EDDIE SPEED + JOE VARNADORE
Eddie Speed is a driving force in the creative financing and non-performing note industry. He has introduced innovative ideas and strategies that have positively impacted the way the industry operates today. He founded NoteSchool 20 years ago (after being in the note industry for 20 years), where he and his team teach thousands of students how to architect deals with terms in their favor. He’s the go-to guy in the industry for mentoring people on both performing and non-performing discounted mortgage notes. He is also the owner and president of Colonial Funding Group LLC, which acquires and brokers discounted real estate secured notes. When you hear Eddie speak, take notes!
Joe Varnadore invested in his first property at the age of 19. He definitely knows the importance of using creative financing to make deals work. Since starting his career, he has created and brokered more than $30 million in note transactions on residential and commercial properties. As an author, speaker, and trainer for the past 25 years, he believes that there has never been a greater opportunity for real estate investors to use non-performing notes to acquire properties and seller financing to cash out.
Where some people see only columns of numbers, Eddie Speed sees opportunities. He has always been a huge believer in studying the latest data to reveal voids in the real estate marketplace so that entrepreneurs can fill the gaps. NoteSchool TV is your trusted source to find the most up-to-date, relevant data that shapes the world of note investing.
In today’s episode of NoteSchool TV, Brian Lauchner hosts our very own Eddie Speed and Joe Varnadore as they take us through the latest data. You’ll love how they interpret the numbers in a way that tells note investors where the biggest opportunities are today, and which opportunities are around the corner.
Eddie and Joe will decipher the significance of delinquency and forbearance rates, and explain the upcoming wave of inventory due to the scheduled end of the eviction moratorium. You might not realize that even though prices on residential properties are up over last year, they have actually come down a bit from their previous high a short time ago.
More surprising statistics include: 50% of tenants have missed rent, and 58% of small landlords are owed back rent. That’s why burned out landlords are a prime candidate to become passive investors in your note deals. And it’s why small landlords are the most open to selling their properties with seller financing so they can receive reliable, monthly, passive income to replace their rent payments.
Most small landlords aren’t familiar with using the Installment Sales Method as a way for landlords who sell their rental properties to defer their tax bill for capital gains. If you know how it works and can explain it to your seller, it gives you a great deal of leverage to close your deals.
2:00 | Brian introduces Eddie Speed and Joe Varnadore. Eddie says the data helps point us to the voids in the market that entrepreneurs can fill.
3:15 | Eddie says the “black swan market is bubbling” with a sharp increase in new construction. We’re in a record year for pricing, way up from a year ago.
5:15 | The government’s eviction ban is adding to financial stress on landlords. Ban has been extended to October 3. About 15 million Single Family Residential (SFR) renters owe $20 Billion. 50% of tenants have missed rent, and 58% of small landlords are owed back rent. Most small landlords are eager to sell. Using the Installment Sales Method is a great way for landlords who sell their rental properties to defer the capital gains taxes on their tax bill.
12:35 | Mortgage Monitor from Black Knight says delinquency rate has gone down 7.6%, and serious delinquencies are down. But there are about 1.9 million loans in forbearance and coming due, and are set to expire in next 60 days. FHA loans are 3X the delinquency of Fannie and Freddy loans.
21:40 | 7.3 million forbearances have started paying again, which is good. But roughly 1.8 million mortgages are still in forbearance. This could be the biggest inventory wave since 2012.
24:40 | Residential prices remain high but have come down a bit. They were up 25% but are now up 17%.
27:30 | A blast from the past. CDs were paying 11.35% in 1984, but inflation was about 12%.
28:46 | Eddie and Joe explain our current opportunities: Housing boom, credit crunch, burned out landlords, buying nonperforming notes, lots of dry cash looking for a good investment, etc.
31:20 | Brian shows how these stats reveal the pain of burned out landlords, and the way for entrepreneurial investors to relieve that pain. He says now is a great time to take classes on how to move forward into note investing.
33:21 | Today’s sponsor: NoteDirect, and Feeding Frenzy Friday