how i made $4,000,000 in 60 days on a deal no one would touch 👇 I've said a few times that perhaps my edge isn't actually sourcing or anything tricky like that

maybe my edge is just a really weird collection of risk tolerances

i suppose this deal is case in point

I first saw this NPL in a widely marketed pool last summer

Here's how we turned a Ten-X deal into a 100% gain (unlevered)

As promised, here's the story of one of the wildest deals our fund did in 2024 👇 Part of sourcing is watching a lot of channels

even stupid ones

after all, even a shitty channel throws off a good deal once every few years

blink and you'll miss it

with a few weeks left in 2024, it was Ten-X's time to shine

LITIGATION FINANCE FOR DUMMIES (me)

If you've followed for awhile, you know I like using AI to find weird shit to invest in

Here's the breakdown of our first deal in the space and some thoughts on why we're going to be doing more of these 🧵👇 Previously, I've outlined the AI-enabled system that we've built out in-house to find opportunities

https://x.com/financeguy725/status/1743367926751592723

HOW TO LEVERAGE THE TIP OF THE ICEBERG ❄️🚢🧊🥶

A few years ago, I almost won a brokered non-performing loan

Collateral: a portfolio worth more than double the loan amount; a great deal!

But, I lost…

Here’s a trick I used to turn that loss into a big win (and software)🧵 👇 EVERYTHING IS A SIGNAL

After drying my eyes, I fired up public records to answer a question:

Does this sponsor own anything else?

I had already done some digging into the sponsor, but this would be the first time I assembled a full picture of their portfolio

HOW TO MAKE MONEY BUYING NON-PERFORMING LOANS

My tweet about buying loans for par spurred some questions

"If you're paying 100 cents on the dollar for the loan, how do you make money?"

Here's the in the weeds mechanics of how you make money in distressed debt 👇🧵 let's take a kinda hypothetical, but actually pretty representative deal that we're closing out of my fund next week.

for the sake of brevity, let's ignore what happens if we get the real estate (obviously a very profitable outcome here)

rough numbers below:

HOW TO BUY YOUR FIRST HOUSE

before getting into credit, I bought a bunch of residential real estate

first time home-buying friends ask for my advice on the clown show that is THE BIGGEST PURCHASE OF YOUR LIFE

Here's my no bullshit guide to buying your first house 👇🧵 FINDING A HOUSE

If you have a personal relationship with someone who wants to sell you can pitch them on saving by selling to you without a broker (sellers pay both the buyer and seller broker fees in resi)

If you don't have a seller lined up, you're going to need a realtor 🙃

HOW TO HIRE GOOD ATTORNEYS

"Your partner hired me, he has to fire me, not you!."

i handed my phone to my partner over the pizza we were having for lunch

"Joe, fire this piece of shit for me"

first casualty of many

here's my process for finding lawyers who don't suck 👇🧵 FINDING LITIGATORS

stay away from big name do-everything firms

big jack of all trades law firms charge high hourly rates for being masters of nothing

find someone specialized and local who's familiar with the clerks and judges and the hyperlocal quirks

𝗛𝗢𝗪 𝗧𝗢 𝗕𝗨𝗬 𝗔 𝗡𝗢𝗡-𝗣𝗘𝗥𝗙𝗢𝗥𝗠𝗜𝗡𝗚 𝗟𝗢𝗔𝗡

Here's a real life example of a 23% unlevered return deal we closed this week out of our new fund!

I'm gonna walk you through how we found the deal, how we underwrote it, and what the play is now

👇🧵 Here's a thread about the fund and our thesis

https://x.com/financeguy725/status/1742208096997437458

FINDING DEALS WITH CHATGPT

Here's an alpha leak look at the internal sourcing system I use to find deals 👇🧵 almost 6 years ago, when I still worked at a hedge fund, I was looking for clever ways to find real estate deals

real estate (a not very smart business) is a data disaster

paid solutions suck and the publicly available data is a mess and difficult to parse

HOW TO NOT GET FUCKED BUYING DISTRESSED REAL ESTATE

Let's be real, investing has risks

But investing in special situations has riskier risks than just buying shit on the market

Here's why your homerun deal could be a ZERO and how to avoid it 👇🧵 If you're gonna invest in distressed real estate (equity or debt) you have to understand the concept of priority

Priority is just a fancy way of saying who gets paid and in what order in a foreclosure

For the most part, priority is dictated by time

DISTRESSED REAL ESTATE INVESTOR PLAYBOOK

You can't turn on the news without seeing commentary on how commercial real estate is fucked

but every fuckee has a fuckor and that could be YOU

Here's the moves you need to land great distressed deals despite high-interest rates🧵👇 So where do you start?

find an asset that you like that's fucked

this could be physical (obvious deferred maintenance and appears distressed) or it could be financial (behind on taxes, not paying mortgage, etc)

I have the best pipeline I've seen in the nearly 5 years since I left Wall Street

Last few months, I've spent ~80% of my time doing things I love

It didn't happen overnight, lots of fuckups along the way

A huge challenge I still struggle with:

LINE OF SIGHT

🧵👇 At a corporate job, the path is laid out.

First day on the job, you can see where you're going if you climb.

Speed varies, but the roadmap's there. 🗺️

Contrast this with starting a company

HOW TO UNDERWRITE A DEAL

QUICK & DIRTY DISTRESSED EDITION

over 90% of my portfolio was acquired without going inside a single unit

knowing your market so cold you can buy sight unseen with limited diligence is a massive edge

here's my quick and dirty underwrite 👇🧵 WHAT ARE THE RENTS?

If you know current rents, you can use those to get as-is value

Usually, I don't have any rent information and I'm looking at Class C multifamily

I can project rents one of two ways:

1.) pull from my portfolio

2.) pull from HUD

huduser.gov/portal/dataset…

DISTRESSED REAL ESTATE CREDIT INVESTING:

HOW TO UNDERWRITE NON-PERFORMING LOANS 📉🗒️💵

by popular demand, here's how I would underwrite a bad loan opportunity 🧵👇 What kinds of things can happen when you buy a bad loan?

Well, assuming the loan is secured by collateral, we really only have a couple of outcomes.

You either get:

1. Paid off

2. The collateral

we also need to consider how long it will take

DEED-IN-LIEU ADVENTURES

@CaseyMericle asked me about my wildest DIL experience

I told him it required a thread

Here it is 🧵👇 @CaseyMericle 1/ First off, what the hell is a deed-in-lieu (DIL) anyways?

technical answer:

A deed-in-lieu of foreclosure is when a borrower simply conveys their title to real property to the creditor before or in advance of a foreclosure action.

THE MOST OVERLOOKED INVESTING METRIC

DOLLARS $$$$ PER BRAIN

💰 ➗ 🧠

I touched on this briefly when I chatted with @fortworthchris, but it's so important it deserves it's own thread

🧵👇

@fortworthchris 1/ The popular ways of comparing investment opportunities like IRR or @moseskagan's favorite UYoC (unlevered yield on cost) are useful, but they don't tell you the full story

they overlook something important:

HOW MANY BRAIN CELLS ARE YOU GONNA LOSE IF YOU DO THIS DEAL???

🧠📉

If you’ve tweeted about eggs or gas prices in the last 12 months I have bad news

You’re not an accredited investor Come for the shitposts, stay for the good shit

Gotten a bunch of inbound about the particulars of some of the stuff that @fortworthchris freestyled about on the @fortpodcast

So let's start simple:

HOW TO FIND BAD LOANS TO BUY 🧵👇 @fortworthchris @FortPodcast 1/ FIND LENDERS

you already know the lenders in your market

it's the local banks you drive by every day going to work

why not JP Morgan?

a. JPM will not take your call

b. JPM's commercial loans are big

c. Chase originates owner occupied mortgages - you DON'T want these

Thanks @fortworthchris for having me on the pod, I had a lot of fun!

Welcome to new followers!

I promise that my tweets have as much (maybe more) swearing

Here's a thread of some fan favorites 👇

@fortworthchris

https://twitter.com/financeguy725/status/1587924709508845573

Trying to checkout of this airbnb, but apparently i have to split 4 cords of firewood first??? We got more than shit posts ‘round these parts

https://twitter.com/financeguy725/status/1576724957031288832