In this episode of Spark & Ignite Your Marketing, Beverly chats with Nathan Turner, founder of Earnest Investing LP. Nathan has built a thriving business by focusing on mortgage note investing, a powerful alternative to traditional real estate investments.
Nathan shares how he navigated the 2008 financial crisis, the key strategies he uses to help investors grow their wealth, and why mortgage note investing offers impressive returns without the hassles of property management.
Key Takeaways:
- Unique Strategy: Mortgage note investing offers steady cash flow and reduces the need for day-to-day property management, making it an attractive option for busy professionals.
- Resilience Through Crisis: Nathan shares how navigating the 2008 downturn taught him valuable lessons in adapting business models and finding new opportunities when the market turns.
- Helping Investors Grow: Nathan’s approach to real estate allows his investors to put their money to work with fewer risks and higher potential returns. His focus on smaller, lower-balance loans in stable markets has consistently delivered solid results.
Follow Nathan Turner:
Earnest Investing
Nathan Turner | LinkedIn
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Transcript:
Beverly:
Did you know that mortgage note investing can yield similar or even better returns than traditional real estate investing without The hassles of property management, welcome to another insightful episode of sparking that you’re marketing. I’m your host, Beverly Cornell. And today I am so excited to introduce Nathan Turner, the founder of Earnest Investing, LP with a background in business management and years of hands on experience. Nathan specializes in mortgage note investing. A really unique approach to real estates that focuses on buying the mortgages rather than the properties themselves. Nathan, it’s wonderful to have you here.
Nathan Turner:
Hey, I am so excited to be here. This is great.
Beverly:
So tell me your origin story.
Nathan Turner:
For the origin story, we’ve got to go back to pre financial meltdown where I was doing fix and flip. That was my introduction to real estate and everything was going really well until market changed and we all of a sudden we saw a dip and we saw that financial crisis coming down. And that was not fantastic. What that meant was I got stuck with one property, one property that other than fix and flip, what do you do with house? You rent it out. So that’s what I did. Cause that’s how you do things. And I quickly figured out, I really liked the cashflow that came along with being a landlord. I didn’t like anything else. It was just, it’s a huge hassle. It’s just, it’s difficult to manage. I was on the other side of the country, so that didn’t help anything. And it was just really not a lot of fun. My thinking went to that’s what you do to why does anybody do this? I don’t understand. Like why is landlording a thing? Shortly after that. I networked into a group where they had bought a portfolio of properties. They are all centered in California. The properties were all in the Midwest. The problem was they bought these properties right at the very peak of the market, right? When everything was looking really rosy. And by the time that I came on the scene in the fall of 2008 it was not looking very good at all.
Beverly:
So in 2008, I’m from Detroit. So the bottom just fell out of the market. What happened in 2008?
Nathan Turner:
Everything started going crazy. Everything was falling out. And then myself and my partner, we were called in to just help these California guys figure out what to do with all these properties and just to try to make the best of it. They knew they weren’t going to make their money back, but our mandate was just do what you can make some money out of this, whatever you can get. We thought we’d invented seller financing. We were selling these properties on terms. In actually in Detroit and Ohio and Indiana, they do land contracts. So we were selling these houses on land contracts which is, I, again, I thought it was a brand new system, but it is not. It’s been around forever and ever and that’s where it got started. I got more introduced into other people that are doing this. I started going to conferences. I started speaking at conferences years later, and then just two years ago, I took over one of the conferences. Besides that, I’ve been buying these mortgages all over the country for about 15 years now. And it’s just been fantastic.
Beverly:
So essentially out of necessity, a different business model presented itself for you.
Nathan Turner:
It’s the mother of invention, isn’t it? It’s just figuring out what to do next. And so that’s really where this came from is just noodling it around, trying to figure out what’s the best approach.
Beverly:
So what makes your particular company, Ernest Investing, unique in the space with other people who do what you do?
Nathan Turner:
There are some people that do what I do. It’s not a really huge market. Not a ton of people that do this at the conference that I host for example, last year we had 225 people, which is not bad, in the realm of real estate investing, that could be thousands. But within that. World, our little niches is fairly small. So what I do that’s unique, I think everybody that does what I do has their own kind of special sauce on there. So I like lower balance loans on lower value properties, typically under 200, 000. That tends to land me on the Eastern half of the country. Between Michigan down to Texas and pretty much everything in between. But, it’s just my own special rules. I like towns with at least 20, 000 people. I like places where if I do need to foreclose, it’s a faster foreclosure. Places like pretty much the whole new England corner is off limits for me. We do what we can to help people stay in their house. And that’s been extremely rewarding over the years.
Beverly:
How many customers do you have? How many right now are you doing this with?
Nathan Turner:
So my customers actually are my investors. And then people that were, I own the mortgage, they’re the borrowers. They’re the people living in the houses. So at one time we had about a hundred of these loans. We’re divesting in that that older model. We restarted with a fund and kicking that back up right now. We’re right around 30 and as we continue to grow, we’ll get back up to Somewhere between 100 and 200 loans that we’re carrying.
Beverly:
Okay. So who, if the investors are clients, who are your typical clients and what problems do you solve for them with your business?
Nathan Turner:
Yeah, the typical clients are people that are professionals that are busy doing their own thing. So they’re doing their nine to five, they’re totally occupied and they just don’t have the time. And then they’re looking forward, they’ve got this money set aside, like in an IRA or something, and it’s doing nothing and they start looking ahead to retirement and going, man, That doesn’t look as impressive as it should. That’s where I step in to help them put that money to work for them, free up their time so they can get that back, whether that’s now or at a later date.
Beverly:
What really frustrates you about your industry and how do you fix it?
Nathan Turner:
I’ll tell you one of the things that frustrates me is so I’ve got my conference and people come to the conference. It’s informational. It’s educational. Nobody’s selling anything at the same time. People that are brand new show up there and they’re ready to learn and they get all geared up and they’re super excited. And so many of them don’t do anything to me. That’s super frustrating. Like just do it. You can learn about it. I’m not going to teach you. I can refer to some friends that will but get out there and do it. There’s so much opportunity all over the place. Once you’ve identified that opportunity, what is holding you back? Just do it, get out there and do something.
Beverly:
What has been one aspect of your journey since 2008 of your business strategy or decision making process that you think has evolved the most over the time and why?
Nathan Turner:
Tell you at the very beginning, when I was first introduced to the business I had no idea there was such thing as a financial calculator. I didn’t know that was a type of calculator. All I’d ever seen was the scientific that I used in high school Just identifying that there are problems and almost everything is fixable. Figuring out, so for example, maybe somebody comes to me and they’ve got like a land contract or something and I don’t know who advised them on how to write it, but it’s been written poorly. That’s something we can overcome. It is going to take a little bit of time and effort and maybe an attorney to get involved to help clean up some of that wording in the contract, but it’s fixable. And so that’s something that I’ve been able to take into everything I’m doing is what is the problem? Can we fix it? How do we do it? Let’s go and just move forward, whatever the problem is.
Beverly:
Do you think that comes from experiencing problems and getting through them? So now you just know problems in general just can be fixed. Or do you think it’s like faith and what informs that for you?
Nathan Turner:
I think part of it is just undying optimism. We can do this. But yeah, a lot of it is just figuring out, now it’s to the point where I’ve seen this problem before we can do that and we can fix that and we can make that work. So
Beverly:
this isn’t your first business. You had a curves franchise before this, right?
Nathan Turner:
I did. Yes.
Beverly:
So how have you navigated like the difficulties and movement from that to this? And what’s been some of your biggest challenges and how have you, is it attitude? Is it the right team? Is it a combination of both? Is there a magic formula, Nathan?
Nathan Turner:
If only there was a magic formula. The beginning and end of that story was. We started we bought our Curse franchise, started in 2004. The next year we opened a second, because the first one was doing so well. So we were in the province of Quebec in Canada. And our first club that we operated actually was the biggest in the province for a little while there. And we were doing really well. We were Really killing it and thought we were, curves is their life. I think, in 2007, we just saw an opportunity where the whole industry was at a peak. So we’re like, you know what, we can sell this and make some money and try something else. So let’s give it a shot. So we had the two clubs, we listed them each for 200, 000. 2008, all of a sudden stuff started going down, everything started going down, all of everything started going down. And by the time we sold in 2009 we had combined the two clubs into one and we sold that one for 20,
Beverly:
000.
Nathan Turner:
So that was not at all what we had planned. So yes, it’s been difficult and no, we had not paid back our investors and no, we had not paid ourselves for a number of months and our staff and all that, like it was right near the end, man, it was ugly. It was extremely stressful.
Beverly:
Despite those are some big challenges, Nathan. That’s huge. Your investment did not turn around the way you wanted it to. So many business owners have experienced these moments where things like you build something, you think you’re doing well, the next minute, something happens out of your control that changes everything. Do you think though that moment was needed? To help you be where you are today. Like it was tuition.
Nathan Turner:
Yeah, my wife and I’ve talked about this so many times and looking back and regrets, anything that we would do different. And I think back and it’s hard. I think sometimes looking back because you have present day knowledge that could affect past decisions. But at that time, all I had was present knowledge. At that time, so given that, where we were and what we were doing, I think that I wouldn’t change anything. I did the best I could with what I knew at the time and it is what it is, and you just have to accept that. Yeah, stuff happens sometimes, but if you can just center yourself and just go no. What actually needs to happen and don’t spin and just go, what needs to happen? What can we do to move forward today? Take a path and go.
Beverly:
Good advice. Share a customer testimonial. That perfectly captures the essence of your business.
Nathan Turner:
Oh, I got a good one. Okay. So bit of a story. For a long time, when we were buying these mortgages, we were buying only non performing. So that means the person living in the house was not making payments.
Beverly:
Okay.
Nathan Turner:
So there’s one in I think it was North Carolina. This gentleman was in there, he was ready and willing and able to start making payments again. So great. We got him back on track. He’s making payments. He actually threw everything that he’d been through. His credit score is really good. So with me, I think his interest rate was something like 9%. And at the time he was going to be able to like bank rates were around four. So I was encouraging him to go back to the bank and then. Get financed through the bank, and then that would pay me off. He was going to save a ton of money by doing that. Frankly, when I get paid off early, that actually boosts my return. So it was self serving as well. The issue was, he went to the bank and everything was getting set up. The problem was that the heating system in his home was old and outdated and not working properly. And the bank didn’t want to refinance him with that old furnace. So he needed a new furnace. He had some health challenges that made it so that it wasn’t going to be the bottom of the line. One, it was going to have to be a much more expensive furnace. It costs right around 11, 000 and he’s I just don’t have it. So I said, okay, what you’re telling me is if you can get this new furnace, then the bank will provide the financing for you to get a lower rate. And for me to get paid off. Yeah, that’s right. So I called the bank. Sure enough. That’s the checked out. Everything is good. I forwarded the 11, 000 so that he could get that furnace put in. Then he got refinanced and win win, win all the way around. And I love that. Just getting out there and solving problems and helping people in whatever they need help with. So that’s one of my favorite stories. I love that part of it, of just being able to help people do what they need.
Beverly:
What is your long term vision for Earnest Investing? what’s your legacy going to be Nathan?
Nathan Turner:
Long term, we’ve got three kids. My oldest is actually starting school right now down in Utah, which is great. And we’re very excited for her. My youngest is 14. He is presumably five years from now going to be moved out of the house. So the plan is my wife and I are looking forward to building. So for now we’re, we’ve got our fund, we’re raising money from investors and we’re doing that part of it. Part of the goal of that, the long term goal for that is to put that money towards our own portfolio where we’re buying our own notes. So the goal is after five years, when my youngest is out of the house, probably then then we’ve got our own portfolio. We’ve got our own notes. We’re self funded. And then I’m, quote unquote, retired. I’m financially free where I can go on my wife and I want to do some missionary work. We’re looking forward to do that and probably grandkids and we’ll just travel and go visit. So that’s what we’re looking forward to.
Beverly:
Nice. So I have a section called the lightning round. So have you, how have you created and maintain lasting connections on your entrepreneurial journey?
Nathan Turner:
Oh, boy, it is so much about just networking and talking to people as much as possible face to face so that I’ve, I have over the years, I have attended dozens of conferences. So I’ll go to, I don’t know, five or six a year and just, Get to talk to people, get in face to face and start talking to people. That’s a big deal.
Beverly:
If Ernest investing LP had a voice, what word or emotion would resonate from its core?
Nathan Turner:
Good question. Hope. We could, where that’s so much of what we do is helping people stay in their homes.
Beverly:
Which book, podcast, or entrepreneur, you can name a couple, has left an indelible mark on your entrepreneurial journey?
Nathan Turner:
I would have to say probably the first book that I read as far as self help was Robert Kiyosaki. Rich Dad, Poor Dad that one was just an absolute rock. And then Napoleon Hill Think and Grow Rich, there’s dozens, but but some of those early ones, especially where it just, it really just set off a light bulb in my mind.
Beverly:
What’s one tool or app that has become your secret weapon to revolutionize your workflow, your daily work?
Nathan Turner:
My daily work? I use a website, called Pipedrive. And it is a cross between a CRM and a project management and email. And it just combines everything into one and I can stay very organized with it. I really like it.
Beverly:
We’re always looking for ways to streamline and make things organized as entrepreneurs, aren’t we? Yeah. It’s a lot of moving parts.
Nathan Turner:
Yeah.
Beverly:
How do you keep your entrepreneurial spirit alive? And what do you feed it?
Nathan Turner:
I am always looking for opportunity now. That being said, not to be confused with shiny object syndrome, but but just keeping my eyes and ears open. And that has been tremendous over the years. I just Seeing what else could I do? And sometimes the answer is no, or sometimes the answer is not right now, but just being aware.
Beverly:
In the fast paced world of real estate and investment, I feel like you got to find the right properties, got to find the right situations. You got to move quick and get in there. How do you stay grounded and maintain your sense of purpose and clarity when there’s so much chaos and uncertainty going around with the market and everything else?
Nathan Turner:
One of the beautiful things about what I do is, okay. Whatever’s happening in the market is extremely secondary. Maybe, third, fourth place because when I’m buying is already established terms. So if I buy it a loan today and the terms say, X, Y Z, then, whatever happens in the market that won’t affect me for years to come. So it’s something that I keep an eye on, but it’s not something to be worried about.
Beverly:
So interest rates and things like that are not affecting you in any way, shape, or form.
Nathan Turner:
Not immediately. No. So lower rates, we’re starting to see the effects of the 2020 low interest rates today. We’ll see the effects of the higher interest rates two or three years from now.
Beverly:
If earnest investing was an animal. Which creature would it be and why?
Nathan Turner:
I’m going to say I we’ve got the tiger up there. We’re going to go with tiger. Cause we can, we love being in the shadows, but at the same time, we’re ready at a moment’s notice.
Beverly:
Oh, I like that. That is the end of the lightning round.
Nathan Turner:
Oh, fantastic.
Beverly:
I want to look back and then look forward. Okay. So looking back, what is that one piece of advice you wish you had received early in your career? You said like the wisdom you have now, if you could go back, what is that piece of advice and what would it have saved you as far as time resources and headaches?
Nathan Turner:
I would go back to one of the first business conversations that I had with my brother in law when we were first opening the curves and We were deciding whether to do an, a summer opening, which would be a slower opening or fall opening, which would be a stronger opening and so debating. And in my head, I’m like, Oh, fall, we want a bigger opening for sure. And so talking it through with him. And he said, did you run the numbers? I’m like, I have no idea what you’re talking about right now. And I did business in university. I think I should know that kind of thing. I had no idea what he was talking about and said let’s get out a spreadsheet. I’ll show you how to fill it out. How did I go through 4 year university degree about business? I never did that. But we put it all the numbers out there and said, so if a slower opening in June looks like this. Versus a stronger opening in September looks like that, let the numbers decide, take emotion out of it. Let the numbers decide. And to me, that was 1 of the best things that I’ve ever heard. And it’s 1 of the things that I’ve applied over and over again is just let the numbers decide, get emotion out of it. What are the numbers?
Beverly:
What practical advice would you offer a business owner today that they could literally hang up, push, stop on the podcast and go do for their business? Could be a seasoned business or a new entrepreneur that would help them seize their unique opportunity. What is one piece of advice you’d give them?
Nathan Turner:
I could give a lot of advice, but it will stick to one. People about what you’re doing. And never know what direction is going to take. So when we had the curves I took a meeting with somebody who I knew they were going to be pitching me some kind of multi level marketing, something that I had no interest in. But I took the meeting anyway. And during the course of that conversation, sure enough, I was right. It was a multi level thing. And during the course of the conversation, she said something about, The real estate market being really hot in Saskatoon, Saskatchewan, which I’m like, I’ve been there. Really? It’s a dot on the map. But I checked it out. And sure enough, she was right. And that took me into real estate. So 1 conversation, 1 thing that opened my eyes and I just was blown away. Ready to listen and hear it. And that changed everything.
Beverly:
What is one marketing tip you would give to an entrepreneur to use for their business?
Nathan Turner:
I’ll tell you one of the best things that I’ve done for my business is public speaking. And I know that’s more terrifying than snakes and heights and things like that for a lot of people dying even, but but it will propel your business. I promise you. Yeah. The more you can talk about it and it doesn’t have to be perfect. It doesn’t have to be polished. Yeah. Because that’s where I’ve come from. It does not have to be perfect, but just get out there and talk, tell people where you’re up to.
Beverly:
Share your story. Share your story. Nathan, before we go, please tell our listeners where they can learn more about your business and what you’re up to.
Nathan Turner:
Yeah, certainly. Certainly. So my website is Ernest investing. com and that’s. Earnest with an A. And that’s got all kinds of information about what we do with our fund, Raising Capital. And it’s got information about our conference that you can come to in May in Nashville. And it’s got my contact information there as well. So check out the website, visit me, talk to me. I’d love to talk.
Beverly:
Thank you, Nathan, for sharing your wealth of knowledge and expertise with us today.
Nathan Turner:
Pleasure. Thank you.
Beverly:
Nathan’s insights have illuminated our listeners paths and he’s offered some invaluable tips and strategies to enhance investment approaches and overall business growth, which is amazing. So to our listeners, I hope you found this episode as enlightening as I did. Remember to implement the insights shared today into your small business and don’t hesitate to reach out to Nathan or myself. If you have any questions or need assistance, stay tuned for more inspiring conversations and actionable tips to ignite your entrepreneurial journey and marketing approaches on future episodes of the sparking that you’re marketing podcast. Keep sparking and igniting!
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