California policeman by day and note investor by night Eric Hyde from AW Notes discusses his journey and biggest nuggets in his first twelve months as a note investor. Eric joined the police force because he wanted to do something in his career where he could help people, which he also found with note investing. He’s done some performing notes, joint ventures, and a few wholesale deals initially to get his feet wet. Eric discusses some ways of policing your business as a note investor, and says going out and doing things, taking action and kicking butts is what really take the note game to the next level on your way to the top.
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Policing Your Business As A Note Investor with Eric Hyde
We are excited to have our good buddy, Eric Hyde, join us from Torrance, California. It’s a little earlier out there than it is here in Austin, Texas. We’re jacked up to have Eric joining us. Mr. Hyde, how are you doing?
I am good, Scott. Thanks for having me here.
We are excited at the amount of growth that you’re having. Some of the great things that you’re doing out there, not only doing note, but you also have a full-time gig as well, so why don’t you share what your full-time gig is? We’ll talk about how you marry the two together.
I am a full-time cop. I’m a Police Sergeant in one of the cities here in Southern California and I’ve been doing it coming up for fifteen years.
Was that your dream as a young kid to be a police officer? What caused you to want to be a police officer?
It was not. My dad was a judge, my sister was a cop, but for whatever reason, it didn’t hit me until 9/11. I remember sitting, drinking some coffee. I used to work for e-trade and remember watching those towers go down and feeling very helpless. I wanted to do something in my career to where I could help people be part of something. I immediately got into law enforcement and have not looked back. I love my job.
We have a big spot in our hearts for first responders and the military and want to say thank you for doing what you do. It’s not easy being a cop, especially in today’s society, so thank you so much.
One of the great things that we love about the note business is it allows for people to get their feet wet and get started while they are working a full-time gig or a full-time job or another career. How did you dive into the note business or real estate? Why don’t we talk about your previous history as a real estate investor and the things that you did prior to the note business, then we’ll dive into how you found out.
My first rental was back in maybe 2006 up in Sacramento. I bought my first house in 2000. Sacramento back then was the number one market. I was calculating how much money I was making a day just in appreciation in my house. I bought another house, rented out the first one, bought another house, rented out that second one, and then 2008 hit and I went through it just like everybody else. Fast forward to a couple years ago, I realized that I need to do more to take control of my financial future, so I got on BiggerPockets, started my journey there, and I had this master plan of buy and holds, so I started buying houses and I realized that California is not the place to invest. I call it the 1% rule. Most people know about that California $800,000 house does not rent for $8,000 a month while my $100,000 house in Memphis rents for $1,000 a month.
Fast forward, I started buying houses and was enjoying it. Then I came across this notes thing and I remember coming across Scott Carson, some dude who does notes. I got your book, read your book, and I realized that there’s something to this. That was about a year ago, and in the last year, I get people sending me REOs, wanting to buy vacant houses and I’d tell them, “Nope, I used to do the shiny object thing.” I’ve got to say, “That’s a good deal but I’m strictly all in notes.” I’ve been making good money. I’ve been having fun. I’ve been meeting people, traveling and I’m in and I love it.
You took the road of the BiggerPockets, which is great because it’s a great website for a lot of great knowledge and a lot of great people there. Did you dive in and buy your first note or did you have somebody help guide you along the way?
I did have somebody that guided me along the way. Being a year into this, I’m still by far a newbie, but for somebody who’s two weeks in, I got a lot more experience. I always tell people I share my story of what I did and this was a bigger plan. My plan was to JV with somebody then do some on my own, and then bring in investor money and that’s exactly what I’ve done. I reached out through BiggerPockets. I remember seeing this lady, Gail Greenberg, up in Pennsylvania. I reached out to her. She sounded like she knew what she was doing and she pulled the wool over our eyes. I reached out to Gail and she helped me along, showed me the ropes, and then we still have a couple left that we’re looking to exit. There is a unique story on those, but I started with Gail and then I started doing my own and then I’ve been bringing in investor money.
You were the social media winner at Note CAMP 5.0. You had some good information from Gail Greenberg, who is also the social media winner. You were in it to win it before we even kicked it off.
I was not going to lose this one. If I lost, I was going to show up to Austin anyways to the Fast Track. I was going to show up and go, “I’m here.” I had fun doing that. If you remember six months ago, I was gunning for it. Chris Seveney was doing a great job. My goal six months ago was to win that thing. I’ll tell you that mindset is everything. This time around, I’ll be honest with you, my goal was not to win it, totally different mindset. My goal was about my business. My goal was to market me, Eric Hyde, not hide behind a logo, put my face out there, put my name out there, market me, and if doing so, if I’m successful at that, then I would’ve won. That was my plan. That was my second goal.
That’s part of the reason that we pushed that, which is to get people marketing for the first time for themselves. A lot of people will do crazy things for a t-shirt or a book. We try to get people to realize it’s not that difficult to start marketing. It’s not that hard to promote yourselves. We like to try to pry in the proverbial pump to help people get that done. It’s amazing. Is it a win-win for us? Yes. It’s a win for us because we get roughly about 1,500 different social media posts for the Note CAMP on a weekend, but also we see a lot of people raising capital from their posts. We see people like yourself who aren’t afraid to make a name and their tribe around them that they don’t even know yet start reaching out to people and making things happen, and “I’ve got some money to invest with you. Tell me more about that note aspect of things,” and you played that perfectly like a lot of other people. You partnered with Gail on some deals. Gail is in the audience and she says, “That’s it? I taught you everything you know.” The bullshit is getting deeper.
I’ve got to give her props. In my note business, there are two or three people that I want to give props to. One is you, Scott. I follow you and read your book. I’m always up on your Facebook, listening to you, and then Gail for that one-on-one all the time. She’ll text me when she’s angry about a decision I’ve made or something I’ve done, a phone call, and then the third person is I want to thank myself because I put in the hours and I worked hard and dedicated to what I do and I’m all in. Thank you, Gail. I appreciate it. You’re right. You taught me everything I know.
Gail is great. She’s awesome, the Great Gail Greenberg. She’s been here before and she spoke at Note CAMP and had the most views on her replay. You partnered with Gail and started doing some deals on your own. How many did you do, some good, some bad, the ugly on the joint venture stuff that you funded?
I’ve gotten great. I don’t have bad. I have ugly. I’ll talk about one that Gail and I did. This one is in a town, Oak Ridge, outside of Knoxville. We bought this thing in October or November. We got a phantom payment. We went through the process, did outreach. We used Polaris on this one and no answer, nobody. It looks like we’re going to take it back. We went through the attorney process. It’s a CFD, so it was a little bit easier process. We get to court, we take the house back, easy, simple process. My realtor goes out there and takes a video of the property. I’m telling you, this house was ruined, trashed, but initially it was like, “This thing is a dump,” but when you start cleaning it up and look at, it doesn’t look too bad. I swear to you, Gail gets a phone call from the borrower. He showed up at the house and he says, “I want to work it out.” We’re in negotiations. The house is a mess. We inherited a boat and a van next to the property.
We’re reaching out to the attorneys to see if that boat and van are ours and how that, so we’re waiting to hear back but Barbara wants it. I don’t know if we’re going to rent it. I don’t know if we’re going to create a new note for the same guy, charge him more, or charge him fair. We’ll see what happens and we’ll go from there. That was one of the ones that we did. Another one was we performed and sold it as a performer. The ROI on that was over 100% and that was a six-month hold period.
On the one in Oak Ridge, did you go in and do some fix-up on it? Did you go and clean it up a little bit or you left it as it is?
We talked about it. The realtor gave me several quotes. He gave me a quote to fix it up and what it would do to the value of it and we contemplated it and there might have been a little bit more money involved, but the rest jumped up. To put in $10,000 to get an extra $15,000, I’m all about the velocity of money. We bought it for $15,000 with maybe $2,000 into expenses. We can sell this thing for $35,000, maybe $40,000. That’s a win-win to have an investor come in and buy it. This whole borrower coming back and wanting to throw a wrench in everything, we’re in the middle of working that out, but this one’s a great deal. It worked out great so we’re probably not going to fix it up. We’ll probably either sell to the investor, put a note on it, and sell it back to this guy. I’m not sure.
How much are you in for?
We bought the note for $15,000 and we are $2,500, we are about to spend $600 for a dumpster and some clean up, but we’re holding it until we figure it out. We’re $17,500 into this thing.
Gail put a note on here that she sent you $1,325.
I’m excited about that. That’s good stuff.
That’s pretty good. The fact also is she says the plan is rental long-term until he proves himself. That’s good. It’s worth $40,000? You’re into it at $17,000?
We’re into it $17,000. The market there is pretty wide-swinging. It might be worth $40,000, maybe $45,000, maybe higher, maybe a quick sale at $35.000. There’s plenty of room to work there. We’re not in a hurry, but we’ll figure something out.
Let’s talk about the numbers. You said that there is the six-month time from the second one you’re talking about.
This was a Birmingham, Alabama. We bought it for $8,500. It was the one of the first ones I bought.
Contract for deed as well?
Yes. When we initially bought it, I did realtor drive-by, lawn was manicured, there was something hanging from the front porch indicating somebody was home. On paper, it only showed that they were a few months behind, so I liked it. It sounded good. We bought it $8,500. UPB was maybe $22,000 to $23,000. Once we got the loan boarded, it turns out that the seller wasn’t keeping up on the records. It in fact was performing, so we decided instead of selling it, let’s hold on to it. If we sell something, we don’t want to sell crap. We want to make sure that it’s something good, that it truly is performing, so we held it for five months, give or take, and payments were coming in on time, so we put it together. I put a little video, put it out there, and I sold it to another investor. I’m not trying to make 400,000%. I want to do what’s fair. We put it out there to 14.5 yield for another investor to sell it quick. Let’s have the investor buying it from us make some money. We’ll make some money. We ended selling it for $17,800 for $500 in fees into this thing, so maybe $9,000 investment, $17,800 on the sale. The buyer was happy, we were happy. The borrower stayed in the home and it worked out perfect. That was another grand slam homerun, whatever you want to call it. It was fun.
That’s great, almost 100% return on your money. We see that sometimes the sellers don’t keep up with their payment streams. Sometimes they will goof up, especially when they are dealing with big funds, because you bought it through a bit of a big fund. We’ve had that happen a few times too where we bought notes and they’re actually reperforming. The seller had payment receipts, and once the servicing got transferred over, we bought performing note on a non-performing price, which is Christmas comes in July. That’s good stuff. Let’s talk about some of the bad, because people love to hear how people overcome bad situations. Ever had any bad deals?
I’ll tell you about a deal that was almost bad. I’ve been in this not as long as you are, not as long as Gail, not as long as most of the audience, but I’ve got one that I put an offer out there. UPB was let’s say $42,000, worked the numbers. We agreed on $15,000 and comes to secondary due diligence. The value on paper through Trulia, Zillow, Realtor, etc., looked like the value was maybe $40,000 to $45,000, so bid accepted and realtor drives by. She says, “I grew up on that street. I know that street very well. The house is worth $20,000 at best.” I was like, “You’re killing me.” Pull the title report, $3,000 in liens. If I would’ve put 18,000 and I give this example and I have investors ask me, “What bad could happen?” I tell this story because the bad that could happen if you do it right isn’t that bad. There’re ways to protect your money. Had I purchased this, I would have been $18,000 into this thing and the house was worth $20,000, so let’s call it even.
Let’s say I’m $20,000 in and it’s worth $20,000. I ended up reaching out to the seller and I backed out. He wasn’t too happy. We made amends. It is what it is. Had I purchased it, I would not have bought it at a discount, it may have ended up being vacant, it probably was, so I rent it. I put a little bit of money and rent it and then it takes me two or three years to get my money back. I ended up walking away because I’m in the business of buying at a huge discount and having, the seven or eight different exit strategies, I was very limited on that one. I avoided that risk and walked away, but it could’ve been a bad situation. In this business, there are so many exit strategies that even a bad situation, you can turn it into a good one.
There’re multiple exit strategies that plan A fails, go to plan B, C or D a lot of times. What was your biggest a-ha about that? Was it the fact not to trust online values and always put eyes and ears on the property?
It wasn’t so much a-ha, but it was like, “I knew this.” I did what I could to get the values, but what I do now a little differently is as I’m putting my bids out there, if it’s markets that I’m already in, which at a point now where I’ve got my team’s built, I’ll reach out to the realtor as I’m making the bid and I’ll try to time that value with my bid, so I can pull from it if need be or even prior to. I might have a drive‑by to take a look at a house. That’s my thing. I try to get the value as quick as possible or whatever I see online, I drop it, I need a bigger cushion if I’m going to look at it.
That’s a big thing. People need to understand that it’s not like traditional real estate where you go under contract and you’ve get a seven-day option period and you’ve got to do inspections. People get so bogged down to try to do every little bit of due diligence on the front end before a bid is accepted that they often miss out on something. Get a bid and then you’ve always got opportunity to say that your bid on the back end. I had somebody reach out to me at joker broker the other day, so here’s a list of assets, here’s the list of notes and a list of addresses. If you got to have your bids in and there’s no fading your bids, and I sent an email back to the guy and I’m like, “You’re having a hard time moving these use?” He says, “Yeah, why?” I said, “You gave no loan information and there’s no information on the collateral, performing or non-performing. You wanted to go off online values to make an offer, that’s a hard fast number. It doesn’t work that way.”
Now that I’ve been doing this a little bit, I get these joker brokers reach out to me. A year ago or six months ago, I would have been excited, “What do you got?” Now I can tell immediately, I don’t even give them the time of day or I might ask some questions to do my due diligence on them, I’ll walk away. It’s great. I’m in a position now where I can walk away, I don’t need them. They need me more than I need them. That’s a great position to be in.
It’s a little bit of a different mindset than the fix and flip and the buy and hold aspect of things. What would you say to somebody who’s branding? What advice would you give them that you’re about a year in. Is that right, Eric?
I started my note research about a year ago, getting on to BiggerPockets on the note thing. I don’t have some canned response, but I wrote down a few things that I thought of that truly have helped and allowed me to be where I am. One is routines. You got to get into a routine. Your routine might not even be note-related. My routine is I wake up at 4:30 AM every day, maybe not seven days a week but I get up at 4:30 AM. I start my day job at 7:30 AM. I get a lot done. I come home, hang out with the kids, I do work at night. You’ve got to get into a routine. You’ve got to be consistent in this business, doing something every day whether it’s an email, whether it’s a Facebook post or Instagram posts. It doesn’t even have to be the two social media. Just do one Instagram post a day. It reminds people what you do and that you are out there.
Beliefs, you got to believe in yourself 100%. If you don’t believe in yourself, no one else is going to. If you can’t believe in yourself, how do you expect other people to give you their money? Actions, you got to take action. I know people that follow you, I see them. They’ve been following you for a year plus us and they haven’t closed a deal because they’re waiting for that special moment. I don’t know what it is. Just take some action. You got to do something even if it’s a small action. Drive, you got be motivated. You got to drive yourself. For me, how I drive myself is I listen to Tom Bilyeu, I listen on YouTube. There’s something about his voice and what he says. It rings true to me. He talks about all these things that I’m talking about. You have to have that drive, that why, why you’re doing this. It gets you out of bed every morning.
Balance, life balance. I get home and I want to start working on getting more things done, but I got kids, I got a wife, tee ball or little league baseball. I set my phone down, we go on the front yard and play baseball, we’ll go out to dinner on Friday night, I’m there. I have life balance. It gives me a breather.
The last thing is risks. You got to be willing to take risks. You have to. You can do your due diligence. You can get to that line, but you’re never going to know until you make that offer. You’ve got to make that offer, you got to buy that note, you’ve got to take action, but guess what? If it sucks and you lose money, awesome. You’ve probably learned a lot of things in the meantime. Those are the 97 things that I recommend for people that are getting started.
The audience asked me to ask you about being shot and the dangers of it.
I don’t think she means in the doctor’s office. Ten years ago, I was at work one day and was involved in a foot pursuit, chasing a couple of guys. We turned the corner, he ambushed me and at about a five foot range, he stood up and open fire. My gun was out. It was this moment that, as a cop, you train, they tell you you could die, you could get shot, and these things and it’s in your mind. You do your best to avoid it obviously, but I’ll tell you when that moment happens. It’s a whole different world to think it will happen to when you’re faced with it, a whole different world. It didn’t change me as to who I am but it reaffirmed what I do for a living. I enjoy it. When I came back to work about six months later, I was motivated and charged up because that son of a bitch shot me. There’re people out there that will shoot other people and it’s my job to help those. That sounds cheesy, but that’s the truth. That’s why I enjoy what I do. Incidentally, I’m not trying to be a full-time note investor for now, maybe in another five years. I’m going to keep doing what I’m doing, but I love my job as a cop. It serves a purpose in my life. I contribute what I do and I’m going to keep doing notes the way that I’m doing it now.
You don’t need to be around long, whether it’s online or videos or stuff like that. You’ve got a big heart and a big passion and also a great sense of humor about life and having a good time too. Definitely if I was out in California a bit more often, we’ll be drinking bourbon and smoking cigars on a regular basis.
I can make a mean old fashioned and any time you go to a restaurant, it will not be as good as what I can make.
You’re still a police officer. You love what you’re doing. It is great. You have great balance, life balance, work balance, doing something daily. Let’s talk a little more about that with your note business. I agree there’re highs and lows, sometimes you see more tapes, obviously you don’t. Once you’ve been around and started making a name and commenting, you will have joker brokers or people reaching out to you with assets, which makes it a little bit easier. What would you say to people that have been around for a month or two and they are starting to get a little frustrated because they’ve been reaching out to banks, they’re trying to get tapes in, but they’re not seeing anything? What advice would you give them?
Network. Whatever it is that you’re trying to do, find somebody who is doing it and work with them. We talked about taking them out to dinner, buying them a beer, or whatever. That’s great if they’re local, but maybe they’re not. You have to add value to somebody and network with somebody. I did that with Gail, and when you can piggyback with someone else, then you’re going to learn. Then you can help work through those frustrations. If you talk to other note investors, I guarantee they’ve gone through the same thing that this person’s going through. When I had the same problem, this is what I did and this is how it works out. It’s normal. You’re going to go through it. When people realize that it’s normal, they’ll feel better about it, but networking is huge. You’ve got to reach out to people.
You went to the Paper Source Convention. You also went to the Note Expo. You were the designated, “Let’s have a happy hour here. Meet me here.” That was one of the great things that you did about, “I’m going to be here at this specific time at this specific event. Let’s meet up. Have an old fashioned it’s not as good as mine and go from there.” What would you say about putting yourself out there?
I’m type A personality if you can’t tell. I see everyone is like, “Let’s meet up,” but nobody took the bull by the horns. Sometimes people are afraid to, so I was like, “Let’s meet at this place at this time. Let’s network.” It doesn’t mean that you have to come and talk to me, but let’s get a group of people. We all share notes in common, but more specifically, we’re all part of the We Close Notes crew. We’ve met each other online and now in person to be able to do that. When it comes time for other people to put themselves out there, here’s what I say, “Do it, you have to.”
Six or nine months ago, I put out my first video. We talked about it. I got written up for that video because I was an idiot. I was in uniform and did a video, “Eric Hyde, everybody. I’m a cop, but don’t worry about that. I do notes.” Sometimes if you’re too successful, it gets out. I’m not saying I’m too successful, but it reached my friends and somehow got to the Chief and I got written up, took it down, whatever, but you got to be willing to take that risk. Put yourself out there. Who cares? What if you do a video and you trip and fall? What if it’s a live video and you trip and fall? You get up, you laugh. They’ll probably watch you next time because you tripped and fell. I noticed with Note CAMP 5, some people started to do some videos and that was great. I guarantee the next video they do will be better than the previous one.
The next one will be better and now people will see the face. People want to do business with the person, not the logo or the name. They want to see your face. They want to hear you. They want to know your personality because maybe not everybody wants to do business with a wild and crazy guy from Torrance. Maybe they want to do business with a conservative woman in Ohio, I don’t know. You have to put yourself out there, you’ve got to take that risk and just do it. That’s what I say.
Our rocket scientist says, “Don’t stall, just call.” An audience asks a good question here. He asks, “Were you ever worried about getting a JV partner in time before putting in a bid on one of your earlier deals?” You were funding a couple deals, joint venturing with Gail, and then you’ve used your own money to fund a couple of deals and now you’re raising money.
Here’s how I do that. When I started to JV with other people, if this is going to be a JV deal, if I’m ever going to JV with somebody, it’ll be a deal that I would own myself. If it’s not, why am I buying it? I would buy the note and as I’m putting my bid out there, I’m marketing it. If I’m going to use my money, I’m not pressed for time. I do not like to have my back against the wall. I don’t want to ruin a relationship with the seller because I didn’t fund it when I said I could fund it. One of the things I do when I’m putting a bid is I’ll tell them, “I will fund this thing on this date,” and when I say that, I do it. I fund it, I market it, and then they will replace that money and then I’ll go out and do it again. That’s how I’ve been doing it.
I’m not a multimillionaire. I can run out of money, so what I’m doing is I have an investor or preferred investor list, so as I’m putting bids out, I know in my preferred investor list who is ready to strike. I know who is ready to fund the deal. I know if it’s going to be from an IRA account that might be a little delayed. I know if it’s going to be cash and they can wire it same day and then I get that person prepped and ready to go, show him what I’m putting out there. If they’re interested, we go from there and then we’ll fund it straight from their account over to the seller
I love it when people are coachable.
Honestly, everything is from what Scott taught, and then since Gail taught me everything I know, what Gail has said as well.
Then I taught him everything that Gail does, too. Gail is extremely knowledgeable, very coachable. That’s a great business.
Let’s talk about some of the things that you’re doing to raise capital. We deal with a lot of people. I wanted to prove concept, which drives me bonkers, but you proved concept, you funded a couple deals with somebody who’s got some experience, and you’ve gone out and bought a few deals on your own. What are you doing to raise capital or marketing to your tribe that you’re closer to now? What are some things you’re doing in there?
For those who may not know, I’ve been getting into making videos, I’ve got a new sign, I’m putting my garage. I’m looking at some different studio equipments, and I’m putting out content, nothing behind it. When they think about notes, I want my name to rise to the top of, “I think of Eric.” I’ve got a referral from somebody in the Midwest who, “So and so is saying good things about you,” and that’s great. I want my name to start getting out there to help me raise money, but also for the investors so they can place their money and start getting a good return. I’m doing these videos. I did one the other day on the difference between ROI and yield because I realized that people get confused with that sometimes. I do content video marketing, I have my email blast, I have my Instagram, a little bit on Facebook. Their analytics are tweaking me, so I’m not sure what to do about that, but I’m going to keep pushing, doing some everyday. Once I do a video, I think about the next concept, whether it’s a video of something that’s not generating money, something that people can watch and appreciate hopefully.
When I sell a deal or when I market a deal, I like putting a video to it so people see. It has a little bit of music, a little bit of pictures of the property. I’m putting myself out there. The more you put yourself out there, the better you’re going to do. When people keep seeing my face, they get to know my name, they see the deals that I’m doing and then they want to be part of that. Raising capital for the last couple months has been amazing and I’m at a point now where it’s like, “I’ve raised almost more capital than I can find deals,” but that’s not a problem with the network and the context. I’ll turn to them and start looking at more deals and start putting bids on more deals. Instead of one at a time, I’m going to start doing three, four, or five at a time, so I can go out to my network and go “Here’s what we got.”
Taking things to a bigger place, which is great stuff. Let’s talk about some of the videos. Are you doing straight from your smartphone? Doing most of the editing?
It is so weird because I keep resisting the urge. I’m like, “I’ve got to get something better,” but this works because I can do the video from walking in the back yard. I joke around a lot. I got a funny video in the backyard, but there is a time and place to be a little more serious, be set up in a situation. I don’t want to have my kids in the background, which is fine, but I’m in the midst of working something out in the garage with my logo, maybe get a camera that’s not always my phone that’s in a fixed position and then start pumping out content. Everything is on my phone and I’m using iMovie, so I’ll use Canva to put together some slides in between and I upload it to my phone and I will be in the bathroom with my phone, editing the video. I can do it anywhere and it’s worked out great. There might be better quality stuff, but this is what I’m doing.
You got two kids and a loving spouse. What’s does your wife do?
She left her job in November. She takes care of the kids, the house, the food. I come home from work and everything’s taken care of. She does an amazing job. I thought about starting to teach the business to her having her help out, but here’s the problem. What if, “Babe, I need this thing done by Friday.” What if it’s not done by Friday? Does she get written up? She stays at home, she takes care the house. It is a full time job. She’s totally on board with the notes. I’ve been giving her receipts and stuff. She’s been doing a little bit of bookkeeping, but that’s it. She’s got a full-time job at home. It’s the best decision ever.
She’s supportive. She went to Vegas and hung out at the pool.
I flew her out on Friday. She and my sister hung out at the pool while I was networking. A group of us went to dinner a couple nights ago and so she got to meet a few people, Mark Hamrock, Jason Dodge, Andrew Bogey and Neil Clauson. It was fun, so she was like, “Those are cool people.” She thought it’d be a bunch of older stuffy people, but no offence to the older stuffy people out there.
It’s a pretty cool group of people. We all have different interests and different things that we all come from and it’s a pretty good grew. You brought a couple of things up. A couple of big points here I want to make with people. You use your phone, you’re doing something on a daily basis for the most part. Do you have that daily basis on your schedule or on your calendar so you know what you’re doing every Monday through Friday or Monday through Sunday?
The answer’s no. That’s one of my weaknesses. I’m an ADD guy. I’ll do an Instagram, Facebook or this, that, the other. If I’m at home and I’m emptying the dishwasher, I get distracted by the laundry before I’m done with the dishwasher. The next thing you know, I’m changing the channel and getting a drink so I need to get better at scheduling these tasks. I wing it each day. When I wake up at 4:30 AM, I’ll jump on Canva, turn on the TV and I’ll put something together and put it on my Instagram, and then maybe when I get home from work, I’ll put something together and send it out. On the weekends I’m doing my videos. On a Friday, I’ll write down or brainstorm what it is I want to do. Saturday I’ll do a video shoot, and then Sunday I’ll edit it, and then usually by Monday, I will put that out because I find that based on the analytics, Monday before people wake up is the best time to put that out.
I do it that way. I think it’s Cody Cox that does it or maybe it’s Adam Adams. Monday is marketing. Tuesday is due diligence. I don’t want to be stuck to a schedule to such a degree that that’s what I have to do. I’d like to be a little more flexible and dynamic, but I do need a little more structure within my marketing and how I’m doing what I’m doing.
A good tip for everybody, but at least you’re getting stuff done. Would you say that your videos or what other type of marketing has been your biggest bang for the buck when you need to get it out to your tribe and raising capital?
Those two things. Videos 1000%. For anybody out there contemplating doing videos, do a video. Secondly, MailChimp, your marketing campaign, you’re your email campaign. You can embed your video into your marketing thing. One of the things I’m starting to transition to is I get these emails from people and they’re 93 paragraphs long. I’ll be honest, I don’t read those. I look at who does it, cool. If it’s somebody that I’m friends with, I might read and see what’s going on, but I don’t read it otherwise. I try to do a quick blog about what it is, a video and then some what’s upcoming, what’s next, whatever. People don’t want long emails, but videos, nor do they want long-winded people, which sometimes happens, but videos and emails 100%.
That’s the biggest bang for the buck for people still. That’s what I keep saying, emails are the biggest way to get out to communicate, 300%ROI, and video is just an easier, faster way of saying what you’re writing in an email. Anytime you get them incorporated, you do a great job. I like to call it like the ESPN way of marketing. If you go to ESPN.com and click on the articles, you’ll see how it’s written and it’s basically the same thing. It often will have a video or image on top, social sharing or they’ll have the rest of the written word below on that as well. That’s one of the great ways. They use image, a video or a photo, to drive traffic. It’s an easy way to do it.
The statistics they say is by 2019, 80% of all content will be video, so I’m trying to get ahead of the curve because let’s face it, as we move forward in time, we’re doing more, we’re doing more, so we don’t want to read some long article rather give me a one minute or two-minute video I can watch on my way to work or when I’m at home. That’s the best thing. I look at it like the 80/20 rule. The idea that if 80% of my productivity is coming from 20% of what I’m doing, what is that 20%? For me, it’s those two things, videos and my emails. For a while there I was testing Instagram. I was pushing hard with Instagram and there was not much conversion. There were some likes and this and that, but it wasn’t doing much, so I shifted my focus a little bit less and more on what’s working. I still do the Instagram because some people, that’s their angle and that’s how they follow me.
It’s easy to share the images on Instagram, with just a click of a button. Now that it’s owned by Facebook, it’s pretty easy to do. The beautiful thing about video is it’s going to be around 24/7 365 days a year once we throw it out there provided that the YouTube gods or the Facebook gods don’t get mad and delete the video. For those that don’t know, the attention span of a goldfish is nine seconds. They say we as adults have less of an eight-second attention span, so you have less attention span than a goldfish, which explains why you go from cleaning the dishes to check the laundry, to do what you do. How many deals have you done in total from those that you joint ventured on, you funded yourself, and then joined ventured with other people’s money on?
I don’t know the exact number. I might be up to fourteen, fifteen maybe, but that includes I wholesaled a couple. I bought and held one and sold it because I got it at a good deal. In my portfolio, I’m managing, including the ones with Gail that we still have, maybe nine, and then I have some bids out there. I should hear back on a couple. I have a slightly different strategy that I’ve been doing recently when it to performing. Performing notes might turn non-performing, so I still I look at the performing list and I look at their pay history and if they’re three months not performing, I might put an offer out there that is a non-performing price and see what happens. I’ve been trying to do something a little different or maybe everybody’s doing that, I don’t know, but that’s what I had been doing.
That’s a great strategy. I like that strategy. It’s one of the things that we’ve done before as well in here.
If the seller says, “No, these are performing, this is the price” and I replied saying, “Cool. Let me know,” and it is actually not performing if you look at the pay history. You probably didn’t look at the pay history, just forwarded it, but they haven’t paying for four months, so get back to me when you want. My price is only going to go down over the next month and next month.
That is a great point that you bring up is in the follow up of your bids. A lot of people don’t follow up with the sellers on their bids, 30 days, 60 days, or 90 days. This is one of the things I keep hammering home in the mastermind. If you made bids and they’ll tell you no, don’t get upset, follow back up in 30 days or 60 days if they didn’t sell it and you’ll be often surprise they may be a little more motivated to move it at a price that makes more sense to you.
I passed on a deal and I had the seller reach out to me two months later to offer me half. I passed. They’ve dropped it more, they said, “What are you willing to pay?” I ended up picking it up for a small amount and held it. One of the best positions to be in is willing to walk away. If it doesn’t work, it doesn’t work. It could work if somebody wants to give me a note for fifty cents, I’ll take that for $0.50. There’s a price. It all comes down to price.
You mentioned that you wholesale a couple assets earlier on, which is great. The wholesale loan is not a bad way as long as the numbers make sense on those. When you got the list of what you’re wholesaling, you come from a bank, you come from a hedge fund, you come from another investor. Did they give you pricing? Did you find a buyer for social media? How did you find the wholesale?
This one came from a hedge fund. I wasn’t trying to wholesale. It was just opportunity. You’ve got to be willing to look at other opportunities. I put a bid out there and it was accepted. I ended up talking to somebody and they told me, “I got some bids too.” We got to talking, sure as shit, it was the same property. I was like “What are your numbers? What if I could save you x amount of dollars? Would you like it?” I looked at it I could keep this in my portfolio, which would have been fine or this person can make good money, save a few thousand dollars, I wholesaled it for lower than what I could have done it for but I’m not trying to screw anybody over. I just did the right thing. I wholesale it to them. They got it for a few thousand less than what they were planning on and it worked out perfect.
Puts some bucks in your pocket too?
Yes, right away. It was great. The only downside to that that I didn’t like doing was the timing of trying to get that because there are too many people involved. I’ve got the seller, I’ve got me, the wholesaler, the buyer who has an investor who’s waiting on investor funds that happen to be IRA money that they are waiting. I was prepared to fund it myself and have them replace it, but if I’m wholesaling it, I’d rather not have done all that but it worked out. It was truly a win-win for everybody.
That’s the importance of knowing where the money is coming from, from your buyer if it’s their funds or IRA funds definitely.
You get up at 4:30 AM everyday for the most part and you do a little bit of marketing, you do a little bit of stuff there. Do you post that stuff where it’s 6:30 AM or 7:30 Pacific time?
What I do is I get it ready to go and then I will generally post it around between 6:00 AM and 7:00 AM my time. That way it hits the people on the West Coast as they’re waking up although most of my network is Midwest and East Coast people, but 9:00 AM or 10:00 AM for them works out fine whether they get it in the morning or at the lunch break or when the boss isn’t looking or whatever, so that seems to work out well.
How often are you emailing out to your database?
Not as often as I should. That’s also the consistency of when I’m doing this has been one of my weaknesses as well. I’ve been doing a little bit more. I have two sets of email. I’ve got my large database of, “This is what we’re doing,” and then I’ve got my preferred investor list where it’s more specific, “I got a couple of deals coming through. This is what it looks like” and then if there’re no takers on that, then I would put it out to the world, but that seems to be working fine. My goal is every couple of weeks to put out some content and send it out to everybody. I don’t want to bombard people too often, like, “Here’s another one,” but I’m cool if people want to unsubscribe. That actually gives me more space in MailChimp to add somebody who cares.
Have you had anybody that you were surprised in your local market, your colleagues, your friends or family or anything that have approached you after seeing you do this for awhile and wanted to invest with it?
Yes and yes. It’s funny because I have these people at work who are like, “Who’s this Scott Carson?” A lot of people have come to meet my seven-year-old son talk about Scott Carson. He hears it in the background. I’ve had a lot of friends from work asked me about it and I would almost prefer not my close network of people because they’re going to see me every day, every week and be like, “How are we doing? How’s it going?” I don’t push it with them. I don’t push it with anybody. I put out what I’m doing and if you’re interested, you’re interested. I let it speak for itself, but friends near me ask all the time, but most cops have $500 in savings. They buy their cars and their boats and toys, so they’re not investors per se.
Do you have a set schedule that you’re working every week or does it vary?
About a year ago, they moved me from patrol. I’m in-charge of our gang unit now, so I work bankers hours on paper usually like 7:30 PM to 5:30 AM but if we have an early morning search warrant or we have some shootings that happen, we’ve got to do a little more work, call in at like 1:00 AM, 2:00 AM, stay until midnight or whatever, so it bounces around, but generally it’s 7:30 to 5:30.
You had you had a deal that worked out that was a win-win situation recently. You reached out to me about two weeks ago before I went on vacation about a deal getting modified. You want to talk about that? Is that one of the case studies that we talked about beforehand?
I’ve had a few. There’s been a couple lately that have worked out great. There have been quite a few good ones and this is the one we were literally twenty minutes before court. The day before court, we’d heard nothing from the borrower. We had tried to work something out the prior month and she dropped out of contact, so the day before court and I said, “I’m going to call this borrower myself. I’ve had some pretty good success reaching out to borrowers personally.” I talked to Joel Markovitz about the legalities of that and we’re good and how I’m doing it. I reached out the day before and I asked her. I’ll call her Jen for the namesake. I said, “Jen, how are you doing? I want to find out what your plan is if you want to stay in the house or not. I don’t want to take this house from you. What’s your plan? Tell me your story.” She tells me the story and we talked about saving her house and she decided she would try to get some upfront money. I said, “I will give you hours or 24 hours. Court is tomorrow but I want to help you.” Twenty minutes before court she calls me, “I got the cash.” I said, “Perfect. Give it to my attorney.” This was in Memphis, Tennessee. She gave it to the attorney, the attorney calls me, I got the money, perfect, so we asked for a continuance for three weeks out because we agreed some now, some in a couple weeks. We got the other half of the money and what we did is we pulled the court date off the calendar. We didn’t cancel it, we just took it off the calendar. We can put it back on the calendar at some future date, and so we’ve got some upfront money. With our upfront money, our return is immediately 10% give or take and then she’s going to send over pay stubs and she wants to start making payments, and keep her there. That was definitely a success on that end. Then if we get her obviously paying, then we have a performing note. We’ll look to see what we’re going to do on that one.
I have a few of those where they just start paying. They’re only a couple months behind, I reach out to them and it’s been working out great. I’m very careful, very nice, “I truly am here to help you.” It’s different if Bank of America calls, “You’ve got to pay,” but “What’s your story? What’s going on? I want to work with you. Let’s work together on this. You’ve got to stay in contact with me because if not, we’ll take the house. I don’t say it as a threat but it’s a matter of what do you want to do.” I put it back in the borrower, “If you don’t want to stay, that’s fine. We’ll get you out. Then we’ll move forward.” That outreach has been working wonderfully.
A simple phone call can save you a lot of funds and save you a lot of money and also make you a lot of money, too.
I don’t do that immediately. I let my servicers do their thing. If they are successful, great. I don’t do anything. If they’re not successful, I will generally then reach out and introduce myself very loosely, “How are you doing? This is Eric.” I don’t say where necessarily but if they ask, I will talk to them a little bit more about that, but soft spoken, very caring, because I truly am. I truly want to work with them. This woman was in tears when I told her that I would work with her. She was in tears when she called me at court saying she had the money and she was very appreciative and thankful for being able to work with her. I was like, “The court is canceled but you got to follow up with me.” She was in tears, which validates what we’re doing, so that was good to be able to do that.
Who is your servicer that you use?
I use Madison, some with FCI but everything else is with Madison.
Shante and their whole crew do a great job out there.
I know Shante. I will reply, “Okay.” When she tells me something happens, I tell her “Awesome, Shante. You’re the best.” It goes back to that relationship. I’ll email her every now and again to check in with her and see if there’s anything I’m doing wrong or anything I can do differently or am I going to the right people. I’m totally happy with Madison.
I want to say thank you for taking time out of your day to join us here. I guarantee a lot of people appreciate this, especially the audience on iTunes or Stitcher, or stuff like that. You shared a lot of great nuggets about your business and your game plan for success. The reason you are having success is because you are doing things. Whether you believe it or not, the bagel method is working for you. What’s your website? Do you have a website that people can go to?
It’s AWNotes.com. It’s a work in progress but if you want to reach out to me, you can email me at Eric@AWNotes.com. If you want to make fun of me, you can email me there too. If you go to that website, it’s just a landing page for people to go. There are a couple of videos embedded in there, but don’t judge me on the website. I’m working on it.
It’s one day at a time. Thank you so much for joining us here on the Note Closers Show. Great stuff, Eric. I’m so proud of a lot of the great things that you’re doing. We look forward to bigger things from you in the future and we look forward to seeing you here in roughly 60 days.
Thanks for having me, Scott. I appreciate it.
Thanks, Eric, for joining us here. You can check them out at AWNotes.com or Eric@AWNotes.com. Go out and get something done, go make something happen and be like Eric. It doesn’t have to be 100 deals in the first year. Eric’s doing a great job balancing his life, his career with a note business. That’s what we love to hear and love to see. Not every deal is a home run, but we all can have a positive outlook if we’re doing the right thing and do some due diligence and partnering up with the right people initially to help get over those hurdles. That’s all I’ve got for you. Go out and make something happen and we’ll see all at the top.
- Eric Hyde
- Gail Greenberg
- Chris Seveney
- Tom Bilyeu
- Paper Source Convention
- Note Expo
- Joel Markovitz
- Madison Management
About Eric Hyde
First and foremost, I am a DAD to my beautiful boys, Aidan and Liam, and husband to my wife, Lily. Day to day I am a police sergeant for the City of Gardena and have done so for the last 15 years. Life has many opportunities and most do not come walking through the front door. I believe opportunity is created which is why I created AW Notes, LLC, which is my note investing company.
I purchase non performing, first lien residential mortgage notes and because they are non performing I am able to purchase these at a steep discount. This allows me, through my attorneys and loan servicing companies, to work with borrowers to keep them in their homes, if they wish. This is always our # 1 exit strategy. However, there are many more exits. But I will not get into that here.
If you are interested in learning a bit more, please visit my website at www.awnotes.com. Click ‘videos’ for educational videos.