Today’s episode features an interview with real estate investor, Al Curiel, who specializes in performing notes. The interview covers Al’s background in real estate, his decision to focus on notes, and how he scales his note investing business.
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Al’s Real Estate Journey [00:01:03]
Investing in Notes [00:03:33]
Avatar and Mentorship Program [00:05:38]
Building a Virtual Assistant System [00:08:29]
Scaling with Trial and Error [00:10:08]
Getting Meaningful Deal Flow in the Note Space [00:13:37]
Buying Non-Performing Notes [00:16:58]
Pricing Changes in Non-Performing Notes [00:19:17]
Rehabbing Strategies for Non-Performing Notes [00:21:40]
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Connect with Al:
Web: http://www.AssociatesinRealEstateHoldings.com
Email: info@associatesandrealestateholdings.com
Connect with Sam:
I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.
Facebook: https://www.facebook.com/HowtoscaleCRE/
LinkedIn: https://www.linkedin.com/in/samwilsonhowtoscalecre/
Email me → sam@brickeninvestmentgroup.com
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Want to read the full show notes of the episode? Check it out below:
Al Curiel ([00:00:00]) – I don’t want to be a process junkie, right? I, I do what I do best, which is raising capital, talking to customers, shaking hands, and kissing babies sort of thing. Um, the, the, the, the other stuff, the day-to-day grind, I lead to someone that is going to be managed by a supervisor that is going to give me results at the end of the day, at the end of the week, at the end of the month. And we compare those in a gigantic spreadsheet as to what our production goals are for that specific quarter.
Intro ([00:00:28]) – Welcome to the How to Scale commercial real Estate Show. Whether you are an active or passive investor, we’ll teach you how to scale your real estate investing business into something big.
Sam Wilson ([00:00:42]) – Al Curiel is a real estate investor that focuses on performing notes, and he also has a mentorship program that focuses on investing in real estate using the power of meditation. Al, welcome to the show.
Al Curiel ([00:00:53]) – Thank you, Sam. Good to be here.
Sam Wilson ([00:00:54]) – Absolutely. Al the pleasures mine. There are three questions I ask every guest who comes in the show in 90 seconds or less. Can you tell me where did you start? Where are you now, and how did you get there?
Al Curiel ([00:01:03]) – Started back in 19 90, 83 when I was, uh, 22 years old. Started with my first, uh, building, uh, it was a rental building, and, uh, I learned quickly that, uh, you need a whole lot more than just money to, uh, to succeed. And, um, my brother and I started the business. We, uh, survived through some of the corrections and, uh, eventually became wholesalers fixed and flippers, renters and all that stuff. And then finally in 2008, as a result of the waterfall from the 2008 debacle of the, uh, subprime market, we started focusing on performing and unperforming notes.
Sam Wilson ([00:01:45]) – Wow. So you’ve been in real estate. Gosh, you’re going on four decades at this point. That’s
Al Curiel ([00:01:50]) – Exactly right. I hate to admit it, Sam, but that’s exactly right. .
Sam Wilson ([00:01:53]) – Hey, luck to you. Some people, some people don’t make it that long, so, you know, there, there, there is that bright side to it. Um, but you’ve seen a lot. I mean, you’ve seen the savings in loan crisis. You’ve seen the.com bust. You’ve seen the oh eight crisis and now on, on the verge of who knows what right now, uh, just we see banks starting to collapse and things like that. So, I, I, I don’t wanna dig in too far really into each of those sections. We just don’t have time on the podcast. I’d love to hear kind of all the different things that you’ve done in that, but tell me why you do what you do now. I know we talked about this a little bit off air, and you kind of gave me some insight into the mess versus message or mess being your message sort of thing. So if you don’t mind, give us some insight on that.
Al Curiel ([00:02:36]) – Not at all. I’ll try to be as brief as, as I can, given the, the time constraints that we have, Sam. But basically what happened was I, being in, in so many markets and seeing so many adjustments, I couldn’t tell, I didn’t have a, a, a, a crystal ball to predict the future. But I certainly had a rear view mirror to see where he had been with, as you mentioned, the, the, the, the dark, uh, Monday of October 29th, 1989, that what happened in, with the doc, with the, uh, Y2K anticipation, with the savings and loans collapsing and, uh, now the 2008, nine and 10 issues with, with subprime markets, that made me realize that I was not gonna have time to recover from what I had seen in the past. So I decided to research for something else. And that’s when I discovered that, uh, uh, the passive income that you realized from investing in performing and unperforming notes is where it’s at.
Al Curiel ([00:03:33]) – Um, and that was a result of, of, again, what happened in 2008. Um, so they had, they had, they had the fallout of that mess still happening. Now you have Covid that happened in 2020. So we had a revival of that. You had the waterfall of 2008 that was still not resolved. The world stops, but commerce didn’t stop. Commerce continued to work. So you had the supply supply chain issue. You had the perfect storm of covid and then the fallout of 2008. So what was gonna happen to all that inventory of, of properties? And the answer was in the banks inventory that were not being sold. So we did some research. My brother decided, you know, he’s had a family, so he says he couldn’t, he couldn’t withstand the rigors of, and the stress of, of not having inventory to flip. So I, I did it along and, and, uh, I discovered that investing in notes was a lot easier than investing in, in fixed and flipping, because you can make money with a pen instead of swinging a hammer. Right. And that’s what bedwin focus in for the last, uh, well now 10 years now.
Sam Wilson ([00:04:40]) – Wow. That’s really, really cool. And are you buying just performing or performing and non-performing nodes?
Al Curiel ([00:04:46]) – We, yeah, we, we, we purchase a performing notes for our P portfolio. We pur we purchase those for our retirement. Hmm. Um, through your, through our, our Roth IRAs and the nonperforming notes, we rehab, we rehab them. Just like you can rehab a house, you can rehab a loan, right? Um, you can, you have three, three different ways of, of rehabbing, quote unquote a loan. And, uh, those we sell to our customers by way of partials. So let’s just say, Sam, for instance, you have a, I bought, I buy a 30, 30 year loan from, let’s just say Bank of America. Bank of America, send me a loan that is not performing. I buy it at a discount. I fixed it a little bit, and then I flip it to Sam. So outta that 30 year loan, I sell Sam 10 years. At the end of the 11th, uh, month, the 11th year, the, the note comes back to me.
Al Curiel ([00:05:38]) – So why do I do that? Two things. I share the risk with my customer and, uh, the customer gets the truly passive income that he wants for a certain period of time while he tries it out. If he likes it, he’ll continue on with it. If he doesn’t, we part company friends and everything is cool. So that’s our mantra, that’s our model. Um, my avatar, our personal avatar is as I, I told you before, the, the start of the show, uh, is somebody in, at or near retirement age that has three concerns. His health not of living his income and, uh, establishing a legacy for his descendants and his descendants. So that, that was my, that was my issue. So I figured that this is something that most people in my age group would, would probably want to hear about. And that’s what we created the mentorship program.
Sam Wilson ([00:06:27]) – Yeah, I mean, cuz I, I can only imagine, you know, I think you shared, I don’t know if you said your, your age here on the show, or you told me that beforehand, but either way, you know, you know who your avatar is and you know what their concerns are mm-hmm. and I would imagine mm-hmm. , the, the, the note space is something that, like you said, you can, you can make money with a pen, not with a hammer. And the person in your, your avatar. That’s, that’s
Al Curiel ([00:06:52]) – I’m 62, Sam, I’m full disclosure. I’m 62. I’m not afraid to say it.
Sam Wilson ([00:06:55]) – You’re not afraid to say it. Great. I didn’t, I didn’t wanna I didn’t wanna, you know, air your dirty laundry. No, I’m joking. It’s not dirty laundry , uh, here on the show. But I think that’s a really powerful thing cuz you, you’ve defined who your avatar is and what it is that they need. And I think so many people haven’t, especially as we are raising capital as we are doing deals, don’t necessarily know who our investor base is necessarily. They haven’t figured out what their areas of concern are, and then they can’t appropriately bring a product necessarily to market that that particular person may need. Tell me, I I guess from a more, more, um, just just the nuts and bolts of what you do, how, how do you scale the node investing business?
Al Curiel ([00:07:37]) – We have, um, I, I reali initially it was just a one minute operation, right Sam, and then with the editor of my brother, after we, we decided that our spark company, because we ran out of inventories and we found ourselves empty handed after 89, after 2000, he just couldn’t stand it. So he says, we have no inventory. What, what now Einstein? And I said, I says, I got a family, I gotta, I got offend him. He says, okay, God bless you. Go. So I had to be a one man operation, and as I started investing in it, it was, it was just me. But as I started to get more properties and I started raising more money and I started getting more investors, then I had to seek the services of virtual, uh, assistance. So now for that, I have specific, I have, I have, I have several, um, assistant firms that, that help me with different tasks.
Al Curiel ([00:08:29]) – I have an acquisitions manager, I have a sales manager, I have a due diligence manager, and then I have a sales manager. Those sales, and these are people that are in the Philippines and do some of my calling. Um, I have people in India that do some of my systems and social media management. And then I have people in Jamaica that do the actual negotiations, and the sales manager is there so that I hold everyone accountable. We have meetings every Tuesday afternoon. We, uh, we find where we were last year, how many leads came in, where we’re at right now, how we are in raising money and where we go next month. So we have to keep everything in a journal. And I write, I mean, I dunno if you can see, but I got back here. I got journals that go back about 35 years of everything that I do every single day of my existence. I journal every day. I meditate every day, and I draft a plan of action for how my day is gonna shape out and how it ended up looking at the end of the day. So that’s keep, that keeps me focused and allows me that flexibility and the latitude to pivot if I make changes to my scaling business.
Sam Wilson ([00:09:36]) – Wow, that’s really, really cool. I, I, I would the, the building the system with that many, uh, or building your systems around virtual assistance, I think that’s one, you know, you hear a VAs handling, you know, certain repetitive tasks, data mining mm-hmm. , you know, whatever it is. But scaling it the way you have done it, it’s, it sounds pretty powerful. I mean, what are, what are some of the, what are some of the tips or maybe challenges that you faced when scaling with VAs and how did you overcome those? Because I think
Al Curiel ([00:10:08]) – It was, it was, it was a, it was a trial and error, uh, uh, enterprise, um, uh, Sam because you, I initially started with one individual and I thought this person was going to be the be all and all. And, and it’s trial and error, Sam, because sometimes they don’t work out. Sometimes they do. And so what I try to do is I try to keep them motivated and have three of everything. If I have, if I have a, a solid, lemme just give it, for instance, without getting too deep in the weeds and, and bore you to death. But basically, let’s just say for my due diligence, I have someone that is, uh, I got hired somebody that is really good. And then, uh, through this other website that I, that I go for Upwork or, uh, assistant.com or something like that. I get a mediocre one and then one that is, it is okay, but it’s a workforce by works when he or she wants, which is not really effective.
Al Curiel ([00:11:02]) – So I have three of those so that I’m constantly hiring. So if the, if the bad one falls off, then I have another bank of, of of VAs that I can pick from that is going to replace the not so good one with a mediocre one. Well then if the mediocre one in the middle falls off, then I have a, a, uh, the really good one to, to replace them. And I just keep con I continue to mix an experiment with their motivation with, with what, what Dr. Their why. You gotta find out your why. And then I let ’em, and then I let ’em go with, uh, with, with what they do, always keeping them on task and always having meetings to, to hold them accountable. It was really difficult, but we had the system down really good so that I know who I can call on what task on any given day. And when you motivate ’em like that, when you keep ’em on a, on a, I don’t wanna say short leash, but it is a short leash, then you know what the ex they manage your expectations and you manage theirs.
Sam Wilson ([00:12:01]) – Right? No, I think that’s super powerful. And that’s, uh, I like the, the the doing things in in in duplicate or duplicate there where if some something isn’t working out, you’re not dead in the water because you’ve put all your eggs in one basket and, and they move, you know,
Al Curiel ([00:12:17]) – It, it, it, it is huge when you, you know, when you realize, I mean, and I’m paying these, these folks, uh, you know, nominal amounts by, by by us compare standards. But still, nevertheless, I need the activity. I need to continue to be out there. I I don’t want to be a process junkie, right? I, I do what I do best, which is raising capital, talking to customers, shaking hands and kissing babies sort of thing. Um, the, the, the, the other stuff, the day-to-day grind, I lead to someone that is going to be managed by a supervisor that is going to give me results at the end of the day, at the end of the week, at the end of the month. And we compare those in a gigantic spreadsheet as to what our production goals are for that specific quarter. And we match those. And if we need to tweak it, we tweak it.
Sam Wilson ([00:13:03]) – That’s really, really powerful. I love, I love the thought process behind that. And also just the idea that it’s trial and error. I think. So oftentimes thank you. We get right the first time where it’s like, okay, we’re gonna do this and this is the way we’re gonna do it. Whereas it’s, it’s probably more of an iterative process than we want, uh, want to admit. Let’s, it
Al Curiel ([00:13:20]) – Usually is
Sam Wilson ([00:13:20]) – . Let’s talk a little bit about deal flow. I mean, how, how do you, uh, when it comes to the scaling side of things, how do you get meaningful deal flow in the note space? Like, who sells ’em, who buys ’em? How do you get in front of sellers? It seems like an obscure market.
Al Curiel ([00:13:37]) – Yeah, it is a rather obscure market. Not many people know about it. It’s a specialized niche that again, was, was found through trial and error and, and just investigating. And I’m one stubborn son of a gun. I, you know, the more you tell me you can’t do something, then the more I’m gonna try and, and, and prove you wrong. So that’s, that’s part of my stuff. That’s my makeup, that’s my father’s teachings. And, and, and us and, and what have you. He was an entrepreneur himself, so I don’t give up easily. And so I decided to look as to, into what was the problem, getting inventory of houses to rehab in 2008 and through again, research and research. And I found out that banks and hedge funds have a specific asset managers that are tasked with getting rid of, of pro inventory, of notes that they don’t want, that are not working, that are not performing, or that are performing.
Al Curiel ([00:14:32]) – And the bank and the hedge fund needs capital to redeploy to be able to lend for cars, uh, personal items, appliances, whatever, what have you. So I decided, let’s just say for instance, one day I decided to call the Bank of America, of the world the asset manager or the Wells Fargo, uh, person of the world or at digital capital hedge fund on any given day. And say, Mr. Asset Manager, this is Al Curiel from the name of my firm, blah, blah, blah. Do you have any, uh, assets that you wish to get rid of this quarter? And initially, Sam, I’m not gonna, I’m not gonna sugar code. It, it was, it was a lot of rejection. They didn’t know me from Adam, but I stayed consistent. I decided when it was a good time to call, I ne I decided, hmm, let, let’s be smart here about this curio, I don’t call on Monday.
Al Curiel ([00:15:17]) – I didn’t call on Tuesday, I didn’t call on Wednesday. I started to call them when the week was kind of dying down Thursday and Friday at two o’clock, they’re more likely to pick up the phone. So I started establishing more dialogue. So after a, you established report, more dialogue, then one day, one day, Sam boom, I got an inventory of 20 non-performing loans. And lucky for me, I was able, I had capital that I had raced before that I was able to buy in bulk. So now I have a set of 20, 20 a list, or what they call a tape, I don’t know what they call it, a tape. It’s a spreadsheet of 20 loans. And they said, all right, pick whatever you want here and uh, if you want to buy ’em all, we’ll give you a greater discount then buying on a per piece basis.
Al Curiel ([00:16:03]) – I, we’ll sell you the case and you can sell ’em off by the bottom. I said, okay. So I, I had enough, I had enough of a discount built into it because we’re still talking 2008 when you can get a hundred thousand dollars loan for $13,000. I was able to do that. I bought all 20 of ’em. I established a rapport with that company. All I need is five. All I need is five for the number of investors that I have. So I established rapport with another one and another one and another one. And that’s how the scaling came about. I’m, I’m, I’m giving you the Reader’s Digest version of it. It’s this lot more that goes into it, Sam, but for our purposes, that’s basically how it happened.
Sam Wilson ([00:16:41]) – That’s, that’s really, really fascinating cuz that, that was gonna be one of my questions was when you’re dealing with Wells Fargo, bank of America, I mean they, I can’t imagine that they’d wanna sell one at a time loans off. That’s, that just seems just not, it’s not the way they’re gonna do business.
Al Curiel ([00:16:58]) – Correct. They don’t, um, and they give you, when, when those asset managers, those asset managers are people like you and me, they get up in the morning, they have families they have to feed, and they have quotas to get rid of loans that they need to get rid of. And if they don’t, there’s hell to be paid, right? So, uh, it, it behooves them to work with as many investors and to show how these investor, how serious these fit investors are. So if they offer me a bulk of a, a a lot of twin 25, whatever, maybe commercial loans, I have to have enough backing meaning capital so that I can build my credibility, continue to keep that credibility so that, uh, the inventory keeps coming. So that’s why on the, you have to anticipate, you have to plan how much money you’re gonna raise before you approach these people.
Al Curiel ([00:17:46]) – And, and I’m just using the example of, of Bank of America, regional banks are very good for that. Regional banks sell assets that, that sweet, that sweet spot for us is anything between 25 and $120,000. Hmm. Right. That’s our sweet spot. That, and you find those mostly in the Rust Bell states. Right? All right. It’s hard for investors in New York and in California to re to get their minds wrapped around the low ban assets in those states. And I’m talking about Michigan, I’m talking about Indiana, I’m talking about Ohio, maybe some Georgia, maybe some South Carolina, and definitely some Texas. And so I can get an answer again, to give an example, to be very simple about it, a hundred thousand dollars loan that I can now I can, I can pick up for about maybe 40 cents on the dollar.
Sam Wilson ([00:18:37]) – Wow.
Al Curiel ([00:18:38]) – So, you know, when I, when I have these people in, in San Francisco, the investors in San Francisco were in mailbox is $150,000 . Right? I mean, they, you can see how there’s like, oh, okay, well then I don’t have to, I don’t have to deal with toilets trash or non paying tenants. Right? I can be the owner, I can take the place of the bank, be the bank, right, and not worry about servicing anything. And I get the monthly income. All I get, all I get is a servicing company that is going to allocate your escrows your taxes and your insurance. And then the difference goes in Pocket National Bank every month.
Sam Wilson ([00:19:17]) – How th this is really fascinating. And I, and I love, uh, I love personally the, uh, non-performing note strategy. I think that’s, that’s, it’s a great one. It’s, it’s where there’s opportunity, I think still. And I’m, I’m invested as a passive investor, uh, in some other non-performing note funds. Even one I think’s spaced outta your hometown there in Chicago. Um, okay. But, but the, how, I guess, how has that pricing changed? I know you mentioned before and you said maybe in 2008, like 10 to 20% maybe was the range that you were buying those on, and now you’re saying it’s, you can still pick up NPNs in the 40%.
Al Curiel ([00:19:54]) – 40%. Yeah. And the reason for that is because now, now that it’s, now that the catch outta the back, so to speak, it’s a sexy thing to invest in. Now most people are now finding out about non-performing notes, right? As you get more demand, the pr obviously the price goes up, right? So that’s, uh, that’s what happened. But with volume, with volume now you continue to have the discount. So I’m beginning to see those, it, it used to be 65 to 75% for non-performing known. Now they’re, they’re coming down to like 55, 45, 40, 40, 40 cents on a dollar. That’s how I’m able to get ’em. Um, but initially in 2008 they were, because they were virtually unknown by anybody, right? Um, that this discounts were greater. But now with, with time or more invest investors being involved, more mentorship programs out there, more gurus teaching this kind of thing, it’s become more of a, of a, of a, of a sexy thing to invest in.
Al Curiel ([00:20:50]) – And not as readily available as, as it was. But still, you can make very, very healthy, very healthy returns. And the, if I may share with the, with the group, what, what with your group, what, what some of those Strat rehabbing strategies are. Yeah. One is to modify the loan. Yep. Um, if, if you can modify the loan and, and if the person loses his job, person stops paying his mortgage for a variety of reasons, not the least of which is divorce, loss of a job, loss of some kind of loss of income, right? But they, they, they love the house. They, you know, they, you see flowers are on the flower bed and mama don’t wanna move, right? She just wants to do whatever they want, whatever they need to do to make it. That’s, that’s number one thing. So you modify the loan, even though they get a job at a lesser paying thing, you can reduce the mortgage, you can reduce the interest rate, you can modify it, period.
Al Curiel ([00:21:40]) – The other thing is, if, if they, if they modify the loan and they are still not able to, um, to pay it, then I like to be really tough on the problem and soft on the people, Sam. So I say, why don’t we part friends? You know, you’ve clearly you’ve been, we’ve tried this modification of the loan, you can’t pay it. Um, I’ll tell you what I’ll do. I will not report those, those four or five months that you’re behind to the credit bureau. I will back up the U-Haul. You put all your stuff in there, you leave the house just as clean as when Bank of America or Wells Fargo sold it to you when you got your loan. And upon inspection, if everything is, is copacetic, I’ll drop you a check for a thousand dollars. You gimme the keys, you gimme the deed, and we’re we’re good. Right? That’s,
Sam Wilson ([00:22:26]) – They avoid a foreclosure on the record that way.
Al Curiel ([00:22:29]) – It’s a deed and lie. Exactly right. Cash for key de and lie. That’s what they foreclosure. And there’s no deficiencies that I de demand. So we all, we we leave in good. He’s, he has a chance to start life, I knew. And the third thing, which is more, the more drastic, uh, uh, measure is, is foreclosure. Um, and that, for that, and that is the reason why I do not buy in judicial states. Judicial states like Illinois. I do not buy in my own backyard because in Illinois, foreclosing on somebody is gonna take me about 298 days. I can’t afford that. Cuz I deal with the velocity of money with my investors. They can’t sit there waiting for their money to be, to be, to be returned. Right? So I go to non-judicial states like again, Texas, um, uh, Michigan, Indiana, even though it’s, it’s traditional non-judicial, there’s special ways that you can do to, to speed up the process. Georgia and one of the car Carolinas, that’s where we focus our investments in. And, uh, so that’s, that’s how we are able to, to scale how you were to rehab the loans. And, um, if somebody’s not paying, I’m taking it all the way to foreclosure, I can wait no more than 120 days.
Sam Wilson ([00:23:37]) – That’s fantastic. Al I’m I, I got about 25 more questions for you. We’re at the end of the show. This has been absolutely fascinating. I love your strategy. I love the way you do it. You’ve shared with us systems, you’ve shared with us the value of non-performing notes. You’ve shared with us the ability, a a and kind of the mindset behind finding who your investor avatar is and how you solve their problems. If our listeners wanna get in touch with you or learn more about you, or maybe even the notes that you guys are working on right now, what is the best way to do that?
Al Curiel ([00:24:05]) – You can contact, uh, our website. You take a look at our website, it’s Associates and real estate holdings.com. I know it’s a long one, but it’s Associates and Real estate holdings.com. Or you can, uh, uh, get a, on our, our list, it’s info at associates and real estate holdings.com, we’re gonna have our, our our first, uh, three day, uh, event coming up at the end of of May. So if anybody wants to get details, they can find ’em at info.
Sam Wilson ([00:24:32]) – Fantastic. We’ll make sure we include that all there in the show notes. Al thank you again for coming on the show today. I do appreciate it,
Al Curiel ([00:24:38]) – Sam. Take care.
Sam Wilson ([00:24:40]) – Hey, thanks for listening to the How to Scale Commercial Real Estate podcast. If you can, do me a favor and subscribe and leave us a review on Apple Podcast, Spotify, Google Podcast, whatever platform it is you use to listen. If you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners as well as rank higher on those directories. So appreciate you listening. Thanks so much and hope to catch you on the next episode.
