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Specializing in seller financing, Dawn is a visionary real estate professional who gets families into (or out of) homes and investments in a way that empowers and enriches them, as well as the communities in which they live… with or without banks and regardless of market conditions. Dawn is the antidote to America’s addiction to Wall Street’s financial opium. She makes the powerful, non-bank, strategies usually reserved for sophisticated investors accessible to everyday people, making or saving them thousands and instilling hope as she illuminates hidden opportunities. As a seasoned note investor intimate with seller financing and the secondary market for private mortgage notes, she provides mission-critical expertise that is extremely rare in today’s marketplace. Sellers: know what your note will be worth before you create it. "Landlord Liberation", "Buyers: The Seller is Your Bank" and "Note Investing for Newbies" are key gateway books for those wishing to engage with The Realm. Visit www.NoteQueen.com.
Like like with you, Ben, or whatever is finding an agent who understands what you're doing and is willing to work with you. And I had a guy walk in 1983, and interesting character comes in in a black car wearing a black tuxedo without without the tie and totally dressed him black. And he walks in 07:30 in the morning, says, I'm buying a house from anybody willing to work this early. Well, I proceeded to sell him a house, nine apartment buildings, resold the eight apartment buildings, helped him manage about $2,000,000, and he let me stay on his houseboat in Amsterdam. But it was interesting because I didn't learn till later.
David:He had his qualifying question as to picking an agent, and that was, are you willing to take your commission as a note? And I said, sure, because I understood notes. Every other place he had gone, the answer was no. My broker won't allow it. What the company won't allow it.
David:So what we did whenever he would say because he was trying to conserve cash. And so what we did in the transactions, you know, he would buy a building for argument's sake, $500,000, and my commission would have been, you know, 15,000 for for discussion. And and all these buildings had seller financing on them. They were multiple unit buildings, and this is when rates were 11%, so on. And so the sellers would carry back a note, and we would take back a collateral assignment on that note.
David:So as the seller got paid, we got paid. Alright. Well, anyway, welcome aboard. This is property and paper live with Dawn Rickabaugh, and she is tied up today. So she asked me to fill in.
David:So I thought it might just give you a little background of myself. I met I actually met Dawn in pre COVID. She was running a in person type meetups in Carson City, Nevada, and I attended and really appreciated the way she approached node investing, real estate, and so on. Her, you know, one mom and pop at a time concept, it is not really rocket science. Interestingly, I got lucky when I first came to Lake Tahoe in 1972.
David:I started out as a real estate agent just getting out of the air force. And, fortunately, I went to work for a broker who made the comment, do you really wanna sell houses all your life? That really stuck with me because the job of a real estate agent was to get fired. You do your job, you get fired, and then hopefully, you get some repeat business. So the idea of note investing was really kind of of appealing.
David:In that particular real estate company, they were they were fixing and flipping houses, and that's where I really got started in it. But I think I think I'm kind of one of the few note people that's whose career started out as an agent and then evolved into the note business. You know, long story short, I made my living, frankly, as a real estate broker. But in that industry, obviously, opportunities pop up. And so it's worked out, you know, quite well for me and my family.
David:And so, you know, I'm pretty much out of the real estate business now. I'm just a young 82 and mostly dealing in owning rental properties and notes, but I'm not selling real estate anymore. So that's how I got where I am. Does anybody else wanna chime in on how you got in into notes? Hey, David.
David:You're part yeah. Hi.
Ben:Hey. You are? You are? I'm Ben Parman. I live in Northern Colorado.
Ben:Yeah. Oh, I was just gonna say I I got into I'm not exactly in the notes space per se as most people on this call probably are, but over the past three years, I've been doing a lot of contract for deed wraps. So I suppose you could say a contract for deed is very similar to a note. Mhmm. But before that, I I did fix and flips for many years.
Ben:So I decided I wanna get away from that and get into something that would provide a little more long term passive, income. So that's how I got into this space.
David:So you're you're fixing a property and selling it and carrying back a contract?
Ben:Yeah.
David:Why don't you sell them and carry back a, note and deed of trust?
Ben:Honestly, I would I would definitely do that. I I have not been doing this with very high dollar properties, and have not usually gotten down payments large enough that I'd be willing to transfer the deed. So that's why I've been Mhmm. Doing a contract for deed or land contract where I've, you know, retained title to the property, but I'm not at all opposed to. In fact, I would probably prefer doing it, you know, by actually transferring the deed and and carrying back a note or two so I could sell one note and recapitalize and then maybe hold a second that, you know, cash flow that I don't free and clear at that point.
David:Yeah. Alright. Yeah. Thanks. The personally, I've always avoided contracts.
David:And the simple reason is I don't wanna be on the title to the property if somebody gets sued. Yeah. You're you're going to be a defendant in a slip and fall or whatever. And I'm in California now.
Ben:Lots of slips and falls in California probably. Right?
David:of Jack Miller, kind of the father of single family investing. I remember at a conference once in the early nineties, I made asked a question, and and he said, where are you from? He said I said, California. He said, my condolences. So, you know, this this is definitely a consumer state, and it's actually malpractice for an attorney to not name a party in a lawsuit who might be tangentially involved.
David:So to leave you out is actually malpractice.
Ben:That's California, I guess, isn't it?
David:Yeah. Yeah. Well, you know, it it is a consumer state. There's a lot of good things about it. I've only lived here since uncle Sam put me here in 1968, so I've survived.
Ben:I one other comment I I would say just on you you asked me why I'm doing contracts versus Mhmm. Yeah. You know, transferring title. I I guess a plain and simple answer would probably be also that's just how I learned to do it, so I continued to do it that way. Though I'm very interested in in in changing.
Ben:So And and a question. In Colorado,
David:if you want to I don't know what the term is, foreclose on a contract, call the contract whatever term they have, is it the same process as a real estate foreclosure?
Ben:That's a great question, and I actually have not done any of these in Colorado. I am doing
Ben:All out in Midwest states. So that said, there are some states where you do need to foreclose regardless of whether it's a contract for deed or or if you transfer title. But, you know, there's others where you don't or, you know, some do once the buyer has, you know and then there's rules, like, if they've been in the property for five plus years or have and or I should say have, you know, 20% or more equity in the property, but haven't run into any issues with that personally. And what states are you doing this in? Missouri, Illinois, Indiana, and Michigan.
David:And what part what part of Missouri? Because Saint there too.
Ben:Greater Saint Louis area. Okay. So and then got some properties across the river in Granite City, Cahokia, Decatur.
David:And just out of curiosity, how do you find these?
Ben:I've found a lot on Facebook Marketplace. I found some on the MLS. Mhmm. I've I've done some direct outreach to sellers that have properties that were expired listings. Mhmm.
Ben:I just bought one couple weeks ago like that. I bought that one subject to the existing loan. It was one where the owner got married, bought another house with her husband, put this one on the market, listed a little bit too high, sat vacant over winter, pipes froze, flooded the basement. No way that they were gonna be able to sell that property as it was. So
David:With an indoor skating rink.
Ben:Exactly. Yeah. Yeah. But that that was a pretty easy fix, honestly. I I I just basically offered him debt relief.
Ben:So I had to pay closing costs, but took over the property, replaced the furnace water heater, tore out a bunch of moldy sheetrock, replaced that. Just about to get that one back on the market now, but it's actually a really nice house.
David:Do you have to go back there and do it yourself, or do you have have a crew?
Ben:Yeah. I've got a crew.
David:That helps.
Ben:Yeah. Yeah. No. I definitely don't wanna be doing any of that stuff myself.
David:Yeah. Have have you met or seen on these meetups, Pat Jackson? He's from Reno, but he does but he fixes and flips houses in more around Saint Joe and that part of Missouri.
Ben:I don't believe I have.
David:Okay. Yeah. He's doing a lot of what you're doing.
Ben:Okay. Interesting. Pat Jackson. And he's in this group, did you say?
David:Yeah. Okay. I'm I'm actually partners with him in in a few properties in Missouri.
Ben:Oh, very cool.
David:Yeah. He he he's very good at the Airbnb model. That's what he's really working on. Got it. And in fact, we just did an interesting transaction.
David:I had a I sold a property out here and did a ten thirty one with into a few properties when one was a fourplex in St. Louis in Afton, which I guess is a pretty good area. And then I saw how much the prices had jumped, so I sold it. And I was looking for a replacement property, bought a six plex in in Saint Joe. So we bought a six plex, and right now, we're operating it as two permanents and four short term rentals as as a mixed use, and he's in the short term rental business.
David:I'm I'm in the old passive investor mode. And so theory theoretically, this will work. We've owned it for about a year, and, you know, when he books it, it books pretty well. And he actually got involved with there's a even a whole class on how to set them up if you've got multiple units so that you can rent them as a two bedroom or a four bedroom, or you can take different size groups and shift how your rooms are rented. Because normally, if you're a single family dwelling, it'll take x amount of people.
David:Yeah. But if you have other available units that are literally, you know, one one second away, you can actually accommodate, you know, whether it's a soccer team or, you know, what whatever it is, you can accommodate a bigger group or shift down to three smaller groups or whatever.
Ben:Okay.
David:Yeah. So he's he's kind of trying to set up, you know, an income stream out of those as opposed to just the fixing and flipping.
Ben:When you've got a blend like that within a multifamily unit where some are, you know, long term rentals and some are short term, do you have to get individual permits for each unit to do short term rental, or could you convert, or I guess just rent out some of the others as short term rentals as well if there's enough demand for that?
David:To be honest, I'm leaving that to him. And at least in that city, the the permit system is pretty loosey goosey. Okay. So but I think other communities like South Lake Tahoe where I am, you'd have hell to pay for trying to do that.
Ben:Yeah. Yeah. It's the same way here in a lot of the the resort towns in Colorado.
David:Right. Definitely become a problem.
Ben:Yeah.
David:Like like, my kids are not gonna have to
MaryAnn:You have to move to mid rentals. Where where they the areas that are difficult in the short term, you move to midterm rentals.
David:Mhmm. Right.
MaryAnn:Or insurance rentals. If you if you want if you don't want to just do a regular long term because the problem I personally have with long term is the idea is if you have to get somebody out, especially in some, know, cities where I tend to be like Chicago Mhmm. And LA, it's really hard to get somebody bad out. It can take months.
MaryAnn:Ask me how I know.
David:The voice of experience.
MaryAnn:And so the midterm rentals work out pretty pretty good. I'm doing midterm rentals in two apartments in Chicago.
David:When you say midterm, are you talking about traveling nurses and so on?
MaryAnn:Yeah. It's like a thirty day it's basically like a thirty day minimum.
David:Thirty okay.
MaryAnn:But it's it's not even just traveling nurses. It's just people that might wanna go for a longer time. I mean, I just had somebody come in for months, and they want now another almost two months in the winter. And then they were talking about long term, and I'm like, well, these guys, probably do long term because I like them, you know, and I think they're they're cool. I I know them before I've rented to them.
MaryAnn:You know?
David:Yeah. And, yeah, Pat Jackson is is you know, that's I think where he's gonna spend most of his time is is you say the midterm or what whatever the exact terminology is, anything over thirty days.
MaryAnn:Yeah. And then you're not turning over I mean, I started short term rentals before Airbnb. Actually, saved my house in, what, with the big crash of 02/1011. I don't even know when that was exactly. In the past.
MaryAnn:Yeah. And and I I couldn't afford to pay my mortgage, but I did have a second home. So, an agent friend of mine said, try short term rentals, and I did that for Airbnb in LA until basically, made it impossible to do short term rentals.
David:I've I've noticed that more and more condominiums are starting to put limits on those things.
MaryAnn:Well, you know, condominiums, would think too as opposed to if you own the property yourself. Like, the one I have here is a two two flat, and I own the whole building. Mhmm. But condominiums, you have so many people there that are likely to be annoyed. Same thing happened in in California.
MaryAnn:People took advantage of it. Somebody would rent a really big house up in the hills and throw an obnoxious party with lions and tigers and bears and god knows what. And then it just puts
David:You've been to our town. Yeah. Seriously.
MaryAnn:Anyway but, you know, if you're doing rentals, I'm I'm not as into the long term because, again, issue of if you decide you don't like them, how do you get rid of them?
David:Yeah. They they
MaryAnn:In my in my humble opinion.
David:They do a big high school grad night party here. They do it I think they do it at Heavenly Ski Area. But one of the reasons they do it is that the students on grad night, they would they would fake being somebody else, and they would rent a big house literally and have these massive graduation parties in a vacation rental. Yeah. We we we live in a community where that's been an ongoing issue, and they were banned.
David:And they're now they're back in place and permits and enforcement staffs and so on. But I think, you know, people who find the right market and run these well, they're pretty profitable.
MaryAnn:Yeah. They're they're not bad. Mhmm. Hi, by the way. Mary Anne.
David:And where are you located, Mary Anne?
MaryAnn:Right now, I'm in Chicago, but I'm a permanent resident of California. I have a house in Hollywood that I'm doing sort of a midterm, like, six month Mhmm. Finish rental and a place out in Brightwood out in the mountains that is sort of less more or less my permanent location, but I'm in Chicago doing some work and and two midterm rentals.
David:Is there anybody on here that that is in Notes?
David:Oh, hi. There you are. Mhmm.
Amy:It's Amy. I don't see you, but I can hear you guys. Anyway, I buy Notes. I buy non performing seconds if I could find them.
Jay:And this is Jay Davis. I I see notes in in primarily in in Georgia because Georgia has a a great landlord and mortgage company state. So I have also sold real estate inside IRAs and four zero one k's using seller finance notes.
David:So I I've got a question, and that is in terms of lead generation for Notes. I mean, a lot of people still do it in direct mailing, but what are some of the less expensive ways to do it that still show results?
Jay:I'm not your guy, Dave. Do you do you do you do it
David:strictly with mailings?
Jay:Yeah. No. I all we do is I I work with a couple investors. And Okay. So they they buy some properties, and we provide funding for rehabbing.
Jay:And then we sell them as seller finance after after they have gone through and been able to get some depreciation off the first couple of years of of after renovation and then and then sell them with seller financing and carry those notes.
David:Oh, so it's so do you go in as a co owner?
Jay:Yes. I do. Or or as a as a as a joint venture.
David:A joint venture?
Jay:Yeah. Because I don't wanna co own something with with with a tax advantaged account.
David:Mhmm. Okay. It it's interesting that you know, I mean, I've been in the real estate business for fifty four years, but, again, mostly on the broker side. And I, you know, even in my age, I am learning so much. That's why I really like Dawn.
David:You know, I learned so much from her and, you know, in the in the different conferences and what different people are doing. And it sometimes I have to scratch my head about how creative some people can be in, in doing all of this. And in living in a ski area resort town, it's much more difficult to do any of the kind of deals that one finds at conferences or to meet up like this. I mean, our median price house we're we're the poorest part of Lake Tahoe, on the South Lake Tahoe, California side, and our median price is 700 and something.
Jay:Yeah. Well, I've I've been in the business fourteen years less than you. Mhmm. But but every every time I talk to Don or every time I listen to one of the the the podcast, I'm I'm just blown away with why didn't I think of that. So
David:Well, I you know, and I think Dawn is unique in that she, you know, left her career, her nursing career. I think she still she still has her license, but she literally did a complete shift. And and when you're gonna do that and have to do it and survive financially, you learn fast, I guess, because, boy, she did. So any anyone else that goes out searching for notes and other ways other than mailing?
MaryAnn:I don't actually search for notes. I or this is Mary Anne. I generally create notes because I work mostly as a flipper, although I have some rentals. And I usually work with private investors that I know through various real estate clubs, generally in a second position note when I need to kind of fill the gap between the first and what we need. Mhmm.
MaryAnn:So anybody that is interested in that at all and might be looking for notes, let me know. Maybe I can help you. You know? Okay. I'd like to be buying notes, but I think I'm more like, like I say, creating notes.
MaryAnn:I'm still actively taking you know, buying properties. So
David:I I think we're I I think we're gonna run into some interesting time right now. I I think back to the stock market went crazy up to about $19.99. People were making a lot of money at it. And then that came to a halt and real estate took off. At least in our area, we we were flat for years, and then, we took off.
David:That being said, resort areas tend to attract more discretionary money. And then, of course, the recession hit, and now we're back into the stock market going crazy again. But it was interesting because Warren Buffett yesterday, he described the stock market as a combination church and casino. Look at the current market. You go into one of them, and you you put your money down on in on the in the in the casino, then you go to the other one and pray.
David:And, even though he's not running Berkshire Hathaway directly anymore, I think, to be honest, I I think he's absolutely right. There's gonna be a lot of people that get hit pretty hard the way they've been chasing the tech stocks, especially the people that made Elon Musk a billionaire, in one day, and one third of that's already gone.
Amy:I think it was t with a trillion, Dave.
David:Oh, excuse me. Yeah. You're right. You're right. I've been
Amy:I forgot Billionaires that was ages ago.
David:Yeah. Right. I forgot. That that that was that was a slip on my part. But but, yeah, the I mean, that there's a stock that people chased up to went pub public at one thirty five, and they chased it right up to 200, and now it's at about $1.30.
David:So whoever bought a 200 has lost about almost 40%.
Jay:It's actually $1.21 right now.
MaryAnn:Okay.
Jay:It it it was up and down today.
Amy:That's crazy because then you're talking about the high frequency traders and
Jay:Right. Yeah.
Amy:Things that that don't involve people like us.
Jay:Mhmm. Yeah. I sold some at $1.75. So
David:There you go. Well, good for you. I I I I bought a little bit of Berkshire Hathaway years ago, and that's about my exposure to the market.
Jay:Very Sad on the
Amy:Do you sell yet, Dave?
David:Nope. Never have. No. I don't think I'll ever sell that one. Kids will get it.
MaryAnn:Okay. And
David:it's in a Roth.
Amy:Well, you know, Abel, the guy who took over
David:Right.
Amy:Mhmm. Did you hear that he's taking 20,000,000 in CEO salary?
David:Don't blame him.
Amy:Well, Warren always took a 125,000.
David:Right. Right. Yeah. However, he also had a 100,000,000,000 in stock.
Amy:Yeah. Of course. But that really changes the dynamic of of Berkshire Hathaway.
David:Yeah. Yeah. I mean, it's it's it isn't a one man run company anymore. And and what what you have to hope for is the principles that they operated under with Warren Buffett will continue in place.
Amy:Well, that's what I'm saying. It it's not if he's taking 20,000,000 a year.
David:Well, I I'm I'm looking more at the investing principles. Yeah. But we'll see.
MaryAnn:I just like something more tangible. Like, you know, I can feel a property. I can go to the doorknob and walk inside. You know? Right.
MaryAnn:I mean, it sucks. I did have the opportunity to get into the Musk stuff ahead of time. Mhmm. And I was like, I don't think I wanna do that. Yeah.
MaryAnn:And now that you guys tell me everything, it's fallen down because I have don't pay much attention. I'm so glad I didn't. Right.
David:So I I wanna throw out something that and something I've talked about before, you know, this could apply to somebody who's doing flipping or whatever, is agents carrying commissions as a note, and how do you how do you pick an agent. And and then the reason I wanted to bring this up, I I co owned and then owned myself a brokerage and had four offices and over a 100 agents over the years. And it amazed me that I only got two of them interested in investing in real estate out of a 100. And the the mindset of a real estate agent is not the mindset of an investor. And real estate agents are notorious for not buying and investing in real estate.
David:And that being said, at what, you know, what they do, which is being salespeople and selling houses, they're good. They do a very good job. And, no no criticism there at all. But I think the trick is, you know, like like with you, Ben, or whatever is finding an agent who understands what you're doing and is willing to work with you. And I had a guy walk in 1983, and interesting character comes in in a black car wearing a black tuxedo without without the tie.
David:Totally dressed him black, and he walks in 07:30 in the morning and says, I'm buying a house from anybody willing to work this early. Well, I proceeded to sell him a house, nine apartment buildings, resold the eight apartment buildings, helped him manage about $2,000,000, and he let me stay on his houseboat in Amsterdam. But it was interesting because I didn't learn till later. He had his qualifying question as to picking an agent, and that was, are you willing to take your commission as a note? And I said, sure, because I understood notes.
David:Every other place he had gone, the answer was no. My broker won't allow it. What the company won't allow it. So what we did whenever he would say because he was trying to conserve cash. And so what we did in the transactions, you know, he would buy a building for argument's sake, $500,000, and my commission would have been, you know, 15,000 for for discussion.
David:And and all all these buildings had seller financing on them. They were multiple unit buildings, and this is when rates were 11%, so on. And so the sellers would carry back a note, and we would take back a collateral assignment on that note. So as the seller got paid, we got paid. And it worked out very nicely with every transaction he did was done that way.
David:You know, it it because the seller got his money. We got an asset for a commission, and he got in with a property with a little less down. And the nice thing from yeah. Go ahead.
MaryAnn:Yeah. I gotta you said you would take back a collateral assignment.
David:Hey. How's it going? Hi there.
MaryAnn:Hi. You said you said you would take back a collateral assignment on the seller's note? Or
David:On the on the seller's note. The the set because the seller carried back
Dawn:Thank you for engaging with my content. If you'd like to hear the rest of the replay, please go over to citizensoftherealm.com and join our free community. If you'd like to participate live, be sure to subscribe at notequeen.com. And if you have a situation where you could use some one on one help, check out notequeendeepdive.com and schedule a private consultation. I guarantee that one hour with me will either make or save you thousands.
Dawn:Take this information and go out there and create financial solutions just one mom and pop to another. See you next time. Take care everybody.