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REIM 106
In this episode, Alex and I are talking with a super-smart financial guy – Bryan Ellis.

Bryan is not only a genius investor, but he’s also a terrific educator and coach who has an uncanny ability for explaining complicated financial stuff in easy-to-understand terms that we can understand. I’ll be the first to admit – self-directed investments like notes are a bit confusing to me, but Bryan is here to set us (and me) straight by laying it all out there in a way that it all makes sense.

Basically, he’s gonna talk to us about investments for the self-directed investor – real estate notes, tax lien certificates and cash flow producing real estate…

In other words, say ‘bye bye’ to the risky, low-yielding stock market and ‘hello’ to the low-stress, high-yielding world of notes. And Bryan shows us how.

So let’s get to it…

Listen and enjoy:

What's inside:

  • 1:20 – Alex tells us about his current marketing and latest deals
  • 4:45 – Joe tells us about his latest – super cool deal
  • 14:28 – Bryan talks about what he offers in his new podcast series
  • 21:55 – How Bryan gets his skin in the notes game
  • 29:26 – Bryan explains what a partial note is
  • 32:30 – Three categories of notes and how to find notes to invest in
  • 45:50 – Bryan’s talks about why he started his newsletter
  • 50:15 – Deciphering good REI education materials and mentors from the bad

Mentioned in this episode:

Tweetables:

Transcription:

Download episode transcript in PDF format here…

Joe:      Welcome, this is the Real Estate Investing Mastery Podcast. Hey! Hello, everybody. Welcome to the Real Estate Investing Mastery Podcast. Glad you're here! And Alex, glad you're here. How are you?

Alex:    I'm glad you're here, Joe. I'm good. I'm good, really good. We’ve got a lot of good things going on deal-wise, and ramping up, actually I got like four different new construction closings in which we're selling out of the properties, so…

Joe:      Nice.

Alex:    It's good, yeah.

Joe:      What are you going to do with all that money, beside send it to Uncle Sam?

Alex:    Pay taxes on it.

Joe:      I was going to say yeah.

Alex:    In fact that might lead into a really good reason for this call, but yeah.

Joe:      Oh yeah, we have a guest today we're going to talk about self-directed stuff, and self-directed IRAs, and investments for the self-directed investor. It's going to be a good conversation. So Alex I just want to ask you about your marketing, is it still going strong, are you still on the hunt for leads and deals? Are you…

Alex:    Always-always, you got to always be on the lookout for leads and deals. The paper click is still going strong, I just got a contract day before yesterday for 45,000, and just before this podcast actually I signed it for a $15,000 profit. So I looked at it and I said– I was tempted to keep it myself, and do it myself and do the whole project, but I was like it would be double 15,000 or 30,000, if I was to do the new construction myself, but I decided to just assign that one to that particular investor and move on down the road. We've got like eight other new construction projects getting ready to go. So just now of those things you just decide, all right, you can do it go ahead, I'll just take the quick money and run.

Joe:      I have been– I'm super pumped, because the last week I have literally talked to more students and clients, coaching clients that have done more deals than maybe ever before, in my short coaching career. I've been coaching folks for maybe four or five years now and I'm so excited, because I also I'm coaching bird dogs right, so there is people that are actually out there in St. Louis right now going in and finding deals for me. This one guy calls me with a lead, “Hey Joe it's listed for 28,” and get this the realtor says, “The owner will take anything above 10, 000,” so…

Alex:    Ten thousand one dollar.

Joe:      What does that mean, so okay, I'll just see, I'll offer them 15 see what they take right.

Alex:    Are you serious?

Joe:      No-no I'm just joking.

Alex:    Oh okay.

Joe:      But like why would a seller– first of all why would the Realtor probably should not be telling people that, but basically bottom line is…

Alex:    Motivated Realtor.

Joe:      Yeah I guess, so that can be a deal, I'm probably going to pick it up and flip it, in fact my wholesaler is going to go and look at it today, and he called me now…

Alex:    What are going to get it for?

Joe:      Probably I'll offer nine, eight, or nine.

Alex:    All right.

Joe:      Because if they tell you the minimum they'll take is 10, I mean they'll take eight.

Alex:    Okay all right okay, our realtor is almost like seriously dude did you offer 15,000?

Joe:      Oh no-no we'll probably offer eight or nine, we're going to go look at it, it all depends, but we can probably flip it pretty quick for 15.

Alex:    Okay.

Joe:      And the cool thing is all we need to do is look on the MLS, see if it's listed for 28, and here we're offering it for 15 and we'll just do…

Alex:    There you go.

Joe:      A double close on it, but it's cool, and this is from a bird dog, I didn't pay anything for this lead, and my bird dog is going to get a nice happy referral fee for that. But I also talked the other day to another client in St. Louis in my backyard who just did a $25,000 deal. He actually closes in five days on this deal, and the buyer has already put down a large earner's money deposit, so it's good to go. It's in a great neighborhood, but get this lead came from a hang up, and did I tell you these deal yet?

Alex:    Absolutely.

Joe:      Did I talk about this last podcast?

Alex:    No.

Joe:      Okay.

Alex:    Not this deal, not while– unless you did another one, but…

Joe:      I don’t know I was going to tell it again so because it's so cool. It was a hang up, he's one of those guys who just takes massive-massive action, gets a hang up and he calls him back anyway. I was talking to him about he said, “You know what I don’t even care about their voicemails, I do listen to them to them, but I just skip them through, like when I'm halfway listening it. Because a lead is– a phone number is a lead,” so he calls everybody the same to voicemail or hang up etcetera.

This guy was a hang up and he just this real matter of fact and says, “You know what I get a lot of postcards, but I'm just ready to sell right now, and I got your postcard at the right time and I want 90,000 for it, and that's it.” So he says, “I want 90 for it,” and he just looks up on Zillow, this guys is new he's only been investing for maybe a month. He runs a quick some numbers that’s about 70/80% of Zillow that’s great, so he goes to his house, gets it's under contract, and then turns around…

Alex:    For how much?

Joe:      For 90.

Alex:    Okay.

Joe:      Because that’s was good number right, and he doesn’t know how to negotiate really even he's just says, “Great, okay.” And then he starts advertising it for 105, now he has a small buyers list of about 20/25 folks, they're active buyers right, and he starts emailing it out to his buyers and nobody responds to it. He finally talks to one of his buyers who buys a lot off deals and he says to him, “You know what you're just so full of it,” the buyer starts not railing on him, but comes down on him and says, “You know you're just advertising that property like that, so you can start building your buyers list, it's not– you don’t really have that deal,” the guys said, “Well yeah I do, really I do.”

So what he did is he actually bumped the price up, because he realized maybe I'm advertising this too low and people just aren’t just believing that it's real. So he bumped it up from 105 to 115, puts it on Craigslist, puts it on Postlets, and starts getting flooded with calls, and he also sent it to me and I sent it to my buyers list. And starts getting flooded with calls, and gets it under contract immediately, and people start telling him, “I'll pay you more than 115,” and he's like, “Oh I'm sorry I already gave it to this other guy.”

So he's got an early contract for 90, he's selling it for 115, and sometimes you can advertise a product, or a house, or something, and if you price it too low it actually discredits you, and it's so funny when he raised his price, and he did a little bit more advertising all of a sudden…

Alex:    Either that or he had a really bad buyers list.

Joe:      Yeah maybe that he did have a probably a really bad buyers list, that’s right, that’s probably what it was, it’s a combination of all of that. Anyway I just so excited for this guy because here he is about a month or two months into it, and he just takes massive action. He's one of those guys ready fire aim, it's he's like he calls me he's like, “I got this contract now what do I do?” I say, “Well you start advertising it, right,” he said, “Okay.”

And then he's got, “I got a bunch of buyers, now what do I do?” So he doesn’t even worry about what do I do step seven and eight, he's just like okay what's the next step, and then he does it and then calls me, “What do I do next?” And then I tell him, and he does it. So it's so exciting to see these guys that I'm working with, I just interviewed a guy– this is another guy in St. Louis it’s crazy, these are three people deals I'm talking about in St. Louis, but I coach people all over the country.

This guy– his name is Rick, and I interviewed him and he's going to be– this is going to be an episode in the future. I posted a job on Craigslist looking for an admin assistant; he actually applied for my admin assistant job. I talked to him on the phone I thought, “That’s kind of–” I'm not sexist but I thought, “That was kind of weird to have this dude who is older than me, be my admin assistant,” maybe I'm sexist, but I just said, “I don’t think it's going to work out.”

Alex:    That’s another podcast.

Joe:      Whatever, so it was actually the reason why I didn’t hire him and I hired this other person, because I already knew this other person and she was going to be– I knew she was she was going to be real good. Well three months later I post a job on Craigslist looking for an acquisitions manager, the same guy applies and he calls me, and I talk to him and I said, “This guys is actually really nice.”

I work with him for about– I hired him, we did probably 20, 25 deals together, and for various circumstances he said, “You know what this is great, but I'm going to have to I have to do this on my own now,” and I totally understood, and we talk about that on the podcast interview. But I talked to him yesterday; he's done over 100 deals in the last 12 months.

Alex:    Wow.

Joe:      A hundred deals and I'm not taking all the credit, because this guy is real smart and he just does it, but I mean I did point him in the right direction at the very beginning, and I told him one thing that’s really important…

Alex:    Is he doing regular wholesale, or lease options, or a combination?

Joe:      Regular wholesaling and this is what he does, he finds the buyers first, I told him at the very beginning the way we're going to this, is we're going to find the buyers who have the money who are looking for turnkey rentals, and we're going to just send a bunch of direct mail to them. Then once we find the buyers we're not even going to do any direct to seller marketing, we did a little bit at first, but we're just going to start spreading the word out to everybody we know in St. Louis that we're looking for deals.

So we started contacting all the investors, all the realtors, all the property managers, everybody that we know go the REIA groups, telling everybody, “Hey we've got five million dollars burning a hole in our pocket, send us your deals- send us your deals.” So all he does now for marketing for leads is send out a weekly email, “Hey this is what I'm looking for, these areas, this price range, these number of bedrooms, etcetera- etcetera.”

And he's getting flooded with leads, and he's just wholesaling these things like crazy, because he has a good solid buyers list. So I'm so excited about that, and just know that I'm kind of like so proud of these guys, and I'm just so pumped and excited because I'm seeing that this podcast, the coaching that we're doing with folks, and helping people, as having an impact in changing people's lives. This guy…

Alex:    Well that’s awesome.

Joe:      He's in the ministry part time, and he used to be a pastor.

Alex:    Oh wow.

Joe:      He's making probably four five times what he used to make in the ministry, and so now what he's doing– and since he's been in the ministry for so long, he didn’t really have– and I may be completely speaking out of line here, because I don’t know this for sure. But I think he didn't have much of a retirement plan right, because it's hard for someone in ministry to save for retirement. And here he has– he's now starting to buy rental properties free and clear, and at this pace he's going to be able to have probably a dozen rental properties in the next 12-16 months, he said I think, and he'll be able to retire if he wanted to, with the passive income that he's getting from those rental properties.

Alex:    What would you say just curious on a hundred deals like that, what was his average deal profit?

Joe:      Well I would rather not share.

Alex:    Okay.

Joe:      Because him and I talked about that, and I just rather not share, but it's very– he's sitting very-very comfortably right now.

Alex:    Sure.

Joe:      He's doing great. So that was Bryan we're so sorry about making you sit through all of that and listening to…

Alex:    We got everybody all excited about deals, it's okay.

Joe:      Well Bryan is– this is Bryan Ellis guys, and first go to realestateinvestingmastery.com, by the time you're listening to this I think you would have already heard my interview with Rick in a prior episode, so if you haven’t heard that interview with Rick go back to our website and listen to that, it's amazing. I'm going to start interviewing more students Alex I'm going to start to…

Alex:    Good idea.

Joe:      I'm going to start interviewing these guys, who are doing deals, and I just– I love it. I love helping coaching people, so if any of you are interested in getting some coaching and assistance go to the website realestateinvestingmastery.com, you can look me up on there and somehow. I'll probably have a link soon on how to get into that. So all right we've Bryan Ellis on the line, on our podcast here. He has a new podcast that just came out Self Directed Investor Radio, and Bryan Ellis has been in the industry for a longtime, great guy, Alex and I have both heard of Bryan, he's kind of a legend in the internet.

Bryan: Check is the mail man.

Alex:    He's well known in the education industry, and does a lot deals. He's been involved in real estate for a long, long time, and I'm real honored to have you on the show Bryan.

Bryan: Well thank you, I've heard so many good things about you guys and about this show, it’s a real honor to be here.

Joe:      Here's the thing Bryan though, we've doing this podcast for how many years Alex, four three or four?

Alex:    Was it like 11 maybe.

Joe:      Yes 2011 is when we started.

Alex:    So four years.

Joe:      And you Bryan have been doing your podcast now for how many months?

Bryan: Three and a half weeks.

Joe:      And you have more reviews than we do, what's up with that?

Alex:    Wow.

Joe:      That’s wrong, I'm just kidding.

Bryan: Sorry man.

Joe:      We are higher in the rankings in iTunes that you are though.

Bryan: Give me a few more days.

Joe:      Lets that sink in a little bit.

Alex:    Yeah, it's not a competition, come on.

Joe:      Yes it is, now that's funny, congratulation to you though, you're doing this podcast, it's taken off you're doing really, really well with it. Talk a little bit Bryan; I wanted to get into your story about how you got started in real estate and stuff, but talk about your podcast first, what is the Self Directed Investor Radio show all about?

Bryan: Joe there are millions of people depending on which studies you believe up to 40 million people, I think that number might be a little high, but millions of people out there who have a pretty decent amount of money and want to see that money grow. But they have a gut level intuition that what they're getting from Wall Street is not really working for them as well as it should be. These guys have to deal with the awareness every night when they go to bed that even if the stock market did really well for them today, something really dramatically different could have happened by the time they wake up tomorrow.

And that’s really a pretty high stress situation, so Self-directed Investor Radio is really all about reaching out to those people and saying, “There are alternatives, there is a better way, there's such a thing as investing safely, and investing well, so that you make a lot of money, but you do it in way that you just don’t have to worry about it,” and that’s the mission of Self-directed Investor Radio.

Joe:      Can you give some examples Bryan of what you're talking about?

Bryan: Yeah sure there's a trifecta of asset classes that we refer to as the holy trinity of asset classes, and they are real estate notes, tax lien certificates, and cash flow producing real estate. Among those three things, if you spread your– particularly if you based your portfolio around good real estate notes, and then also have a good smattering of liens, and income producing real estate.

Then what you'll find is you have a portfolio that produces regular income that’s predictable, that’s low risk, and that has a potential to grow for the future. The low risk and predictable thing can never be said for the folks who are investing everything in the stock market, and frankly we can beat stock market returns pretty handily on a regular basis. So we win every single time using that trifecta of asset classes wisely.

Joe:      Nice, so why do this show Bryan? I mean what's in it for you? Are you just trying to educate people on this stuff, because you have a passion and interest in it? Why are you taking all the time and if you don’t mind me asking?

Bryan: Sure yeah.

Joe:      Why is this so important to you?

Bryan: Well it's so important to me because number one, I love that medium, I actually had a radio show here in Atlanta for a brief period of time, and that went pretty well, but we didn’t have a real clear picture of what we wanted to use it for. But I fell in love with the notion of having a radio show or the podcast as it were. And it turns out that demographically the people who listen to podcasts are whole lot of them are fairly affluent, well-educated people, who really do match the criteria that we're looking for.

So I'm using it as medium to get the word out, because here's the reality Joe you know what a self-directed IRA is, I know what a self-directed IRA is, Alex knows what a self-directed IRA is, but just about nobody else does. I mean out there in the real world, outside of the real estate investing expertise area, nobody has ever heard of that. They think a self-directed IRA is the thing that lets you chose this stock versus that stock. And so it's my objective to get in front of those people and say, “Look, there's an alternative, here's how you do it, and you can make more money, and do it more safely.” That’s really what I want to do, use this thing for is to get the word out.

Joe:      Yeah I'm looking here you have an episode called; The Evidence Why the Stock Market Could be Scary for the Next Five Years, what do you mean by that?

Bryan: Well there are some studies that indicate based on how the economy looks, for example there's a pretty big divergence going on between GDP and actual real economic growth. When there's divergence in those two things that usually suggests that there's what everybody in the industry refers to as a, ‘Correction', I think that’s kind of a funny term to use to refer to a falling values. But that generally indicates that there's a correction coming.

Furthermore, stocks are undeniably overvalued. If you were to read the industry trades just in the just on CNBC, or anything like that, if you were to read those or consume those pieces of information as they existed 10 years ago, versus as they exist now, what you'll find out is that PE numbers and all the data that is used to measure the expensiveness of stocks, those numbers have changed, those factors have changed.

They don’t work anymore because the old numbers make it clear that the current market is really-really unattractive. So taking that and factoring it in with the reality that the stock market offers no security whatsoever, I mean when it falls apart you're screwed, and that’s it. Taking those things together we simply absolutely believe that there is a time of reckoning coming for the stock market.

Because the other thing is you got to understand Joe, is that during the last several years there has been between $50 and $100 billon a month of money pumped into the stock market every month by the FED, and that has inflated the market dramatically, and that’s being rolled back presently and the reality– I'm sorry…

Joe:      Sorry to interrupt that, how do they do that? How does the FED do that?

Bryan: Basically what happens is that they provide funding for the banks, the big banks at no interest rate, no expense.

Alex:    Okay.

Bryan: And so the banks were able to get that money and the big investments funds as well, and use it to essentially prop up the stock market. I believe that’s basically a handshake deal between the government and the banks, because it benefits the perception of the stock market, which helps the big financial companies, and helps the government as well.

Joe:      Okay, interesting. When you're talking about self-directed stuff, you're not talking about investing in index funds, in REITs; you're talking about taking more into control into your own control, your own personal investments. And again the three different main things you're talking about were defaulted notes, right?

Bryan: Not necessarily defaulted notes, but real estate notes generally.

Joe:      Yeah okay good.

Bryan: Tax liens certificates, and cash reproducing real estate.

Alex:    You're talking like– even doing hard money kind of style?

Bryan: Absolutely-absolutely that is a component of real estate notes from my perspective; I love the hard money business.

Alex:    Absolutely.

Joe:      Now do you– I'm trying to figure out the right way to ask this, like do you do your own investing as well?

Bryan: Oh sure.

Joe:      So then are you– you're doing this podcast you're probably finding a lot of people who are looking for places to place their money from their self-directed IRA, is this also now giving you some opportunity to work with investors, does that make sense?

Bryan: Oh yeah absolutely it is, I tell my listeners that the ideal scenario for them as far as getting involved in real estate notes, is that they work with someone who knows how to find and evaluate those notes, but who will also have some skin in the game with them, and do note deals with them. And that’s what I do, the approach that we take Joe is that, I buy these notes myself, and I hang on to them, let them season a little bit…

Joe:      Oh really?

Bryan: And then I sell off a portion of them to investors, a lot of them come from the Self Directing Investor Radio show, so the net effect is that the investor that I'm working with they end up getting the advantage of a note that has been seasoned and proven. They also get the advantage of knowing that, I have something to lose if that note doesn’t go well. So it really is a very complementary type of relationship, and its one where I can recommend that with absolute confidence, because my money is not merely going to be on the line, it's already on the line.

Joe:      It sounds a little complicated to me and maybe I just, because I’ve never invested in notes before.

Bryan: Sure.

Joe:      Could you explain little bit more how that works, maybe simplify.

Bryan: Yeah, absolutely. Yeah-yeah so if you are my prospect I’d say Joe, so I’ve got this note that is paying 350 bucks a month.

Joe:      A note from- a note from what?

Bryan: It’s a mortgage note; it’s a first mortgage note on a little house in Toledo, Ohio for example.

Joe:      Was it an owner financing note or was it a note that a bank had that they are selling now?

Bryan: That particular one was actually an institutional note.

Joe:      Okay, all right.

Bryan: And just so you know, my prospects don’t ask those questions, I’m happy to provide that information, but they don’t ask those questions. What they are interested in is how much money can I make and how safe is it.

Joe:      Right, right.

Bryan: So basically my pitch is Joe I have got this note that is paying $350 a month and if you pay me $10,000 and by the way I don’t know if these numbers actually work out, so disregard that, but if you pay me $10,000 I will let you have the next 60 payments and that will equate to a 12% return, how does that feel?

Joe:      Pretty good.

Alex:    Well selling partial is really cool, I mean back in the day before I even started in real estate, there was a guy out in the business who actually got into really big trouble selling winning in the cash flow business and that kind of, you ever had of that Bryan?

Bryan: Yup, I know who you are talking about.

Alex:    Yeah, and it was, you know he was kind in the grew education space and did you know, did a lot of different things and what was really cool about that was he was teaching people how to flip notes, and you could do the same thing. You could mail just like we look for wholesale deals, we can mail owners who sold their properties using owner financing and you could buy their note or a partial of the note and it’s actually really-really cool just because the way it works it’s like okay, if you sold off and I don’t even really know what the numbers are, but if you were to sell just a portion of the note you still almost have the entire note left on the balance when you are done with it, isn’t that the way it works? Like-

Bryan: Yeah, it really is and we…

Alex:    Back in the day too, yeah, go ahead.

Bryan: We you know, we buy them that way too. I don’t just sell them that way, in fact this very morning like this morning I got a tape in from a guy who has some properties in Detroit, now Detroit- I’m sorry some notes on properties in Detroit and Detroit is a pretty scary market. And I don’t know it intimately and so I’m not really inclined to do it, but I made him a ridiculous, ridiculous partials offer where I would only buy a couple of thousand dollars’ worth of the fine end of several different notes.

And but my yield was going to end up being north of 50% and he was getting back to me today and said, you know I’m seriously considering that, but the cool thing about it for him is that he is going to get those notes back from me in a couple of years and he is still going to have them, that’s the majority of the value left on it, so it’s really pretty cool thing.

Alex:    I mean and also back in the day as well, Ryan and I can see this guy name is Ron McGran, he had a FSBO course for sale by owner course and one of the strategies with that was when you are selling at the closing, or you could shoe how the seller and I don’t know if you can do this nowadays, but let’s say you got the seller to take an owner finance note at the table, you could then find somebody to come in and let’s say they need the cash.

So the whole idea is you know seller is like, well I’m not getting any money if I do any owner financing on this thing, so I’m not going to do it but he showed you how you could get the seller to sell a portion of their note at the table and still have a vast majority of their principle left when they did that, but I mean I don’t know if there is anybody buying brand new notes anymore like that.

Bryan: Well you know, there used to be a lot of that back in the late 90s and early 2000s, but it was happening all the time but no, there is no institutional purchasing of that kind of brand new note any longer.

Alex:    Right, right, right but.

Joe:      We have a, we had an interview with Eddy Speed on the podcast about six-eight months ago, really good interview, anybody wants more information about notes and how they work should check that out.

Bryan: Absolutely, Eddy is the man in this.

Joe:      Oh man, he’s a genius and my eyes still glaze over when we start talking about notes. It’s kind of intimidating to me and maybe I don’t know why.

Alex:    It’s all the same, it’s just, it’s just not a house, it’s not a piece of property, it’s just a note, its money, that’s all it is.

Joe:      But I don’t get the whole partial thing. Like Eddy talks about-

Alex:    If you say the math on it you’d be amazed the way it works.

Joe:      I know, Eddy Speed showed to me once, and I was like that’s amazing but then like five minutes later, I was like how does that work again? I forgot, and I did really well in calculus and you know, I have an engineering degree and…

Bryan: Oh my gosh! What do you do with your time?

Joe:      I don’t know, I just don’t like, I don’t get notes.

Alex:    Where did you go to school, he’s asking.

Joe:      No, I’m not going to tell you because that will make, I went to Iowa State University. Iowa state in Iowa.

Bryan: Cool.

Alex:    That’s no big deal, everything is cool.

Bryan: Is that bad?

Joe:      No, I’m embarrassed though that I’m collage educated, I’m really good at math and I don’t understand notes.

Alex:    Come on, oh, okay, it’s okay man, it’s all good.

Bryan: Joe, it will be okay.

Joe:      Maybe it was my upbringing and I wasn’t potty trained correct or something.

Bryan: That’s probably what it was; you crawled too soon or something?

Joe:      It’s my parent's fault.

Bryan: Yeah.

Alex:    There you go.

Joe:      It’s my parent fault but okay, explain the partial thing maybe a little, one time like because you can, as an investor, if you are you are selling like the front end of the note and then after that you keep the rest, is that right?

Alex:    Just use a round figure of $100,000.

Bryan: Yeah, fine, you– this is much simpler than you think it is Joe, so I don’t start at this point, the point that I start at is okay Mr. investor, are you interested in making you know, 10% and having a rock solid piece of collateral behind that investment so that even if you don’t get your payments you are going to get lots of money out of the deal.

Well invariably the answer to that is yes. So what I would is I would say okay, I have this note, it’s a mortgage that I’m collecting on, I’m getting paid $1,000 a month on it and you can pay me $25,000 and I will give the next three, four, five years or whatever the number happens to be of payments and that’s going to equate to you making a 10 or 12 or 15 or whatever percent return during that time. So the question is Joe, do you want to collect a $1,000 a month for the next five years in exchange for $25,000 now?

Joe:      Yes.

Bryan: Well you run the numbers; you say that is $60,000 in exchange for 25 grand, that’s a pretty dog on good deal, that’s a sizeable.

Alex:    Without worrying about tenants and toilets and problems and issues?

Bryan: Yap, you don’t think about any of that, you don’t think about taxes or insurance, you don’t think about any of that. It’s just passive income.

Joe:      Okay so then at the end of that five or ten years, then what happens? Then the rest of the note is yours?

Bryan: The rest of the notes reverts back to me; it happens automatically because that’s the contractual agreement, and probably what that investor will do is come back to me and say can I buy five more years? And so I will probably say yes and we’ll just do the thing again.

Joe:      So but because of the way compounding interest works or you are paying down your principle slowly you have more rapid principle pay down at the end of the note, right?

Bryan: That’s right, that’s right.

Joe:      Why is that better for you? I don’t get that part.

Bryan: Well, it may not be better for me, it depends on the how I purchase the note, you know if I paid $90,000 for that $100,000 note I’m probably not going to sell off the back end of it, but you know, that little house in Toledo, Ohio I mentioned for example, that was a $50,000 note, so it’s kind of a round number.

I paid $20,000 for that and you know on that one we are about to partial it out and we will certainly collect the entire $20,000 back and this is after having held it for a year and a half so we are, we’ve already made you know 30-40% on it already, but we are about to sell of a partial of that thing and we’ll collect the entire $20,000 that we’ve got in it already. And that will only account for the next six or seven years, then we’ll get it back and do it again and make a really nice return again.

Joe:     And you can do all do that inside of a self-directed IRA?

Alex:    Tax free.

Bryan: That is the perfect environment in which to do it yes, tax free it’s a beautiful thing, a beautiful thing.

Alex:    Now are these defaulted notes you are buying from a bank and then working to keep on making them whole? What’s the source?

Bryan: No, no, no, that’s very insightful question, for all of your listeners there are really three categories of notes. There is what’s called a performing note and that’s probably most of your listeners that have a mortgage, they are paying their bills on time.

Alex:    They are performing.

Bryan: Yeah exactly, there is defaulted note and that’s people who’ve stopped making their payments so it’s defaulted, and then in the middle there is something else. There is thing called re-performing notes and these are people who defaulted on their mortgage probably because they lost a job or something, but then they get a new job, they go through the whole modification process and now they are paying again, so they are re-performing.

So I stay away personally from defaulted notes not because that’s a bad business, it’s not a bad business, but see I am not in this for real estate, I don’t want to end up owning property and that’s the reason you do defaulted notes is so you that you end up getting into real estate at a good price.

Alex:    Right, right.

Bryan: I am interested in cash flow, passive income, and so we really focus heavily on performing and re-performing notes. And I like re-performing notes specifically because you tend to be able to get those at a very-very low price and a very-very high yield compared to performing notes, but if the deal is right I do either one.

Joe:      Interesting, I think…

Bryan: Well, thank you.

Alex:    Yeah, very interesting, so can you give us a source or two, like you know we will say yeah, you can mail to find these things, yeah you can make offers for properties on MLS, yeah you can put out band signs whatever, so what– if somebody wanted to find their own note what would they do?

Bryan: You know it’s– that’s the downside of the notes business, it is kind of an old boys’ network, and if you want to be able to really have access to a lot of inventory you got to know people. You can do direct mail campaigns to owner finance mortgage owners and that does work, and that’s a completely wise and intelligent thing to do, but really if you want access to a lot of this stuff you got to know somebody. That’s really why we always recommend that folks who are maybe interested stop by our site and check out whatever we got available at the time because it’s just not, it’s not the case that these guys are standing on the street corners.

This is one of the reasons the financial advisors don’t recommend this stuff, it’s the biggest reason is they don’t know it exists, they have no clue whatsoever, but even if they do they don’t know where to get inventory. So that’s really one of the big primary functions of Self Directed Investor Society which is the organization that backs up our podcasts is to connect our listeners with those types of opportunities.

Joe:      What is the website Bryan people could go to get more information on that?

Bryan  The website is sdiradio.com and if you are interested notes specifically it says the sdiradio.com/notes.

Joe       Cool, SDI, SDI stands for what?

Bryan: Self-directed investor.

Joe:      Right sdiradio.com and .com/notes.

Bryan: That’s correct.

Joe:      If they are interested in notes.

Bryan: Absolutely.

Joe:      Very cool and so you are selling these notes, can you talk a little bit about Dod Frank, does that affect this at all or.

Alex:    Yeah, what about the SCC and all that wonderful stuff?

Bryan: Do you know how may rules I have to follow, dear God, I need to look into that.

Joe:      Yeah.

Bryan: Yeah, it’s actually fairly easy to sell notes particularly since I own most of the inventory that we sell.

Alex:    You are selling securities, no doubt about it.

Bryan  Well no, talk– you should talk to a securities lawyer, there are special little lovely exceptions for notes that I really enjoy and take advantage of. Now we are actually about a week away at this point from having a five or six C I think it is offering the package available, so we are going to start allowing investors through that mechanism as well but…

Joe:      Do they have to be accredited investors?

Bryan: Yeah, we are going to take only accredited investors.

Joe:      Meaning a million net, correct?

Bryan: Yeah, a million net exclusive of your home, I think it's what it works out to.

Joe:      Okay.

Alex:    And they have to have an annual income of over a couple of a hundred thousand a year or something.

Bryan: Yeah I think it’s 250 for an individual and 300 for a couple if I recall correctly. But yeah we are really going to focus on the accredited market because I think there is plenty of those people in my experience, and so it’s where we are going to go.

Alex:    Well that’s smart.

Joe:      Absolutely.

Alex:    But does that make you a little nervous so Bryan because you know, do you look at these as, I guess another question would be Bryan, why not just go out and buy a bunch of rental properties, right.

Joe:      Tenants and toilets and trouble.

Alex:    Sure, do you think about that like maybe I’m just better off doing deals or why do you like notes better for you own investing? Does that make sense?

Bryan: Yeah, it makes perfect sense and the answer to that is a couple of things actually you know, rentals make sense. There is a place for rentals in a wise portfolio but let me just, can I give you little example here to compare?

Joe:      Yeah, yeah.

Bryan: Rental versus note?

Joe:      Sure.

Bryan: I’m going to give you a little prototypical a hundred dollar house example, now I realize there is no such thing as a $100,000 house in some areas, so for your listeners who are living I California or whatever or Detroit yeah exactly.

Alex:    It’s a mansion in Detroit.

Bryan: It’s an entire city block in Detroit, so for everyone else there as a rental property owner of a $100,000 house here is how your numbers might stack up, this is kind of hypothetical. Let’s just say you are doing well, you are getting $1,000 of rent per month, taxes are going to knock out 80 bucks, insurance is going to knock out 80-100 bucks and there is the management fee, that’s another 100 bucks and you total it all up if my numbers are coming up mine correctly that is $8,640 a year of income that you are making from that $100,000 property.

So then there is also the issue of vacancy. Let’s just assume that you are going to have one month on average per property per year and then we’ll go really conservatively and say you are only going to have $500 worth of maintenance each year well, that knocks you down to $7,420 a year of income on that rental. That is 7.4% yield okay, everybody with me on that 7.4% yield so far. So the rate of return…

Alex:    Meaning cap rate.

Bryan: Cap rate so, your rate of return might improve if the property value increase and that’s a good thing, but it’s not something that I feel comfortable banking on because it is not, it’s not a guarantee.

So 7.4% isn’t bad and there is the potential that the property will go up, your rents will go up, but unfortunately, taxes, insurance and maintenance, all that stuff will go up over time as well also, it will happen, there is no question. So contrast that with this scenario, you have that same $100,000 house and I’m just going to try and lay it out for you in a way where if you took a rental property and converted it into an owner-finance note how it would look different.

So instead of renting it out you sell this thing, but you do it by providing financing to the buyer yourself and because you are providing financing you absolutely can, this is not theory, this is not something I’m suggesting may work, you absolutely can sell that property for more than the appraised price, and 10% over the appraised value is really-really common, so that’s easy to do. So you sell the property like this, you price it at $110,000 dollars, you get a down payment of $10,000 and your finance the balance of a 100 grand at 10% for 30 years.

These are all numbers that work today and we’ll practice right now. I’m going to spare you details, but this yields and annual returns of a little bit better than 10% every year. Now by the way you don’t pay the insurance, the buyer does, you don’t pay the property taxes, the buyer does, you don’t pay for maintenance, the buyer does. So for that same property that’s effectively yielding about 10.5 percent versus 7.4% it ends up being a pretty freaking huge difference. That’s an $80,000 difference over 30 years, $80,000, now it’s true that that rental might increase in value and it could increases in value by more than $80,000 but…

Alex:    Which you as the note holder would have no interest in that; yours are just based on note instrument itself.

Bryan: Yep. You would have no interest in that, but you would have $80,000 guaranteed, as much as it can possibility be guaranteed.

Alex:    Actually I take that back, you do have an interested in that because now your collateral becomes that much better and so there is your LTV and your debt to value or…

Bryan: Yeah, I mean your note actually becomes more valuable with every passing year assuming that the property at least maintains its value. So here is the deal…

Alex:    Right, your ITV investment value.

Bryan: Yeah, the investment value. So and by the way that extra $80,000 does include the ten grand you collected upfront. Now this is the same house in one case used as a rental and one case sold via owner financing. Now let me be clear, I man not, not, not saying that there is not a place for rentals in your portfolio, but what I believe is that the smart investor and I have observed this from– remind me to give my observation about this in a moment, but the smart investor would be remise if he didn’t consider using self direct– I’m sorry owner finance, seller finance transactions as a fundamental basis of his portfolio because it is high yielding, it is highly secure, it is predictable, it is low stress.

You can go to bed every night knowing that what is going to happened next month is you are going to get your check because you not going to have the situation with this thing that you do with rentals where maybe you have a month or two of vacancy every year or two. I mean think about it guys, with a rental over five years, how many different tenants are you likely to have?

Alex:    Five.

Joe:      Five at least.

Bryan: It’s probable that you are going to have at least five and between every tenant is it possible you are going to have two- three-four weeks’ worth of vacancy, maybe not for you guys, you guys are really good marketers, but for the average person…

Alex:    And a $1,500 turnover deal at least.

Bryan: Yeah and see, that’s not even factored in to the analysis I just gave, I tried to give a really rosy picture for the rental side of things, but I gave you a very realistic picture for the seller finance side of things. The beauty of it is that you are collecting payments on a regular basis, you know what it’s going to be doing, you don’t pay taxes, you don’t pay interest, you don’t pay maintenance, that stuff just isn’t, it’s not necessary, it’s not part of the game. So that’s why I love it.

Joe:      Now get me- and this is why we talked about Dodd Frank briefly, Dodd Frank has zero to do with this because we are not taking about originating notes, we are talking about working with existing notes correct?

Bryan  Well, yes and no, what I just described to you is the origination of the note because it’s comparing renting out a house versus selling that house by seller financing.

Joe:      Yeah, yeah you are originating.

Bryan: But in that case it really doesn’t matter because the answer is you are– there is a type of person, professional that you need to evaluate the buyer, I think they call it an mortgage originator or something like that originate from mortgage to, yeah something like that .

Alex:    Yeah, licensed mortgage originator.

Bryan: Yeah, yeah that person. So you pay that person 500 bucks to evaluate your buyer and then you are compliant.

Alex:    And you are done.

Bryan: Yeah, yeah.

Alex:    Simple.

Bryan: Yeah, so we play by the rules for sure, it’s just that the rules even though their owner is stupid and indicative of everything that’s wrong with government, the reality is that it doesn’t really hurt what we are doing.

Joe:      Right.

Alex:    Yeah, I was just talking to some– long story but I was just talking to a mortgage broker here in Saint Louis and he said yeah, I can do all your seller finance deals for you if you want. He is a licensed mortgage originator; he said I can do them for you. So there are mortgage brokers out there who can do this for you and probably every major city in the country, don’t be intimidated by it.

Bryan: No, absolutely not, it doesn’t pay to do this stuff yourself, it’s very-very low compensation type thing and yeah, it’s worthwhile to just pay somebody.

Alex:    Good, good, well I want to change the course a little bit Bryan and ask you about your education business. You’ve got a really popular newsletter and keep talking– I’d be curious to know how you got started into that. You do a lot of deals, you invest in a lot of notes, I mean, how, you’ve been in the business a long time.

Bryan: I have.

Alex:    What made you decide to start this newsletter and why do you do, what’s the newsletter all about?

Bryan: Well back in the day when I started, I had no concept that it would become what it is now. Back in the day I was, I also went to engineering school, I went to Georgia Tech and was…

Joe:      Good for you.

Bryan: Yeah. I was there for about a year and a half and before I realized that I wanted to start my software company and so I quit school and started software company, and was doing really, really well with that, and right about the time when my first daughter was born I realized that working 90 hours a week wasn't going to work for me anymore and so I wanted to find something else to do. Real estate is where I settled, and guys let me tell you something, my first year and a half in this business to say I was bad at it, oh my God I would have had to improve a lot to be awful.

Joe:      Wow!

Bryan: I didn’t do any deals; I just threw away lots of money, lost lots of time. It was pretty terrible. But I learnt along the way and this was something that I know, you guys know well, I learned kind of what I was missing. It turns out it doesn’t matter how much contractual knowledge or how much technical knowledge you have, it's doesn’t matter at all if you don’t have your marketing right. So once I kind of learned that and put that piece of puzzle together, I started doing a lot better. And it was about that time that I started collecting an email list of local investors here in Atlanta.

So I did a lot of wholesale deals back then, and I ended up collecting a couple 1,000 names of people here locally who were interested in buying houses. That was how I flipped my houses back then. I’d get the property into contracts, send out an email, and three hours later I’d have somebody who would — seen the offer, and fax in an offer to purchase it from me. It was really quite the machine, and so that’s how I got started in real estate and that’s also how I got started in the education business because at some point I realized that that email list that I was using to flip properties could probably be used for other things.

And so we used it to generate mortgage leads, we used it to sell insurance to our investors etcetera. And so now we could use it to make money in ways that had nothing to do with selling real estate, but that were topically relevant and we naturally gravitated over towards the information marketing side of things because it was just such a good opportunity to teach and share with people exactly how they could get involved in the business and do the same thing. So we ended up creating a program called Ruthless Internet Marketing that was really just an internet marketing program just for real estate investors. This is 10 years ago I guess.

Joe:      Yeah.

Bryan: And it did very, very well. We left no doubt in any one’s mind because we would– it was a two day seminar. On the first day of it we would– in the course of the first four hours, the morning session we would use my email list both to find a deal and to flip a deal and it was done all live in front of everyone’s eyes, and it was that predictable. So that was how I got into the information marketing business and we have since built the newsletter list to several 100,000 subscribers and it's been a great ride. I’ve really, really enjoyed doing that and look forward to doing it for many more years to come.

Joe:      What is the website people can go to, to get on your newsletter?

Bryan: It is Investing.bryanellis.com. Again Investing.bryanellis.com and that’s B-R-Y-A-N-E-L-L-I-S.

Joe:      Investing.bryanellis.com.

Bryan: That’s right.

Joe:      Cool, and B-R-Y-A-N– nice. So Bryan you probably see a lot of stuff that goes on in the information business, and I imagine there is a lot of good and there is a lot of bad in there.

Bryan: You’re right.

Joe:      Okay. Maybe you can talk to the people out there that they are just getting started and they are getting bombarded with offer, after offer, after offer. They are going to boot camps, they are going to workshops. How can you tell the good from the bad, somebody who is offering a good course, a good coaching program from somebody who is maybe not?

Bryan: Well there is a standard in the law called preponderance of the evidence and what means is if you look and you can see that something is obviously happening or obviously has happened then that’s a pretty good indicator that you ought to look harder there. And so in your case Joe you’ve got story after story about people who are your clients, who are flipping deals, who are making money, who are just making the thing really, really happen and you’ve got to be pretty dawg [ph] on good liar to come up with that stuff week end and week out.

And you are not lying; you are telling the truth that it comes through. I will tell people to trust your gut instinct above your greed because understand this, all of the people who are in the information marketing business most of them are good people, really. And I know a lot of those people, most of them are good people. They are some people who will separate from your wallet as a matter of sport and not think twice about it. And there is this notion of fear and greed and all of us make our decision from the basis of those factors whether we would like to do it or not it, whenever we are thinking unconsciously.

So what I would recommend that you do is if somebody wants you to buy their training course, it might be the greatest thing with their coaching program, whatever, it might be the greatest thing in the world for you to do because I am a proponent of having my hand held by people who have gone before me, and are smarter and know more than I do. I think there is overwhelming value to that.

Joe:      Sure.

Bryan: Having said that, just listen to your gut. Try to swallow the greed thing that is going to come up inside of you as you see the pictures of big checks. And the flashier someone’s marketing is, it doesn’t mean that they are dishonest. It does not mean that, it might just mean that they are very, very good at what they do. However for me, the more big fat checks that you see or the more pictures of Lamborghinis that you see, the more I see all that stuff, the more nervous it makes me.

Alex:    Sure.

Bryan: And so use your gut feeling and just listen to your spouse about this too. Your spouse is frequently going to be wrong by the way.

Alex:    That’s a good one.

Bryan: Listen to your spouse because ultimately you are going to find somebody that resonates with your spouse as well. And when you do that then you’ve got real alignment on the home front because if you go without your spouse what's going to happen is, you are fighting not just learning in the market, you are fighting your spouse and that’s a losing battle every time.

Joe:      That’s a really good point, and I’m embarrassed I didn’t think of that. I’m glad my wife doesn’t listen to this show.

Alex:    My wife is always right. I hate to admit it but she is always right.

Joe:      Well there is something…

Alex:    I told you so.

Joe:      Yeah. And there is something to be said with the women’s intuition on that whole thing. For whatever it's worth, I have seen it time and time again with my wife. When she’s had a bad feeling about something, I may go ahead with it. Maybe it's a deal, or maybe it's some kind of coaching program that I’m investing in. If I don’t listen to her, I get in trouble and it turns out to be a bad decision.

Bryan: Yeah, absolutely. I have seen it happen time and time again as well.

Joe:      So it is important if you are going to be investing a lot of money into a coaching program or an education program if you are married, get your spouse on board and get their feedback. I was going to tell a bad story about somebody else I know, but I won’t because they might be listening to this. I’ve seen it where somebody didn’t get their spouse on board and the spouse found out about it and it got really, really ugly. You just got to be careful with that kind of stuff. That’s really good advice Bryan. I like that a lot.

Bryan: Well thank you.

Joe:      And speaking of education I was asking you before the show, you self-publish sometimes different products of your own. Is that right?

Bryan: Yeah. We haven’t been doing that a whole lot in the last several years, but we did resume doing that this year and the reason is, exactly what we were just talking about product quality. Number one, there is really not that much new stuff coming out and number two, there is certainly not that much great new stuff coming out. And so what I have decided to do is that we are blessed with a big platform, we are able to get the word out really, really aggressive, really quickly using my email list. And so we are going to use that as a platform to share the expertise of real in the trenches experts. And we’ve got a product coming out in the next three weeks or so that it has two sides to it.

One of them is the private money side, this person named Jackie is teaching exactly how she has built a multimillion dollar investment fund that funds all of her deals and lets her participate in hard money loans as well. But she is also a real expert in finding deals that not only email lists, that are not on the MLS, that are not traditionally listed, and that you would just never otherwise be able to find without a few really ingenious strategies.

And so we are going to publish those two courses because I really just see them as an opportunity to make a big difference in the lives of the people who use them. So it's an exciting time around the Bryan Ellis Investing ladder.

Joe:      I’m excited about that too, because I know Jackie. We are both part of Life on Air and you’ve heard me talk about Lifeonaire before. It's a great program about…

Bryan: Me too.

Joe:      Creating a vision for your life and then designing a business around that.

Bryan: Exactly.

Joe:      So it's funny we’ve– Bryan and I are kind of somehow involved in the same mastermind. He’s in one part of the mastermind; I’m in the other part of the mastermind. But it's a great group, I just want to give a plug and shout out for it, if you go to Lifeonair.com or just Google Life on Air instead of Millionaire Life on Air, and get some more information. They do several events every year; it's a great group of folks. But Jackie is in that group, I’ve known her for a long time. I’ve spoken at her Real estate investment club in– where is it? Appleton, Wisconsin or maybe Green Bay, Wisconsin.

Bryan: It's up in a cold world, I don’t where.

Joe:      Yeah, it's cold and there is just a bunch of cheese heads that are walking all around the place, wherever it is. And she is a great lady, she really does this business and I’m really glad to see that she is actually starting to teach because she has a lot to share.

Bryan: Yeah, she really does.

Joe:      And that’s where I kind of look at myself as a defender sometimes of the education industry because it gets a bad rap. And that bothers me sometimes because it's deserved in a lot of ways. But I thank God for those guys that were willing to stick their neck out and put a big target on their back and come out with some kind of course, or do some kind of coaching, because if it wasn’t for them willing to teach that stuff and share it, I would have never learned about this opportunity.

I would never have learned about how to do deals and what kind of marketing works and what kind of marketing doesn’t. And yeah, I’ve bought my share of bad courses and signed up for bad coaching, but anytime I didn’t make my money back it was because it was my fault. It was because I didn’t implement the stuff that I learned and sure enough when I did implement the stuff that I learned, I made a lot of money doing it, so kudos to you Bryan. I know it's easy with a huge newsletter like you have sometimes to be the target of unfair criticism.

Bryan: It is.

Joe:      You’re just out there to make a quick buck and to sell information, you really aren’t doing deals, and what do you know, etcetera. I just don’t that's– I don't think it’s fair, does that make sense?

Bryan: Yeah. It's not fair and it's not accurate, but it's part of the business and that’s okay. The beauty is that every now and again somebody who buys one of those courses will go and do something spectacular, and that’s a pretty big payoff from a comic point of view if nothing else. It's a beautiful thing because I was much like you Joe. I bought a lot of books and did a lot of courses and didn’t do anything with them for a while. But once all that stuff kind of settled in my brain and clicked, and I was finally ready, then the success happened pretty quickly, but it didn’t happen immediately.

Joe:      And you know what else, there is a guy here in St. Louis who is also in live here by the way, he just joined. He is probably the biggest wholesaler in St. Louis if not the biggest one of them. And he also owns a bunch of rental properties. He knows St. Louis like the back of his hand, he is spending quite a bit of money every month on marketing, he knows– and he tests everything. This guy is really, really smart. And he wants to do more deals, and guess what? He's decided he wants to start getting into coaching and he wants to start coaching and helping people.

And I’m just so excited about that because here is a guy who knows St. Louis, the St. Louis market better than any other investor out there probably, who has done a ton of deals, who has an incredible rolodex. Like he knows all the guys that you should avoid, the guys that you should work for, he’s got access to the money, he’s got access to just the knowledge in his head. So I was having breakfast with him this morning and I was telling him, “Listen, this is awesome. You go for it 100% because you can create a system that can really, really help people and help you do more deals at the same time.” It's just such a great win, win.

Bryan: That’s a beautiful thing. In fact if I was looking for a coach for real estate I would give preference to people with really intense knowledge of the specific market that I’m located in.

Joe:      Right.

Bryan: There is a lot of exception to that, but think about that guy. I don’t know St. Louis tomorrow; if I would move to St. Louis tomorrow, I would have a big disadvantage because I don’t know the market. But if I hired that guy I’d be able to compete with anybody basically from day one. That’s huge, relationships are huge.

Joe:      Yeah. And if you could swing it– I was giving him some general figures of what he should charge for his coaching. But if I really wanted to get into the business and knowing what he does, I would not hesitate paying him $30,000 to work with him.

Bryan: I wouldn’t hesitate a bit.

Joe:      I know that’s a lot of money and I would never feel comfortable charging that much for coaching myself, but that’s how much it's worth because I know if I just hang out with him and did what he said, I could make that back in my first couple of deals.

Alex:    That’s what it comes down to. If you can make it back in one deal it's a no brainer.

Joe:      Mm-hmm.

Bryan: Exactly. But you know what he’s going to do; he is going to go and charge five or $10,000 for his first couple of years until he realizes that people will actually pay it. So maybe the people there in St. Louis will take advantage of it while they can.

Joe:      So that’s what you do. You got to find those coaches that are just getting started in the business.

Bryan: Exactly.

Joe:      And just work with them first, as they start wising up to their value that they are offering they are going to start charging more and more.

Bryan: Exactly.

Joe:      It's frustrating to me sometimes because there is guys in this industry right now that they’ve been coaching for three, four, five years and they are doing extremely well. And now they are charging a ton of money and I’m like, “Dang, I wish I would have started working with this guy before he became so well-known because I would have saved some money.” Anyway I believe in coaching, I believe in education, it's really important.

Bryan: Absolutely.

Joe:      Good. Let’s see Bryan, I know we are right about an hour now.

Bryan: That’s gone quickly.

Joe:      It was a really good interview, I really enjoyed this.

Bryan: Well thank you.

Alex:    Awesome interview.

Joe:      You guys got to get on Bryan’s list because if you are not on his list you are not going to see the announcements when they start promoting Jackie’s course or courses. I guess these are two things that she’s coming out with you Bryan.

Bryan: It's actually two courses, but whenever we make the offer the first time it's going to be a buy one get one. So you buy one and get the other two.

Joe:      Nice.

Bryan: So it's going to be a beautiful thing.

Joe:      Jackie is a great lady. She does a lot of deals up in Wisconsin. I’m excited that she is actually finally doing this because she has been talking about it for a while, and it's great that she connected with you on this. I’m really excited about it.

Bryan: Yeah. We got a text from her this morning actually, she is pretty excited too. She’s got a speaking engagement at a REIA sometime in April and she is going to be offering it to that group as well.

Joe:      Great.

Bryan: I’m excited for her. I know she’s wanted to do that sort of thing for a while.

Joe:      Great. So it's going to be about private lending which is really important where we are at now with all of the regulations that are out there. And so you got to be very careful you are doing it the right way.

Bryan: Yeah. It's going to be more about private borrowing than private lending. It's really going to be about financing your own deals rather than lending to others.

Alex:    If it wasn’t for private money I definitely wouldn’t be where I am at today with all the construction stuff I’ve got going on.

Bryan: Makes all the difference doesn’t it.

Joe:      Yeah.

Alex:    Absolutely.

Joe:      And it's so important to make sure that whatever course that you are buying is up to date.

Bryan: Yeah, absolutely.

Joe:      That stuff changes so frequently. And Jackie has been known for a long time in Lifeonair as being the lady that gets all these crazy deals and you hear her stories and you just scratch your head thinking, “How on earth– what did you do again?” Oh that’s how you find those deals…

Bryan: Well one of the things that she does is so outlandish, but I can see how it works. She takes bandit signs and we’ve all seen we buy houses bandit signs. She takes bandit sings and goes to the house that she wants to buy and puts the bandit sign up in the front yard facing the house.

Alex:    That’s the calling card move.

Joe:      I love it. I’ve heard of guys doing that on vacant properties, but not…

Bryan: These are occupied properties.

Joe:      That’s so cool. So I’m excited for that. You guys go to Bryan Ellis’ newsletter. If you just Google Bryan Ellis newsletter you will probably find it, but the link is Investing.bryanellis.com B-R-Y-A-N E-L-L-I-S. Investing.bryanellis.com. and his product is Self-directed Investor Show, that’s Self-directed Radio Show, something like that. Self-directed Investor Radio Show. Is that right Bryan?

Bryan: There you go.

Joe:      Okay.

Bryan: Self Directed Investor Radio, that’s it.

Joe:      Sdiradio.com. I like the shortcut. In fact I’ve been thinking about– Alex maybe we should shorten Real Estate Investing Mastery.

Alex:    REI.

Joe:      Reimasterypodcast.com or something like that.

Alex:    Maybe, but Real Estate Investing is definitely a good key word.

Joe:      Yeah, for sure. Thanks Bryan we sure appreciate it.

Bryan: Hey, it's been my pleasure guys. This has been a fun time. I’ve really enjoyed it.

Joe:      Very good guys, and you can get the show notes and the transcript to this podcast over at Realestateinvestingmastery.com and just do a search for Bryan Ellis or do a search for Self Directed Investor and you’ll find this show. And download the transcript and leave us a review on iTunes. We’d appreciate it. In fact we need– Bryan Ellis has 260 reviews, I think we have 247. So we just need like five or 10 more and we’ll have more than Bryan.

Bryan: Bring it on man. I need the competition.

Joe:      If you liked this show leave us a review and we’ll appreciate it. And go listen to Bryan’s show and leave him a review too as well. Hey thanks Bryan, we’ll talk to you later.

Bryan: Thanks guys.

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