From Debt Slave to Debt Master: Nathan Turner’s Journey to Abundance in Real Estate

00:00:00
This episode with Nathan Turner is really a very relatable one. And I just love the fact that he went from being in debt. He and his wife were not doing well financially with some franchises, and they were in a lot of personal debt, owed a lot of people money, and so they went from being in debt to owning debt. And now Nathan has been a very active mortgage note investor and real estate investor for the last 15 to 20 years, and he has a lot of experience in the space, and now he owns the debt that used to own him. In a sense, we talk a lot about mindset shifts and mental fitness for the real estate investor and real estate entrepreneur, how to still keep going through the hard times even if you don't have any money.

00:00:57
He walks through how he was able to get into the flipping business and also ended up getting into creating notes and seller financing even though he didn't have any of his own money. There were a lot of reasons to quit, a lot of reasons he could justify giving up, but he didn't. He pivoted his techniques depending on market conditions and what he had in his life available, but he did not quit. And so I think that's really the big takeaways, going from debt to owning your debt and owning your situation. And now he's got a thriving mortgage note business and a fund.

00:01:37
He runs, the diversified mortgage Expo, which is one of the more popular note investing events each year. And that's coming up in Nashville at the end of May 2024. So this is a very relatable and inspiring episode that is perfect if you are financially struggling or if you're in the real estate space at all. You're going to love this one.

00:02:05
Welcome to from adversity to abundance, the go to podcast for real estate entrepreneurs seeking not just to thrive, but to conquer with resilience and mental sharpness. Each week, join us as we dive into the compelling world of real estate through the lens of mental fitness, where challenges transform into opportunities. Get ready to transform your mindset and expand your understanding of what it takes to succeed in real estate. Let's explore these stories of triumph and resilience together.

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Excuse me.

00:02:48
Welcome, everybody, to another episode of the from Adversity to Abundance podcast. I am your host, Jamie Bateman, and I'm thrilled today to have with us Nathan Turner. Nathan is the manager of the earnest investing fund, which is a mortgage note fund. We're going to get into some of that. And also, Nathan, I know you put on an awesome mortgage note event, and this year it's going to be in Nashville.

00:03:14
It's coming up. It's called the diversified Mortgage Expo. Nathan, thanks for joining us, man. My pleasure. Thank you so much.

00:03:21
Absolutely. So, before we jump back into your. Into your backstory, tell the listener a little bit more about what you're up to today. Yeah, so my. My.

00:03:30
Kind of my real job is manager of the earnest investing note fund, where we buy performing notes just for passive investors, people who are looking to build their retirement, just looking to put their money to work for them. On top of that, kind of like a side gig, is running this conference, diversified mortgage expo. We just took it over last year, and then this year is our second time running it. And coming up quick here, May 31, June 1 in Nashville. And it's just all things notes.

00:04:01
Anybody who's either interested in or, well, invested into notes, it's for anybody in that whole category. Absolutely. I know. I've been to it before, and it's. I was not able to make it last year, which was your first year running it, like you said, but I heard a lot of very positive reviews about it, so we loved it.

00:04:22
It was a lot of fun. Yeah, absolutely. So we'll talk more about that in a bit, but sure. Nathan, I know it hasn't always been rainbows and unicorns and butterflies. From a business standpoint, you.

00:04:38
Let's jump back and let's just dive headfirst into some of the adversity that you've been through with running a business. Where do you want to start, Jeff? Oh, boy. Well, let's start here. So, I've never had, quote unquote, real job.

00:04:55
I've always just worked for myself. Probably the closest thing that I had was just after my wife and I were married. We went to Korea for a year to teach English. So at that point, I was employed by somebody else. A bit unusual and a bit unorthodox, but that's probably the last time that I've actually had somebody else pay me.

00:05:15
Wow. That was a long time ago, huh, Jeff? That was. We have been married, so it was right after we got married. This year's our 23rd wedding anniversary, so it was.

00:05:27
Congrats. About 22 years ago. A long time. Got it. Um, and before we, uh, start talking about the.

00:05:35
The. Some of the. Your business ventures. Yeah. Was it.

00:05:39
Did you know. I mean, because, you know, everyone. Everyone's situation is different. Everyone's story is different. Everyone's path is different.

00:05:45
As far as you know. For example, I had some businesses a long time ago. You know, lawn and landscaping business. I had a I had a. I never really talk about this one, but I had a gumball machine business and just a little, you know, and then went to college and eventually got a real job, and.

00:06:05
But I did seven years part time at my, quote unquote real job while I was building my real estate and node investing businesses. So not everyone has that same path. Did you know, you know, just when did you know I'm an entrepreneur? Um, I think for me, the revelation came where we had our first, my wife and I's first business curves franchise. It was that gym for women that happened years ago, and it was shortly after we opened our first location.

00:06:41
And I remember being home, and I mean, really, really, it was, it was after our first daughter was born and I was home, I was working from home, and she's apple of my eye and just such a blessing in our lives. And then the realization to me came that, and I said to my wife, I actually don't care what I do from here on out, as long as I can work from home. And I know that's not for everybody, and certainly the office has its place and it's a great thing, but for me, I was like, no, this is what it's all about. So that's probably the moment that makes sense. And I mean, truth, you know, truth be told, that back then, people listening now might be like, well, why didn't you just take a job working from home?

00:07:28
Well, it really wasn't a thing. Not really. Not back then. No. Yeah, and then, yeah.

00:07:35
And we'll maybe get into it, but there's certainly been times where I'm like, maybe I should just go to get a job where things were. I hear you. Either. Yeah, either for, I mean, it could be. Sounds like financial reasons, but also sometimes, you know, working from home also has some, some downsides as well, just from a day to day living standpoint, but, yeah, so, okay, you mentioned curves.

00:08:02
So talk about, talk about that business, if you would. So curves was a, it was a franchise, women's fitness and fantastic concept where they used hydraulic machines, uh, where ladies would go around and women only, so that it was, um, a comfortable place for women to come and work out, that, you know, not the gym, Bunny. They're not going with the big muscly guys eyeing them and stuff, but they would go, and it was just a comfortable place to do it. And because they're hydraulic machines, the more, more you pushed on it, the more it would resist. So it was really tailored to all fitness levels.

00:08:36
It was really a great concept. So we opened our first one 2004. We actually moved to Quebec in Canada, which is a french province, and my wife and I both had some french, so we thought, yeah, we can do this. We're young. Sure, why not?

00:08:51
The plan was we were going to move there, open up the business, stay there for a year, and then move back closer to her family in Ontario. That was the plan. We thought we'd be there for a year. You know what Mike Tyson says about plans. And we certainly got hit in the face multiple times.

00:09:16
But, yeah, we ended up staying there almost 19 by the time we finally moved away. So certainly not what we originally planned on, but sure. So can you open the first? Yeah. Okay.

00:09:29
Now, just briefly, why. Why a franchise? Well, it started when we were in Korea, where we were coming back to Canada, and we thought, okay, now what. What do we do now as far as life and work and those kinds of things? We had.

00:09:46
We had been able to pay off all of our debt and create a little bit of a nest egg for ourselves. We were like, yeah, we got this. We can do whatever. And then separately, my mother and my father in law both sent us different information within maybe a week of each other, all about curves and this new franchise that was coming up. So we're like, okay, that's interesting.

00:10:09
And so we looked more into it, and it looked like something that we could do and something exciting to kind of sink our teeth into. Both of us spoke French, and the only place you could still buy a franchise territory was in Quebec. We're french speaking, so we're like, yeah, you know what? We got this. We can do this.

00:10:27
So we were. We were up for an adventure. We thought we could make a go of it. Got it. That's how we got started.

00:10:34
Okay. All right, so, you know, we've. We've alluded to the fact that things did not go to plan. Not exactly. So.

00:10:45
So how did your. Your curves experience look overall? I mean, what was the. You. How many.

00:10:52
How many locations did you end up having? What did things look like? We ended up having two. So after the first year, there were maybe 40 franchises in Quebec, and we were in the top five, maybe even the top three of the largest clubs. So it was very successful.

00:11:10
We were doing really well. And we're like, yeah, this is cool. Let's make this our life. So we're like, okay, we'll open another. And then maybe another.

00:11:17
Maybe another. We'll see. So we opened up the second right from the get go. We knew just according to the area, we knew it wouldn't be as successful as the first just because of the demographics and stuff. We just, we knew that was going to be the case, but we also figured it would be profitable.

00:11:36
And then it was barely, it was like just barely making any profit month after month, and then it wasn't. And then we started getting into 2007, and I think everybody could kind of see the writing on the wall where economy was just starting to dip. And then by 2008, when things were really going down, if people are trying to save money, whats the first thing they cut? Gym membership. Sure.

00:12:04
So that was tough. So then it just went down and down and down. So just prior to that, well, we'll get into that in maybe a minute. But that second location, it was great. But like I say, it was just kind of barely making it and we were having to take money from the first club, put it back into the second one from sometimes and other times not.

00:12:28
But it was just kind of like just barely hanging on. So that was kind of where we started thinking about, like, okay, what else can we do here? Because we want to keep doing this or something else. That's, that's when I kind of fell into real estate. Okay, so before we get to real estate, so how did, how did you decide to, like, how did you and your wife divide and conquer on the business side of things, you know?

00:12:54
Cause I've worked with my wife and on business things before, and it's, you know, she'll tell you, it comes with its own set of challenges, for sure. Yeah. What did that look like? What did you, which role, what role did you each play? So initially, initially, I was kind of the behind the scenes guys, so I did like, the marketing and the accounting and things like that.

00:13:17
And she was the face. I was a women's fitness place, so she was the one. She was there literally every day. It was open six days a week. So she was there six days a week most of the day.

00:13:31
And it was. Right, maybe six or, I don't know, ten months in somewhere in that range where we wanted to, it was at that point we wanted to have our second child, so we already had our baby and we wanted another one. We're looking at just our life and going like, how's that going to work and how's that going to be with two kids and mom working all day? And I was home, but is that what we wanted? So a lot of looking at that and, and eventually we just decided, no, you know what?

00:14:06
For us, it was, it was, mom should be in home. Mom is much better than dad in a lot of cases. So we kind of flip flopped where she ended up staying home, and then because she was home, she could do a lot of that background stuff. And then I would, sometimes I wouldn't go in very often, but I would go into the club a couple of times a week, get rid of the reports. I needed deposits and things like that.

00:14:32
And the ladies knew me and, you know, I was. I was the one guy that was allowed in and that kind of thing. So it was okay. But again, we didn't have that omnipresence that we had before. And it was really, I think that's where it kind of started to.

00:14:48
To crack a little bit, where we had to hire managers and then they weren't handling things exactly the way we would have. And, you know, you start to lose. A little bit of that control, that oversight and control. Yeah. So it was because of your family situation, you two had to pull back as a unit some, and you just weren't as hands on, and therefore you're hiring, which creates more expenses and then less control.

00:15:16
And so what did it look like, if you're willing to share from a financial standpoint or anything like that, as far as maybe, how much did you put into these and what did the business overall, if you're. We're talking curves overall, kind of just how did it look financially? All said and done? Yeah, I don't mind sharing. So, like those, like I say, those first couple of years, we were doing well, and we've.

00:15:43
We were kind of looking at it and going, okay, if we can duplicate what the first one was doing, if we could do that, like three or four times, we'd be sitting really pretty. That would be fantastic. That second one did not perform the same as the first. And we're like, okay. And then eventually, so as time goes on, it's kind of up and down and up and down and kind of in a downward, downward line trajectory.

00:16:09
Yeah. And then we put up this. We decided we wanted to sell and just kind of try something else, do something else. We had originally listed both clubs for $200,000 each. Okay.

00:16:27
By the time we eventually sold in 2009, we had shut down that second one and combined the membership to the first. And by the time we finally sold, we've sold that one club for 20,000. After putting in a lot of money, tens of thousands of dollars into rent and payroll and things that we just. The club wasn't producing for itself. Gotcha.

00:16:51
No, I appreciate you being, you know, open and transparent, and that's one of the things we try to bring out in this, on this show is the fact that you and I were chatting a little beforehand. But business can be hard. Business can be really hard and can be. It's. It's not for everyone.

00:17:10
It can bleed over into other areas of your life if things aren't going well, can affect relationships. And, um, so we're going to get to real estate in a second here, which is obviously both. Both of our, you know, wheelhouses. Um, mentally, where were you and your wife when. When you sold, you know, for 20.

00:17:31
20,000? This show is a lot about mental health and mental fitness. Fragile. Okay. Yeah.

00:17:38
So, yeah, yeah, talk. But talk about what that looked like from a mental standpoint and. And just mindset and what, you know, how did you kind of climb your way out mentally from that? You know, I imagine it was a fairly dark place. It was.

00:17:54
It was. I'm incredibly stressful where. I mean, talk about losing sleep at night. Yeah, exactly. Where literally, I was not sleeping at night.

00:18:03
Just, you know, up worrying about all these different things and bills do and things like that. And it was brutal. It was really hard. And then we had our two little ones at home, and it was soon after that we had our third, and. And that was, in itself, very stressful.

00:18:21
We had actually, we lost our first child, so we've got four kids, but we're raising three. The first one was stillborn, so pregnancies were already super challenging and very, very. Yeah, very stressful. So then add on the business to that. Right.

00:18:42
And getting back to the real estate thing, that's what kind of kept us afloat for as long as it did until we started to. Till we were eventually able to transition into a full time and start to turn things around, but it's taking some time. Yeah, yeah. And it's one of those. We talk about that you were in the sort of the valley for probably.

00:19:06
Probably several years. You know, it sounds like. And we'll gloss over it and it'll sound like it was a bad day. Yeah. And so just.

00:19:15
Just for the listener, you know, it's your. Nathan went through a really hard time. I've been through some hard times and, you know, both personally and professionally, and everyone listening is going to go through additional hard times, and it's part of life, and that's. That's. That's the adversity that we're guaranteed to face.

00:19:35
So were there any. We're going to get to the real estate, but were there any sort of mental tricks or habits or any kind of, you know, mindset shifts that you started to put in place to help you maybe see the real estate opportunity. Yes, I kind of from the time that we started working in business, so I started reading books like rich dad, poor dad, millionaire mind, things like that, where it helped me to start looking around and seeing different opportunities. So that's what kind of got me going in the real estate in the first place. But then even on top of that, I remember very distinctly at one point, and I don't remember exactly when, but I remember very much that I was sitting there and I kind of had the realization that I'm the boss, I run the company, the company doesn't run me.

00:20:33
And that was very much a mind shift where it was like, no, no, no, I'm taking charge. I'm the one that runs things, not the business telling me what to do. Yeah, I love that. Hold on. And just that reversal.

00:20:45
Yeah. So, and, you know, some people might hear that and freak out or. But the way you're explaining it and the way I'm understanding it is that it's, it's a liberating realization, definitely. It's, yes, you're taking ownership. Yes, there's responsibility now on your shoulders, but that was already there anyway.

00:21:08
It's just now you have control and influence over how this thing, the direction of your business and your, ultimately your family's future. Okay. So that was a big deal for me. I had a similar just mindset shift and a little bit few years after you did. But just 2014, 2015, I started listening to more real estate podcasts and reading more real estate books and just more positive mindset influences in my life.

00:21:40
And I stopped watching the news and started paying attention to the strengths that I had in my life and the, the people in my life and the resources that were available to make a change. And so I can identify with that for sure. So we're talking, you said around 2000, 920 ten. Is that when you started to make the transition into real estate? Yeah.

00:22:09
More full time? More full time. So, going back. So let's go back a little bit. Yeah, we're running the curves, and I got a call from somebody.

00:22:20
They wanted to meet with me about being able to get discounted cleaning products. Okay. I'm like, sure, we do cleaning products. You know, we clean stuff all the time, so, sure, let's have a conversation. So I met up with her at one of the gyms, and we go into the little side office thing, and she.

00:22:41
We kind of chatted for a little bit. And as we're chatting, she said something about the real estate market in Saskatoon, Saskatchewan. And if you don't know where that is, that's fine. Most people don't. It's like, straight up from Wyoming is where that would be, small farming city, about 200,000 people.

00:23:03
But she's like, yeah, it's really booming out there. And it just kind of, like, flicked in my mind. I'm like, oh, that's interesting. And then she proceeded to try to get me to join Melaleuca and buy Melaleuca products and this multi level thing. And multi level marketing.

00:23:20
Yeah. I was just not interested at all. Not that there's anything wrong with it, but it just was not for me. Right. It's not my thing either.

00:23:29
Yeah. Yeah, for sure. But I did take that little piece of information. I went, really? Saskatoon.

00:23:35
I'd been there. My dad was born there. And so we'd visited some family. It's a pretty sleepy town. Like, it's literally farming city.

00:23:43
That's it. That's what they do. But I knew somebody that lived there, so I called and I said, hey, what's going on in Saskatoon? Like, is there a lot of real estate going on? He's like, oh, you mean Saskaboom?

00:23:54
And he just, like, went off and talking about prices just going up and up and up every month. And I'm like, really? Saskatoon? So that was kind of like that whole idea of keeping your eyes open where I'm like, interesting. Yeah.

00:24:09
You could have either not met with this person about the cleaning thing, or you could have really just dismissed it as, I'm not interested by. But you were listening and open to opportunities. Right. And before that, even. But after that, I'm like, I will never turn down the meeting.

00:24:28
I don't care what it's about, because there's going to be something that we can. Yeah, that's a good point. Right. So I talked to everybody, because who knows? You never know.

00:24:35
Sure. But that was it. So then we started flipping properties, okay. And sure enough, the real estate market was red hot. Where I could go, I would pack up a suitcase full of tools and a sleeping bag.

00:24:50
So I'd go, and I'd sleep on the floor, and I would work 16 hours a day just renovating whatever house we had just bought, using my brother in law's money to go out and get this project done. And it worked fantastically well, and it was enough that it kept us afloat, and it helped keep the businesses afloat where we ended up. Most of that the vast majority of that went back into those businesses just to keep them afloat, pay for, like I say, rent, payroll, those kinds of things. Yeah. This was the curves business, as you're saying that.

00:25:27
Yeah, back into. Right. So you were doing the flipping pretty much the whole time. You were running the curves franchises the. Last couple of years, yeah, last couple of years.

00:25:37
Got it. Um, so what time frame are we talking about that you were doing flipping? Started doing that, like, in 2006. So I did, um, between 2006 and seven, I think I did six properties. Okay.

00:25:51
We fix and flipped and worked really well, except for the last one, where, again, that economy just started to change. Yeah. And so I ended up having to rent it out because I'm like, well, I guess that's what you do when you own property. You can't sell it, you rent it. And I figured out very quickly that I really liked the cash flow because surely we needed it at that point.

00:26:15
But I didn't like anything else. It was really difficult to manage, especially from afar. It was just a major headache. And I'm like, man, why do people do this? Like, I don't see the draw.

00:26:29
Draw? Yeah, I mean, I. Similar to you, I got into rental properties first before I got into mortgage notes, and I never had a flipping business. We're more doing the burr method, where you rehab and then hold the property and keep trying to do that again in current conditions. I don't think that's a real strong play right now, but, you know.

00:26:53
But, uh. Yeah, but it was working for us, and my wife and I have held on to those. Those properties, which is, um, we've got property managers, so it's really not. Not too. Too much of a headache, but it's a.

00:27:06
It's an important piece of our cash flow, for sure. But, yeah, it's a different thing. Flipping is a transactional, very hands on thing, and you can get a lump sum, which is nice. Then you got to go out and do it again. So.

00:27:21
Okay, so then you were kind of a forced landlord, if you will, on that last flip. And then where did things go from there? So it was. And then we finally sold the curves, so, like, okay, at least it's off my plate, you know what I mean? We weren't.

00:27:38
We were even further in debt at that point, and now we owed all kinds of money to all kinds of people, and. But the bleeding had stopped, so. Good enough. And then it was soon after that where it was a friend of mine, also from Canada, he'd moved down to California. He met up with this group of investors where they had bought a portfolio of properties, mostly centered in the midwest, and they bought in zero 7, April of zero seven, right at the top of the market.

00:28:14
And by the fall of 2008, theyre like, oh, shoot, what do we do with this stuff? Its not what we thought it was. And the value has certainly dropped and all that. So they basically just gave us whatever freedom they said. So you guys have power of returning over all of this.

00:28:31
Do what you can. So we started, we thought wed invented seller financing. We were like, oh, this is a great idea. Well, sell it on terms. So that was the method that we had created to start selling those.

00:28:44
So that was really my first introduction to notes, was selling these properties on terms. Creating notes. Yeah. So it can be hypothetical or a real example, but just give us a short version of a case study. So with some numbers behind it.

00:29:01
What does that look like? What are you talking about? So just for the listener who's less familiar with this, what did one of those properties and those projects look like? So you got to go back in time a little bit. So this was like, 2008, 2009, Midwest houses that were already in disrepair in 2007.

00:29:22
So this, before the crash, they were in. They're in rough shape. So I would rent a car and go and drive around to go and kind of inspect these properties and see what was going on with them. I had a vinyl printing machine, like a vinyl cutter. And so I would make a sign that says, own a home for less than rent with my phone number.

00:29:44
So we would look at market rent, say was like dollar 400 on this house. Then we would sell it to you for $350 a month. We would get like $1,000 down payment and $350 a month. The deal is you as the borrower, as the occupant, you're the one in charge of fixing up the property, taking care of it, doing all that stuff. We're just basically providing the financing for you so that after whatever time it was five years or something like that, then the rent, you're paying a portion of that.

00:30:19
Like it was a lease agreement, basically. Lease option. Yeah, yeah, got it. And we'll set it up so that after a certain time, you've created a little more equity. You can go back to the bank now that you fixed it up, and it's in better shape, all that kind of idea.

00:30:34
Got it. So that was really kind of the. Beginnings of that plan foray into mortgage note investing. Yeah, yeah, yeah. And not knowing really what I was doing.

00:30:45
We did it all wrong. The paperwork was totally wrong and, you know, made all kinds of mistakes, but it was. That was the introduction. And what states was this in? You said Midwest.

00:30:58
Midwest. So, like Ohio, Michigan, Indiana, primarily. And then we had a couple others in, a couple in Kentucky, one or two in Texas, one or two in Georgia, a few, you know, outliers, but the vast majority were those three states. So at this point, was your, was your wife mostly? She wasn't really involved in that side of the business.

00:31:20
No, she was home taking care of kids and just, you know, trying to keep things going as best. Oh, I. Yeah, it's definitely a lot to manage. Yeah, yeah, for sure. So.

00:31:34
Okay, so you. How many of those lease, option, or seller finance type deals did you do? So we. The. It was a package of 60 properties we sell or financed out, maybe, maybe 25.

00:31:53
Gotcha. And then they sold off the other roughly half. Yeah, sold them off, or in some cases, the city, you know, destroyed the house because it was in such bad shape or lost it to taxes or something. So there's a variety of other things, but. But we did enough of the seller finance ones that were like, huh, this is cool.

00:32:11
Like this. Given the right circumstances, this is a really cool idea. Good option. Well, I think what's cool, too, is, um, is like, with your flipping. Okay, you.

00:32:23
You were in debt. I mean, you, at least at some point, so you had it, but you realize there's access to capital, someone else's money. Right. You're able to still. It wasn't a reason for you to just quit.

00:32:35
Right? There was still a lot of cards stacked against you and a lot of adversity, but you found a way to make that work through someone else's money. And then with this 60 property portfolio, I don't know the relationship or ins and outs of there, but you were helping someone else with their problem. You had more time, I'm guessing, than they had. And so you're gathering all this experience and knowledge along the way without using any of your own money, and you're.

00:33:07
You're making money through that process. Um. What did I get wrong there? No, that you nailed it. And then at the same time.

00:33:16
So, uh, 2009, we had. We had started making some of these contracts because that's. We didn't know they were called notes. Uh, started making some of these, and then I heard about a class happening down in Texas where what he was describing sounded a lot like we were pretty similar. Yeah.

00:33:34
Yeah. So I go down there, and Mister Eddie Speed was teaching his class all about buying what I was making these notes, I'm like, oh, they're called notes. Okay, cool. That's so funny. And that was kind of that introduction to this larger world.

00:33:49
And then he told me about this conference coming up in the fall of 2009 called Noteworthy that was happening down in New Orleans. So we got, you know, we got permission from these guys to use some of their money to send us down to New Orleans and learn more about we're doing and do it better. Immediately started making those connections and contacts, and that's been just the launch pad for sure. That's, that's really, really cool. So in the last, sounds like 15 years is when it's how long you've been doing, like, the note thing?

00:34:25
Maybe a little bit longer. But since you heard the term note and its been 15 years, what have been some of the ups and downs in the last 15 years when it comes to mortgage note investing, Robert? Thats a good question because it hasnt all been just fantastic and perfect. Definitely still ups and downs. We had those 60 properties.

00:34:48
There wasnt a whole lot there to work with. So it was what it was. My old partner and I, we started raising money to go out and do the same kind of thing we were doing, but with higher quality property, higher quality borrowers and things. And had some success with that. Like, it was decent but not fantastic.

00:35:08
And again, huge learning arena. Yeah. And then just kind of up and up and up, like slowly, slowly but surely. I worked for a hedge fund for a year, which again, just added to the experience, helped pay the bills for, again, just a little while. And it was in 2015, early 2015.

00:35:35
My old partner, he's like, you know what? I've got this other opportunity. I got to take it. I said, no problem. So you did work for somebody else after I did.

00:35:44
Technically, that's true. That's true. By on contract, I wasn't officially employed. Fair, fair. All right, that's contract.

00:35:52
Yeah, yeah, semantics, but, yeah, I hear you. No, I'm, yeah, I'm with you. So you see, I mean, you got to do what you got to do, but so, and sounds like that was a contract. Experience was a positive one. You got, got good experience, got some pay for it, paid the bills.

00:36:12
Uh, so that's always good. And then, so in the last nine years, then since 2015, what is your mortgage note investing career looked like? That's when it really has, that's when it made the biggest difference is I felt like those first few years was a lot of learning and just kind of getting it done. Uh, and then after that, um, started, you know, on my own, going out and raising some money for going out and buying notes. And when I first started, it was all for non performing notes.

00:36:46
And, and that can be a challenge in and of itself where. Yeah, for sure. You think it's going one way and it goes a different way and you think you're going to make this much and make that much. And so that was. So.

00:36:57
Talk about that. Sorry to interrupt. Yeah, the, you know, there's, there are a lot of nuances within the note space, as you and I both know. And first seconds, contracts for deed, mortgage notes, deeds of trust, whatever. But how did you kind of moving away?

00:37:19
It sounds like you moved away from non performing notes. Cause you mentioned earlier in your fund, earnest investing fund, you, you buy performing notes. So was that shift from non performing to performing? Was that market conditions driven or was that really just what you prefer? It's more predictable.

00:37:38
What were the reasons to move away from the non performing side? Kind of all the above. So market conditions for sure. Uh, availability and uh, pricing just got worse in both of those cases. Yeah.

00:37:51
Um, so that was, that was a big part of it. And, and I'll tell you, going from the adversity to abundance thing is, uh, a big draw for my wife and I looking at this was if we set up a fund and we start buying performing notes, you mean we could have monthly income with the non performing? We'd make a bunch of money one month and then nothing for another month or two. Back to your fix and flip days. But it could be even a longer hold potentially.

00:38:22
And like you said, it's very hit or miss on the NPL side. And for those who are unfamiliar, we're talking about creating or buying debt. And so then youre essentially the quote, unquote bank. No, Nathan is not a bank. Im not a bank.

00:38:39
But youve become the lender. In that sense. Youre acquiring or originating. Youre acquiring existing mortgage debt or originating seller finance debt. So some people are, this may be a foreign concept to some people, so we wont go too deep on that.

00:38:57
But so talk about the last maybe two or three years of your mortgage note career. What has that looked like? Again? Just up and up. And it's just because this is a relatively small space, relationships, connections, networking, whatever you want to call it.

00:39:19
It's all the same thing. But really it has so much to do with who you know. And so just over. And it's not something you can just create day one. That takes time.

00:39:29
And so over time, that's been building up. And so it was last year that I took over this conference, and I was approached by the old owners, and they said, you know what? It's just not for us. Are you interested? And my first thought was the networking and just those connections and the contacts.

00:39:45
I'm like that. Absolutely. Yeah, for sure. I remember talking to you at the diversified mortgage expo two years ago, and you had decided to take it over for last year. Yeah.

00:39:58
And you said that you had some experience running events as well. Yeah. So to me, it's like, okay, maybe you hadn't done this exact event before, but you're pointing. You're drawing off of your experience and your strengths, and, yeah, you're pushing the boundary, probably stretching your. Your own comfort, you know, out of your own comfort zone a little bit, I'm guessing, but.

00:40:19
But you've done. You've done similar things, so. Yeah. And like I said, it's gone. It's gone really well, from what I've seen.

00:40:27
And that. You're absolutely right. I mean, people ask me all the time, where do I buy these mortgage notes? It's like, well, it's a relationship game, so chill out a little bit and start building relationships. And that's.

00:40:41
My answer is go to conferences. Mine, somebody else's, it doesn't matter. But you have to go to conferences. It makes such a difference. Sure.

00:40:50
Just getting face to face with people. And I think now after the pandemic, it's even more important. I don't know about you, but it's very easy for me to be sort of isolated, working from home, and I'm on Zoom or teams all day long, and then it's like, yep. Did I really actually connect with anyone? These live events, I think, are even more critical now than they.

00:41:12
Than they were five years ago. Yeah. So, okay, so it's just gone up and up and up. And I know you have a podcast as well, right? Yeah, Dave Putz and I would do a podcast together.

00:41:27
It's fun. We don't. We're. Our businesses are not actually connected at all. We just do a podcast together because it's fun and interesting and we learn stuff.

00:41:36
Yeah, absolutely. Did you say the name of it? No. So if you're looking for it, easiest way is just go JKP holdings, search that on YouTube or Spotify or whatever. And we've got three years now.

00:41:51
We've been doing this a little more than three years. And so I don't know how many dozens of episodes that is, but a lot. Well, it's when Chris Severny asked me to join his good deeds note investing podcast years ago. My first reaction to myself was, no way, because I was just not comfortable. And actually, I want to talk about this with you.

00:42:12
Um, I I'm not an extrovert. I mean, I'm definitely an introvert. Um, and it's, uh, it just was. Are you kidding me? Whereas Chris can just, like, he'll just talk to anybody and, uh, you know, spout things off, and he.

00:42:29
He's in his wheelhouse behind the mic. But, um, it scared. Scared me. But I knew I should say yes for the exact same reason you said yes to running the diversified mortgage expo. Different things.

00:42:43
But I knew this would help me, you know, network and get out there and just sort of, you know, expand my own connections and help me professionally and personally. And it really hasn't. Now I've launched this podcast, which is a sort of a. In a sense, a spin off of that one. But, yeah, I know, sort of public speaking and being.

00:43:04
Being out in front and center in front of a big crowd is maybe not naturally your, your thing. No, talk about the. The growth, the personal growth and mindset growth that you've experienced on that front. So, um, it's. I do quite a bit of public speaking now.

00:43:26
Uh, and I'll tell you, pretty much every time, I still get butterflies. Like, it's. It's not 100% comfortable. It's not my. It's not my comfort zone to be out in front.

00:43:37
I can do it, and I actually do enjoy it, but I'm nervous every time. So that's the first thing we'll start with. Uh, so if you're in that camp. Yeah, don't worry. That's okay.

00:43:47
And I. Exactly. That's right. And it's like people nowadays, I I'm not. There's way too much anxiety and stress, and that's a real thing.

00:43:55
I'm not knocking that when it's an extreme. Um, we definitely have a mental health crisis, crisis on our hands. That said, it's okay to get butterflies, it's okay to be nervous, because that means you care about your presentation and how things go, and you wouldn't be human if you didn't have some level of stress beforehand. Um, that's. That's my opinion, anyway, for sure.

00:44:20
And then the trick is, um, having those butterflies and that nervousness and then doing it anyway. That's the trick. That's right. I love that. But just push through, because it's not that big a deal.

00:44:34
Honestly and truly, it's really not. And the honest truth is, if it's not a perfect presentation, if it's, you know, you're kind of flubbing through it a little bit. People like that because they know, totally identify with that. So that's, there's absolutely nothing wrong with that in so many ways. And I've been told that too, where they're like, I like your presentation because, you know, you're real.

00:44:58
I'm like relatable. I don't know how else to be, but okay, thanks. Right, right. I like that. You really screwed up.

00:45:04
No, but, but no, you're right. And the truth is, too, you zoom out after you've done a few of these DMe events and no one's going to remember what you said two years ago. So it's like, it's not that big of a deal if you make a, if you fumble things a little bit. Okay. So you've definitely expanded your mindset and expanded push yourself outside of your comfort zone from a public speaking standpoint.

00:45:35
Got the podcast, you've got the conference and then now, now and you have your fund. Are those kind of the main things from a professional standpoint that you have going on? Yeah, mainly a couple other kind of side projects, but. Yeah, yeah, but mainly that's it. And it's, and it's good and it keeps me very busy, which I actually really like.

00:46:03
There's times for sure where I'm like, just, I just need a break for a minute. But really I would rather be busy than bored. So. Yeah, so is, I'm going to try not to answer this one myself, but is, is node investing passive? Wouldn't that be awesome?

00:46:26
Here's the thing, kind of, if you can get a portfolio of. So there's a couple of ways that it can. There's levels of passive. Yes. If you're running your own portfolio and it's all performing sort of relatively.

00:46:47
Yeah. There's always going to be something you're going to have to deal with. There's at the very least, you're going to have to talk to your servicer at least once a month and just get updates on things and then have decisions to make on whatever the outcome of those meetings are. So at the very minimal, you'll have to have that. The most passive way to invest in notes is into a fund and.

00:47:09
Sounds like a plug, but it really is. It can be, both things can be true. It can be a plug and it can be the most passive way. And, you know, you and I each have, I still have a fund that's open, the integrity income fund. And it.

00:47:26
I couldn't agree more. It's, it's the most passive way to be a node investor. I think buying stocks and bonds is probably, you know, about as passive as it gets, but you still should watch it. And. Yeah.

00:47:40
Um, so I agree. That's a, it's a spectrum. Uh, it's not either or. Uh, yeah. People like, uh, to hear that everything's black and white.

00:47:49
But the fact is there's a lot of in between in note investing. And if you're running a massive non performing note fund that is not passive. You're managing, you're raising capital, managing the assets. Uh, it's not passive. Um, so, yeah, absolutely.

00:48:08
But, but we. But you and I each have a path for the passive note investor to, um. Yeah, and I will say there are a lot of benefits to note investing that you don't find in real estate. To me, it's a little bit, quote, safer. Nothing's, nothing's fully safe.

00:48:23
But if you're investing in first lien mortgage notes that are backed by hard real estate, that's fairly safe relative to a lot of the other investment options out there. You may not get a 30% return as a passive node investor, you won't. And that's the trade off. The more passive probably, the less return you're going to get, more or less generally. Absolutely.

00:48:49
Agreed. Awesome. You ready for some rapid fire questions? Yeah. All right.

00:48:55
I've got a couple that I'm going to that are new here. Um, okay. In your opinion, what is the role of luck versus skill in real estate success? Uh, there's certainly a degree of being in the right place at the right time. Um, but a big part of that is just having your ears and eyes open to opportunities, because there are tons all over, if you're paying attention and if you know what to watch and listen for.

00:49:24
Really? That's what I would say. That's a, that's a great answer. Um, here's a little controversial one. What are some unethical practices you've witnessed in real estate or mortgage note investing?

00:49:40
Oh, um, I'll tell you, I was part of a, I wasn't the only one. Which kind of makes me feel better. Uh, where there was wire fraud, uh, somebody working for one of these hedge funds, and, uh, unbeknownst to me, and I think about six or seven other investors, uh, the guy working for this fund, I don't know how he thought he would get away with it, but he, when we, when it came time to purchase the note, you send a wire to the. To the company, and then they send you the documents. Uh, he had set up his own bank account, so instead of sending money to the fund like I thought it was, I sent it right to him.

00:50:21
Wow. I was actually the smallest investor in that scheme, but, uh, he, in total, he took everybody for just under a million dollars, which is a big ticket. So, I mean, I'm not quite sure what happened. I know FBI was into it and all these other things, because that's a pretty big amount. Absolutely.

00:50:42
That can happen.

00:50:45
Yeah. Ask you how you know. Right. Yeah. What about recently?

00:50:50
Any surprising market trends or market changes that you've weren't necessarily expecting? And how have you adapted to that? I've been interested to see the different kinds of notes coming out lately. I've seen raw land notes have become more popular lately. And short term loans, like fix and flip loans, that kind of thing, bridge loans, those have been more common where I didn't see any of those five years ago.

00:51:23
And now banks have really tightened up their underwriting standards. It's hard to get a loan. Even if you have millions of dollars in your own bank account and you want a loan, it's hard to walk into a bank and get a loan right now. Yeah. Yeah.

00:51:37
So that there's. That gap is being filled. Um. Got it. Awesome.

00:51:43
All right. What is a challenge that you're facing in your own business right now? Um, for me, actually, I would say raising capital. Um, yeah, that's, uh, that's for me, that's the bottleneck. I've got tons of deal flow.

00:51:58
Uh, and then I hate saying no to deals, but I'm. I'm having to do that just because I don't have the capital available. As soon as I get money in from an investor, it's right up door within a week. So it's. Yeah, that's been the challenge is just getting the money in the door quick enough.

00:52:15
Inflation and just higher rates, higher cost of living, higher, you know, interest rates, and it's just been harder to raise capital in the last three years than it was before that. All right, back on the personal side, what is one thing that people misunderstand about you?

00:52:35
Something people misunderstand, I think, you know, they'll see me out at a conference or something, and I can do the stage thing, I can do the speaking. But really and truly, I would rather just be at home watching a movie. I like quiet right now. The house is empty. That's my favorite.

00:52:56
I just like it just a nice, quiet, calm environment. So the conference thing is the total opposite of that. And like I say, I can do it, but my preference is actually calm, quiet. Yeah. So you're worn out after it.

00:53:10
I am, yeah. If you could have coffee with any historical figure, who would you choose?

00:53:18
Let's go with Thomas Edison. Okay.

00:53:23
I. Tenacity is the word for him. Just, you know, the light bulb thing, where it's hundreds of attempts till he finally got it. And it would have been easy to give after attempt number 50 or 100 or 200, but no, he just kept at it. So.

00:53:40
I like that. I like that quality. I'm just like, no, you just keep going. Just keep going. So he was a what, a.

00:53:48
Like a ten year overnight success or something? Yeah. If you were given $10 million tomorrow, personally with. No, not for your fund, just someone wrote you a check, what would you do with it? Honestly?

00:54:01
That would buy a bunch of notes. The whole overarching reason of setting up the fund and everything we're doing now is to fund my retirement, which I'm hoping to do in the next five years. So. That's nice. So if I had 10 million today, yeah, I would go and do that and have my retirement funded.

00:54:23
Sounds great. What is a book or two that you could recommend? You mentioned a couple earlier. Any others? Yeah, great ones to get started if you haven't read them already.

00:54:35
Rich dad, poor dad, for sure, is one of those life changing books.

00:54:43
We call it Millionaire mind, but I think there's a longer title, secrets of the Millionaire mind. I think it's called Harv Ecker. Also fantastic. Just. Just to open your mind, look at things differently.

00:54:57
A third one, I would say Darren Hardy. The compound effect. That's a good book. Also fantastic. Just little changes over time result in massive change.

00:55:09
It's very true.

00:55:12
What is one question that I have not asked that you wish I had?

00:55:23
I don't know. I think we did a pretty good. Job and pretty thorough. What about your fund? Are you able to talk about the intricacies of the fund more?

00:55:30
Yeah, yeah. It's a 506 c, which means I am allowed to talk about it. I can advertise and all that stuff. It also means that it's open to accredited investors, so people that make at least $200,000 a year or have a net worth of over a million dollars outside of the primary residence. It's really made for people who just want to set it and forget it.

00:55:58
It's a great investment in an IRA. To help build up your IRA fund. Um, it's. It's a good investment, honestly and truly. Um, and again, I know that sounds like a plug, but it really is.

00:56:11
Yeah. It's just a good place to put your money. And minor, but notes is a great set. Absolutely. So is it a.

00:56:19
How long is the commitment? What do you pay distributions monthly? Quarterly? How does that work? Sure.

00:56:27
Yeah. So it's a minimum investment is 50,000. Um, we're doing a five year term. Okay. And, uh, raising 5 million, and we pay out 8% with quarterly distributions.

00:56:39
Got it. Okay. Yeah. I couldn't agree more. I mean, it's.

00:56:43
And with all of your experience, um, you've, uh, you know, with the. I mean, even the curves experience and then the fix and flips and then creating seller, creating notes, doing the seller, financing the contracts on that side, working for a hedge fund, and, you know, this wasn't an overnight thing where you're like, oh, I'm just going to start a note fund and ask for people's money. You've got a lot of. No, and, you know, beware that. The weekend warrior that went to a course for three days, and now things, they can do it all.

00:57:21
Nice, nice thing, too. The fact that you're out, you're front and center. You're out there. Yeah. Chris and I.

00:57:29
Chris, 70, and I have talked about this. It's, you know, you got a podcast, you got an event that you're the face of. You can't really run too far. If you're gonna try to steal people's money or do something, you know, that, you know, then it's. It's gonna be a tough one.

00:57:48
We'll be able to. We'll be able to track you down. So. Yeah, I think so. Someone who's out there in the, in the public eye a little bit, like, like you and I are a little bit is, you know, we're, in a sense, more.

00:57:58
More trustworthy than some. Somebody you've never. Who you never see. So. Nathan Turner, this has been awesome, my friend.

00:58:06
Yeah. Anything you want to add before we sign off? You know, just in going back to the title, adversity to abundance. Just keep. Just keep going.

00:58:18
And just. It can be a rough ride, but just keep going. There's light around the corner. It's there. Just keep going.

00:58:28
Absolutely. And your website is earnest investing.com dot. Is there anywhere else we should direct people? You can go there or to the conference website, diversified mortgageexpo. Both of them connect with each other.

00:58:42
So, yeah, have a look. Awesome. I know you're active on LinkedIn and some other platforms. So fantastic. Nathan, this has been really good.

00:58:51
Thanks again. Hey, my pleasure. Thank you. And to the listener, thank you for spending your most valuable resources with us, which is your time and specifically your attention during that time. We appreciate that.

00:59:04
So check out our website, adversity two From Adversity to Abundance Podcast and we'll talk to you later. Thanks all. Take care. Thanks.

00:59:21
Thank you for joining us on from adversity to abundance. We hope today's episode has equipped you with valuable insights and practical advice to elevate your real estate journey. For more inspiring stories and resources, visit us at www. Dot Adversity two From Adversity to Abundance Podcast. If this episode has inspired you, please share it with a friend who could also benefit from our conversation together.

00:59:44
Let's turn adversity into abundance. Until next time, keep building your mental fitness and your real estate empire.