing. January we’re going on that cruise and I’d be able to work from there.

We’re excited to hang out with you for a couple of days in California for the Distressed Mortgage Expo taking place in September 16 and September 17. For more information on that, check out Note.Guru, use the code WCN40. It will get you an extra $40 off of your ticket. Also, the Note Expo that’s hosted by Eddie Speed of NoteSchool in the first weekend of November. I’m looking forward to going up there. That’s a great networking event as well. The Quest IRA Fun Cruise taking place in January 8 through the 14, something like that out at Fort Lauderdale.

Longer than that, that’s an eight-day cruise, but yeah, the first of January.

That’s one thing you do really well, is you do maximize your time. Let’s talk about that because you network really, really well with people. Talk about your philosophy behind you going to events and networking.

You just got to meet everybody. You’ll never know who is going to be a partner or a contact, even your vendors can be great contact. Shake hands, say hello, be their buddy. That’s really it. I think I got a big deal coming and it’s because my insurance agent thought I need to know some other person and that person knows someone who buys from Fannie Mae directly. It’s a good person to know. We’re actually trying to work something up. With my vendors, I did it. It wasn’t me shaking someone’s hand. I’m always talking to my vendors like they are my buddies and she’s helping me out and it pays off.

It does because you’re always one conversation away from your business exploding, everybody is.

You’ll never know who it is.

I love what you did in January at Distressed Mortgage Expo that took place in New Jersey. You walked around with a badge saying an episode. That’s on Note MBA podcast. Our buddies Chase Thompson and Robbie Woods are running an amazing podcast as well. You can check them out there at NoteMBA.com. You were on there for episode 107. You had it on there while walking around, and people were like, “I remember you now.” Leveraging that relationship with an online aspect in a good way to meet a lot people. Let’s talk about the last two weeks. You’ve been buying assets, first hatch the idea of, “I’m going to go out and hit Tennessee and Ohio.” What was the conversation for you and Jen?

We actually went to the eastern Tennessee for the whole how. I know people in Nashville area. I went to go hang out with them. I’m up there by Ohio, “Let’s turn this into a longer trip.” I got Franco, my attorney, and spent a few days with him. I got to go to Cleveland and go visit him. I got properties and we go check them out. Columbus, I got someone under contract there. I got a property manager there I want to meet them and just put my way down to 71 and get all the way down to Cincinnati where we got properties as well.

How many properties did you hit in total that you were under contract or you already own?

Four in Akron. Columbus I hit one. Dayton I got five and then Cleveland I got three. A couple of people asked me to go out and check out their properties. I met some tenants. We’re renting out one in Dayton. They were a really nice couple.

You meet with any of the borrowers that you’ve modified or reinstated or even the deceased houses?

I got a borrower. I helped him out. I lower their rate so much. I got this thing for $5,000. It was a $36,000 bid and it just felt really great. I lowered it from 10% down to 3%. I lowered their term from 30 to 15. I’m getting $325 a month and I want to get paid back in two years. They’re great, they love me. Actually they just came in to a lot of money. They’re going to pay off the note and I’m winning.

Winning is right there if it get paid off. If they do it in paying you off in twelve months, it’s somewhere around 300% return to you.

I’m giving them a big steep discount. I think I said $25,000 if they could come up with the money. I only paid $5,000. There’s a point where, “How much money do I really need to make? I’m going to make a lot of money on this and I’m making their life better.”

You had a string of assets that you’re buying that if you’ve found out that they’re owners that have passed on. You picked it, “That was occupied.” It was by the spirit of the deceased.

I sold off one in Cleveland and I went to auction, that one was a deceased borrower. I got one in Cincinnati, deceased borrower. I’m working on that. I counted it and I’m up with 66 borrowers and one convicted murderer.

You have bought some assets in Flint, Michigan as well. What’s your philosophy behind investing in Flint though?

NCS 162 | AJA Realty Investments

AJA Realty Investments: The biggest problem is how do you plan that, because until you test the tap you don’t know.

Flint is getting fixed. I like Flint. Water is getting fixed. Even some of my houses have already been fixed. It was a big problem since they don’t know which houses are affected. They don’t know until they get to that street and they got to go actually test every tap. We might hit a street with twenty houses and five needed to be fixed. We go straight over and we got twenty houses, and fifteen need to be fixed. The biggest problem is how do you plan that, because until you test the tap you don’t know. They’re fixing it and it’s okay. If there are jobs moving to Flint, I’m happy with those numbers.

You could buy stuff relatively cheap there, you just got to either repair to work it out or hang around for a while. This is not a true fix and flip.

I’m buying this to sell. I’m buying them, either they start paying it or we turn them into rentals. Just buy homes and exit.

Basically because you’re buying them cheap. That’s the good thing, you’ve got options, you’ve got some flexibility with stuff but resale market isn’t where it needs to be at in your end.

Probably might not hit. It might not get hot. When I buy assets, I look at the income. If I take it, I got to turn it into a rental. I shouldn’t say I have to. I do not buy on the philosophy that, “I’m going to get it, I’m going to fix it, I’m going to flip it,” because the market can turn any day and I do not want hot potatoes. If I’m buying out properties I can’t sell, I need to be able to turn them into an income, that’s it. That’s how I look at everything. If I can’t get rents on a property, I don’t buy it. I don’t care what the flip value is. I just don’t do it.

One thing too as well is you are using most of your own funds to fund the deals initially and then arbitraging investor funds after you closed the deal, correct?

Yeah. I haven’t bought anything with anybody else’s money. We have some cash so whatever we get anything on a contract, we can pay for ourselves. Then once I get it, that’s when I get my investors and they’ll pay us off or reimburse us. This is why I like to model. One, if I’m getting someone that’s going to get their money at equity, I’m not going to get their money fast enough to close. It takes some two to three weeks, fine, I got it done. There has been some assets I’ve bought and I’ve bought them. I don’t know if I would put a JV on this. I might have made a mistake. I got to work it out. If I get 10%, I get 10%. If I had a JV on it, it would be 5% and it’s not really what we were looking for. I’m okay with doing that stuff and it’s happened. I got some bad stuff. I got one really bad one.

One of the things that you’re really good at is when a tape comes in to you, being able to filter it down and identify the assets you’re looking at. Is it all automated through your macros and your spreadsheets or your systems?

Some of the sellers, I can just import their tape and I’ll go through all the assets. It tells me the ones that are recent. That gives me a count on every time that asset is showing up. When it’s the sellers, it’s first come first serve. I have to get my bids in twelve hours. It already knows which ones I like. I just send my emails off to my people and they tell me values and rents and I base my analysis off of that. Other ones, it’s the higher bid. The highest bids on whatever date, plug everything in my database. By state, it tells me what my costs are going to be. It tells me the land contracts. Every state’s got different rules. It knows the rules. If certain parameters are in, will my cost change? Going from $800 for forfeiture to $5,800 for foreclosure. It’s those things you have to know. I have a database that pumps it all up for me. It tells me what I needed to know. I need eight more subscribers in my YouTube channel to get my name up there.

A lot of people don’t know that you create a YouTube account and once you get 100 likes, then you can go in there and that’s the signal for YouTube that now you can customize it.

I just started the videos three weeks ago. I’m putting up Pipedrive instructionals. I’ve got people telling me I need to start charging for that but I come from the IT world and IT changes every week. Pipedrive changes every week and I don’t want to have to stay on top of, “There’s a new change, I got to go do a video.” If I do that, I just created a job. My goal is to not work. I don’t want to work. I’ll post stuff out there. I’ll help people get the whole CRM stuff going, but I’m not going to maintain it.

Update it for every update. It creates a job. Also, if you charge for it, then people are going to expect that and that’s going to take away from you and Jen having some Adams time.

We do have a hammock in the backyard. I do use it. I do take naps. I go to grocery store during the day. I watch TV. I don’t want to work. That’s what it’s all about.

My favorite time to go to the movie theater is in 2:00 in the afternoon.

The best; center, row, anywhere you want, no one’s talking. It’s great. I do too.

My staff gets phone calls from angry borrowers who are cussing us out and calling us racists and said that we need God in our lives.

I got six dead people, one murder and four lawsuits.

You got borrowers sue you?

One sued me twice. The one I got now, they want to get the loan removed completely and get the deed in their name. They only made seven payments. I don’t get it.

Let’s talk about the person that sued you twice. When was the first time she sued you for it? Is this a contract for deed or a non-performing note?

NCS 162 | AJA Realty Investments

AJA Realty Investments: There’s already foreclosure on the property and it didn’t showing up on their report and so we filed a new complaint.

Non-performing note. She lives in Florida. The property is in Akron, so it’s unoccupied. We tried to get her sign the deed in lieu and she said she already signed a deed in lieu with PNC. We didn’t get anything from PNC, but sign another one. What’s the problem? Next thing we know, her attorney’s contacting us for harassment. Here’s a tip, I love ProTitle, but if you’re actually going to get legal, go get a real title search because the foreclosure didn’t show up. There’s already foreclosure on the property and it didn’t showing up on their report and so we filed a new complaint. I guess that’s against the law so we got a sued for that. We won on the State level, but it cost me $1,200 on legal costs. The lawyer turned around with the Federal level, Franco is like, “You might want to just settle this one.” It was pretty cool. We split the cost on that, both Franco and I, it’s $4,700. I think we got $6,000 in legal cost on that one.

It happens. I’ve got a tenant of a property we bought. We offered them to stay. New lease, stay in the property. We offered them Cash for Keys, they said, “No, that’s all right.” We started eviction. He sued me, got kicked out of Crook County, and he sued me in Federal Court, which is now I just finally kicked out after a year, this guy representing himself. Those little things happen, that’s why it’s a numbers game. You’ve got four losses over 37, that’s not bad.

I’m not crying. I’m trying to tell everybody else you need to expect it. It’s going to happen.

It will happen and it’s not something to be shied away from. Most of the time when you get an attorney involved, especially when you have somebody who has no common sense, hiring attorney to do some stuff, sometimes an attorney can talk some sense with their client. “We’ll just give you $1,500 to go away or $2000 to go away. It makes a lot more sense than dragging this out.” They’re not going to get anything in the long run.

The one that we got on now is a legal aid and they’re just deep pockets. They’re doing nothing except hassle me. I’m paying for those deep pockets.

Let’s talk about long-term. You’ve bought 37 notes in roughly a year and a half, if you look at it from January of last year starting to where you’re at today, what are your long-term goals?

Double this number, I think I could still do another 37 without any help. If we do get to the point where I need help, that’s when Jen moves to part-time. At some point in time, we both do this full-time. I don’t know when that’s going to be. She likes her job actually, so it’s not a big deal.

Jen does a great job, very, very supportive. She likes to get involved as well. What’s Jen doing full-time?

Infection control monitoring for a hospital system in Dallas. She’s the one looking at the spreadsheets.

She really enjoys her job but she’s also really looking forward to the point too when it can be full-time. You guys aren’t that far away from it for the most part. You got 36, 37 cranked up to 70, 75, then you bring her around to help out. The biggest thing I can give you a lot of kudos for, Adam, and I know I’ve said this before but I’ll say it again, you have put your systems in place initially. You took the time to get your Pipedrive, your other things up, to figure out your database and specific cost in your five states, five markets. That’s helped you filter through the rest of the stuff that you get bombarded with when we get tapes, would you agree to that, Adam?

Yeah. When I started, I picked Ohio. I just got lucky one of the realtors I got was a good realtor. She’s an investor. She actually invested with me so that was cool. I just got off after that. I started in Akron and Cleveland. I found someone in another team down in Cincinnati and found another team in Dayton and then in Columbus. I build the teams up so now when I do get those tapes, I’m not trying to get on the phone and call new people that I don’t know to, “Give me values and stuff.” I can just send the stuff right to them, and they get back to me in the day and it helps a lot. The other most important part is they tell me, “No, don’t bother.” I’ve seen a lot of properties that a lot of people bought, and they buy it and then they find out they shouldn’t have bought it. I had one in Painesville, that’s what happened. I didn’t have a realtor there. I got two BPOs and they both had good news to say. I didn’t have a realtor to talk to in Painesville and that’s the one I’m getting burned on.

Let’s talk a little bit about that. You ordered two BPOs or they were two BPOs from the seller?

No. I got two BPOs. I don’t trust sellers. I think there’s one seller out there I trust but I’m still going to get my own stuff. I spend more than probably anybody else does on BPOs, not just because I get two. Once I get an area and I trust my realtor, I won’t get two anymore but I pay them a lot. Here’s my philosophy, if I pay the National Services to go get me a BPO for $100, they’re paying their guys $30, $50, to go run around to the properties. I don’t think a realtor that’s happy getting $50, driving across town and is a good realtor. They never get out of the car. I just got a BPO from the seller. They just got the BPO in May and they didn’t go out to the property. It’s a condo unit. They didn’t even go to the front door. I went to the front door the other day and there’s a lockbox on it and there’s an abandoned sticker in the window. Yet the BPO came back as occupied and in great condition. Some of the BPO’s I’ve ordered in the past from these companies, I get the same stuff, so I just quit using them. If I don’t have my own guy, I don’t.

I’m not a big fan of using the nationwide company either because they’re just basically market them out to local realtors and have an assistant do it, make the quick $50. It’s more of a desktop CMA than it is really a true in person to go out and take a look at it. Actually, WeGoLook.com often gets a lot better value than a national BPO company.

At least I know they drive-by.

They have a bunch of current photos too.

I actually pay my guys $150. When I send them a pool of four, they’re making $600 that day. They don’t mind that. Usually they know people at no-income model, I don’t always care what the ARV is. Like in Flint, I don’t care. I’m not going to be able sell it. I need to know what the rents are and what kind of neighborhood it is, and stuff like that. I look at things a little different. I came from apartments. It’s all about the rent and expenses. That’s how I look at things.

That’s a really good model because you have that business model mindset for long-term cashflow. You’re going to reinstate or you’re going to evict, foreclose, turn it into a rental and you take the emotion out of the big check aspect of selling. Don’t get me wrong. You are getting some big checks from cash pay offs and foreclosures sold at the auction. You took that out of your main business model because you didn’t want to be seduced by it, I guess you could say, right?

NCS 162 | AJA Realty Investments

AJA Realty Investments: You’re going to put the rehab in it and you’re going to list and it’s not going to come in that way.

Yeah, it’s exactly it. I think we’ve sold three, got one closing later on this month or next month. It happens. You do get to flip some, but I don’t make that my primary exit strategy. This is what happens. You’re going to get that ARV in your head because some realtor told you that’s what it is. You’re going to put the rehab in it and you’re going to list and it’s not going to come in that way and they’re going to say, “You need to go fix this,” and you go fix that. That’s cost and you’re paying for electricity, insurance, you’re paying for property preservation with the lawn care and everything else. All you see is all that profit going away and then you get that offer that’s $10,000 less than what you wanted. You’re going to say no because you’ve already invested too much to say anything else. It’s just a headache. It’s either going to be I’m going to be able to work it as an income model. If I can flip it, great, but income model, number one. It’s the only way I look at it.

Briefly talk to me again how you used to be in apartments. Why have you come to the dark side and gotten out of the, “Everybody loves apartments,” model?

Apartments are the bandwagon this decade. Fix and flips, that was the bandwagon back 2006 era. It’s apartments now. We got in it 2012. We made money with apartments. Stuff down the road, we could get it for $25,000 to $30,000, $100 a foot for rent. It was good money. Then, everybody else started want to do it, the next thing you know a $20,000, $30,000 a door is $60,000 and they’re like, “Are you crazy?” Two years later, it’s $100,000 a door. It’s the same door and it’s only been four, five years. That’s too high. One of my friends, he just got $17 million deal on a contract. To even be considered, you have to put down non-refundable hard money.

A $17 million apartment deal, and to be considered to submit a bid?

You can spend all the bids you want but as soon as it gets under contract, it’s $150,000 non-refundable escrow. It’s on the contract. There’s maybe a couple of stipulations so maybe ten days later it kicks in, but that’s hard to stomach if you come across similar loans you’re writing up. Now you’d see, “It was $150,000 or I’m just going to go ahead and suck up this extra cost.” You don’t get it back and I’ve seen them this way. Some deals go to $100,000 non-refundable escrow, $50,000 goes into the guy’s pocket. It doesn’t matter. It goes straight in the other guy’s pocket.

It’s called the consideration fee.

To me that is the perfect symbol that the market is too hot because it’s just not sane to me. My friend, he’s a great guy, he’s really good at what he does. I can’t do it. I wouldn’t be able to sleep at night.

The apartment model is to buy something, non-performing. It’s under utilized, revitalize it, re-freshen up a little bit, bring the value up and hold it for cashflow for three years and then you get it refinanced out, refinanced all your private investors out in three years with a traditional loan, correct?

That’s the old model. There’s a new model. Someone’s already done that and you buy it from them and they’ve done about 50% of the rehabs and there’s 50% more. You’ll get arrangements on 50% of the unit so you buy it like that. A lot of interest only loans are out there now. You can make it in one, two, three years and then the adjustable rate kicks in after that. Here’s my theory. Dodd-Frank created renters. That’s why everybody went to apartments because they don’t have any place to live. Dodd-Frank gets fixed, those renters become homebuyers and then your vacancies rise. All these people paying their premium are screwed because they’re on interest only for three years. They’re not going to get refinanced. It’s going to be a pretty messy thing.

Just a little bit of a messy thing when you have all of the inventory sitting out there that can’t get refinanced out and you got people that were expecting to get their money back plus you get a return in three years sitting there holding something long-term than what they wanted for. We have a question, “Is that more common or more specific to certain sellers in that space?” She’s talking about apartments about doing the 50% rehab and selling them off the 50% rehab.

Yeah, because of all those stuff; we need to get new roofs. If it’s 100% occupied, we’ll get in and fix it up and get some new tenants. That’s already been done. Those aren’t out there anymore. Those people are selling off those assets and there are some people like, “I’ve already done most of the rehab. You just got to do a little bit.” That’s what’s out there right now.

We’re talking about the $150,000 non-refundable hard money instead of the flip. Is that more common now as the non-refundable deposits for hard, hard money?

It’s every deal. I don’t care if it’s a five-unit deal that they won’t allow the non-refundable escrow. This is the thing, you and me are bidding on the same property and you’re going to offer $100,000 non-refundable and I’m not. The other guys are like, “I’m going to get $100,000 whether he buys it or not.”

It’s about as close to bribing as you can get. While you’ve pulled back the ratings on the apartment investments and focused more on the cashflow side, you still actually raise a lot of capital from apartment investors, correct?

Yeah. My first investors were apartment investors and mainly their thoughts were, to get into an apartment deal you need $75,000, that’s your minimum. They got $50,000 and said, “Can you help me raise my money so I can get an apartment complex?” I’m like, “Okay.” That’s I got the money. Now all these people are cashing out apartments like, “I don’t know how to get an apartment. I got $300,000. What can you do?” I’m like, “I can do a lot.”

What would you say has been your biggest a-ha moment in the last eighteen months, Adam? There’s been a lot of a-has I know, but the biggest one.

I’ve been through ups and downs. My initial plan, it’s not my plan anymore.

What was your initial plan when you first got started to where you are at today?

NCS 162 | AJA Realty Investments

AJA Realty Investments: I get $10,000 on one deal and that was my check and I wasn’t happy.

I’m looking at fix and flip. I already have prices and do a lot of modifications if I could, and all those other things. I’d rather tag $200,000 day than $200,000 over twenty years, I don’t remember. Now, I’m more into mid-man checks every month. I cashed out the other day, a borrower got refinanced. I got $10,000 and it was a six-month deal. I get $10,000 on one deal and that was my check and I wasn’t happy. I was like, “If he was just paying, I got a guy on $200 a month for I don’t know how many years.” To me that just sounds better.

Now, you got to go back to work to put that $10,000 back to work.

Exactly, it’s almost like a wholesale. I got my money, but now what? I got to start over.

You would rather have a 24% ROI to you monthly versus $10,000. Now you got to get up out your hammock, got to get to work, go find something to invest that money in. That’s a good problem to have. A lot of people come to the realization, if they do a lot of foreclosures, where they could have modified, I’m speaking voice of experience here because that’s what I exactly started with thinking, “I’m going to get on the fix and flip side. I’m going to foreclose and everything. I don’t want cashflow. I don’t want modifications. I want those big checks.” Those big checks didn’t come near as often as those performing monthly payments would which make a nice life.

I know it’s a twelve, eighteen months to resolve on average. We knew that but it’s been a year now and we’re just now getting to the point where some of some of the rentals are coming online. We’re getting some of these people paying on a regular basis just starting to see the positive cashflow. Even though we knew in the beginning it’s twelve, eighteen months, it just didn’t really click for some reason. Now it’s been twelve months and a lot of people get in and they think, “I got a note. I got one note.” It might be a year and a half before you see anything.

I couldn’t agree with that anymore than what you said there. That’s why we always harp on getting people started on buying stuff and getting stuff working. While you’re still working fulltime or you still got income coming, you can do plenty between 7 PM to 2 AM. You can put these things in place. You can use Adam’s videos on YouTube for Pipedrive and really set up your systems so you can automate a lot of stuff and get done during your workday with just a minimal jumping on in fifteen-minute breaks or at lunch to solve some stuff, to really get your bids started. By the time you get off, you’re bids are ready to roll and ready to submit.

Be patient.

You’ve got some really great attorneys. Attorneys are one of the biggest keys to success in this industry, because you’re going to use attorneys to foreclose, modify, or reinstate. You’re basically going to use attorney at some point. What’s in your key to really uncovering good attorneys for you?

Telephones, referrals. I got Franco and Tony from Scott Dilley and they’ve been awesome. They’re almost like family now.

One of the great things too that you have done really well is you’ve networked throughout the Note Mastermind Group. You mentioned Scott Dilley there is a referral source. He’s a fellow Mastermind member and really networked with a lot of people who are doing things. Why don’t you talk a little bit about how that’s important to network with people that are actually doing things, or who have taken the steps before you, and not listening to people outside that haven’t bought a note or anything like that?

I joined the Mastermind last spring of 2016. I did get my Fast Track. I actually met Wayne before my Fast Track. I met him with Kimberly’s group down in Dallas Note Meeting Group. It was funny because I wasn’t even talking to him. My wife was talking to him. She came down to the other side and was like, “You need to talk to that guy.” I started talking to Wayne. Even though he’s been doing this for years, he was at our Fast Track. Then we went to our first Mastermind up in Napa. Me and Wayne have been talking ever since. We go out dinner every month with Kimberly. Every time I got a problem, I’m always talking to Wayne. The Mastermind Basecamp, I got a question and someone’s got an answer. That’s the beautiful part about it. I don’t have any questions anymore but I got a lot of answers now.

Basecamp is a great online platform that really delegate things. We use it a lot here for our classes in our Mastermind group. We put everybody into it. It’s a great message board for the most part where people can share experiences, ask questions, post articles, post files and things like that to share among the group. It’s really a living and breathing organism now, with so many people taking advantage and asking questions. That’s where you initially share a lot of your videos there as well for people. It becomes a really valuable asset to have a hundred people that you can ask a question instantaneously versus one or two people.

I’m on that. I get a lot of that. There’s a lot of those in Bigger Pockets. I like to be more focused with Mastermind.

BiggerPockets is not bad. I see it coming on things out there, but there’s a lot of chatter from people that aren’t in the same experience level or you’ll have the educated non-doers, I like to say.

The one that’s been out lately is just driving me nuts, SEC stuff. I came from apartments and apartments is all SEC. It’s crazy. Notes, the last thing I saw was JVs. Technically, they need to be SEC. I’m like, “No. That means I can open up a lemonade stand with a kid around the corner. I can finance them to run.” It’s stupid. There’s a lot of miseducation out there. I see this coming from attorneys and their SEC attorneys and they’re like, “Call me up. We’ll fix you. We’ll get you going,” but then you’re breaking the law. I don’t know how to tell you what the answer is. You got to find out the answers on your own, because I talked to a lawyer, but you might be talking to lawyers that’s telling you you’re doing it wrong and you’ve got to go and pay him $20,000 to get that SEC. If you set up a $20,000 SEC deal for $15,000 note, it’s not going to work.

You don’t need a $20,000 private placement of memorandum to fund a $20,000 deal. Funding deals, when you’re doing this, you’re basically keeping one investor per transaction or per asset. An asset is only going to have one investor to fund that deal. That one may fund eight deals or nine deals, but you’re not pooling three or four people to buy an asset like you would in an apartment complex.

NCS 162 | AJA Realty Investments

AJA Realty Investments: Don’t get stupid and go start a GoFundMe page to buy notes, you’ll get burned.

There are no pools. Don’t get on Facebook and ask the public for money. I don’t do that. If you know my email is, you’ll never see me ask for money. I tell you about deals but I’m not asking for your help. I always say, “Talk to me more if you want to be part of a JV deal.” Then we’ll have some conversations. Then we talk and meet and see what your knowledge is on the deal or notes. Then I get you on the other email list and that one is not public. It’s private and you have to ask to get on that thing. Don’t get stupid and go start a GoFundMe page to buy notes, you’ll get burned.

There are crowdfunding websites out there for fix and flip deals. There’s crowdfunding websites out there for performing notes, but it doesn’t work well on non-performing because you don’t have a guaranteed outcome.

You can sue SEC qualified GoFundMe. It’s all about, what kind of investors are you taking up? Are they sophisticated or accredited? Accredited means you’re rich enough to be stupid and the Feds don’t care. Sophisticated, which is a $1 million dollar and under, not counting your house and that’s your net value. You have to be educated to invest. Taking your money, they need to know that you’re educated. It’s a messy thing.

You just talked about the deals you’re closing because you’re funding it with your own money first, which is great because honey attracts flies. You get them up to opt-in. What’s your website for those who are just curious out there?


You can go there, there’s an opt-in there for people who wants to get in your email list and find more about what you’re doing. Is that right, Adam?

Yeah. Shoot me an email and we’ll start talking.

You also are a very avid reader. Let’s talk about that because you’re ingesting a lot of great info and then regurgitating that out in good ways.

I read so many history books. I think the biggest thing I’ve learned reading history books is that, history repeats itself. I remember it was Livy. For those who don’t know Livy, he was a historian in about 40 BC. He was writing about the history of Rome. Rome was already 400, 600 years old at that point though. I remember the foreword, he’s bitching about taxes, bitching about the government, and bitching about the gays getting married. I said, “He sounds like my dad. Nothing’s changed.” 2,000 years later, same stories. I start reading about American history with the crashes. The Great Depression wasn’t the first. I don’t know if people remember because there’s still some survivors. Stuff happens all the time. The other stuff I read is current history which is the news. I just constantly read those State news every day. I got new channels coming in. I got Google alerts looking for keywords. I get emails every day with all these different stories.

If you’re interested in certain towns, I recommend setting up a Google alert for that town so you can see factories that are opening up or factories that are closing down. If you’re investing in certain towns, you want to know all about them. In fact, with all the ones I’ve got, I like Indianapolis. I’ve been watching the development there. There is this street with all kinds of money getting dumped into, a lot of condos. A note came up that was five blocks away from the edge of it. I’m not one to speculate. I did this business went off of income model so if it doesn’t spread, I still get rent. If it does spread, I’m going to make a payday on that one, but you got to educate yourself on that stuff.

There’s so much free information out there utilizing RSS feeds and things like that from popular blogs, very easy to stay abreast with what’s going on in a city that you’re not living in full-time.

If you got a smart phone, you got to use a smartphone. I know a lot of people are spending time on Facebook. I’m on Facebook, but work. If you spend 30 minutes browsing everybody else’s stories, spend 30 minutes reading book. You’ll be well-informed.

We have a question here, “Could experts come up with a list of good lawyers I have dealt with notes or is that too personal?”

Lawyers, I don’t mind. Realtors, I won’t share.

Realtors we won’t share. Attorneys are pretty easy to find. A good source, initially, is go to LegalLeague100.com. It’s an easy referral source on there, also just networking. I have some attorneys I have recommended in the past, they’re just too overwhelmed with business right now, that I won’t recommend out because they’re swamped. I still use them but I know that they’re swamped. They don’t have room to add any more business to what they’re doing. They’re like any other vendor, they ebb and flow with what they got business going on and go on from there. Would you agree to that, Adam?

Yeah. Actually a lot of people want to know who my CPA is. They would say, “Don’t send any referrals. Wait until October. We got deals going on right now.” My bookkeeper, she wants more referrals.

We have some really good breaking news for you, Adam. You’ve hit your 100 like on YouTube. You could probably name it Youtube.com/AJARealtyInvestments.com as your YouTube page, probably?


Adam’s very humble but there’s something I wanted to let everyone know that they may not know about Adam. He is a veteran. I didn’t know this until recently, but a portion of proceeds that he gets from buying, selling notes, he donates to the Intrepid Fallen Heroes Fund.

I’ve been donating to them for years.

That’s a good place to support your veterans as well that Adam has opened my eyes to. Thank you and thank you for your service as well. Actually, if it wasn’t for Adam’s service, he never would have become a student of ours. If you are a past or current active military or first responder, we do comp you in to our quarterly Virtual Note Buying Workshop because we have a big heart for our vets and for what they’ve done and the sacrifices they’ve given. You were in the army, is that right, Adam?

Yeah. It’s up in New York.

Adam’s wife is also a retired Peace Corps, right?


You can get a hold of Adam by going to AJARealtyInvestments.com. You can also find him on Facebook under his business page. He’s also going to be at the Distressed Mortgage Expo in Orange County, September 16 to 17. He’ll be out there hanging around, having a good time.

I’ll be on the cruise too.

NCS 162 | AJA Realty Investments

AJA Realty Investments: You can to go Quest IRA and check out their incoming cruise schedule.

Really looking forward to that, that will be a fun time. It will be a nice fun cruise, about 300 IRA investors. They’ve got a few spots left if you’re interested, you can to go Quest IRA and check out their incoming cruise schedule. I think they got one going in the next week or two. Literally, if you sign up and you’re in We Close Notes too, you could use the discount. It will cut the cost for the seminar part of the cruise in half, from $500 from person down to $250 for those that are interested. You could check that out. Adam, thanks for joining us.


If you’d like to find more information on notes or get some access to over 80 hours of training, you can always text the word ‘Notes’ to the phone number 72-000. You’ll get a text message with the way to opt-in to get updated videos and self-training. We look forward to seeing you all at the top.


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