224. Note Investing to Financial Freedom with Fred Moskowitz

Are you frustrated with the traditional real estate investment route, spending countless hours dealing with property management and tenant issues but not achieving the desired results? It's time to break free from this ineffective approach and explore note investing as a new path to financial freedom.

Join us on Average Joe Finances as our guest Fred Moskowitz reveals the ultimate solution to attaining the desired outcome of financial freedom through note investing. Get ready to learn the strategies and gain the knowledge needed to pave your way toward a life of financial security and independence.

In this episode:

• Discover how to transition from a successful career to mortgage note investing and unlock the path to financial freedom.
• Learn about the benefits of note investing as a lender, including cash flow predictability and scalability, and how it can help you achieve your financial goals.
• Explore both active and passive ways to get involved in note investing and find the strategy that suits your lifestyle and investment objectives.
• Understand the key differences between mortgage note and stock market returns, and discover how note investing can potentially offer higher returns and greater control over your investments.
• And so much more!

Key Moments:

00:00:46 - Fred Moskowitz's Background
00:03:15 - Introduction to Mortgage Note Investing
00:05:53 - Why Fred Chose Mortgage Note Investing
00:09:23 - Active vs. Passive Note Investing
00:18:01 - Utilizing Retirement Funds for Note Investing
00:21:07 - Trends in Mortgage Notes
00:25:42 - Buying Notes at a Discount
00:26:19 - Starting with a Fund or Individual Notes
00:27:48 - Importance of Using a CRM

Find Fred Moskowitz on:

Website: www.fredmoskowitz.com

Facebook: www.facebook.com/thefredmoskowitz

Instagram: www.instagram.com/thefredmoskowitz

Average Joe Finances®

All of our social media links and more: https://averagejoefinances.com/links

About Mike: https://mikecavaggioni.com

Show Notes add-on continued here: https://averagejoefinances.com/show-notes/

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See our full episode transcripts here: https://podcast.averagejoefinances.com/episodes

Transcript

0:00

Ep 224===

Average Joe Finances: 0:02

Hey, welcome back to the average show finances podcast. I'm your host, Mike Cavaggioni. And today's guest is Fred Moskowitz. And we're going to be talking about note investing, which I'm pretty excited to talk about. So Fred, thank you so much for joining me today.

Fred Moskowitz: 0:03

Thank you, Mike. It's great to be here.

Average Joe Finances: 0:04

Yeah, absolutely. It's great to have you here. Now there's a long distance between us, but I think you've been enjoying some of that heat recently. I saw what's been going on the East coast and back on the mainland. You guys have been getting slammed with some hot weather.

Fred Moskowitz: 0:05

Yeah, it's pretty intense.

Average Joe Finances: 0:06

It's actually been cooler here in Hawaii.

Fred Moskowitz: 0:07

Nice, Nice.

Average Joe Finances: 0:08

Okay. So Fred, I want to start this off the same way I start every podcast episode and we want to know more about you. So if you could share a little bit about yourself, tell us your story. Who is Fred Moskowitz?

Fred Moskowitz: 0:09

Yeah. Happy to share a little bit about myself. I'll tell you, Mike. Going back, I started out in life having a really long and successful career working as a computer engineer. And I spent many years working at different tech companies, technology companies, startup companies. And what happened, Mike, was I watched my entire industry get flipped upside down during the bursting of the.com bubble. We had that massive rise, the.com boom, and then followed by the bursting of the.com bubble. And right around that same time, we had the September 11th terrorist attacks. The right around the same time. And so there was so much turmoil in the world and, I realized through all of this that I was way too dependent on the income for my job. I loved the work I was doing, but my job always had all of these circumstances completely out of my control. And Mike, let me tell you. I learned that no matter how talented of an engineer I was, or how valuable of an employee I was, if things were not going well in the company or in the economy, I could quickly lose my job through no fault of my own. And what I decided to do was to take action, and I wanted to start. building an investment portfolio, but I was interested in alternative investments, the whole idea of buying and building assets that generate income and cash flow for you, so that I would have a lot of diversification in my income sources. And so that's what led me to this world of alternative investments. Got involved in real estate, doing real estate, building a portfolio of rental properties and other investments. And after a few years, I got involved in mortgage note investing and mortgage note investing. What I found was a really interesting part of real estate investing. But it's a niche area. Not too many people talked about it. If you buy a real estate book, there might be like a mention of it in the book, in the back talking about selling a property with owner financing. But I found this industry fascinating and over the years grew and expanded. And it's been a wonderful journey for me.

Average Joe Finances: 0:16

Yeah. Fred that's amazing. Actually, it's funny because I'm working a deal right now where we're looking to do some seller financing on it. And the seller carry a note in second lean position. So I think that's it's perfect timing to have you on the show here.

Fred Moskowitz: 0:17

Yeah, it's a great strategy. It really is. And I feel that it doesn't get utilized enough. It's all part of doing creative deals when you're putting together a transaction. Now, the area I focus in specifically is we buy bank originated. Institutionally originated notes. Okay. So they're the seller finance notes that's out there for sure. And that's a separate niche that I know many colleagues in the industry that focus on that. But I focus on institutionally originated notes. And as a result, we're buying all over the country, nationwide. And As you can imagine, most, I'm sure most people can relate. You go, you buy a property or you refinance a property, right? And within a month or three, you get a letter from the lender saying, Dear Mr. and Mrs. Homeowner, we're writing to let you know that your loan is being sold. And here's the address of the new lender. Here's their contact information. Starting next month, please send your payments to the new lender. Right? And so there's a secondary market for mortgage notes where notes get bought and sold every single day.

Average Joe Finances: 0:21

Yeah, that's awesome. Now, I want to ask you, Fred, too, because you said that you were involved in real estate in general. So you had rental properties, you had a whole portfolio going, and then you discovered mortgage note investing. What is mortgage note investing to you and why? Did you decide to focus your attention on that?

Fred Moskowitz: 0:23

Mortgage note investing is where instead of investing in the real estate and owning the property we're talking about investing in the paper. And that is the notes and mortgages associated with all of those properties. And I find that it's a really interesting part of the real estate business. And a lot of real estate investors don't pay any attention to it. Most people, when they think of a note in a mortgage, they think of being the borrower and not as being the lender. But what happens with note investing is it allows you to step across the aisle and become the bank. And when you do that, you transition from being the one making the monthly payments to being the one receiving the monthly payments. And I found it's just a great way to increase the predictability of your cash flow. But what was attractive to me was that I saw that this is something you could really grow and scale up into something big. Relatively quickly and because of the different vendors we use and service providers, you can ramp up a large portfolio very quickly, which is something you cannot do with acquiring single family rental properties, for instance.

Average Joe Finances: 0:27

And not unless you buy a full portfolio from somebody that's exiting and that's very hard to do.

Fred Moskowitz: 0:28

But I like it. I real estate owning real estate is a great asset, but this is some diversification and you're dealing with a different, instead of dealing with tenants, right? You have the tenant mindset. Now you're dealing with homeowners who have a different mindset homeowners when. The air conditioning system breaks down. They don't call the lender to get it fixed or if the water heater gives out, they don't call, you don't call the lender. They go and they take care of it. And so you're dealing with owners, property owners are responsible. They show pride of ownership. They take care of the asset and the lender is secured on title. Their investment is protected. And it's for the most part, it's hands off. All the work you do is in the beginning. It's up front when you do your due diligence, evaluating the note before you buy, that's where all the work goes in. And then the ongoing management, the day to day it's handled through. Using loan servicing companies, they manage the Note on behalf of the lender. And so that this is how you can really scale up a large portfolio.

Average Joe Finances: 0:31

Yeah. So speaking of doing that and scaling right now, you have the. The service that provides, that, that helps the lender out with doing all of the service. But what kind of time requirement are you looking at being the lender yourself? What kind of time are you actually putting into the business?

Fred Moskowitz: 0:32

There's multiple ways. Let me jump back a little bit, like, how does someone get involved in Note investing? There's really two ways. And so for each investor, I always teach about this and I write, written about this in my book on Note investing. You have to decide whether you want to be active and hands on in the business. And it isn't. An active business vary, or if you want to be a passive investor, then maybe you're not going to go out and build a portfolio of notes, but you can invest in a note fund. A note fund is managed by the fund managers. They go out and raise capital and then they go and buy notes in bulk quantity. And the benefit there is that for the investors, they get to rely. on the fund manager's expertise, their experience, their relationships, the access to buying notes, and they receive a passive income for that cash flow. And so it's a good, it's a good match. And so You can go either way. There's no right or wrong answer. It comes down to how much time do you have how much time do you have available if you're a busy entrepreneur or busy professional and you want to focus on what you're expertise is in, then be a passive investor. For a lot of people, it's a great way to go. And you can invest in a note fund. There's many different funds out there that all have different characteristics. And that's great. That's a great way to go. But if you want to be active as a note investor, then yeah, get involved in the industry get yourself educated and build relationships, which is what you need to be able to buy notes.

Average Joe Finances: 0:37

Yeah, I'd even think about that that the fact that you can, invest into a fund. Of, with a manager that's managing all these different notes, similar to how you would invest in a real estate fund.

Fred Moskowitz: 0:38

Yeah.

Average Joe Finances: 0:39

That's really interesting.

Fred Moskowitz: 0:40

Because it's set up very much like real estate syndications are. Absolutely.

Average Joe Finances: 0:41

Yeah. So Fred, one of the things I'm curious about, is when you look at interest rates, and you look at, okay, people are getting loans right now between five and 7% depending on. If it's their primary or rental property, whatever it is, it might be. Yeah. Now you look at that as you being the note investor. Okay. That's a 5 percent return. However, comma, it's a 5%. Now, the debt is amortized, right?

Fred Moskowitz: 0:42

It is.

Average Joe Finances: 0:43

So how much big of a difference does that actually make when you're looking at, okay. Getting 5 percent return is great and all, but it's a lot different than just like a 5 percent return from like the stock market.

Fred Moskowitz: 0:44

Yeah, absolutely. So you're correct. When you receive no payments, it's per the amortization schedule and you can buy a note. that's has 30 years ahead of it, 30 years of payments coming up, or you could buy another note that was a 30 year note, but there's only five years left of payments on it. So the amortiz according to the amortization schedule, each payment you receive, each monthly payment, consists of interest and a portion of your principal back. And so the value of the note, the loan balance, decreases over time. And so you actually have an asset that's going down in value. However, you're recouping your capital a little bit at a time. Now another important point with note investing is notes are customarily sub bought and sold at a discount. They're sold for less than the amount owed, so a note with a 100, 000 loan balance might be sold for 94, 000 or 90, 000 or maybe 80, 000. That depends on many characteristics of a note, the risk of it track record, and how good of a negotiator you are. Are you buying one note or are you buying a pool of 20? Because if you're buying in volume, you can negotiate better discounts as well. All of these things impact it. And so that note that you said was 7% if you bought it at a discount, your effective yield might be eight, nine, or 10%. And so that's how that's how it's impacted.

Average Joe Finances: 0:48

Time on the amortization schedule. It's even higher than that.

Fred Moskowitz: 0:49

Yeah, there's a lot of factors when you're analyzing a note you get good at using financial calculator and understanding the five buttons at the top row of the financial calculator, how those work, because you use that's what allows you to compare one note against the other and see which one's going to be the most suitable for what you're looking for.

Average Joe Finances: 0:50

Yeah, I've never done it with the calculator. I always had to do it. With a pencil and paper because when I was taking my real estate exam they give us an amortization table, but we had to do all the math, in our heads or, we weren't allowed to use the calculator. It's interesting though, because I never really thought about how beneficial note investing could be or how lucrative it could be right until I actually sat down and looked at my own mortgage amortization and looking at my monthly payment on my mortgage, how much of it is interest. Versus how much of it is principal, all that interest is what the lenders pocketing, right? That's their return right there.

Fred Moskowitz: 0:51

Exactly.

Average Joe Finances: 0:52

And that's really amazing. So they're getting their money back up front, right? And then they pay off what was, what they lent. And then after that, it's just all profit.

Fred Moskowitz: 0:53

Yeah.

Average Joe Finances: 0:54

So yeah, that's.

Fred Moskowitz: 0:55

Exactly.

Average Joe Finances: 0:56

Yeah.

Fred Moskowitz: 0:57

And what happens a lot.

Average Joe Finances: 0:58

It is definitely the higher rate of return than just like 7%.

Fred Moskowitz: 0:59

It is. Yeah.

Average Joe Finances: 1:00

Okay. Yeah. I just wanted to put that out there. Cause when it comes to mortgage amortization, it could get very complicated. So I was trying to make sure it's explained in the simplest terms possible so that, someone that's listening to this might be like, Oh, okay. I get it. If they've never looked at an amortization schedule before, okay. That's awesome. Now, Fred, I want to ask you besides that I know On the real estate side as an investor, you get different kind of tax benefits and write offs different things like that. Is there anything you get as a note investor that you're able to write off or are you just eating the bag here?

Fred Moskowitz: 1:02

Yeah, this is a great question. So is there anything you get? You get two things, Mike. You ready?

Average Joe Finances: 1:03

Yeah, I'm ready. Let's go.

Fred Moskowitz: 1:04

Capital gains and interest income, both are taxable events. So you get a lot of tax liability from Note investing for sure. There's no deductions, no depreciation, none of that. One of my favorite strategies for note investing that I always teach about and speak about and I actually have multiple chapters of my book dedicated to this, is if you can and you're going to do note investing, whether you're buying individual notes or investing in a note fund, can you do it In your self directed retirement account, preferably a Roth IRA or Roth 401k. And the reason for that is all of that tax liability, it's shielded. Because you're, you have preferential tax treatment on those accounts. And a lot of people have, they have an old 401k from a prior employer, they have an IRA. And so that's a great source of capital to use for note investing, because like I said, you're generating tax liability through it, absolutely. And so putting those two tools together is a really powerful combination.

Average Joe Finances: 1:07

Yeah. Being able to utilize your 401k and IRA, especially a Roth IRA for the tax benefits is something that is powerful in so many different ways. You could use it to invest in multifamily syndications or to buy real, just buy real estate in general. You could do it for note investing. I had a guest on recently where we were talking about how you can use it to start a franchise, right? So there's just so many different ways that you can utilize that. Obviously you need to talk to a CPA, get the right lawyer on your team to make sure that they build it out correctly. So that, the IRS doesn't come after you, but there are ways to make that happen. So that's very good to know for somebody that, that might be looking at a way to get a better return. On their 401k or IRA rather than just sitting in like index funds, right?

Fred Moskowitz: 1:10

Yeah, exactly or for someone that's looking to diversify out of the stock market but I always recommend if this is something you want to explore set yourself up with a good IRA custodian Self directed IRA custodian. There's many different ones that do a good job, they will help you with the compliance and the rules and keep you from doing things you're not supposed to with your self directed accounts so that everything is in compliance with the IRS rules and they help you. They help you. That's their expertise. They do this every day. So that's an important relationship to establish if it's something that that you might pursue. But let me tell you, I have seen investors grow their self directed accounts tremendously. The rate of growth when you compound that over time, it's exponential and that's powerful. It's really powerful.

Average Joe Finances: 1:13

It sounds powerful. So speaking of note investment funds from what I understand you, you have your own fund as well, right? So you have your own note fund running that what are some of the trends that you're seeing right now? With mortgage notes with what's happening in real estate.

Fred Moskowitz: 1:14

Yeah. There's some interesting trends for sure that I can talk about. First of all, there is a lot of capital that's chasing after assets of all kinds whether it be real estate or private equity deals, mortgage notes. There. Money is seeking a decent rate of return. I feel like more, more so than ever. And so people are looking for that. People are looking for ways to go outside the... Customary practices to do things other than, Hey I'm investing in my 401k at work and all I have as far as choices, it's like a half dozen options to select from different funds. But guess what? It's a hundred percent in the stock market. So there's no diversification for sure. Some other trends, Mike we just had an amazing Run of Refinancing and loan payoffs over the past several years, it's been like nothing I've ever seen. I've been investing in notes for the past 13 years and never had seen that so many loans. We would sometimes buy a note and then the next month it would pay off.

Average Joe Finances: 1:17

Oh, wow.

Fred Moskowitz: 1:18

And yeah. And so that's, there's an element of randomness with note investing because notes can get paid off at any time and you never know when that happens. So

Average Joe Finances: 1:19

what happens when you buy that note that pays off so fast, hopefully you got it at a discount. So you're at least getting some type of profit.

Fred Moskowitz: 1:20

Exactly. That's where you, that's how capital gains happens is you bought, let's say you bought a note, $100,000 loan balance. You bought it for $95,000 and then the loan gets paid off it. It gets paid off at $100,000. And so you get that. $5,000 is profit immediately and that creates can create capital gains. So it's a good problem to have, but that's been been a boom we've seen over the past few few years, but now we have a different interest rate environment, interest rates have been rising and that certainly impacts pricing on notes. The pricing varies, but always notes are available to buy and to be sold. Their notes are being sold. That secondary market is very active no matter what.

Average Joe Finances: 1:22

Yeah. Is it common or have you seen people buy notes for higher than what's owed on the note? Just because it's a very young loan let's say a 30 year mortgage and it's for a $100,000, but somebody would maybe offer $110,000 because they know with the interest they'll make over the next couple of years that it's going to be a great run for them. And also the person selling the note is I'm not selling it for a $100,000.

Fred Moskowitz: 1:23

That can certainly happen. As I said, it's whatever the buyer and seller agree to.

Average Joe Finances: 1:24

Okay. I'm just saying, have you seen that? Is it like common practice? I'm just asking out of my own curiosity when it comes to note investing because in my head, the way I look at it, a $100,000 loan at 30 years is valued much higher than a $100,000 in my own opinion, just based off of the amortization and how much interest will be paid over the life of that loan. And it just makes me curious as to if that's something that's pretty common practice.

Fred Moskowitz: 1:25

It happens from time to time, but the most common is that there is a discount.

Average Joe Finances: 1:26

Okay, nice. Yeah. That's even better. I like discounts.

Fred Moskowitz: 1:27

Yeah. Let's face it for real estate for anyone in the real estate investing space. Isn't that always the objective to buy a property at less than market value?

Average Joe Finances: 1:28

Absolutely.

Fred Moskowitz: 1:29

People negotiate.

Average Joe Finances: 1:30

You want to do the same thing with a real estate, with a mortgage note.

Fred Moskowitz: 1:31

Yeah. Yeah. But with mortgage notes, it's common practice. So that's certainly something that, that can be appealing.

Average Joe Finances: 1:32

Okay. Right on. Now, Fred, I know that you speak at several conferences and you wrote a book as well about this. And you train investors on how to do this. If there was somebody that came to you today, Fred, and they said, you know what? I think I want to sell a couple of my real estate assets and get into mortgage note investing. Would you tell them Hey, it'll be great to buy a couple of notes or would you recommend that they start off maybe going to a fund just to get the feel for it?

Fred Moskowitz: 1:34

Yeah, that's a very personal personal question. Either way is good. I've seen some investors start out getting involved in Note investing by getting into a fund and that's great. You learn a lot. You can see how things work. You can get comfortable with the asset class and then i've seen many investors they start out with a fund and then after some time they transition to buying individual notes and building a portfolio now conversely I've seen it happen the other way around as well. Someone has a very successful Note investing business for many years. Maybe they get a little older and they want to work less and take it down a few notches. So they transition into a fund because they know the asset class. They like it. But it's less hands on for them. And so that works out And so it just depends on what your goals your objectives are and how much time do you have? But either way is great.

Average Joe Finances: 1:36

Okay. No great. I appreciate that now another this is like a personal question for you, too. From when you got started to where you're at now, are there any specific CRMs or tools that you use that you think are very valuable to somebody that's a mortgage note investor?

Fred Moskowitz: 1:37

Yeah, Absolutely, CRM's customer relationship manager, very important tool. I use multiple CRMs. We use one that's been customized for note investing for handling all the details about each note, but I also use CRM for keeping in touch with the people that we conduct business with trading partners, note sellers, note buyers, investors. It's something, no matter what business you're in, use a CRM so that you can keep track of your conversations. You can reach out to people on a periodic basis and it helps to be top of mind. It really does. And so, it doesn't matter which one you're, I think your question might be around which one. It doesn't matter. You said that CRM.

Average Joe Finances: 1:39

You said something that really sticks out to me that I want to jump on that. You said it pays to be top of mind. And I really like that because that's 1 of the things that I talk about when it comes to building relationships when you're building your network out that it is very important that you remember certain things about individuals so that when you talk with them, you could bring that up and then they realize, okay, This guy actually cares about what I'm doing. One of the things, an example that I use when you go to a conference, I always tell people try to find at least two to five people that you definitely want to stay in touch with. And you have a great CRM system right there in your pocket. This thing right here. Cause when you create their contact info, there's a little spot down there, like besides, the websites and all that other stuff you can add, there's a spot that says notes and you can put notes in there about what you talked to that individual at the conference about and everything.

Fred Moskowitz: 1:41

What has a cluster of activity and all of that.

Average Joe Finances: 1:42

And give them a call and say, Hey, I remember you told me that your son, little Timmy was playing in a soccer tournament for the championships. Did they win? How'd it go? And they'd be like, this is who? Oh, yeah,

Fred Moskowitz: 1:43

and the best thing is.

Average Joe Finances: 1:44

You remember that. Okay.

Fred Moskowitz: 1:45

But more than that is the conversation you had, maybe it was three or six months ago. You can continue right where you left off.

Average Joe Finances: 1:46

Exactly.

Fred Moskowitz: 1:47

Which is wonderful. And I love what you said, Mike, the idea of when you go to a conference or an event that you're strategic about networking, because that's one of the most important things is the relationships you build from going to a place where there's 300, 500, a thousand. Like minded individuals that are interested in the same topics as you are. That's amazing networking opportunities. And so never lose sight of that.

Average Joe Finances: 1:48

Yeah, it's easy to get bogged down on the number of people, which is why I say two to five max. If you try to get everyone's info and just collect a bunch of business cards, you're not going to keep in touch with all those people. Yeah, with people that have the same goals as you that are like minded, same doing the same thing you're doing and really connect with them and build a relationship.

Fred Moskowitz: 1:49

Absolutely. I love that.

Average Joe Finances: 1:50

Yeah. Awesome. Okay, Fred. I've got 1 more question. I want to ask you before we take this into the final round. And this question is based off of the different things that you've done in your investing career, right? So you've done real estate, you've done alter other alternative investments besides mortgage note investing. But I want to know on top of everything, what is your why for doing what you do with your investments?

Fred Moskowitz: 1:51

My why is to make an impact. I want to make an impact to the people around me. And so that's why I really love speaking and teaching and sharing of ideas, I feel that so many people, there are, they have a thirst or knowledge, want to learn, maybe they. They don't know anyone in their immediate circle that is involved in investing, involved in real estate. And so people are seeking to learn. And so I love networking, building relationships and sharing, sharing some of these concepts and strategies. And so I, do that through my body of work, through my book, through speaking, through. doing podcasts so many ways. But the most rewarding thing for me, Mike, is when someone comes to me and says, Fred, I put into practice the things I've learned and Now my cashflow is diversified and I have so many more options in life. And so you can start to see how people shift and change and grow and expand. And it's a beautiful thing. And I love that.

Average Joe Finances: 1:53

I too love that Fred that's a great answer. And it. I was just talking with somebody about this as a guest on their podcast about one of the things that I've loved about since I started my podcast, getting reviews on the show is great. Sure, whatever. It's a review, right? You're going to get reviews. You're going to get good ones. You're going to get bad ones. People are going to say what they're going to say. When I get a DM on Instagram or LinkedIn or Facebook or just somebody just messages me or shoots me an email and says, Hey, Mike, that episode you did with so and so I learned so much and I put this into practice. And, now I'm doing this and now I'm doing that. And man, my, my whole life has changed. That to me is more impactful. Then anything else, if I, my whole intention with this podcast was to help people, with financial literacy, learn about alternative investments, how to build their wealth, get out of the rat race, right? And if I can impact one person, then I feel like I've done my job, but now my podcast reaches thousands of people. A month, which is just amazing to me. And again, out of those thousands of people, I could care less as long as I impact one person, then I know I'm making a difference in this world. And that's to me what matters and why I do what I do. The fact that you have a very similar like mindedness when it comes to that is, is very. Heartwarming and it tells me how genuine you are, Fred. So I definitely really appreciate that.

Fred Moskowitz: 1:58

Thank you. I appreciate that compliment.

Average Joe Finances: 1:59

Absolutely. So Fred, with that compliment to the side, I would like to now transition this to the final round where I'm going to ask you the same four questions. I ask everybody that comes on the show and it gives us a good idea of how you are under a little bit of pressure. So if you're ready to go, we'll get that party started.

Fred Moskowitz: 2:00

Yeah, let's jump in.

Average Joe Finances: 2:01

Okay. Let's jump in. And the questions ain't that bad. I just, I like to scare you a little bit before we start. Okay. Fred, the first question of the final round is what's the biggest mistake you've ever made when it comes to your finances, investing, real estate, or just business in general?

Fred Moskowitz: 2:02

Wow biggest mistake I've ever made was this in the beginning, I was trying to do everything myself and I find that for entrepreneurs.

Average Joe Finances: 2:03

I feel that spiritually.

Fred Moskowitz: 2:04

Yeah. Entrepreneurs it's natural. It's natural. And when you can build a team, when you can partner or have hire vendors or employees to help you that and that they're good, right? Fine. Here's the thing find the things that you're doing that you're not good at and pass it on to someone else hire the right people or outsource it to the right company that can handle it for you where that's their expertise and That's gonna free you up to do what you're uniquely good at And it's something that took a while for me to learn that lesson the hard way, but. Yeah.

Average Joe Finances: 2:05

That, that answer gives me goosebumps because I went through the same thing. It is so hard sometimes as an entrepreneur to give up, that power, right? That responsibility and that control that you have over your own business or something that you're working on. So yeah, that, I love that answer. Thank you.

Fred Moskowitz: 2:06

The best way to start is it's through the relationships you have asked people, Hey, do you know someone that's good at managing my social media? Because I'm not good at it. And then they'll make your introduction. Hey, do you know someone that is a good accountant? Good CPA. Yeah, absolutely. And you know what seat accountants and CPAs, they're like the best people to ask for references referrals from, they know everyone, whatever you need. Yeah they're very well connected. So that's a great source of introductions that when, for whatever you need in your business, because CPAs work with business owners, small business owners, and that's something, just start doing that from the beginning.

Average Joe Finances: 2:08

Yeah, that's one of those things that I love about what I'm doing too with the podcast is just the network I've built. I like to say that, Hey, if somebody needs something, Hey, I know a guy or a gal, and that's my favorite thing to say, Hey, I know a guy or a gal that could help you with that. Yeah, that. But that's the power of networking, right?

Fred Moskowitz: 2:09

It is.

Average Joe Finances: 2:10

Okay, Fred, so this next question, these all kind of tie into each other. So second question, the final round for you is what is something that you've learned that you wish you knew when you first got started? And we'll say when you first got started in note investing.

Fred Moskowitz: 2:11

Something I learned was the power of getting around people that are already at a higher level than you are, right? So if you're wherever you seek to be, you aspire to be, find people that are already there and build a relationship with them, be of service, get around them, spend time with them. Because what happens is you're going to start to have higher level conversations. They're going to have different problems, right? Someone, if you have a hundred thousand dollar a year business and you start hanging around with people that have a million dollar a year business, they're going to have very different problems they're solving and talking about. And so the conversations shift, they're going to introduce you to great people and invite you to amazing events that maybe you otherwise wouldn't have known about. And so that starts to shift because it puts you in a different game.

Average Joe Finances: 2:13

Yeah. I love that, Fred. I absolutely love that because it's, who is it? Jim Rohn that said it right. If you're the average of the five people you hang around the most. So if you're hanging out with 5 millionaires, you're going to be the sixth one, right? Cause you start getting involved in those conversations and seeing what they do differently at that level. And then you could take some of that and put it into your business because all it is from that a hundred thousand dollar business to the million dollar business is two more zeros. That's it, and that's just showing to you, I'm sorry, one more zero, not two more zeros. That's multi million, but it's just another zero that's added on the back end. So if you look at it that way and just say, okay, this is where I want to be. These are the people I'm going to be around. That, that is powerful. For sure.

Fred Moskowitz: 2:16

Yeah.

Average Joe Finances: 2:17

Okay. So Fred, the third question of the final round is, do you have any tips or tricks that you would recommend to someone that is just getting started out today?

Fred Moskowitz: 2:18

Yeah, absolutely. The best thing you can do is get good in networking. If it's something you're good at, take it to the next level. But here's the thing. We touched on this earlier, find. The top conferences and events that are in your industry and go attend them spend the money might cost you a couple thousand dollars to travel and a hotel and few days of time. And yes, it's a heavy lift for sure. But the people that you meet at those events is, can change your trajectory of your business. And if you're getting started out, there's a lot of education opportunities. So you're at a conference, you have different speakers. You can learn from the top people in the field and maybe meet them because you go to the. Cocktail session. And that, Oh, the speaker that was on stage this afternoon, he's sitting right next to me. And now you can have a conversation and share with them what you're doing. That's powerful. And don't be shy about spending money and time. In the beginning to invest in that, because that's going to really ramp up your trajectory.

Average Joe Finances: 2:21

That's the key word invest, right? You're investing in yourself by doing that. And the return on you get the return you get on that investment is infinite. Because the people that you're going to meet the network that you're going to build, as long as you are active, don't be one of those people that buys the ticket from the conference, sits in the back, takes a couple notes, and then doesn't talk to anybody. You see them at all the conferences. Don't be that person. Be the person that goes and sits up front and is attentive and talking with other people about what they may have just learned at this conference, and ask other people, what have you learned? The last conference I was at, we have a WhatsApp chat and they're just going at it about, holding each other accountable and everything else. It's fantastic. I love seeing things like that and.

Fred Moskowitz: 2:23

Yeah, those are the great things had happen.

Average Joe Finances: 2:24

Those are the folks that got the most out of the conference and yeah, so I'm 100 percent with you there. You got to invest in yourself. You have to pay for that upfront education or conference or go to the meetups. Get you put yourself out there.

Fred Moskowitz: 2:25

Yeah.

Average Joe Finances: 2:26

Okay. So Fred, this is it. This is the final question of the final round. And I will preface it with besides your own, because I know you wrote your own book, but besides your own, do you have a favorite business investing or real estate related book or podcast or both?

Fred Moskowitz: 2:27

That's a tough question. There's so many to pick from. So what comes to mind? I'll give you a couple. One of my favorite business books is the ultimate sales machine by Chet Holmes. This is a book that came out decades ago. It's a classic. And for someone like me, that was an engineer and I had a complete. A technical background, never worked in sales a day of my life when I ventured out into the investment space, I found that, yeah, I'm in sales now. So I had to learn on my own. And so that book is very powerful. And it's like a bot, the Bible of sales been around for decades. Yeah. Another book that I found to be very impactful is Atomic Habits. Atomic Habits which is all about productivity and building momentum by James Clear is the author and he breaks down strategies, he talks about the concept of whatever habit you want to build, start small, make it something you can do in two or three minutes, but do it consistently every day and then over time that builds and grows. And builds momentum. Those are some books that have been very impactful for me.

Average Joe Finances: 2:29

Yeah. Fred, those are great recommendations. I don't think I've had the ultimate sales machine recommended here before. Atomic habits, definitely. But those, both of those, yeah, both of those got to get onto my my list for sure.

Fred Moskowitz: 2:30

Yeah.

Average Joe Finances: 2:31

Okay. Right on. That was it for the final round. And you survived. Great job. Now, I do have another question for you. And this is the most important question I'm going to ask you throughout this entire interview.

Fred Moskowitz: 2:32

All right.

Average Joe Finances: 2:33

And it's because of the fact that we've had a great conversation. You've put a lot of golden nuggets out there. You've really piqued my interest and probably a lot of my listeners interest in mortgage note investing. So people are going to want to learn a little bit more about that, because we touched up top here at the a hundred thousand foot level, and they might want to get down into the weeds with you. So where can people find more information about you? Do you have a website you could share with us, social media, and where can we get your book and what's the name?

Fred Moskowitz: 2:34

Yeah. Thank you. Thank you, Mike. The name of my book is the little green book of Note investing. It's available on Amazon. You can find it there either by typing in the title or my name, it will come up the little green book of Note investing. And for anyone that would like to connect with me, I invite you visit my website, which is fredmoskowitz.com. You can connect with me there. And if you prefer a little easier spelling. You can visit giftfromfred. com. It'll take you right to my website. It's a lot easier to spell. And once you're there, you can sign up to receive my newsletter. You can connect with me. And I have a special report about Note Investing that I'm happy to send out send out by email to anyone that would like to request it. I always love connecting with investors. building relationships. So I look forward to hearing from you. And if you prefer to text me, we can do that too, by texting the keyword money to the phone number +215-461-4433. And then just follow the prompts. So I look forward to connecting with you. Please reach out. Happy to serve in any way I can. And it's been a wonderful interview, Mike. Thank you so much.

Average Joe Finances: 2:38

Yeah, Fred, it truly has been wonderful. And I want to make sure, just so you know, we're going to have all those links and the phone number in the show notes to make it easy for our listeners to go ahead and copy and paste or click away. The only thing I ask is please don't do it if you're driving right now. So Fred, super excited to learn about you, to learn more about note investing. This was, Really fun for me. I feel like I've learned a lot and if I've learned a lot, I'm sure my listeners also have learned a lot.

Fred Moskowitz: 2:40

I am Happy, So Happy.

Average Joe Finances: 2:41

And I'm really, I really hope that you you hear from some of them because this is a pretty lucrative alternative investment to get into for sure.

Fred Moskowitz: 2:42

Yeah, that's great. I'm so happy to hear that. And yeah, it's a great asset class. It's powerful and I feel that it deserves consideration in just about everyone's investment portfolio.

Average Joe Finances: 2:43

Yeah. Hey, diversify, right? Fred, again, thank you so much for taking the time out of your day to join me today. I also want to thank. All of my listeners, just thank you all so much for joining me and our special guest Fred Moskowitz on the Average Joe Finances Podcast. Go leave us a five star review and tell us what you liked about today's episode with Fred. Aloha from Hawaii and have a great rest of your day.