- Managing Roles in Business (1:06 – 2:47):
- Dividing tasks to avoid conflicts.
- Importance of not listening to negative opinions.
- Introduction to Mortgage Note Investing (4:04 – 5:25):
- Explanation of mortgage note investing.
- Benefits of predictable cash flow without property maintenance.
- Getting Started with Note Investing (8:16 – 9:12):
- Joining a mastermind group for education and support.
- Public and private avenues for purchasing notes.
- A&E Investments’ Mission (9:19 – 10:50):
- Focus on educating and helping investors.
- Community building and mentorship.
- Website: https://www.aeinvest.net/
- YouTube: https://www.youtube.com/channel/UCE1dOH6KXwOn5b7VqSjS8PQ
- Linkedin: https://www.linkedin.com/in/adam-roberts-23918aa/
- Instagram: https://www.instagram.com/ae_investments/
- Contact Number: 843-619-3005
- Email: corwyn@corwynmelette.com
- Instagram: https://www.instagram.com/exitstrategiesradioshow/
- FB Page: https://www.facebook.com/exitstrategiessc/
- Youtube: https://www.youtube.com/channel/UCxoSuynJd5c4qQ_eDXLJaZA
- Website: https://www.exitstrategiesradioshow.com
- Linkedin: https://www.linkedin.com/in/cmelette/
ROBYN:
Do you want something more? More meaningful moments, opportunities, deeper relationships, and memorable experiences? Do you want to make a difference? If you said yes, a career in real estate could be the opportunity you’re looking for. Guiding people through one of the most important decisions they ever made, the purchase or sale of their home can be both rewarding and lucrative. Exit Realty’s revolutionary compensation model, training, and technology that provides you with the tools you need to start and build your successful real estate career. Call me today, Robyn Collins, R – O – B – Y – N Collins with Red Robin Homes at 843-557-5003. Again, that’s 843-557-5003 or visit us at redrobynhomes.com/joinexit and make your exit today
CORWYN:
So you guys are married and work together. So you’re lifing together. That’s what you’re doing all the time, all the time. So how does that play out? What does that look like? How have you managed to do so successfully? And one thing you said earlier about not listening to other people, that thing resonates with me just so you know, because I’m constantly telling people, look, weed others out because taking in all that negativity or taking in somebody’s random opinion about whatever you’re planning on doing may or may not be in your best interest. So listen to what you and who you need to listen to and the rest of it you need to go work on and figure out. So how does that work? I mean, that dynamic, because you guys are, y’all are sitting close together. Y’all are right here together. Y’all are happy. Y’all smiling. Look, I don’t think either one of y’all got a knife stuck to the other side or anything. Nobody is fighting. So how do you guys manage this?
EMILY:
The first year that we worked together, we both did the same tasks and that obviously didn’t last very long. We would step on each other’s toes. Who’s doing this? Who’s doing that? And so after that first year, we really learned from some of the other working couples in our industry and we developed more roles and responsibilities. And we actually broke it up where Adam was more of the operations side and I was more of the acquisitions and investor relations person. But that has still evolved over the years. And we now have a full-time virtual assistant. We use a task management system even between us so we can assign each other tasks professionally. I mean, there’s a lot to manage.
ADAM:
I’ve got a simple answer for the question, Corwyn. It’s how do we do it? She makes all the important decisions.
CORWYN:
So obviously the dynamic, it works, it’s functional, and most importantly, it is successful because you guys, I mean, you’re living proof of it. You are living proof of the success of a couple working together and in turn doing magnificent things. So I want to switch up and for our listeners, guys, I need y’all to hang on for the ride because we’re going to delve into the other side of the coin. We’re going to flip it and we’re going to delve into the other side of the coin because we all look at real estate typically from what we see on HGTV and all that stuff. And just so you know, that is like not it. But what we see in those arenas, and that’s how we think everything in the business works, but there’s another side to it. For every investment property that’s sold, there is a transfer of cash. And sometimes that cash is cash out of a bank, meaning your bank account, or sometimes it’s cash that is borrowed from someone else or some other entity or some bank that’s then being provided. So there’s a whole nother side of that business. So you guys also operate in that other realm.
ADAM:
Am I correct? Correct. Yeah. Especially since multifamily real estate investing has become a challenging environment the past year or two, from a cashflow perspective, property taxes are going up, insurance is skyrocketing. For our own financial purpose, again, through that rhythm of reviewing where we’re at, we jumped into a totally different space, which is mortgage note investing.
CORWYN:
What is that? Let’s break it down to layman terms. What is that?
EMILY:
So I like to use the example, when you buy a house with a loan, sometimes a couple months later, you get a letter. And the letter says, oh, your loan was sold. Now, instead of paying this servicing company, you need to pay this other company. Well, that’s what the homeowner sees.
But in the background, your loan was sold from one company to another. And what most people don’t realize is that normal people like you and me, we can buy notes. We can buy mortgages.
And it’s so crazy to think about, but we didn’t even know this a year and a half ago before it was brought up in one of our mastermind groups, that notes are an incredible investment for cashflow. Because when you’re buying somebody’s mortgage, their payment that they’re paying ends up coming to you. The principal and interest comes to you every month that they pay their mortgage. And so it’s a really complimentary investment to multifamily and real estate in general, because it cashflows every month, but you don’t own the house. And so you don’t have to pay for the maintenance. You don’t have to pay for the insurance, the taxes, anything like that. And so it’s a different type of investing that just meets a different need in our portfolio.
CORWYN:
So I love that. Some other industries, we have had guests on that are in the storage space and things. And we talk about trading toilets for people and their toilets for their stuff, because you get out of that entire arena. You ain’t got to worry about, quote unquote, the asset. You have the lien on the asset. So in turn, you’re going to be paid for it. And if not, then you take action contrary and take possession of it. So what even prompted you to say, this is a direction or piece that we’re going to add to the portfolio and offer this to the people that invest with us?
ADAM:
It really was obvious to us that, again, with multifamily, when our entire portfolio, distributions that would be given to us monthly based on the tenants paying rent and the expenses, the mortgage payment, and then the bottom line figure, those basically vanished. Interest rates went up. We used to pay like $300 to $500 per unit for insurance. And that’s well above $1,000 per unit now every year. And that all equated to Emily and I shrinking our cashflow. And we needed that money to pay our mortgage. And we have a two-year-old daughter, so diapers at the time. And so when you start buying these mortgage notes, really immediately the first thing you notice is the payment comes in dependably every month like clockwork. Yeah. If your portfolio is big enough, there will be some challenges, right? You’ll have a borrower slow pay or something will happen, but it’s like something I’ve never seen before. Even being a single family landlord, the mortgage payment seems to be even more important to someone who has pride of ownership in their house. And it just comes in every month like clockwork. So that was the primary reason we got into it is for that cashflow number.
CORWYN:
How does someone get into that? And I know you guys have this whole roadmap. So I want to make sure we start getting into that as well and how we get people in, get them connected to you that have these questions. But my assumption is there’s some type of exchange or something where these mortgages are, and you guys tap into the exchange and say, oh, I want that one. And these mortgages change hands often. Later in, you know, most times they change early in turn because your first several years are primarily interest, but sometimes they do change a little bit later. So are you guys tapping in the earlier years or you’re tapping in the later, or are you doing the counter combinations of both?
EMILY:
Well, first we decided to join a mastermind specific to mortgage note investing. And that came with education, mentoring, coaching, one-on-one, like we’ve got somebody to text if we have questions. And they did provide a trade desk or a deal flow for notes. So they pretty much hand you notes on a silver platter and say, hey, here’s some notes you can buy. But there are public ways to buy as well. There’s free educational routes, there’s YouTube channels, there’s podcasts where you can learn about note investing. I would say a website called Paper Stac, S-T-A-C, is one of the biggest public forums for note purchases. Like anybody, you could go on Paper Stac today and buy a note if you wanted. And so that has just opened our eyes to the possibilities. And we’ve done both. We’ve bought on the public forums, we’ve bought on the private forum that we have. And we have also been able to leverage other people’s money with some of the note investing as well.
CORWYN:
That is huge. So let’s talk about A&E investments. So the brainchild, obviously this is the culmination of the work that you guys have been doing. The brainchild and the intent of this platform, because you guys actually help people, like this isn’t just you doing this. This is you educating, teaching people, helping people roasting money up and make money in these processes. So tell us about A&E investments and let’s delve a little bit into that.
ADAM:
Yeah. So for A&E investments, I think you hit the nail right on the head. Our value add is working with our investors primarily to help them do the things that we’re doing. I mean, it’s not, there’s no secret sauce, right? It’s, hey, Emily and I have built a business and it’s around investing in real estate. And we love, I mean, we love that part of the lifestyle and business so much that teaching it turns into working with people and helping them do the same thing. And case in point, when we switched over and pivoted into mortgage notes and started making that a big part of our routine, we had dozens or more of our multifamily investors reach out and say, hey, I’ve been working with you for the past five or six years. It’s been a positive experience.
I see you’re doing some different things. How can I learn more about that? And it’s really turned into maybe a mentorship. It’s, I think people like to see what we’re doing. They trust our track record and that’s what A&E investments is all about. It’s the educational component. And if people are so inclined to work with us as an investor, we love it because the more we work together, like you said, Corwyn at the beginning, the more of a community there is around it, everybody wins.
CORWYN:
Exactly. Initial steps for someone who may have interest in talking with you, meeting with you, learning more. For our listeners, guys, I’ve been on the website, on the website actually now.
And I mean, you guys have an amazing portfolio. You’re helping about a thousand investors currently, and you’re getting them an average return well over 20%, almost close to 30%. You guys are like killing it. So how does someone get connected to you all? And for what it’s worth, I mean, let’s be transparent. Let’s be real. Every listener listening, sometimes we find back, we create barriers. We quick to build a wall. It’s amazing how quickly we can build a wall, but never figure out how to build a ladder to go over it. So with that being said, let’s talk that also about what is the requirement, if you will, for entry, what does that look like? Because some people will automatically create a barrier entry. Well, that’s not for me. I don’t have enough money. I don’t have this. I don’t have that versus, okay, this is what I can do. I need to learn about this. So what does all that look like, guys?
EMILY:
So the best way to reach us is our website, which is aeinvest.net. But really we have a lot of different options. On the multifamily side, that is usually more for sometimes the higher dollar investor, sometimes 75,000 minimum, a hundred thousand minimum. It depends on the deal. And it depends on the size of the property we’re purchasing. With notes, there’s a lot more flexibility. And we have worked with investors with balances as low as 20,000, 15,000, but the average note investor is somewhere around that $50,000 range. And so what’s really unique about notes is it can be customizable and it’s really a one-on-one investment. Whereas the multifamily is more of a group investment.
CORWYN:
Okay. So why should, and this is not necessarily a trick question, but it’s the question that many people have, but they probably won’t ask. Why should someone connect with you? Why are you quote unquote, the master of this space? So let’s talk about it.
ADAM:
Yeah. I mean, I think connecting with us and working with us is beneficial for someone because that person can use OPT. They can use my time, even if it’s a 30 minute phone call to educate themselves on a direction to take. I mean, that could literally be all it takes to change the trajectory of your generational wealth. And that doesn’t even mean that person needs to do business with me or invest with me. Now, granted, I think our investors do like working with us, but I think Emily and I, what we’ve learned and what we have and the knowledge we can give to folks in their portfolios, I think can help them for generations to come. I’m purely confident of that.
EMILY:
But I do think it’s important for people to get to know multiple active investors, deal sponsors, because depending on what they are looking for, if we don’t have that kind of offering, we are quick to tell them that’s not something that we can give you right now, or that’s not something we can have to offer. But if we do have that kind of offering, we would love to have you consider us and consider our next opportunity. And so personally, as I mean, we are passively invested in 18 deals. It’s important to know lots of different active investors and have different opportunities to look at, because that’s how you diversify. That’s how you grow your portfolio in a safer manner and across different asset classes, too. Like if you want to do a little bit of note investing, you can come to us. If you want to do self-storage investing, that’s not us. But it doesn’t mean you can’t have both in your portfolio.
CORWYN:
So you guys recommend a diverse portfolio, yes?
ADAM AND EMILY:
Yes. Oh, yeah.
CORWYN:
Single families, multi-families, maybe a little bit of note investing, pull all that stuff together, sprinkle some magic dust on it. Watch it grow. So this one is an interesting question. And your path to this, if somebody had the ability to go on anywhere, where would you advise them to start?
ADAM:
I think it depends on two aspects of your financials. One, how critical is it for you to have cashflow versus growth? Your typical stock market investor would say, okay, well, I’m retiring in 40 years. So I want a lot of growth today, maybe higher risk stuff. It’s similar with real estate, right? And I really got to appreciate this after we got into the note space, because if you have all, I won’t say high risk, if you have all growth, real estate holdings where, hey, I’m going to throw this money into this development project, and it’ll pay out in five years based on the economy and this, well, that’s not as certain as say, maybe a self-storage facility that’s already built and is cash flowing and has day one yield or a note investment that is like a known yield with a known interest rate. And so I think everybody needs a little bit of everything, to your point, Corwyn, with diversification. But what I see a lot of is folks that are getting into it for the first time doing a little bit of both, right? I’m going to get some cash flowing real estate, maybe that is an asset that has day one cashflow. And then I’m going to do a little bit of maybe growth real estate where it’s not going to pay a cashflow today, or maybe even next year. But this thing is based on the studies and the economics and the fundamentals, it’s going to double in value over the next five years. And so I think you really do need a little bit of both in your portfolio.
CORWYN:
That leads me to what I will call, at times referred to it as a mic drop question, but it’s that hindsight question that we all tend to get. But before I get to that, we talked about, mentioned the website. I want you to drop all your contact information. Where can our listeners get in contact with you? Where can they reach you? Let’s get all that stuff on the table so they can make sure, and we can make sure, that they can find you to get this help that they so desperately want. And those who want to pursue this avenue to be very transparent, they need, if they knew what they were doing, then they would have already done it. So they need someone who is doing it that, quote unquote, can help them along the way and expedite the process for them while limiting the learning curve. We ain’t all got to get busted in the head to notice something hit us. You know what I’m saying? We ain’t all got to get our head busted in the white meat, so to speak, to know we ran into something. So what does that look like? How can people get in contact with you?
EMILY:
Well, our website is www.aeinvest.net, and there’s a form on there to fill out, and that goes to both of our emails. And so one of us will respond. We have Calendly links. You can set up a call with us. And we really, like I said, we want to talk about what’s important to you. Is that something that we can help with? Is that something that aligns with some of our investing strategies? And if it doesn’t, then I’m happy to refer you to other deal sponsors or active investors that I know that might be able to help.
CORWYN:
Awesomeness. So the mic drop question is a hindsight one, which is very simple.
If you would have known all of this way back yonder when, what would you have done differently that would have accelerated this entire process and gotten you to this point that you guys are a lot sooner?
ADAM:
I would have bought a lot more real estate. That’s for sure. Oh yeah. Like we said earlier in the show, right, as you progress and do new things and build your business, it all feels new and sometimes scary. But yeah, in the rear view mirror, you say, wow, you learn a lot, but I would have done a lot more of it. Okay.
EMILY:
And personally, I think that we didn’t diversify enough a few years ago. So a few years ago, we were in to multifamily hundred percent. And I would say probably about 90% of our wealth was in multifamily. And that was a big lesson learned for us because when the market did start to shift, like Adam mentioned, our income dropped by thousands and thousands of dollars a month because the multifamily industry shifted and cash flows reduced. And we looked at each other and we knew at that point that we were too heavily invested in a single asset class. And just looking back, I think we could have saved ourselves a lot of heartache and sleepless nights and difficult conversations if we would have had a more diverse investing portfolio.
CORWYN:
So that’s like having too many cars or too many gas cars when gas prices go out.
ADAM:
Yeah. When the outlaw gas.
CORWYN:
Yeah, exactly. Exactly. Exactly. Mad facts all over again. So guys, I want to thank you for taking time to be on the show with us today. It has been an amazing show. We’re going to do this probably as a two parter. So for our listeners, guys, please make sure that you stay tuned, that you come back, that you pick up, quote unquote, the rest of this, because, hey, we got some amazing guests here who have delivered some amazing information that is useful in taking you on an amazing journey to a fabulous destination. And we don’t want to miss any of that.
So, Emily, Adam, thank you all so much for being on the show with us today. Thank you so much from the bottom of my heart for being part of the Exit Strategies Radio Show family.
ADAM:
Thank you, Corwyn
CORWYN:.
I appreciate it. So, guys, listeners, look, y’all know how I feel. Y’all know what I say. Y’all know I always put the two of those things together and I deliver it to you this way, which is very simply, I love you. I love you. I love you.And we’re going to see you guys out there in those streets.
