Scott Carson was born in Minnesota – he jokes with a Minnesotan accent – but his family relocated to Corpus Christi, Texas when he was about four years old. He was big into sports as a kid, had a supportive family, and even received a full-ride for two years in college on a football scholarship. He studied business and communications, and graduated from Southwest Texas State University, which is now Texas State University. Scott says, “A year or so out of college, I got married, started working at JP Morgan Chase, and started buying properties in 2002 – inspired by the Fix and Flip trend – as many where doing. I also think I was inspired by the tv programming about it.”
”I always had that sales and entrepreneurial spirit though,” says Carson, “which I got from both my parents. My dad had owned a local hardware store in our small town. Both my parents worked incredibly hard.”
In 2002, Scott was laid off at his corporate job as a financial advisor at Chase after working there for a year and a half out of college. He had just started to get into real estate and owned a few homes with partners. In fact, the bad luck extended to his tenants – who also had been laid off at their jobs in the computer industry. He had three mortgage payments to make, his own, and two tenants. . .
It was a rough time for everyone, and I was in rough shape for a little over a year but I got it together. After Carson got back on his feet, he returned to work for Chase, this time as a vice president. Shortly after that, he started learning the mortgage business, learning from a buddy who was teaching how to do this creative financing — wrap-around mortgages deals, owner-financing, creating a note and then selling that note off. What that, Scott affirms — “I said goodbye to my corporate job as a vice president of JP Morgan Chase on July 4, 2004.”
Scott was around for the 2008 recession when the sh*t hit the fan. And when it hit, he sold his share of the mortgage company “for a buck,” as he laughs, “because that’s about all it was worth at the time.” Scott Carson goes on to say — “Then I just started dialing for dollars, he laughs, and calling banks and mortgage companies to see about buying their debt because I really had a four-year apprenticeship with these guys that had taught me creative financing.”
“That’s all I’ve focused on the last twelve years is buying distressed debt on the commercial and residential side from a variety of banks and commercial lending institutions from across the country We’ve purchased over a billion dollars in debt for our portfolio,” says Scott Carson.
How Scott Carson Can Help You . . .
“I am, however, most proud of the fact that we helped a lot of people stay in their homes, but we also helped a lot of real estate investors learn this niche of real estate investing and do some amazing things for their own families and their future, as well.”
Scott has his own podcast series, The Note Closers Show, which you should check out. As with our podcast, it offers a valuable education, insight, and quick tips – in an enjoyable and interesting manner. You don’t have to do your own research here – traveling from webpage to webpage, reading article upon article. If you want an education on purchasing default notes, it’s all here on our podcast with our expert, Scott Carson.
The Nuts and Bolts of Notes, According to Scott Carson . . .
Scott Carson emphatically says, “Non-performing notes affect the banks in a very bad way. A non-performing note is a mortgage that has missed payment for at least 90 days or longer. In fact, before Coronavirus, about one in ten people were at least 30 days behind on a mortgage payment.”
“So we buy very distressed stuff, usually where it hasn’t been paid for six months or longer. I looked at a portfolio yesterday in which a payment hasn’t been made in six years. A non-performing note is very detrimental to the banks. There is this misconception – a lot of people think the banks want the houses, want the properties. No. They want the notes because they can leverage all that money dramatically. So when a borrower falls into default – accident, job loss, sickness – pandemic – like we see right now – that value on that mortgage and that note really starts to depreciate. And banks are often willing to sell that debt off at a big discount – if you know who to talk to . . .”
More Detail on the Process . . .
“We’ll buy that debt at a discount from the bank. The borrower, however, still owes the amount owed on the property.” Scott Carson goes on, providing easy to follow examples. . . right here at 8:29.
“New York is a very difficult state to close on defaulted notes, says Scott Carson. You’re talking about a minimum of 2-3 years.” James knows this well and agrees.
What is Happening with the Banks?
“Anyone can do this,” notes James Prendamano. Because of the subprime housing crisis, the banks have been very stringent with their lending over the last decade. Now, as you can imagine, since the subprime crisis of 2008 – the banks have tightened up their restrictions. Now the banks go out and give loans to what they deem vary stable owners, very stable homes in stable markets with solid equity. Then, along comes a global pandemic. Casandra Properties — and their commercial mortgage lending arm, Capex Funding, have a really good handle on this situation.
James goes on to explain about the banks . . .
Along comes a global pandemic, and now the other respective shoes have dropped for the banks and for the landlords — that the banks which were solvent and liquid because they were collecting this debt service ,and they’re replenishing their deposits, and they’re staying about that threshold. A bank has to remain liquid, and they have to have a certain percent against what they’ve leant out at all times – to be in compliance with their charter, right?
Now, the pandemic hits and not do we have a massive amount of job loss, portfolios are starting to slip, cash is becoming more tight, people are being laid off. And moreover, legislatively, people are moving with the intent further and further to protect the “Everyday Joe.” Now what’s happened is there is a massive amount of people here in New York City, in particular, that went out and bought that building or that investment property – those one or two buildings with a partner, and they’re in that mid market (exactly what you had said), $2-$5 million dollar asset. I think we are seeing just the tip of the iceberg. Now what the banks are going to have to do in an effort to remain in compliance – they’re going to have no choice but to start unloading this debt. . .
Scott Carson’s servicing company is licensed in 30 states and therefore can provide services in those states. Carson says, “But I’m based out of Austin, Texas – because that’s where I live – that’s what I know, and I work out of Florida because that’s New York South, g*d’s waiting room, as they say,” he laughs.”
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