On this episode real estate investor Gerald Lemoine joins Holly. Before Gerald got into real estate investing he had 30 years in general construction. When he met his wife he knew that she would not want him to continue to do construction and travel to different countries and different states for work. He started to research his options and came across real estate.
Gerald started his real estate career with house flipping before he moved to note investing. He felt that his biggest mistake with house flipping was that he rushed into a deal that he bought. He jumped into the project head first started painting and ripping out flooring but shortly after starting the rehab he got a call that the sale had been rescinded. While this lesson was painful it was a learning experience that he took with him into the houses he would flip after.
Gerald got into the note business after attending a seminar where a presenter was offering a workshop on note investing for one thousand dollars. Gerald paid the money to attend the workshop and has since integrated what he has learned into his current note business.
Gerald’s first note that he bought was in Ontario, California. This property was already in foreclosure when he purchased it. Gerald took the property to auction and was not able to sell it so he decided to flip the property. During the rehab Gerald put a ‘For Sale by Owner’ sign up and got several inquires on it before he has even finishing the rehab. A couple approached Gerald about the property and wanted to purchase, the buyer gave him a deposit and signed a contract and the home was in escrow before the rehab was even finished. From the time Gerald bought the note to the day the home sold it only took him sixty days.
After flipping houses Gerald got into note buying. Gerald has purchases 500 notes since 2008. Today he manages about 250 notes that generate about $1 million dollars of income. His team of 4 buys notes and sells them, they also hold onto some of the notes that they buy. Gerald suggests when buying notes to spread your money out, don’t buy one note for $100,000 buy 10 notes for $10,000 each because you don’t know what could happen with the notes that you buy. Some notes end up in court, or some notes are bad notes where you could potentially lose some money.
For those of us not familiar with note investing Gerald lays out what notes are all about. Gerald gets his potential notes on a spreadsheet that tells you about the borrower, the home, the mortgage, and the second mortgage if applicable, as well as the fair market value. Gerald and his partners will buy just about any note if they see that it has potential profit.
Gerald compares house flipping and note investing. He looks at note investing long term and wants to compile a portfolio of notes that he can live off of the return of them. He wants to hold notes and get them performing so that he can create a stream of cash flow. Sometimes borrowers do not cooperate with Gerald’s plans and then he has to send the property to foreclosure.
When investing in notes you need to be mindful of the risks with this type of investment. Gerald reminds listeners to be careful of condition of the property. He has someone go out and look at the property to make sure that he is buying what the note says that he is buying. Be mindful of the condition of property and the value of property.
To get educated on note investing Gerald suggests you attend note training, but make sure that you are not spending a lot of money on training; do not spend thousands of dollars on note training. Some websites that Gerald suggests are:
If you are interested in getting in touch with Gerald you can reach him by phone, email, or Facebook.
Gerald and his team also offer monthly meet-ups for $15 at his office in Garden Grove, California. To get more information about those meet-ups visit: