NoteSchool - October 2021

NoteSchool - October 2021

NoteSchool News OCTOBER 2021

GOOD NEWS FOR NOTE INVESTORS! NoteSchool News Is a New Resource for You

Hey folks, it’s Eddie Speed here! If you’ve been getting the NoteSchool email newsletter, The Buyline, then you already know I love writing monthly articles for you about creative financing, the note industry, and my own successful deals. (If you haven’t been getting The Buyline, welcome to the best club in town.) Hopefully you’ve enjoyed those stories, and if you have, you’ll like this newsletter even more. From now on, instead of coming to your email inbox, my letters will be coming to your mailbox . Each month, you’ll receive a story from me, a market update from the experts on our team, tips to keep you in the investor mindset, and more. Bringing that kind of content to your doorstep is important to me because my mission ever since I started NoteSchool has been to educate Open this newsletter to learn more and register before it’s too late! Oct. 22–24 DON’T MISS OUR NEXT LIVE CLASS!

folks like you on the note industry and how to get creative to fill voids in the market. Once upon a time, I was just a startup investor in a cowboy hat, so I know how intimidating it can be to get going. Yes, you read the “cowboy” part right. The pair of scruffy leather chaps hanging on my office wall didn’t come from being a dancer at Chippendale’s. I grew up around horses and honed my horse tradin’ skills by actually trading them. If you’re lucky (and if I’m in the right mood), you might get to see some flashy rope tricks next time you come by the office. I still love horses, but back in 1980, I learned there’s a lot more wealth to be built with a pencil than a rope. That was when my father-in-law, an early pioneer in the field of seller-financed notes, took me under his wing and taught me the ropes of the note business the same way I teach my students today. When I first started, mortgage rates were a staggering 18%, and I put deals together with creative financing that never could have closed otherwise. I’ve been perfecting the craft for 41 years now and have personally bought over 50,000 notes. After my first 20 years as a note investor, I launched NoteSchool, the best place in the country to learn the art of creative financing for both performing and nonperforming discounted mortgage notes. NoteSchool opened the door for building wealth to anyone who wants to learn how. Some of my students come to their first note class from real estate

backgrounds, but the rest come from all walks of life. They’re engineers, dentists, restaurant workers, and other people who dream of having the freedom to control their own financial destiny. If that sounds like you, you’ve got your hands on the right newsletter! After more than four decades in this business, people often ask me, “Eddie, why are notes still your favorite form of investment?” My answer is that note investing doesn’t have the endless headaches of being a landlord. Whether buying or selling, creative financing also allows the investor to structure the note with terms in their favor. The deal can also be structured to offer immediate transactional income, receive monthly passive income for years to come, or a combination of both. Best of all — unlike stocks, which offer no safety net — every mortgage note is secured by the property itself. Speaking of the perks of note investing, I have some good news for you. Whether you’re a first-timer or an experienced note investor, today’s real estate market — with its record-high prices and tight credit requirements — offers huge opportunities. Check out Page 3 to learn more about those, and keep an eye out for this newsletter every month for more updates, advice, and insider secrets from yours truly.

Wishing you great success,

–Eddie Speed

NOTESCHOOL.COM

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Investors, here’s your monthly market update on what’s going on in the world of real estate. NEWS IN A NUTSHELL EVICTION MORATORIUM Though the Supreme Court has ruled to end the moratorium on evictions, there have been continuing regional challenges to extend it. These state-by-state legal efforts complicate the process for landlords, but the momentum continues building for millions of tenants facing eviction. • About 15 million residential renters owe $20 billion, with 50% of tenants missing payments. • Even though 58% of landlords are owed back rent, only $5.1 billion of the $46.5 billion in aid had been disbursed by the end of July because of bureaucratic delays. DELINQUENCY AND FORBEARANCE RATES The overall delinquency rate remains on pace to return to pre- pandemic levels by early 2022, but serious delinquencies continue to improve at a much slower rate. • Mortgage Monitor from Black Knight says the delinquency rate has gone down 7.6%, and 7.3 million forbearances have started paying again. • Roughly 1.8 million mortgages still in forbearance are set to expire in the next 60 days. FHA loans are three times the delinquency of Fannie and Freddy loans. • With August numbers coming in, analysts have seen a rise in foreclosure activity, but don’t expect a large increase. Our Clients Say it best

What if you could harness the knowledge and skill possessed by some of the world’s top CEOs — specifically eight of them? With investment expert and author William N. Thorndike Jr.’s “The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success,” you can. How ‘The Outsiders’ Provides an Unconventional Road Map Tap Into a Successful CEO’s Mind

After years of analyzing investments and the companies behind meteoric climbs on Wall Street, Thorndike has compiled stories, lessons, and tactics used by eight CEOs whose methods and beliefs don’t mirror those of other leaders — unconventional leaders like Virgin Group Founder Richard Branson or SpaceX and Tesla CEO Elon Musk, whose companies’ growth speaks volumes for their methodology.

Thorndike examines the successes of various business

leaders, like pet food company Ralston Purina’s CEO or Berkshire Hathaway’s top leader, to discover what makes these companies so successful, even as they quietly grow. Through his storytelling and deep-dive into the mindsets of these CEOs, Thorndike offers readers various perspectives on a different way to amass success. Thorndike also illuminates how many of these top business minds were quietly outpacing their loud, celebrity-like counterparts. For example, frugality is a major component of their success, while most others view a singular metric as the biggest determining factor in their company’s long-term success. Together, many of these top CEOs often value the human elements of their business, attributing the people they have working for them as one of the most important parts of their company growth. As you read through the various lessons and experiences of these CEOs, you find models emerging. Some of the tactics may work for you, while others prove that unconventional methods were never out of the box to begin with. All told, Thorndike’s “The Outsiders” is a reminder that sometimes the quiet ones make the most progress.

You can learn more about Thorndike’s book at Goodreads.com, or you can find it on Amazon.com or your favorite bookstore.

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RESIDENTIAL HOME SALES Heading into autumn, the demand for residential properties remains high, though down slightly. • The median home-sale price increased 14% YoY to $358,250. • 47% of homes that went under contract had an accepted offer within the first two weeks, which is slightly above the 43% YoY, but down 9% from the 2021 peak set in March. • 34% of homes had an accepted offer within one week, up from 31% YoY, but down 9% from the 2021 peak set in March. • Homes remained on the market a median of 19 days, up from the all-time low of 15 days in late June and July, and down from 33 days YoY. • 50% of homes sold above asking price, up from 33% YoY. This measure peaked at 55% during the four-week period ending July 11. • Inventory remains tight, with 27% of buyers waiving the appraisal and inspection. • Florida is the No. 1 state for retiring. Younger people are flocking to Austin, Texas (with prices up 35% YoY), then St. Louis at No. 2. Three of the top 10 cities for young people relocating are in Texas. PENALTY BOX BUYERS CONTINUE GROWING The Mortgage Bankers Association’s monthly credit availability chart shows a tightening of credit approval criteria. • Most lenders require a credit score of 750-plus and average 19% down payment. • Mortgage credit availability has dropped to a six-year low. • 35% of well-qualified people who want to buy a home can’t qualify through traditional lenders. LEGISLATIVE CHANGES COMING Jeff Watson (Eddie Speed’s attorney) and Bob Repass have been working with Congressman Vicente Gonzalez (D-TX) and Congressman Andy Barr (R-KY) to introduce a bipartisan bill HR 5013: “The Affordable Homeownership Access Act.” It will eliminate many of the burdensome requirements that Dodd Frank imposed on small seller financers. “Having the ability to move forward and build a financial future for our kids means the world to us. Eddie and the entire team at NoteSchool have given us that opportunity! We are truly grateful for that. We have the flexibility to explore our business and grow it as we see fit. Notes are the

Picture in your mind’s eye a 50-year-old milkshake machine salesman. In the past, he has worked as an ambulance driver and a radio station piano player. With a wife and daughter at home to support, he feels frustrated schlepping from restaurant to restaurant selling Multimixers. This goes on for years. Then, at 52, the milkshake salesman steps into a restaurant in San Bernardino, California, that changes his life. When he dies at the age of 81, he’s worth $1.4 million, and his family will never want for anything. HOW EDDIE’S DAD ENTERED THE NOTES BUSINESS AT 68 It’s Never Too Late to Invest! That 52-year-old was Ray Kroc, the man who bought McDonald’s and turned it from a small West Coast chain into a global franchise that sold 75 burgers per second in 2013. Ray’s story is proof that even if you’re nearing retirement age, it’s never too late to make a smart investment, build wealth, and secure a better future for your kids! This is particularly true in the notes business, where you can hit it big at 50, 60, 65, and beyond. Here at NoteSchool, founder Eddie Speed set out to prove that when he got his dad into the business at 68 years old. Before working with Eddie, his dad managed construction and equipment companies. He also dabbled in real estate, but he wasn’t seeing anything like the success Eddie was having with notes (read more on that on Page 1). So, Eddie’s dad called him up and said, “Man, I want to do this too! I’m not too late, am I?” Eddie said, “No!” Instead of crushing his dad’s dream like many young men would have, Eddie used the methods he teaches at NoteSchool and showed his dad the smart way to invest his money in the notes industry. Within a few years, Eddie’s dad had a steady stream of disposable income growing his wealth for the future. He lived well on that money for the rest of his life! Next time you catch yourself thinking that you missed the boat on investing or are failing the money game, just think of Ray Kroc and Eddie’s dad. It’s never too late to invest.

epitome of flexibility. There are so many ways to create them, sell them, and modify them. It’s very exciting and refreshing to know that we control the Chalkboard!” –Ryan Pennock

“There’s no sense in the world in settling for getting less than 1% (interest rates) on your bank account. And that’s why I got

into notes. I was so frustrated I had all this money sitting in the bank doing nothing. So with the notes, I’m able to earn a great return without a lot of effort, using my brain and Eddie’s systems. I’m the bank.” –Virginia Rogers

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How a Joke Became a Multibillion- Dollar Currency Market THE ORIGINS OF DOGECOIN 3 What Are Our Clients Saying? 3 How Eddie’s Dad Entered the Notes Business at 68 4 How a Joke Became a Multibillion- Dollar Currency Market 1 Good News for Note Investors! 2 ‘The Outsiders’: A Model for Success 2 Real Estate News Inside this issue

Would you create an actual cryptocurrency to make fun of other cryptocurrencies? That’s exactly what Jackson Palmer and Billy Markus did, and it’s paid off with an over $70 billion currency market. Now, it’s the fourth-largest cryptocurrency in the world. Dogecoin (symbol: Ð) is a cryptocurrency that provides a payment system (like Bitcoin, another digital currency) that is instant, fun, and free from traditional banking fees. Its playful name and Shiba Inu dog mascot caused the currency to start as a meme, but as people began to actually purchase it, it became worth more and more. Before Dogecoin, Palmer was a product manager at Adobe Inc.’s office in Sydney, Australia. As a “skeptic-analytic” observer of crypto, he joked on Twitter about creating Dogecoin as a way of satirizing the hype for cryptocurrencies. Surprisingly, people were totally on board. So, he bought the domain name Dogecoin.com. That’s when Markus, a software developer at IBM, contacted Palmer. He wanted to create a digital currency but had trouble promoting his

project and decided to jump on the Dogecoin buzz. He asked Palmer’s permission to build the software to create an actual Dogecoin. Most cryptocurrencies are fairly serious and sterile in presentation, but Dogecoin was always different. Palmer and Markus decided to market Dogecoin as the “fun” version of Bitcoin. Since Bitcoin had a limited supply while Dogecoin had an unlimited supply, Dogecoin was also faster and more consumer-friendly for new crypto investors. In 2015, Palmer made his departure from Dogecoin, citing the currency’s “toxic community” as a main reason why he left. Dogecoin also had its financial struggles during the 2018 cryptocurrency crash, but today, it’s grown stronger than ever. As of early May 2021, Dogecoin’s price is up more than 13,000% for the year. Even though Dogecoin’s origins are humorous, Palmer and Markus’ business decisions were no joke. If you decide to purchase Dogecoin yourself, whether as a joke or for investing, please do your due diligence to understand the risks of cryptocurrency.

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