Be The Bank

001 - Mick and Mike They Look Alike

January 12, 2022 Justin Bogard Season 4 Episode 1
Be The Bank
001 - Mick and Mike They Look Alike
Show Notes Transcript

Be The Bank S4 Ep1 - Mick and Mike They Look Alike

On the first episode of season 4, Justin Bogard interviews Mick Kuehn. 

 Key Takeaways:  

  1. REOs
  2. Stated Income; Stated Asset
  3. They Can Afford to Pay; They Can Afford to Stay

 Resources and links discussed  

  About the Host

 Justin Bogard – Note Investor specializing in performing Residential Real Estate Debt. He finds deals and acquires them for his own portfolio as well as educates investors while walking them through the process of owning a Real Estate Note!  

  Connect with the Host: 

Justin Bogard:

Interested in real estate. How about wealth? Well, they go hand in hand and here you'll learn all about it, about it. Welcome to be the bank, a podcast where we discuss and debate the topics centered around real estate. Investing your host, Justin Bogard shares insights into investing in real estate to create real wealth and passive income for you and your family. He'll share stories of real estate investments done, right? Walk you through the process of owning a real estate note, and most importantly, educate you so you can be the bank, the bank. This is be the bank brought to you by bright path notes. Now here's your host, Justin Bogard. Hello? Hello and welcome back. This is now the be the bank podcast. We were formally the two wealth show with my co-host super E as you know, if you listen to the last episode on season three, she is no longer a part of the podcast. She kind of hung, hung reigns up. She had a good run she said, and she was ready to focus on some things with her business. So now you just got me. So everyone I'm Justin Bogard and the episode's brought to you by bright path notes. And so we're gonna focus on this podcast. Now with this rebranding is we're still gonna be in the real estate realm, but we're gonna talk mainly about, um, storylines and gonna talk about and debate and discuss topics in and around real estate. And we're gonna focus on, uh, as well stories about being the bank and what we do as far as note investors. And I'm gonna bring on guests, uh, here in, in future episodes and talk to people about things. And we have a guest for today as well. So, uh, let's get right into this episode, Mr. McCoon, how are you?

Mick Kuehn:

I'm doing well, Justin, how are you today?

Justin Bogard:

I'm doing fantastic. Thank you so much for being a part of my, uh, new branded podcast in the very first episode of it. This is gonna be our season four. Well,

Mick Kuehn:

Cool. I'm honored. Thank you.

Justin Bogard:

Yeah. So Mick I've known you for a few years now. We've both been, uh, trained by Eddie speed. That's true at the note school and, um, we become good friends. Uh, my family has, has visited South Carolina many times, and that happens to be where you and your wife Gina live.

Mick Kuehn:

That's a fact. Yeah. Yeah. I enjoyed a couple of, uh, Beachside lunches together.

Justin Bogard:

Had a great time. Yes, yes. What was the name of that place? Uh, coconut Joe's coconut Joe's that's right. How can I forget that? That's such a cool name. Coconut. Joe's like going coconut Joe's right now. That's right.

Mick Kuehn:

Good time,

Justin Bogard:

Nick. So let's kind of set the story here for, for today. Exactly, exactly who you are. So you are a real estate agent. You have a, a brokerage and you're also an, an REO specialist as well. That's right. That's right. And so you and your wife are both agents. Yes,

Mick Kuehn:

We are. We opened our brokerage in, uh, 2007 as an independent company. Um, you know, and of course looking at that, uh, timeframe, you know, 2008 was just around the corner and that's when the housing market, uh, took a, a dive. And, um, all of a sudden we were flooded with, uh, REOs is, uh, real estate owned, which is, uh, bank owned, foreclosures. And, um, not only banks are getting in on this, but, uh, the department of housing and urban development, which we all know is HUD. Yep. VA U S D a all these other, um, uh, government backed loans defaulted. And we had a huge tsunami of, uh, properties. And I can't take much of the credit, uh, because my wife, Janet was smart enough to, to position us into that spot. Uh, we started receiving, you know, listings and, uh, and all kinds of different properties. And, uh, we were so super, super busy until probably 2018 or so

Justin Bogard:

Just with the REOs

Mick Kuehn:

Strictly with REOs. Um, again, Janet was looking, you know, forward into, in time and knowing that this, uh, this REO wave wouldn't last forever. Yeah. And if there's other REO agents on here, you, you realize that, um, telling you the truth, cuz, uh, right now your inventory's probably at almost zero. Right. Um, so she started looking for something in 2012, knowing that we would probably have to pivot and do something different mm-hmm<affirmative> so, um, she ran across Eddie's speed and note school and saw the, uh, trim, tremendous opportunity and notes. And we flew out to Houston and got started in 2012 in notes.

Justin Bogard:

That's awesome. So you've been doing that for about a decade now. Yes, sir.

Mick Kuehn:

Almost 10 years.

Justin Bogard:

So you obviously are a very seasoned, uh, real estate investor because you're a realtor, you have real brokerage, you specialize in AEO, that's right. A properties and your EO agent, you and your wife. And then also you're a note, a note investor as well. So now you've learned the performing and non-performing world. So you have a very well rounded, um, skillset here. I assume you've probably flipped some houses and you've probably done some rentals as well. Right.

Mick Kuehn:

You know, that's funny is to say that, uh, we learned that real quick. Uh, we, we fix and flip two houses and quickly figured out that wasn't for us<laugh>, You know, and then we thought, Hey, you know what, what's, what's the, why would we sell it when we can make the rent, you know, become the landlords? Well, it didn't take us very long. I think, uh, we went through two tenants and uh, quickly figured out that we didn't like that either. Neither one of us have the temperament for it. Yeah. Um, not that we're mean people, but we just seem to, uh, uh, unfortunately believe people when they're in tough straits, you know?

Justin Bogard:

Yeah. The human side of, of yourself, right?

Mick Kuehn:

Yeah. Yeah. So unfortunately when you do that, Um, that doesn't reflect very well on your checkbook. Right. So you may feel good morally, but the business decision is isn't always, always the, always the best decision. Right? Absolutely. Yeah. So, uh, we decided we'd, uh, we'd do something a little bit more passive, something that made a lot more to us and notes fell right into that spot. And it, it, it was one of those aha times when, um, Janet was in her office and she yelled over to my office and said, you've gotta come in here and see this<laugh>. And it's one of those things. When, when I saw it, I recognized it. We both did and said, this is what we've been looking for. Yeah.

Justin Bogard:

Yeah. It made sense. Yeah. Made sense. So, thanks for, for sharing a little bit about your history into the world of real estate investing and kind of who you are and what you guys do today. Mm-hmm,<affirmative> one of the things I wanted to talk about ick is that, uh, I'm really, uh, glad that I know you because, uh, I've been having to use this book. You, ah, book is called the property preservations for no owners. Yep. And this book is written by Malcolm. Who is that? Your twin brother?

Mick Kuehn:

No, that's actually me. Oh, that, that is you.<laugh> that's my given name. My twin brother's name is actually Mike. Oh, okay.<laugh> and it's, that's not a joke.

Justin Bogard:

<laugh> you have a twin brother named Mike. I sure do this whole time known you. And just now I know that you have a twin brother named Mike.

Mick Kuehn:

Yep. And the easy way to remember that is Mick and Mike, they look alike. Ah,

Justin Bogard:

<laugh> funny. Mick and Mike, they look alike that to be the name of our podcast for this second episode right here.<laugh>

Mick Kuehn:

Yeah. It's awesome. It's been

Justin Bogard:

A riot well, I'm, I'm glad that I got to read you book. I'm also not glad that I got to read you a book because I had to read it because not only are you my friend, but I had to read it for research purposes because I've had to take back a couple properties this past couple months. Ah, I see. So this book is just a gold mind of information and I'm talking to the listener out here. This book is gonna to tell you everything you need to know from a, from a very detailed checklist of exactly what the process is. Mm-hmm<affirmative> to having this delinquent note, uh, once you're dealing with the borrower, you've got a couple of options, right? And when you're dealing with this borrower, that home is not probably gonna be taken care of, uh, as well as, as you would like. And so if the borrower is willing to leave, Hey, great, you got this opportunity. You can take the collateral back. You can go through the process of reselling it, renting it, you know, all the things that we do as real estate investors, right? If the borrower stays in there, well, then you got a few options as well. But what I really took to, to light from your book is the detailed checklist of what you have to do when you take deck this property, when it becomes, you know, an REO we're talking like, you need to check on the utilities, you need to check, you know, you need to search for any tax lie or anything that popped up on this property that you weren't aware of. You need to have preservation companies come out and like I've had two properties in Michigan right now where I've had to winterize pretty quickly. Oh yeah. And uh, if you don't winterize,'em quickly, you're gonna have a big problem on your hands.

Mick Kuehn:

Yep. Yeah. And, uh, I can honestly tell you when we first got started with this business, um, we found that out quickly, we had a property in Ohio and we didn't get to it quick enough. And, uh, and uh, it froze up. So that was not a, like I say, you know, all the time experience is what you get when you were looking for something else. Right. And this is when we gained some experience.

Justin Bogard:

So thanks for providing the experience and a hard back copy for me. Okay.<laugh> I appreciate that very much.

Mick Kuehn:

Oh my pleasure. My pleasure. It really is. But, uh, yeah. There's, there's certain items that you really need to pay attention to. A lot of it is common sense. Like, um, you're saying a couple properties in Michigan mm-hmm<affirmative>, you know, winterization is definitely gonna be a big issue for you. Um, you know, depending on what the,

Justin Bogard:

When it's single digits, right. It's like, yeah, right. You can't get over there today. How, how do I get you over there today?<laugh> that's

Mick Kuehn:

Right. That's usually at a zero. Right, right.

Justin Bogard:

<laugh>

Mick Kuehn:

But, uh, yeah. It's, uh, I, I try to go at it with, uh, from a point of somebody new getting into the, um, to the note business. Okay. And having to take back an R O I I've seen many, many times with the training platforms that we're in, people will ask a question, Hey, I had to take back a property. What do I do next? Yeah. Well, there didn't seem to be a whole lot of, um, resource out there for people. Yeah. So I decided as amateur-ish of a writer, as I am, I do know the knowledge and I put it back into a, kind of a, a form it's a fairly easy read. It's not an encyclopedia, but, uh, it gives you all the steps that, uh, you really need to pay attention to.

Justin Bogard:

Yes. Great. You made it simple, you made it concise and you made it kind of short and sweet. If you will, like you said, it is, it isn't a long novel, but it, it has all the details that you need to go through to, to get it to an REO right. And I did have to use them. And there were things in there that I didn't even realize, even being a note investor myself, because you have all this experience with being the REO agent, you know, what, everything that you've come across that you need to double check and recheck. And, and it was amazing. Some of the stories that I saw that you wrote in there, I was like, wow, I never thought that could happen, but I'm sure, glad that I know about it, because I just wouldn't have thought about it. So yeah. Thank you for writing that book. And where can we go to purchase this

Mick Kuehn:

Book, uh, that can be purchased on Amazon. Uh, just go ahead and start punching in the address, the, um, uh, title of the book. And, uh, it'll come right up. There's only like one<laugh> know. So, and, uh, yeah, it's out there on Amazon. Ready

Justin Bogard:

For you, ladies and gentlemen, has 100% market share of the REO, note owner space.<laugh> in A book form. Come on. I was one according to the market. That's Right. You got it. You're the first one in right. First one in, well, cool. All right Mick today, uh, I wanted to talk about a specific subject that is around real estate. Mm-hmm<affirmative> now you and I both know pretty well. And that is the affordability factor of homes today. Yes. And how it relates to seller financing. So for those of you that understand what seller financing is, let's pretend like M has this property and he wants to sell it to me. And so I say, Hey, I'd like to buy that property from you, but I can't go to the bank and get a loan for it because of this, that, and the other, right. There's a box that I have to fit inside for the bank to qualify me to get a loan from them. And I don't fit that box, but I do have some money to give you, and I can owe you that I can make monthly payments, um, what, whatever the monthly payment is, says, okay, great, Justin ne I'll sell you the house and I'll carry back the financing for you on this property. And then becomes a seller financer, and he has a seller financ loan. So that is kind of how the seller financing world is generally works. It's also called owner financing. People have heard the word land contract and not, and mortgage. Those are all things that are seller finance instruments as well. So with the affordability factor, there's been a lot of news about how interest rates are lowering real estate prices are appreciating at just, I don't even, I can't even describe the word, let's say an enormous level. Yeah. And so we have a new problem now, which is real estate is so expensive. We're not able to afford it because our pay rate has not gone up. Sure. So there's that affordability factor? So, um, housing wire came out with a couple of articles recently in there. Pretty good about the affordability plumbing in the fourth quarter of 2002 21. So we can see numbers from 2021 versus 2020. So I know this data set, I know we're both kind of data minors and this data set shows they, they grab like a certain amount of counties, uh, in the United States and they just, they just track them through Attom at T T O M. Yeah. Uh, that is the, uh, the company that's kind of mining this data. And they say that in October to December of 2021, the medium prices, um, for the 440, the 575 counties that they analyze, uh, they saw notable home price growth. And as a result, 77% of those counties include the report are now labeled as less affordable by at T O M, up 39% of the counties from the year before. So they're, they're basically saying that this appreciation of this house is going up so much, that you have to be able to afford that house with, you know, a monthly, monthly income. So your debt to expenses, I don't know, uh, make what you like to see for debt to income for someone on what their max, uh, monthly payment is versus their income. Yeah. Well, a percentage that you like to use,

Mick Kuehn:

We start to bump up against 40%. Mm-hmm<affirmative>, you know, and then at that point we start to really pay serious attention to it. Um, and the thing is, is, is if you're just using that simple data set of, of information, you know, you could probably, uh, filter yourself out of a couple of, uh, of these deals. Yeah. Um, I know that they're talking about using more data points to analyze whether a, a borrower can go ahead and, and afford that. And lenders can go ahead and start using that, those pieces of information as a bigger picture, to be able to, to analyze and look at the borrower on a, on a, on a more broad scale. So we're trying, it, it looks like the, this type of information's starting to be used to be able to draw more people in and make, uh, more loans and, and more homeowner home ownership, affordable.

Justin Bogard:

The banks also have a problem too, because they can only lend, lend to a certain set of people now that's right. Right. So there's a credit score criteria that banks generally go off of, let's say, and not a hundred percent how they go off of, but that's the majority of what they go off of. Right. Right. And then how much down payment can they put down.

Mick Kuehn:

Exactly. And if you've been paying attention for over the last year, I mean, uh, we've covered this many times, you know, it was kind of an unprecedented jump in, uh, down payment requirement. Yeah. You know, last year I think it hit like a, a 20% requirement and a borrower was, uh, in some instances, in some, uh, lenders, they were requiring a 700 plus credit score, even with a 20% down payment. Yeah. You know, I mean, is that astronomical or what?

Justin Bogard:

Yeah. It's a big difference. Yeah. And then we look at 2006 and you pretty much didn't you, they probably gave you money at the closing table and you had to have at least a 500 credit score and you can get a half million dollar mortgage and make$50,000 a year.

Mick Kuehn:

That's it? You know, it's incredible. Well, you remember back then they had what we call liar loans, liar

Justin Bogard:

Loans.<laugh> yeah.

Mick Kuehn:

I didn't know. Stated income stated asset. You can tell'em any, you wanted it didn't fair.

Justin Bogard:

Approve like the stamp on it. That's right. I didn't know that that's, that's a cool term. I heard that loud loans fogging the mirror I've heard, that's it. I

Mick Kuehn:

Stated income stated asset.

Justin Bogard:

Awesome. Totally different time than we are today.

Mick Kuehn:

That's true. That's

Justin Bogard:

Trues. So what, what do we need to do as real estate note investors that's different than the bank so that we know that we're getting a borrower, that's gonna be able to make these payments and be successful, but they just don't qualify with that bank box, with that credit score with that down payment. Like what, what can we do? Well,

Mick Kuehn:

That's what you're, that's exactly what I mean, you're hitting it right on the head, you know, not only are you seeing the affordability of the property. Okay. You also have another moving piece, which is the box that the borrower is supposed to fit into. Yeah. Okay. The lenders themselves, the big banks bank of America, Wells, all these, that box is shrinking. Okay. The easiest way to put that is the box is shrinking and the properties are becoming less affordable. So I mean, 70% of the people who could, uh, qualify for a loan last January can't now. Yeah. And that's an incredible amount of, of people in the United States. So the best thing to really do at becoming a private lender. Okay. If you're gonna do owner financing or seller, carryback what, you know, whatever the term is in your area, you know, you definitely wanna do the due diligence on your lender or, I mean, your borrower mm-hmm<affirmative> okay. Um, and make sure that you use a qualified, registered mortgage loan originator. Mm-hmm<affirmative> okay. And this is gonna fall right into a very large, uh, uh, subject called DOD Frank mm-hmm.<affirmative> okay. If you can't sleep at night, go ahead and Google DOD, Frank, and you'd be asleep in no time.

Justin Bogard:

Okay. I'm kidding.<laugh> God like read the text code.

Mick Kuehn:

You got it, man. You know, uh, let let's pass a million page, uh, um, uh, yeah. You know, go a law and yeah, just pass it because it needs to be passed and nobody knows what's in it. But anyways, that, uh, that was, uh, a, a law that was designed, um, to protect the consumer, but it actually had the backlash of, of actually freezing other yeah. People, you know, borrowers out. So there's, there's a couple of, uh, organizations that are out there trying to get that dial back. But, um, the best thing to do is make sure that you are compliant of DOD. Frank. That's probably one of the most important things you can do.

Justin Bogard:

Let's let's talk about that for a second. For DOD, Frank, we won't dive into the specifics of DOD, Frank, you, you can look that up on, on your own offline, but off on this topic here. So DOD Frank, it put the kibosh, it puts some handcuffs on these banks to say, and for right reasons, let let's, let's let's talk about that. The, it was for right reasons. Okay. Yep. But it went a little too far, a little too stringent. So what it did was a lot of these folks and, and make, tell me if you disagree, but I think homes under$150,000, this really put a hamper on them to get loans from the bank. Okay. If they had great credit score and they had great down payment, then they are, they're not in the, as data set they're outside of this data set. Okay. There's the folks, it's the working flat class folks in the blue collar areas, blue collar cities. Sure. That aren't making the large incomes. They have good cash flow coming in. They do deserve to have a home, but they just don't fit in that bank box because they've had just, they just had unfortunate things happen with their credit history and they don't have enough data points to support what the normal lending, uh, underwriting process is. So those folks fell outta the box pretty quickly. So those are considered high risk, high risk loans. So now the banks, they're just not able to make the loans to them. They probably would like to, but they just can't because they don't fit within this regulatory box. Right? Sure. So then we got folks like mic and I, at our note investors that we can say, Hey, look, I can finance you this property. Obviously I wanna make sure you can afford it. Right. I don't just wanna sell it to you, but if you can't afford it, but I need to go through other things to figure out, like, I wanna see how you're making your payments elsewhere with your phone bill, your credit card. I do care about your credit score, but I wanna see where this income is coming in. Do you have multiple people living in your family? Hey, that's great. Let's include that income in this data set as well. Let's see how much you guys can afford. Let's see if this house is gonna fit for you. And most of the time it's, it's gonna be like a foreign national comes to mind. It's, it's a great, great borrower, a person that is definitely doesn't fit the bank box because they, they probably don't have the proper, um, you know, um, citizenship credentials, let's just say, uh, to go through the banking process, but they show that they make income and they do live in the country and they do pay taxes. Sure. And, you know, they typically have a pretty sizable down payment that they can make. And they typically don't have any credit history, but they can show their income that comes in and stuff. And so those are great candidates for seller finance loans. And that's kind of where this bottleneck is. So I believe that the rental industry drove way up after the 2008 crash right around the, the 12, 13 timeframe when we were all were buying non-performing loans. Certainly. And then that went up because they didn't have anywhere else. They could go these folks mm-hmm<affirmative> they wanna live in a home, but they can't get a bank loan. So what did they do? So rent, renting, renting was an option. And then renting started to go up because everyone's looking for rental to have. And so that's why the rent rates went so high. So I think they're still at a level that's pretty high that make, would you say?

Mick Kuehn:

Absolutely. Absolutely. And I don't really see them coming down too terribly much, uh, in the near future. Um, there was an article, uh, this morning that Janet and I were discussing actually at the, uh, breakfast table from Bloomberg. And they were talking about, you know, the IBU like Zillow and, um, uh, what was a red door, things like that. I think so they're big IBUs. Okay. And they messed up somebody's algorithm, uh, got a little bug in it or something. And they over bought, they bought properties at, uh, much higher price than they really should have. Well, they have created kind of a pipeline to sell these to the large hedge fund investors. Okay. Which is squeezing out the smaller buyers in any given area. So if you, if you look at the Bloomberg that's, uh, I think it's called the morning buzz, um, urban buzz. That's what it was. Uh, you go ahead and read I all about that and, uh, see that there are factors outside of this that are, are playing into it as well. So not only are the, the smaller borrowers, you know, the people who are trying to get into a, a, a forever home mm-hmm<affirmative><affirmative> are being squeezed out by the banks and lenders. They're also being squeezed out by the market

Justin Bogard:

Is there's always somebody that gets left out in any of this legislation that comes through that's right. And I understand that they can't make everything perfect. They can't satisfy all parties, but there needs to be some, some bend and some give and take. And you had mentioned earlier on this conversation about there's some groups out there that are trying to help that legislation of DOD Frank, uh, to kind of, kind of minimize some of the, the, some of the requirements so that we can, we can help facilitate the needs for, uh, private lending, if you will. And seller financing, absolutely. The, the regulations are more on our side as the investor or the financer, because we need to go through a process of, if we do a couple of these, we've gotta be basically regulated, right. Make, we gotta go through underwriting process with somebody that's third party outside of our organization. So that there's no, there's no bias in that. So if you do have to go through foreclosure, you can show to a judge, like, look, you know, we went through the proper process. Otherwise you might look at as, uh, the P lending that Ooh.

Mick Kuehn:

Yeah. As, yeah. The, the one important thing to remember with that, okay. Is as you, as you have a borrower and they're going through the qualification process, say you use a company like call the underwriter out of Phoenix. Mm-hmm<affirmative> okay. They'll create the file. And they will gather all the information on the borrower and they'll present it to you. Okay. Remember the underwriter does not make the decision on whether to lend or not. Mm-hmm<affirmative> you do as the, as a private lender, you are the one who makes the decision, okay. That company call the underwriter will make that file. And therefore you are compliant showing that yes, we did gather all this information and yes, the borrower indicated and can prove that he can make the payments comfortably and fall within, you know, a comfort zone. So like you were saying, Justin, exactly. If you ever got called to the carpet on it and said, Hey, this, uh, this loan wasn't made properly, you can stand up and say, absolutely. It certainly was. And here's the proof.

Justin Bogard:

Yeah. Yeah. So that organization is the seller finance coalition that we're talking about, coalition that I believe they started back in 2015 or 2016, right. To, to go after DOD Frank and get some reform with it. Meaning specifically there's some language in there that prevents, uh, investors like our ourselves being able to do this, um, like before 2008, 2009, 2010, right? In that timeframe, you could sell our finance and up to really 2012, you can sell our finance as many loans as you want and not have to go through any sort of regulatory underwriting process at all. And you, you could do an infinite amount of these and there's no, there's nobody putting any sort of, um, you know, ribbon around you to say, okay, no, you, you gotta, you gotta be within this, this playground here, right after thousand 14, when DOD Frank came to effect, things changed a lot, not only for the banks, but for small time investors like ourselves. Right. And so they said that we can do a maximum of like three, I think with certain criteria mm-hmm<affirmative> a year is the most you can do without going through that underwriting process. So we, you know, as a community have just started making this process, just be uniform, no matter if it's one or, or infant, infant, infinity, gosh, I can't talk as far as going through the underwriter, you know, just, just to do things right. And compliant, but we're trying to get that reform back down to about 20, 20 to 24. Right. And so what that will allow to do is there's a lot of mom and pop sellers out there that have a smaller portfolios from one to, you know, 10 pro properties that want to be able to sell our finance. But they're not the, at the sophistication level that we are because they haven't had the training and the knowledge and experience in the note world and know kind of how to do it, but we wanna be able to help them out as well. And so it helps, helps keep things compliant. Cuz a lot of times we're gonna be buying that paper as well and that paper's not compliant. Then you got, you have to fix it before you buy it.

Mick Kuehn:

That's right. That's right. Yeah. If, if, uh, if anybody's gonna start to do this, even if you are only doing one and you say, Hey, I don't have to make it compliant. If you've got the, uh, even the inkling that you're gonna do more than three mm-hmm,<affirmative> start off, right. Start it off the right way, get it, make the first one compliant. And every one of'em comply as you go forward,

Justin Bogard:

It's a small cost of doing business. It, it's not, it's not thousands and thousands of dollars to do this stuff. It's, it's a few hundred dollars, uh, you know, outta your pocket, going through the underwriting process. And I like what you said, Nick, because, uh, a lot of people don't know that is that the underwriter doesn't make the decision on whether the borrower is gonna get the loan or not. You make the decision, they collect the data and they show you and analyze it, be like it's it's within the affordability factor is all they say, that's They can afford to pay. They can afford to stay.

Mick Kuehn:

That's it. And that's the name of the game. You want a great customer for your bank.

Justin Bogard:

Some of our best loans are not the institutional loans. They are the seller finance loans that we have in our portfolio. Absolutely true. We've bought a lot of land contracts. Uh, we've converted them to note and mortgages just to help them out and borrow work like that as well. But our, our best loans have always been the seller finance loans. Yes.

Mick Kuehn:

Uh, I will completely agree with you on that one completely. I don't think I've had to, our, our best loans have been just like that. You know, mom and pops who, uh, sell to a landlord, you know, or mom and pops who sell to, to an owner or occupant who, uh, just needed a little bit of help. And they're so appreciative that, uh, you know, they'll bend over backwards to make sure that the payment gets made. Awesome.

Justin Bogard:

that w as, that was a good w rap session on this, u h, on this topic here. And so I wanted to ask you some kind of some different questions here. And so is there any, besides reading your book, which is awesome by the way, a nd I recommend everybody read it and it's a quick read and i t's, i t's well worth it c uz you'll, a nd you'll revert back to it. It's one of those books to where it's j ust like, you know, it's like, u h, the Robert K iosaki book, u h, the rich d ad, poor d ad, it's like, you always go back and revert to it, you know, c uz there's something in there that you wanna remember l ike, oh, that's what he said. This is that type of book I'm being serious. That type of book to where you can go back and you look at i t a nd b e like, oh y eah, that's what I'm supposed to do in this situation. I'm t elling y ou, i t's, i t's totally worth t o read anyway. Well thank you. That's enough plug for you.<laugh>< laugh>

Mick Kuehn:

You only get a certain amount for a dime. Right. So what, what type of books do you recommend for no owners or for real estate investors to read that you, that you like to read or that you and your experience, um, you know, investing so far? Well, Dave van horn, uh, wrote a book, um, about note investing his name's Dave van horn. And it's a, it's a pretty much a basic introduction. Anything that you can find from Eddie speed? Okay. Eddie speed has been in his business and since the, uh, early 19, I think it was 1980.

Justin Bogard:

Yeah. Like 81 I think. Yeah. Yeah.

Mick Kuehn:

You've got like 40 years of experience in this and I

Justin Bogard:

Was just a few years born just a few years before that me.

Mick Kuehn:

Oh my<laugh><laugh> wow. Well Eddie has, uh, uh, a more knowledge in his small finger than, uh, I'll ever have in my head. So yeah, he is just, uh, an incredible, incredible, um, uh, knowledge base. If you can find anything from Eddie speed, note school, um, things like that, they are so well worth the read. Um, you know, he's, he's been talking about owner financing and seller financing for years and years and years and uh, uh, if you can find it by all means, grab that awesome,

Justin Bogard:

Mick, uh, what is the one thing you like to do about real estate the most? Is it the owner of financing part of it, the note part of it, or is there another part of real estate you like to do? You,

Mick Kuehn:

You know, that's a great question, right? What I find is the most rewarding and, and it, you know, personally rewarding is doing a presentation like a lunch and learn mm-hmm<affirmative> from 12 to one in a small office, maybe half a dozen, maybe a dozen people show up and you do a basic, um, note presentation, just talking about the, the opportunity with notes, what you can do with them, how they differ from, you know, sticks and bricks, real estate investing, and actually showing how people, you know, peop busy individuals, busy professionals, just how passive it can be. You know, if you can open your checkbook, uh, statement and see that the payment was made, that's all you need to do for that, that month. You know? So there's, it is just a, a great, uh, uh, I love showing people what notes do and looking out and seeing somebody's light bulb go off and they go, oh my God, are you kidding me?

Justin Bogard:

It is. It's funny you say that. And I think of that exactly the same way. You can just see it go off in their, you can see it in their eyes going, oh wow. Now I get it. Cuz at first, you know, you're just like, you're kind of confused. You're you're kind of stepping into and you don't understand how to make money, then you're like, oh, oh, you know, oh, they get it.

Mick Kuehn:

Yeah. A partial, can you Really do that? Let's let's not get into that today.<laugh> we're gonna extend this a couple of days. If we talk about partials that's Uh, yeah, absolutely.

Justin Bogard:

Absolutely. Thank you so much for being part of, of my first episode of season four on this new brand and podcast called be the bank. You can check out the, uh, video feed of this and you can see Mick and his little, uh, dungeon office there.<laugh>, that's it on our YouTube channel, the bright path notes, YouTube channel, and, uh, it there's anybody that wants to get ahold of you. You, uh, do your local real estate there. And, and uh, in South Carolina area, I do, is there a way they can get ahold of you?

Mick Kuehn:

Sure you can, uh, reach me either at, uh, so, uh, that's, M I C K, like Mick Jagger, mick@ktfinancial.com or mick@southernbreezesrealestate.com. Either one of'em get it right directly to me. If there's anything I can help you with by all means, uh, reach out, love to talk, chat with you. And thank you, Justin. It's been an honor. Uh, it's been a real pleasure. Thank

Justin Bogard:

You. Welcome my friend. Don't forget to check out his book on Amazon. It is property preservation for note owners. I'm holding it up here on the video part of it. You will find that an Amazon and it is well worth the buy well worth the read, and you will keep it on your shelf as a go-to, uh, piece of information that you will definitely need over and over again. Hopefully you don't need it very often in the worst way, but hopefully it's, it's in a good way.

Mick Kuehn:

Yep. It's like a bandaid there if you need

Justin Bogard:

It. All right. Thank you so much again, my friend, this has been episode number one of the season, number four of the, be the bank podcast. And we look forward to seeing you guys in the next episode. Yeah.

Mick Kuehn:

Yeah. Thanks Justin. Bye bye.

Justin Bogard:

Thanks for listening to be the bank. We hope you learned something from today's show. If you enjoyed this episode, please rate and review us. Plus check out our bright path notes channel on YouTube and follow us on Facebook and Twitter at be the bank and on Instagram at be the bank podcast. Be the bank is sponsored by bright path notes. Thanks again for listening.