Foreclosures in Texas

Here’s an awesome FAQ article on the foreclosure process in Texas written by one of my favorite attorneys Ian Ghrist:

“Texas allows nonjudicial foreclosure under a power of sale granted by a deed of trust for most real estate loans. Nonjudicial foreclosure is not available in Texas for certain loan types, like home equity loans and property tax loans. When nonjudicial foreclosure is unavailable, the foreclosure must be done through either judicial foreclosure or an Expedited Foreclosure Proceeding under Texas Rule of Civil Procedure 736. In a judicial foreclosure, a lawsuit must be filed, and the plaintiff’s petition in the lawsuit must ask the Court to grant an order for foreclosure. This is the slowest and most cumbersome method of foreclosure because the case will likely not go to trial for several months or years…. ”  CLICK THE LINK BELOW TO IAN’S SITE TO READ THE REST OF THE ARTICLE

keyword: Foreclosures in Texas

Ian ghist texas foreclosure attorney head shotAbout the Author Ian Ghrist:

Ian practices general civil litigation, primarily in the areas of Debtor/Creditor, Real Estate, and Mineral Rights. Ian has handled cases involving deed restrictions, mechanic’s liens, mortgages, lien subrogation, class actions, the Texas Mineral Interest Pooling Act, title disputes, fraud, deceptive trade practices, evictions, foreclosures, lift stay motions and bankruptcy-related matters, post-judgment collections, breach of contract, insurance claims, cases under the Uniform Fraudulent Transfer Act, contract-for-deed litigation, etcetera.

Before law school, Ian spent about four years as a banker for J.P. Morgan Chase where he held a Series 7 license and served as both a stockbroker and a loan officer. During law school, Ian won the 2011 Gershon Moot Court Tournament, served as Executive Editor of the Law Review, and competed interscholastically in Mock Trial. Also during law school, Ian interned for the Honorable D. Michael Lynn, Bankruptcy Judge for the Northern District of Texas, served as Intern to General Counsel at a manufacturer, and served in the Summer Honors Program at the U.S. Securities and Exchange Commission. Ian is an award-winning legal writer, having been inducted along with four out of his 126 classmates into the National Order of Scribes in 2013 in recognition of the exemplary quality of his legal writing. Ian graduated law school in the top four-percent of his class ranked 5th out of 126 students. Ian has published two scholarly articles in legal journals, one on securities and administrative law issues, and another on issues that can arise during a bankruptcy proceeding involving income-producing property. Hyperlinks to these articles can be found below.

> Texas Wesleyan (now A&M) School of Law, Juris Doctorate, 2013,
Magna cum Laude
> Texas Christian University, B.B.A., Double Major in Marketing and Entrepreneurial Management, 2006

Awards & Recognition:
> Inducted into the National Order of the Scribes, 2013
> Medal of Excellence Winner, American Bankruptcy Institute, 2012
> Preeminent Advocate Award, Wesleyan Board of Advocates, 2013
> Pupil, Mahon Inn of Court, 2013

Bar Admissions:
> State Bar of Texas (2013)
> U.S. District Court, Northern District of Texas (2014)
> U.S. District Court, Eastern District of Texas (2014)
> U.S. District Court, Southern District of Texas (2015)

keyword: Foreclosures in Texas

Buying Notes Can Be a Great Way to Invest in Real Estate

Buying Notes Can Be a Great Way to Invest in Real Estate

invest florida podcast eric odum david campbellCLICK HERE TO LISTEN TO: Episode 81 of the Invest Florida Podcast with host Eric Odum and featured guest David Campbell – founder of Hassle-Free Cashflow Investing.   David and Eric talk about investing in mortgage notes and making hassle-free cashflow as a private lender.


David Campbell featured guest on the “The Land Geek Podcast” with Mark Podolsky

David Campbell from is a featured guest in this episode of the Best Passive Income Model Podcast with host Mark Podolsky.

CLICK HERE to listen in as Mark and David talk about real estate investing strategies.

If you’d like to help out the Land Geek Community, please rate, review, and subscribe to the podcast on iTunes.

David Campbell - Mark PodolskyTip of the week:

David: I’ve got a couple resources on my website at for free you can download a very expensive white paper called Hassle free Cashflow Lending that’s on my website at I’ve also got three awesome webinars each of them are an hour long specifically Nuts and bolts of private lending, with the Tax investing strategies for private lenders and How you use self-directed IRA to be a private lender and all those are free videos on my site at


The Best Passive Income Model Podcast With Mark Podolsky, AKA The Land Geek

Mark Podolsky Chats with David Campbell,


Mark: Hey, it’s Mark Podolsky The LandGeek with your favorite nichey real estate website and today guest probably forgot more about real estate than I’ll ever know, this guy is so big, the founder of Hassle free cashflow investing. David Campbell started investing in real estate part time while he was working as a full time high school band director with zero net worth and within six years and before the age of 30 David had become a financially independent millionaire through the vehicle of part time real estate investing. He has done over a billion dollars bid, a billion dollars of transactions and advisory experience and he’s very well know within real estate circles. I’ll just put on my anchor voice. David Campbell you’re a big deal, how are you?

David Campbell: Hey Mark I’m so happy to be here with you and your audience.

Mark Podolsky: I’m thrilled to be here. So let’s go back to the high school band director days and how did you get the bug and the gumption and did like okay I’m going to be big in real estate?

David Campbell: When I was first teaching I was working part-time in an income tax office and my job was to put the stuff in the computer and then let the CPA

process it and at the end I would staple the return together and hand to the guy and say you owe so much in taxes. I did a tax return for my middle school science teacher came in, “I’m like you owe 32% of your income in taxes.” I’m like that’s not very good and I could see in their pay stub he didn’t make very much money.

And then this guy came in and it took me a whole week to put his tax return into the computer and he owned business, shopping centers and apartments and grocery stores and at the end I put it was like a rim of paper his whole tax return and I gave to the guy and said, “Your tax bill is zero.” Wait something is wrong here. I know that you make hundreds of thousands of dollars this year and your tax is okay, zero and I asked my boss. I’m like, “Eleanor how is that possible that this guy made so much money?” And she said, “Well someday you’ll figure out you know depreciation and the tax shelter for business and the best advice I can give you is when you get your first grown up paycheck go buy a two bedroom something and go rent out the other bedroom.” So I did.

I was teaching high school then, I got my very first paycheck and I went and I applied for a loan and they said you got a credit score and a job so here you go 100% financing to buy a two bedroomed, two bath condo. I think I bought it for 140 grand in Southern California in 1999 and I rented out that bedroom and it covered half my mortgage payment. I thought that’s cool and then I did a little bit of work on it and at the end of the year I looked into my check in account and it said zero. You have $0 in your checking account and I’m like oh that’s not a surprise, I’m like I’m a high school band teacher. I was making like $30,000 a year teaching a high school band in 1999 and then I looked at my balance sheet and I had my $140,000 condo had gone up $170,000. I had $30,000 of equity that I didn’t have before.

That was my entire paycheck earned as a schoolteacher now is equity on my balance sheet and then the very next year, the same thing happened. The $140,000 condo was worth $200,000, I was getting some great tax shelter from the depreciation on half my condo and writing off half the utilities and that turned out to be a good deal. I suddenly after two years of teaching high school then I had 60 grand and I sold that condo.

I thought if it worked small it will work and I bought a five bedroom house. The biggest I can afford and I rented out four bedrooms and there I was now I had no housing payment. Those four roommates paid the entire PITI on my mortgage, plus the utilities, plus the cleaning, and I was living there free.

Mark: Yeah, but David you got four roommates.

David Campbell: Yeah, when you are young.
Mark Podolsky: Yeah you’re right. That’s right I keep forgetting you’re not even 30 yet, okay.

David Campbell: Yeah. So here I am young, four roommates it’s not optimal, but now I’m bankable. Because I got to my bank and I say look I have no housing payment, check out my DTI. Give me a loan to go buy rental property and I was able to do a cash-out, refinance and pull some money out of my primary residence and I was bankable. I went out and bought a rental and that rental went up in value and I took the money out of that and I bought three more rentals and the rentals all went up in value. I sold those and I bought eight more and those all went up in value. Then I bought an apartment building and I was out of the rat race, bada bing it’s pretty simple.

Mark Podolsky: Wow. Okay so you’ve gone the whole gambit as far as real estate investment. I mean you’ve done single-family homes, you’ve done apartments, you’ve done retail, you’ve done offices, you’ve done medical, you’ve done condo conversion, net lease properties, triple net lease, I love triple net by the way, syndications land development which we’ll talk about, production homebuilding, private lending and a winery. If you could go back in time are there any of those pieces that you’d be like yeah I could probably do without the condo conversion or you know the production homebuilding. I don’t know or is there’s any that you’d have double down on? Like you know what apartments are great or retail is great.

David Campbell: That’s a good question. So I’m very much a market cycle investor. So when I look at my real estate resume it looks like I’ve got ADD and I just don’t know what to invest in but I very much look at what the opportunity is in the market, will find a way to add value, will look to see where there is a gap in the marketplace to add value and then there’s a little bit of do the deal that’s on your plate. When someone brings you a deal and it’s a good deal. You know, when I was early in my career I didn’t have a very clear investment philosophy and so it was do every deal that makes sense.

Mark Podolsky: Right but there’s a big education piece to this. How are you learning land development, syndications and triple net lease properties?

David Campbell: That is a great question and you find people who are experts in the field and then you partner with them and you put together groups of people and you sit back and you be the quarterback of your team so you don’t have to know. Like when they interviewed Henry Ford and said, “Mr. Ford how does a carburetor work?” And he says, “I have no idea but I know how to use a telephone and I just call someone who works for me and they tell me how a carburetor works. In fact they don’t even tell me they just tell the guy in the production line how to make a carburetor and then I just sit back and run the whole thing.” That’s what I view my role as an entrepreneur is to pull the puppet strings. Find the opportunities, analyze them, pull the puppet strings and let your team do what they’re good at.

Mark Podolsky: Yeah. I love the model and the beauty of this is you’re doing this all part-time. You’re still a high school teacher.

David Campbell: No no no. I retired from teaching 11 years ago.

Mark Podolsky: No, I know but like then…

David Campbell: Oh at that time.

Mark Podolsky: …you were doing it. When you first started, you were doing this all part-time you don’t leave until 2005.

David Campbell: That’s correct. Yeah, that’s correct, so you’re right. In year one when I was teaching high school band I was very fortunate that I had summers. So you get the couple of months of summer vacation and when I was teaching I’d spend my lunch hour, and before and after school time really reading and immersing myself in real estate. So there I was in my office and school was done at 3 o’clock and then band practice didn’t start till seven so I got four hours and I didn’t want to go home. It was a long way to go for just a short break to go around and then come back. So I would sit in my office almost every day after school and just read and study real estate and got my license and anyway it’s been a great great ride.

But your question earlier about what would you again and what would I not do again and the crux of my current investing style is hassle free, cashflow, investing it’s got to be all three. It’s got to be cash flow, it’s got to be hassle free and it has to be an investment and to me an investment is not a job. So if I’m working it, if I have to put in my time, it might be lucrative, it might be a very lucrative real estate business, but it’s not an investment. An investment is something that I can put in money and my money makes money and cashflow is obvious. It’s got put more money in my pocket every month, or every quarter, or every year, whatever that time period is it puts money in my pocket rather than take money out and then hassle free.

There’s a whole realm of things that go into making hassle free investment. So when you’re looking at a lot of those things on my bio like land development, production homebuilding and condo conversion those are not

hassle free and they’re not cashflow. But it was certainly a great way for me to make a bunch of equity in a real estate related business and then move that equity over into hassle free investments like triple net lease properties and mortgage investment.

Mark Podolsky: Yeah I mean absolute. I remember having a talk with a big apartment investor in California and he said Mark if I could do it all over again I wouldn’t have gone through the brain damage of apartment investing. I would have only focused on triple net leases on like Jack-in-the-Box’s and Taco Bell’s and these big single tenant leases with these franchises that rarely go out and I thought was really interesting. He says at the end of the day its 15% all day long. You know the rents go up every about 15 years or something and they never leave. Is that your experience with triple net?

David Campbell: Yeah absolutely. So when I’m buying a triple net property I’ve got a couple of rules. The first is I want the cap rate to be higher than the interest rate. So if I can borrow money at five and I can buy a seven cap property then I’ve got a 2% arbitrage spread, positive arbitrage and that makes my yield really work. If you go out and borrow money at 5% and you go buy a 30 year triple net lease McDonald’s at the corner of Main and Main in San Francisco it’s going to be two maybe three cap and you’re upside down.

Mark Podolsky: Yeah exactly and that’s the problem with getting triple net properties is that the cap rates are so low.

David Campbell: Yeah. So I winded up buying triple net lease properties where I’ve got a very strong national credit tenant, but I might be in a secondary market. So I got to go to Georgia or South Dakota or somewhere where you know Wall Street doesn’t want to go buy that net lease to asset for some giant hedge fund. It’s more of a mom-and-pop style investment which gets you those higher yields but still great locations, great land and great tenants.

Mark Podolsky: Yeah okay but let’s get back to the original question. If you could do it all over again where do you think you’d put most of your focus? It’s because I love the model hassle free, cash flow and an investment because my model eventually becomes an investment but it’s really… It starts as a land business and until you create your team, your systems and your automation you don’t get out of it for a while.

David Campbell: That’s right.
Mark Podolsky: So I like the start out with the investment part.

David Campbell: So there are certain things that I’d definitely do again and there are certain things that I would recommend to a new investor and those aren’t necessarily the same thing. Things that have worked very well for me that I would you again and again I really like production homebuilding, particularly during the last market crash. We were very aggressive about buying finished lots. We bought a lot of lots that were below replacement cost. For example, maybe we paid $10,000 to buy a lot where if the dirt were free it would still cost you $25,000 to put the roads and utilities and all of the improvements to make that a buildable lot.

Mark Podolsky: Oh yeah. I mean we had tonnes of that out here, tonnes of it.

David Campbell: Really?
Mark Podolsky: Yeah.

David Campbell: So that was a no-brainer for me is to go heavy into developed finished lot inventory in a down market and then the homebuilding company is just a means to an end to realizing that equity. Because if you go buy that distressed lot you could just sit on it and hope and pray and feed the alligator of mowing, taxes, insurance and maybe your mortgage payment or you could build your way out of that. You bought the land cheap, go put a house on it and if it sells that’s awesome you make your money, if it doesn’t sell you just built yourself a rental property at wholesale rather than retail.

Mark Podolsky: Right. Yeah I love it. So is that what you’d have done from the very beginning?

David Campbell: No.
Mark Podolsky: If you can go back or how would you have started?

David Campbell: I think if I were to start I would do it at the same. I’d go buy a condo and get a roommate and then leverage that into more and more single family homes. I think I call it the low hanging fruit, when it’s a buyers’ market you buy, when it’s sellers’ market you sell and here we are in 2015 it is a hard time to buy properties in this market so I go on the habit that makes sense. So I think it’s a good time to sell. In your stock market when stocks are high you sell stocks and you buy bonds and then when the stock market gets low you sell bonds and you buy real estate. So right now in this market cycle I’m selling real estate and buying mortgage notes. I don’t want to be holding real property; I want to be holding paper. So if there’s a market correction then I’m insulated from that and then in the mean time I can collect the income on my mortgage paper just wait for the next market cycle to correct.

That makes a lot of sense for me because I have a lot of resources to play with and a lot of education to work with and a big team to work with. So that makes sense for me but for someone just starting out and investing I would say go find some house that you could buy at a six or seven cap rate, you put 30 or fixed debt on it at 5% get as much leverage on that as you can and just sit and wait. It’s not a great vehicle for producing atomic cash flow, but it’ll create equity for you. Right you just sit and let your tenant pay that mortgage down for you and let that property appreciates due to inflation and appreciation. It’s a slow road to pass to 12 but you got to do something to get your equity and then once you get your equity, convert that equity into cash flow either through more cash flow investments like triple net, commercial property or through mortgage notes.

Mark Podolsky: Yeah I know. I mean I’m a big believer like let’s start slow and then build your wealth gradually right and then you won’t end up making a huge mistake I don’t think if you do it that way. Where if you were starting out let’s say in 2006 and things seem so easy, it’s very easy to kind of crash and burn I think. You know, not having any perspectives as far as what a real estate cycle really looks like and the typical real estate cycle is 10 years, correct?

David Campbell: Yeah.
Mark Podolsky: So where do you think we are in our cycle.

David Campbell: It’s hard say from like a national perspective because real estate is local, local, local. So like the markets that I really keep my eye on are the Bay Area. San Francisco, Bay Area because that’s where I live then and then I keep my eye on the Dallas-Fort Worth market because that’s where the majority of my investing is. And I think here in California were in a bubble and I think the stock market is in a bubble and I think real estate market is in a bubble and I see the next move is either going to be kind of just sideways or slightly up and then 10 to 25% down. That’s my perspective, and I’ve got a great blog article that went a little bit viral on how to predict real estate prices. So on the website at there’s a great article. Just Google how to predict real estate prices and you’ll find a great blog article that you can apply your local market and say hey me what’s happening in my local market. Dallas-Fort Worth I think has a lot of very strong fundamentals. I still think that market is undervalued so it’s still very bullish on Dallas-Fort Worth. It’s affordable, jobs are abundant, jobs are being created at a record pace, people are moving in faster than people are building new housing and the ratio between incomes and housing prices is affordable. So for example in San Francisco just for a teaching point, and these numbers are not accurate but just for an illustrative point.

Let’s say the median home prices in San Francisco are $1,000,000 and the medium income is $100,000 that’s 10 times. You’re using 10 years of salary to buy the median home or median income times 10 equals the median home price. In Dallas and a lot areas where we’re investing the median [00:18:00] [Indiscernible] which is less obviously in San Francisco but the median home price is only 150 which is three years of median income divided by median home price which is very affordable. So that’s where I see areas like San Francisco have to come down because there’s no greater fool, there’s no one left to come in the door to push the prices up.

Mark Podolsky: Right but San Francisco is kind of an interesting market with all that Silicon Valley money you know.

David Campbell: It is and a lot of the people who are always pushing the prices up are not doing it with wages, they’re doing it with stock options that they received at their tech companies. So the stock market has done really well, that stock market equity has found its way into the housing market, but if the stock market goes down those buyers don’t have any equity to buy real estate with or if the stock market just stays sideways everyone who bought is going to buy and there’s no one new coming in the door to have that instant equity or the pop of equity that they earned in the stock market.

Mark Podolsky: Right. So David, I’ve never heard a note buyer or a note investor or note expert on the podcast you will be the first. So can you kind of just give us at a high level what note investing is, why it’s hassle free and what the benefits are?

David Campbell: That is a great question. When I’m looking at mortgage note investing I want it to be profitable if I’m repaid which means I’m looking for a strong interest rate or a discount on that mortgage to give me the yoke that I’m looking for and I want to be profitable if I’m not repaid. If I can answer those two fundamental questions will I be profitable because when you’re buying a note there’s only two outcomes you’re going to be paid or you won’t.

If I’m buying an unsecured note, like a credit card note or medical note receivables or something like that, if they pay you’re happy, if they don’t pay you well you just say please pay me and they’ll say no. You say well please, please, please pay and they’ll say no again and there’s nothing you can do about it and you’re right it’s not a good outcome. So part of investing in mortgage paper is the collateral, that’s what makes the whole thing work. If the borrower doesn’t pay you, you get the property for pennies on the dollar, which makes it worth the time and effort of making a loan and foreclosing on the asset.

Mark Podolsky: Right. So it’s really underwriting game at the end of the day. Can you get extra yield and is there enough equity in that property so worst case if I got to go through the pain of foreclosure I’ve got an asset at unbelievable discount.

David Campbell: That’s right and you look at most mortgage lending the vast majority of mortgage lending in the country is either purchased by Fannie Mae Fred [00:20:58] [Indiscernible] government is manipulating interest rates there to creating low yields or it’s securitized and sold on Wall Street and investors are so starved for yield and bond rates are so low that they push the yields incredibly low. So the vast majority of paper is going be Fannie Mae, Freddie Mac or securitized on Wall Street and they buy very sanitized things. They’ve got a very clear box of what fits in those niches. If it doesn’t fit in that niche, let me just take a step back. If it does fit in that niche your interest rate is incredibly low.

Mark Podolsky: Right so there’s no deal there for you.

David Campbell: That’s right. If it’s an A-plus borrower, clean collateral and they fit in that Fannie Mae, Freddie Mac box I can’t compete there because Wells Fargo is going to do the loan at 4% and I need to get a higher yield than 4%. So if it doesn’t fit in that box there is no lender and so then the private investor gets to step into that market and state Mr. Borrower I am the only lender you have. So when I look for opportunities in the marketplace, I’m looking in places where I can add value and not compete with the bank but to provide this service that is absent from the marketplace. So I’m not competing with Fannie Mae, Freddie Mac or Wall Street, I’m the only lender that will do that loan so I get to dictate the interest rate and the borrower can either accept that rate or not.

Mark Podolsky: Yeah. In order to do that many deals you needed to move the needle?

David Campbell: That’s right. One of the things about making a hassle free investment is duplicate ability, being able to do the same thing over and over again. In my business I look at say Starbucks and McDonald’s and every single Starbucks and every single McDonald’s has the same systems and the same products. If a big mac in Los Angeles is tasting the same as a big mac in New York City as it will in Dallas and that’s what I want for my business is systems where I can do the same thing over and over again. Having been that kind of ADD market cycle investor doing [00:23:46] [Indiscernible]. I realize if I can make something duplicate able and put a system then I know the types of deals that I can and I can go to the market place and create them.

Mark Podolsky: Yeah I love the model, I love it. So how did you get into that?

David Campbell: I was running my home building company in 2009 is when we started building houses in Dallas, Texas. It was great time to start a home building company because land was cheap, everybody was looking for work and so labor was cheap and materials were cheap because no one else was building. So it was a great time to build except for there was no buyers and there was no money. There’s only a small problem so we specifically said let’s go build now and build rental products because everyone has to have a place to leave.

In 2009 when everyone is being foreclosed upon they still needed a place to live so they were just moving out of owner-occupied housing shifting to rental housing. So we created a model to fit that time in the marketplace and then we went to banks and said, “Mr. Banker look I’ve never built a home in my life, but I’m an experienced investor developer who’s only had kinds of commercial real estate development that I’m doing. I’d like to build a single family home and put it out for rent would you give me a loan?” And they said “Don’t let door hit you on your way out. Get out of here there’s no way we’re going to lend to: a) home building that’s a nasty word and two you’re like a new developer forget it and three you want to go rental product no way.”

Mark Podolsky: Right.

David Campbell: So most people would just stop and give up and I said no this is going to work. So I called up hard money lender that I knew from Alaska and I said Mr. Hard Money lender in Alaska I know that you got a very fragile economy there in Alaska and all of your assets are single economy focused. How would you like the opportunity to diversify into Dallas, which is one of the most safe economies in a tomentous time would you like that opportunity to diversify? He said great 12% and six points and I said thank you I’ll take it.

So we started a home building company with a line of credit out of a hard money loan company in Alaska and we started building house and it went great. I had the opportunity to build more houses and I thought you know what I don’t want to pay 12% and six points, let me see who I know in my personal sphere of influence that might want to do that loan. So we started borrowing money at 10% from friends and family type investors and suddenly we had more capital available to us than we could use. So it was a good problem I didn’t have to borrow money at 12 and six any more I can borrow it at a 10 and no points and suddenly I had more money than I could use as a borrower so we started lending it out.

I started brokering deals, finding other homebuilders that needed money to build. So we would borrow it basically at 10 from our clients and make some points on the deal by lending it out and that went well and then we started buying houses fixing them up and selling them to families that had a big down payment, great job, great debt to income ratio, but their credit profile didn’t fit that Wall Street or Fannie Mae, Freddie Mac box. So they couldn’t go get a loan at 4% from Wells Fargo and I said well how much would you be willing to pay for a private loan on the house and it turned out that there’s a whole bunch of people that are willing to pay 10% on 15 year note

to buy a home. So we’d fix their properties, we’d sell them on seller financing and then we’d sell that seller financing paper to our clients that want to have a first position lien at 10% interest rate.

Mark Podolsky: Sure. It’s so good David Campbell but now we’re at that point in the podcast that I get to put you on the spot and explain to you my business model and ask you, do I have the best passive income model like the podcast says. Are you ready David?

David Campbell: I’m ready.

Mark Podolsky: All right so I buy and sell raw land and the ways that I buy it is I look for somebody who’s distressed. And how do I know they’re distressed? They owe back taxes and if they live out of state that’s even better. There’s no emotional connection to that raw land. So we send him a “top dollar offer” typically 20 to 30 cents on the dollar and percentage of those are accepted and then we can flip that property at about 300% return on investment on average.

But my favorite way to sell it is as we’ve been discussing owner financing. So I typically get my money out on the down or within six months of that time and now I have a thousand percent return on my investment, I’ve got a one-time sale, I’ve got recurring income coming in every single month on that note, and I don’t have to deal with any tenants, no renters, no rehabs, no renovations, no rodents. Because I’m not dealing with the tenant I don’t have to worry about Dodd-Frank, I don’t have to worry about RESPA, I don’t have to worry about SAFE Act land is exempt and I’m in a noncompetitive niche, there’s no private equity groups, there’s no hedge funds that are in this unsanitized real estate investing niche. David Campbell do I have the best passive income model?

David Campbell: Mark what I love about your business model is you found something where someone has a need, they’ve got a need to sell that property and there are no buyers. You’re filling that need with a cash offer and then you’re reselling that property by providing the value of seller financing to the marketplace and so you’ve added value each step of the way and you deserve to be compensated for creating that value. I think it’s awesome, I think that is an amazing business model.

If I’m trying to shoot holes in it the caveat is if someone buys that vacant land at a discount because it couldn’t be sold otherwise and then they try to resell it. It’s possible that that land has no value because either for example, it could be in a part of the country where if it’s development land, I’m a developer, sometimes I look at land and say if this land were free I couldn’t pencil a development on this, I couldn’t put a house on this property and sell it at a profit because everything is selling below replacement cost. So I’m going to say a very qualified you have an amazing business model and for people who are looking at getting into the niche you just have to ask the question, do you have the experience or a team that gives you that experience to help determine if that land has value or not.

Mark Podolsky: Right. I’ve done over 5,000 transactions and I’m kind of embarrassed to say it because it sounds so unrealistic, but I’ve never lost money on a land transaction and that’s since 2000.

David Campbell: That’s awesome.
Mark: Yeah. So in our niche if you buy it right it’s really really hard to lose if not impossible.

David Campbell: I love land; I’ve made a lot of money in land but one of my rules as a land purchaser I only buy land that I’m going to consume myself. Either I’m going to develop it myself or I have an end-use for that land immediately. Because one of the challenges of raw land is you buy it if you buy it on leverage, you’ve got a mortgage payment, you’ve got taxes, you have insurance and then it eats. It is negative cash flow so it doesn’t fit that paradigm of my investment philosophy but on the same time I probably made money in land more than anything else. Because even my home building company we make money selling houses but it’s really because we paid a good price for the land.

Mark Podolsky: Right. I love it, I love it. All right one more time I’m going to put you on the spot and I’m going to ask you for your tip of the week, a website, a resource, a book, something actionable with the best passive income our listeners can go right now, improve their businesses, improve their lives David Campbell what you got?

David Campbell: Mark we talked a lot about paper today and I’d really like to help [00:32:44] [Indiscernible] understand some of the terms, hence the mechanics and the nuts and bolts of how paper works and private lending works. So I’ve got a couple resources on my website at for free you can download a very expensive white paper called Hassle free Cashflow Lending that’s on my website at I’ve also got three awesome webinars each of them are an hour long specifically Nuts and bolts of private lending, with the Tax investing strategies for private lenders and How you use self-directed IRA to be a private lender and all those are free videos on my site at

Mark Podolsky: I love it. So my tip of the week is also your site but, which is, you kind of stole my thunder there David Campbell.

David Campbell: You let me go first.

Mark: I let you go first but that’s okay because look I always have a good site to send people to. So how about because we have such a geeky group of listeners have you ever heard of site called This is pretty geeky.

David Campbell: No.

Mark Podolsky: Okay it’s not real estate it’s and it’s just these geeky gadgets that you can go on and see and they’ve got the latest and greatest of whatever geeky gadget you want. But if you want to learn more about building your wealth in real estate please go to and download for free all the resources that David has. Wouldn’t talk about it but your real estate blog is repeatedly named one of the top 100 real estate blogs in America. I want to remind the listeners the only way to get the kinds of quality of guests like David Campbell on the Best Passive Income Model podcast is if you subscribe, rate and review it. So please do that. David are we good?

David Campbell: Mark I am so happy to be on your show today and really excited to be a student of the content on your site. The information that I’ve been able to read and digest is fantastic and no matter how much experience you have as a real estate investor it’s so important to be a perpetual learner. Always be learning, always be studying and as a note investor I love that you’re teaching people how to create paper. I mean you call it LandGeek but the land is just a vehicle for manufacturing in equity that becomes a piece of paper, a note and once they have that note it produces income, it can also be sold. Our company loves buying existing notes. So once you create that paper you can sell it.

Mark Podolsky: Yeah exactly and actually the honors are mine. Thank you so much for taking your valuable time out of your day to share all your real estate investing wisdom with our listeners. I really really appreciate it and if you guys want to learn more about me of course, go to and download for free The passive income blueprint and get the e-book How to avoid 3 fatal land buying mistakes and get this always informative and engaging podcast delivered each week to your email inbox.  Dave Campbell of thanks again and we’ll see everybody next time.

[End of transcript]

Get Rich Podcast Episode 51: featuring DAVID CAMPBELL and KEITH WEINHOLD

Here’s an awesome podcast released today:

Get Rich Podcast Episode 51: featuring DAVID CAMPBELL and KEITH WEINHOLD

What if the real estate market crashes? Our guest, Hassle Free Cashflow Investing’s David Campbell, tells us how to hedge yourself against this with Mortgage Note Investing.

Learn why this could be the ideal time in the real estate market cycle for Mortgage Note Investing. This can provide stable returns to you, yet more liquidity than owning real estate.

Listen to this week’s show and learn:

02:36 You can be the bank. Rather than be the real estate investor, you can be the real estate ender.

05:08 Our guest,‘s David Campbell invests based on the real estate market cycle.

08:58 Terms similar to Mortgage Note Investing are: Hard Money Lending, Private Lending, Deed Of Trust Investing, Seller Financing.get rich podcast keith weinhold

12:36 What’s the minimum amount of money you need for Mortgage Note Investing?

13:20 How you get money for this investment. Arbitrage.

17:10 How Mortgage Note Investing’s advantage over Peer-To-Peer Lending instruments like Lending Tree and Prosper. In a word, the answer is “collateral.”

19:25 Why this is a good time in the market cycle to be a Mortgage Note Investor.

24:35 Many people are equity rich and cash poor.

Ten Rules For A Hassle-Free Cashflow Mortgage Note

Ten Rules For A Hassle-Free Cashflow Mortgage Note

(1) lender friendly state like Texas

(2) 1st position Deed of Trust (not mortgage)

(3) SFR with a min property value of $75K

(4) Less than 75% loan to value

(5) mortgage payments lower than equivalent rent

(6) Borrower debt to income ratio < 45%

(7) lender title insurance paid for by borrower

(8) professional servicing paid for by borrower

(9) professionally underwritten with due diligence available to investor

(10) fully amortized no more than 15 years for houses over 40 years old /  20-30 year amortization OK for newer houses

Want to learn more about private lending?   CLICK HERE to download a free ebook.

mortgage note to stock comparison chart

Should I Buy In Today’s Seller’s Market?

Many of the local real estate markets in America are in a Seller’s market.  If you want to determine if your real estate market of choice is a Buyer’s or Seller’s market  CLICK HERE to read one of my most popular blog articles: “How to Predict Real Estate Prices”

I get this question a lot:  “Should I Buy A Home In Today’s Seller’s Market?”

This is easy to answer from a purely theoretical perspective:  NO!

  • Buy during buyer’s markets.
  • Sell during seller’s markets.
  • In between market cycles have your money invested in well-secured income-producing bonds like mortgage notes.

(Disclosure:  Yes, I sell mortgage notes and I hope you buy lots of mortgage notes from my company.  However, I hope you can read past this author bias because there are a lot of good lessons to glean from this article.  Shameless plug: CLICK HERE to gain access to our current inventory of Hassle-Free Cashflow Mortgage Notes producing 10% annualized ROI.)

When I look at the vast number of buyers in today’s real estate market, I want to shout “WHERE WERE YOU FIVE YEARS AGO?” when it was the best buyer’s market of our lifetimes.    You see it always happens this way… Smart investors buy when everyone is selling.  When everyone is buying, dumb money rushes in and smart money sells.   I’m not saying don’t buy right now.  I’m saying BE SMART about buying.  If you can still borrow at 5% and buy a property producing a +6% return… well, that sounds pretty smart to me.   You see, even though real estate prices are relatively high right now compared to rents,  money is still cheap (as a result of an abundance of Federal government stimulus).   Interest rates are low which means it is a buyer’s market of debt.  Smart investors are still borrowing all the money they can get their hands on at long term fixed interest rates.   What do you do with that cheap money after you borrow it… well, BE SMART and make sure you are “positively arbitraged”.

If you aren’t really, really, really sure what “positive arbitrage” means,  you must absolutely watch this free video series as soon as you’re doing reading this article:   CLICK HERE

After you’re done with the above video series watch this free video training series on real estate investing math.

These two sets of free investor training videos could make you rich, or at the very least they could save you from making some very poor financial decisions.

OK class… everyone turn to your neighbor on the right and explain “positive arbitrage”.   Getting the positive arbitrage formula right (CAP > interest rate) is the razor’s edge difference between financial freedom and bankruptcy.   Positive arbitrage is the most important real estate lesson there is.  Unfortunately, very few people teach it.   If you don’t understand positive arbitrage well enough to teach it, please promise you will watch the above videos and not just gloss over this point.

The question “Should I Buy A Home In Today’s Seller’s Market?”  is harder to answer from an owner occupant perspective because a primary residence is both a consumable item for pleasure and utility as well as a major financial investment.

As long as it is cheaper to rent than own, you are financially ahead to be a renter and go buy rental property in parts of the US where it is cheaper to own than rent (CLUE: this is why so many California investors are currently buying rental houses in Texas).   When real estate prices are at a market cycle low, it could make financial sense to buy a primary residence even if the cost to own is higher than rent if you choose to speculate that when real estate prices return to market cycle norms you will make a bunch of equity that would be significantly greater than the cash flow “losses” you experienced from paying more to own than rent.  The caveat of this formula is that once the market cycle booms, you need to sell your house, reinvest the equity, and go back to renting.  In lieu of selling and going back to renting, some savvy property owners choose to harvest their market equity gains through a cash out refinance and reinvest the capital elsewhere.  That is an excellent strategy as long as you have the positive arbitrage formula right (CAP > interest rate).

Of course, many times the decision to buy a primary residence is made on emotions rather than finances alone and that’s OK too.  Ultimately, the money you earn is designed to bring you the things you want when you want them.   So, if you can afford a house and you really want to own it, then market economics be damned!  A house to live in is really a liability (not an asset) anyway.  If you like the convenience of paying retail prices to get what you want when you want it, then who cares what part of the market cycle we’re in.   A retail buyer will buy something because they want it and can afford it and that’s OK!  I pay retail prices for food all the time. I know it is cheaper eating at home than eating out, but eating at a fine restaurant can be really, really fun.  Sometimes it’s OK to pay retail prices for stuff you want when you want it.  Just make sure you know you’re doing it on purpose.  Dumb money buys the things they want because they want them and then justifies the expense as an investment.  Expenses are fine; just realize that expenses and investments are very different things.

If it is cheaper to rent than own and you’re trying to make a financially intelligent decision, go find a rental situation you are happy in and use your cash to invest where the numbers make sense.   If it is cheaper to rent than own and the house you want to buy is relatively fungible (e.g. not a unique one of a kind property that comes on the market once in a generation) then I would wait until the next buyer’s market to buy a house to live in.  When the next buyer’s market comes along, it will be obvious to you and every one else because the words “foreclosure” and “short sale” will be on the evening news like it was 2009-2011 all over again.

If you have assets in the stock market, I would apply similar advice to the above.   IMHO stocks are in a bubble.  A few months ago, I published a prognosis to my newsletter subscribers that the stock market was at a top and ready to crash.  The DJIA was 18,100 when I made that announcement.  As  you know, the market is currently down significantly from that point.   Two weeks ago, I published to my subscribers that there is a lot more downward movement coming in the stock market.   Today’s DJIA closed at 16,384… that’s a ~10% decline from the market peak just a few months.   After reading my prognosis, a few of my investor clients cashed out of the stock market (at the top) and used their cash to buy well secured mortgage notes paying 10% interest.   These clients achieved an ROI well over 20% annualized relative to where they would have been if they had left their assets in the stock market.  Protecting yourself from loss is almost as good as earning a profit.
mortgage note to stock comparison chart

Of course, no one knows for sure where the market is headed so use your own judgement where things are going and how to prepare accordingly.   Personally, I’m selling real estate in areas where I see a price bubble and moving this equity into income producing mortgage notes, farmland, and silver bullion.  I am also still bullish on the Dallas-Fort Worth metro for acquiring income-producing, positively-arbitraged rental houses.  If you can still borrow money cheaply and you’re looking to build long term equity and tax shelter, I would not be afraid of taking a long term investment position in the DFW rental housing market (HINT:  CAP > interest rate).  If you’re looking for investment opportunities in income producing Hassle-Free Cashflow Mortgage Notes or Dallas-Fort Worth (DFW) rental property, I am here to help you.   Always remember, I offer a free 30 minute investment strategy consultation over the phone to help you navigate the potentially turbulent economic waters ahead.

click to schedule CLICK HERE to schedule your no-cost investment strategy consultation with professional investor David Campbell
Best regards,

David Campbell
Real Estate Investing Strategist
866-931-9149 x1

If you’re thinking of making an investment in a Seller’s market, read this first…

We are living through interesting times. If you’re thinking about investing in real estate (or anything for that matter) in a Seller’s market, it’s essential to change your investing strategy to respond to different investment cycles.

Amateur investors learn an investing trick that worked once and try using that same trick over and over in all market cycles. That’s like planting corn in your garden every single month of the year. Some months you’ll have a bumper crop and other months you’ll wonder why there is no corn growing in your frost-covered garden. Your mutual fund sales person will call that dollar cost averaging; I call it silly.

There are times for buying and there are times for selling and times for just holding on. Having invested through the last real estate cycle of boom and bust and boom again, I am currently investing a lot more conservatively than I was in 2003-2007. Although real estate is local and there will always be good deals to be found, in today’s market good deals are definitely getting harder and harder to find. That’s because we are in a Seller’s market. In a Seller’s market, amateur investors overpay for properties because they don’t see any other alternative.

Investing 101 – buy as much as you can during a BUYER’S market. My home building company was very aggressive about purchasing heavily discounted vacant lots during the down market. Now that the housing market is booming, we are building houses with the help of contractors like Ideal Construction LLC and selling more houses than ever.

Vacant lot prices have quadrupled from the market bottom making it extraordinarily difficult to find vacant lots to replenish our inventory for future development.

Investing 202 – don’t overpay for assets during a SELLER’S market. Most home builders are currently ‘overpaying’ for the small supply of lots on the market, because they only know one trick – building houses. They have to pay the high market prices for lots because that is the raw ingredient that makes their business run. Many home builders will ‘overpay’ for lots even if that means their profit margins virtually disappear. Because they only know one trick, it means ‘overpay’ for their raw ingredient of lots or go out of business because they have no more lots to develop.

If you’re thinking about buying real estate in a Seller’s market, think long and hard about that decision. Although I don’t think we are at the peak of the current real estate or stock uptrend, I do think we are currently well above where the next market bottom will be for both real estate and stocks. Of course, if you’re buying real estate for long term cashflow and positive arbitrage, it could still make sense to buy today because interest rates are still incredibly low. You could say that real estate is in a Seller’s market, but interest rates are still in a Buyer’s market. If you are buying ‘over priced’ real estate with ‘under priced’ financing and you are positively arbitraged you hold on for a very long time, you’ll probably do very well. (Positive arbitrage is when your CAP rate exceeds your interest rate)

Investing 303 – When equities are overpriced, sell equities and buy bonds. In most of today’s US real estate markets, real estate is now overpriced. Click here to read my blog article “How To Predict Real Estate Prices” to determine whether your real estate market is currently under or over priced. DON’T MISS THIS PROFESSIONAL INVESTOR HINT: I am currently selling most of my real estate portfolio, using the cash to buy mortgage notes, and will sit on the sideline collecting mortgage interest until the equity market / home prices crash. I plan to buy back into the real estate market at the next cycle low. I am currently buying precious metals as their price continues to drop, as well as farmland and timberland as an ultra-conservative hedge against hyper-inflation and a potential currency collapse. Market cycles are very long. It can be a decade or more from market bottom to market top and back down again. Amateur investors do not think far enough into the future. They plant corn seeds in summer expecting to harvest their corn crop in the middle of winter. Sometimes it just makes common sense to stop planting and wait for the proper season for planting to come along.

Investing 404 – Not all bonds are created equal.  Mortgage notes are my personal choice of bonds. The only thing I own in my IRA is mortgage notes. A mortgage note (bond) is a promise to pay secured by a piece of real estate. If the borrower pays me as agreed, I am happy because I have earned a 10% interest rate with no tenants, no toilets, and no vacancy. If my borrower pays late I earn late fees in addition to mortgage interest and my ROI goes even higher. If I buy a corporate or government bond and they don’t pay, I can pretty much write off that investment as a total loss. If I buy a real estate mortgage note (bond) and the borrower doesn’t pay as agreed, I will do the happy dance of joy because I get to foreclose upon the real estate for pennies on the dollar. By restricting my original loan amount to 75% of the property value, I should make a higher return on my money by foreclosing on the borrower’s equity rather than getting paid as agreed. That’s what I call a win-win! If the price of real estate drops and I have to foreclose, I at least have the borrower’s 25% down payment equity as protection from loss. I also have title insurance to help protect my investment from fraud and/or sloppy paperwork.

I am currently focused on buying income producing mortgage notes in Dallas, Fort Worth, and San Antonio Texas. These three cities have excellent population growth, economic diversity, very affordable and stable housing prices, and the foreclosure laws are extremely favorable to lenders. I’ve been buying and brokering mortgage notes in those cities for about five years and I’ve developed an extremely strong system in the process.

Using the strength of my investor network (the same network that brought you to be reading this blog post today), I have developed a steady supply of mortgage note investment opportunities. I promise you won’t find mortgage note investments like these anywhere else, because these notes are specifically created by my team to fit my personal investment philosophy.

All of our mortgage notes:

(1) are in the foreclosure friendly state of Texas and the rapidly growing markets of Dallas, Fort Worth, and San Antonio.

(2) are secured by recently renovated, highly affordable, single family homes in class B neighborhoods near major employment centers.

(3) have strong borrowers with less than 45% debt to income ratio.

(4) are 1st position deeds of trust at ~75% loan to value.

(5) have mortgage payment comparable to the cost of renting the same property. If it is the same monthly payment to rent or own, the borrower has little economic incentive to default. If you do foreclose on a non-performing note, you can resell the property for cash or rent out the foreclosed property and generate about the same net operating income as you were getting from your note.

(6) are supported by a conditional buy back guarantee from Hassle-Free Cashflow Investing giving our investors peace of mind and a secondary source of repayment for their mortgage investment.

(7) are professionally serviced by a licensed and bonded mortgage servicing company.

(8) are self-directed IRA friendly. Our team can handle all of the compliance paperwork for you.

(9) are turnkey and hassle-free.

(10) have lender title insurance in place issued by Chicago Title Company and paid for by the borrower.

(11) have zero investor closing costs associated with the purchase price.

(12) are able to be purchased at a nominal discount below the face value of the note – usually about 99 cents on the dollar and the 10% annualized ROI would be improved if the borrower paid their note off early.

(13) have complete due diligence files available on the property, the loan, and borrower.

(14) are professionally underwritten by a licensed and insured residential mortgage loan originator (RLMO) to be “Frank Dodd compliant”.

(15) are secured by houses who have a minimum value of $75,000.

(16) are fully amortized over 15 years but can be resold for the amount of the unpaid balance at any time.

(17) have a bite sized purchase price between $60,000 – $120,000

If you would like to purchase high-yielding real estate notes secured by 1st position deeds of trust recorded against quality real estate in Dallas-Fort Worth, TX send us an email – or call 866-931-9149 ext 1

To request general information about mortgage note investing, you can read my free white paper – “CLICK HERE for Secrets of Hassle-Free Cashflow Lending” as well as watch this video “CLICK HERE for Investing and Tax Strategies for Mortgage Note Investors” and this video “CLICK HERE for Nuts and Bolts of Being a Private Lender.”