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Show Summary
In this episode of the Real Estate Pros podcast, host Q Edmonds interviews Dan Deppen, an expert in real estate investing and note origination. Dan shares his journey from mechanical engineering to real estate, discussing the importance of compliance in note creation and the strategies he employs to help investors succeed. He emphasizes the value of building relationships in business and offers personal insights on maintaining mental well-being. The conversation concludes with Dan providing valuable tips for aspiring investors and how to reach out to him for further collaboration.
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Investor Fuel Show Transcript:
Dan Deppen (00:00)
One opportunity you have as an investor is you can go out.buy that paper that has some problems and assuming you buy it at a price that makes sense on its own, right? And then if the borrower is willing to cooperate, which they often are, what you can do is work with the borrower, cancel that bad loan and create a good one. And so now you’ve bought this kind of cruddy asset at a discount.
Quentin (00:24)
Hmm.Dan Deppen (00:31)
and now turned it into a really good asset.Quentin (02:06)
Hello everyone. Welcome to the Real Estate Pros podcast. I am your host Q Edmonds and I am super excited to be here today. You know, I say that constantly and I promise you I’m not lying when I say it. I am excited. I always find it a privilege to get to meet new people and to get to look at things through their lens. They are the expert at what they do and I find it so refreshing to listen and find out people’s strategies and the way they go about doing business.And today is no different. have somebody that’s incredible here. He helped investors originate notes. He wanted to make the process easy for them. And so I love it. I want to hear more about it. And I want you guys to hear more about it. So I’m so excited to introduce you guys to Mr. Dan Deppen. Mr. Dan, how you doing today, sir?
Dan Deppen (02:54)
I’m doing great, here. Good to be here.Quentin (02:56)
Good to be here too. And I did get that last thing right, Deppen, right? Did I get it right? Awesome, So like I said, excited to be here. Excited to look at things through your perspective and lens. So Mr. Dan, I’ll be honest with you, I’m going to dive in. I would love for you to tell the people what your main focus is these days. If you want to give us a little bit of an origin story, we love the hero’s journey. So if you want to tell us, know, kind of how you got started a little bit, we would love to know that. And then what market you’re operating in. So, sir, you got the floor.Dan Deppen (02:59)
That’s right. Yeah, no, that’s perfect. Yeah.Sure.
Yeah, it’s a long story, but I’ll give you the super quick version. So
with real estate investing, I’m on my third career. So I started as a mechanical engineer in the aerospace industry. Did that for 10 years, enjoyed it, didn’t want to do it for like another 30. So I went and did my MBA and then went into the product management.
world. So worked for like Oracle for six years and AWS and some startups, and then found real estate along the way. And then the last couple of years had been focused full time on real estate. came into it through kind of a unique avenue. I got into real estate investing through buying notes. And so I started doing that around 2017. And then I had bought
And I still buy a lot of notes. So I kind of have two businesses. I have one where I buy notes and then the main focus now, which is helping investors to create notes. ⁓ but I had ended up with a number of REOs from non-performing notes and did seller financing on six or seven of them through a company called called the underwriter. And a little over a year ago now, I actually ended up acquiring called the underwriter from the previous.
owner and so what I’ve focused on now is helping investors when they originate notes vet and underwrite their borrower make sure they got a solid borrower and then help them with all the consumer laws and compliance things that come along with creating notes especially for owner-occupied
borrowers so that that’s kind of in my main focus lately
Quentin (05:54)
I love it, I love it. So the markets that you serve, you nationwide, you narrow? Beautiful.Dan Deppen (05:59)
Yeah. 50 States. Yep.Yeah. So we can help people with all 50 States. So if you’re doing, and so the rules get a little bit complexing and I don’t want to nerd out on that cause I’ll, I’ll lose people, but, ⁓ you know, as an investor, if you’re creating a seller finance loan, you can create a certain number, ⁓ every year, you don’t necessarily need a license to do that. However,
If you’re creating a loan for somebody, they’re going to be an owner occupant. And let’s assume this isn’t a one-off friends and family deal. You’re not like selling the property to your kid or something. ⁓ but then all the consumer rules still apply. So you still got to follow Dodd Frank, validate that the borrower has the ability to repay. You’ve got to follow Trid, which basically just means you got to send loan estimates and closing disclosures to your borrowers on certain timelines. And then there’s some other odds and ends. And that’s what we help.
real estate investors with and the real benefit of doing that is not always what people think. Like a lot of times people come to us because they’re like, I need to be compliant. could get in trouble if I don’t do this right. And that’s true to an extent, but I would say the real value is one, if you’re creating a loan, especially like a 30 year loan, right? You want to know you have a good borrower. So
You know, if you look at Dodd-Frank, tells lenders that they have to validate that if you’re to put a lender or if you’re to put a borrower in a home, you’re to give them a mortgage. You got to make sure they can pay it. Well, it’s kind of something I want to do anyways as a lender. And honestly, that Dodd-Frank bar is fairly low. So for me, I actually have a higher standard. So the bigger value is underwriting the borrower.
understanding your risk level and knowing that you’re creating a good loan. And then the other thing that some people don’t even realize you can do this, but if you create a loan, a good one,
it’s a really valuable asset that you can do a lot of different things with. Right. I can sell that asset. can borrow against that asset. I could sell a piece of it. What’s called a partial. Maybe instead of selling the whole 30 year loan, I’m going to sell somebody a couple of years of payments.
to free up some cash. And if your loan is compliant, the main benefit is now if I want to sell it or borrow or do whatever, I can work with banks and financial institutions. Because from the bank’s perspective, if they’re going to buy a loan, lend against a loan, whatever, they have to know that that thing’s compliant. Otherwise, they’ve got a little different level of scrutiny.
Quentin (08:28)
Hmm.Yeah.
Dan Deppen (08:44)
And so really that’s the main benefit. It’s a really powerful instrument that sometimes investors don’t realize. One that they can even create a loan or two. They don’t even realize they can sell it. They just think I make this loan. got to hold it. And you might choose to hold it, but then you’ve also got a lot of flexibility in what you can do with it. Assuming you made, you created a good one and that’s, that’s what I help investors with.Quentin (09:09)
Gotcha. Absolutely. So what determines ⁓ creating a good note versus creating a bad note?Dan Deppen (09:18)
So there’s a lot of things, right? But from the perspective of someone who might buy your note from you and for you as the investor, your risk level, right? Two of the big hitters are one, the loan of value. So how much of a down payment did I get? And then the second one would be the borrower’s credit as well. Those two things are the biggest factors that will kind of indicate.Quentin (09:25)
Hmm?Okay.
Okay.
Dan Deppen (09:45)
the value of the loan should decide to liquidate it or the risk level of the loan for you as the investors, if you’re holding it. Now, you know, there’s a lot of other things as well. We look at debt to income,know, if that’s huge. we’ll pull the borrower’s credit, which also gets us a list of all their other monthly payments, right? So we know their, their other monthly payments. We know the monthly payment on the new loan. also collect all their income documentation. And we go through that.
compute what their gross monthly income is to figure out their debt to income ratio as well. So that’s one of the main factors that the terms, you know, can the borrower afford the loan? Yes or no. Obviously they want to be able to afford it, but you can also tell how easily they can, you know, afford that loan. So the lower the debt to income ratio, the lower risk. So when we look at like a borrower and their risk profile, there’s kind of
It’s funny because Dodd-Frank talks about eight elements of the ability to repay. But in my mind, there’s the ability to repay. Okay, how much money am I bringing in versus what are my monthly bills and my obligations, right? We also will look at the borrower’s residual income. After you’ve made all those payments, how much is left over? Like, let’s say you’ve got a debt to income ratio of 50%. Those are not all
The same, if your debt to income for somebody’s 50%, let’s say there’s a single borrower, but they make $20,000 a month and they have a lot of toys. They’ve got this free like 10,000 residual income. That’s a much different scenario than the borrower who let’s say is on disability, social security benefits, maybe getting $2,000 a month.
Quentin (11:57)
Yeah.Dan Deppen (12:14)
Their mortgage payments 1000. So their debt income still 50, but they’ve got 1000 leftover versus this other borrower that had 10,000. Oh, and maybe that other borrower that’s on disability has three kids and they got dependents and maybe they’re in a high cost of living state, you know, so there’s a lot of different factors that we have to consider.Quentin (12:36)
Yeah, yeah, I love it. Well, listen, obviously, notes is definitely a strategy that you have used to be successful from buying notes yourself and helping investors, you know, originate notes. I want to see if there’s any other core strategies that you have that you can identify that you know really helps you, you know, within your business. But I also want to know if there’s any personal strategies that you have that really help you just kind ofwhen you need to ground yourself, like when you need to kind of make sure that you’re on a good pace mentally and different things like that. So there are core strategies for your business, strategies for personal use that you can use.
Dan Deppen (13:15)
⁓ yeah. Sure. Talkingabout the yeah. So kind of my key, sort of personal non-business strategy to kind of keep my head straight. I’m, I’m an early morning person, so I’m usually up pretty early. And so I have a, an unfinished basement in my house. And so I’ve got a gym down there and I’m also big into golf.
And when I bought this house, my key requirement was having a basement ceiling tall enough to put a golf simulator. So I spend about every 90 minutes every morning working out and hitting golf balls. And that is what really like sets me up for the day. That’s, that’s the big like personal one that I do. And that’s, you know, maybe a little unique. Not a lot of people have found a house that they could fit a golf simulator in the basement. ⁓ and then, you know, the other.
Business strategy, you know, going a little off, off tangent is one of the things that I do. So I’ve kind of got two businesses. So I got called the underwriter, I help investors create notes. And then I’ve got fusion notes where I go out and buy notes, usually buying existing ones. Um, and, the way that I’ve grown that business. I own about 55 or so notes at the moment, but I’ll use outside.
investor funding to scale that. And the mechanism I used is called hypothecated loans, which is an ugly, like confusing word, but it just means taking a loan using another loan as collateral. So what I’ll do is I’ll go out and I’ll buy a loan at a discount.
And maybe I’m buying that at a 12 to 16 % return. Mileage varies. And then I’ll refinance myself out with a loan from an investor.
Usually, know, they’re usually like lending out of a self-directed IRA. Maybe they’ll lend it like eight or 9%. And so that creates a little bit of a spread. So I get some monthly cashflow out of that. And then, cause I bought the underlying loan at a discount, if it pays off early, ⁓ I can get these little bumps because basically I’m keeping the profit if it pays off early and there’s, no free lunch. And so the risk is if that loan does default, I’m on the hook.
Quentin (16:13)
Yeah.Dan Deppen (16:20)
You know, to handle the foreclosure, to pay for that, to do that work and then continue paying the investor of while I’m doing the workout. So that’s kind of my favorite strategy around the, the note buying side of the house.Quentin (16:35)
Absolutely. No, thank you so much. Definitely. I love asking that question because I really love picking the brain of people to find out some of the personal strategies that like center them. know, think all of us know systems we know is a big thing just in our life and business. But life systems, having systems in place that really can focus you, get you fired up, create creative juices, the flowing through the brain. Like ⁓ I know one of the major things.that I think some people forget about is setting away time to play. Setting away time to play and have fun can really rejuvenate you and get the creative juices flowing. So it’s a beautiful thing, man, that you got a golf simulator. I think that’s just a wonderful way to kind of reset, recharge, and get back at it. And so I really appreciate you sharing that. really do. Yeah, absolutely. So listen, what’s the next real goal for you? I know you got your two businesses.
Dan Deppen (17:25)
Yeah, absolutely.Quentin (17:32)
Are there some target goals that you can see that you’ve set that you’re working towards?Dan Deppen (17:38)
Yeah, so for me, it’s really to double the scale of call, double the volume that we’re doing at Call the Underwriter every year. And so, you know, I mentioned I had acquired it from the previous owner. And it’s funny because the reason I got into that business was I saw kind of a gap. There’s a lot of seller finance activity and there’s really not a vendor. There’s not a very, there’s not a very solid vendor infrastructure there.Quentin (18:04)
Gotcha.Dan Deppen (18:05)
to support it. So I was actually working on spinning up a competitor until I found out that the other guy was interested in selling. So I was able to acquire that and save myself a lot of steps. during the course of 2025, I’ve gone through and, you know, because Call the Underwriter was like many RMLOs where, you know, you basically had a guy kind of just doing everything manually. I’ve put some systems in place, created a lot of standard operating procedures.I’ve gone out and hired some underwriters and now I’ve got kind of the, the machine in place. I’ve got things kind of, you know, stabilized and set up to where it can scale. And now 2026 is going to be about going out and actually growing the business. Now that I’ve got that stable base, had I tried to do that at the gate, everything would have fallen on the floor. Cause I didn’t have the systems to, I wouldn’t have had the systems to manage. if I had gone out and
you know, created some, some growth. now that that’s the plan for 2026.
Quentin (19:07)
love it. love it. doubling the value, putting systems in place, hiring underwriters. It sounds like to me that you know the value of building relationships. And so I want to just talk a brief moment and get your perspective on relationships. Have it really helped you? Has it hindered you? Like how has building relationships affected your business?Dan Deppen (19:30)
Yeah, it’s been huge ⁓ because I haven’t really done a lot of ⁓ dedicated marketing around my business, but I have acquired a lot of new customers just through positive word of mouth. And that’s those relationships. Some of those are investors I’ve known for a long time. Some of those are, you know, new ones that have tried us and had a good experience. I’ve also got, you know, some relationships with different educators.you know, in the space that will create referrals. So yeah, I’ve definitely, you know, leaned heavily on, on, my relationships over the past year or so.
Quentin (20:10)
Yeah,absolutely. I love it. I think relationships, I always say people are the real currency. And so think building very healthy relationships can go such a long way. It can definitely bring you money, but if not money, resources to get you where you need to go. And just on a transactional tip, just building good relationships that you can foster over the years is just an absolute game changer. So I’m with you. believe relationships are a beautiful thing.
So listen, Mr. Dan, is there any other kind of nuggets you feel like would be valuable to people? Is there any kind of words of inspiration, education, motivation? there anything that you wanted to say to people that maybe you feel like, let me just pass this little free nugget on, because I think this may help.
Dan Deppen (20:56)
Yeah, just, just one trick you can do that people probably haven’t thought of. I’ve done this a handful of times over the past year. So, you know, I mentioned how the vast majority of seller finance loans that get created are really bad loans. They might have like bad paperwork. They weren’t originated correctly. And so if you created one of those, those things are hard to sell.One opportunity you have as an investor is you can go out.
buy that paper that has some problems and assuming you buy it at a price that makes sense on its own, right? And then if the borrower is willing to cooperate, which they often are, what you can do is work with the borrower, cancel that bad loan and create a good one. And so now you’ve bought this kind of cruddy asset at a discount.
Quentin (21:45)
Hmm.Dan Deppen (21:52)
and now turned it into a really goodSo people think of like fix and flipping real hard real estate. You can actually fix and flip paper as well. And so ⁓ like I said, I’ve done that a handful of times this past year and it’s one of those, I think it’s a really good strategy and there’s a lot of paper out there with, with flaws and it’s just something that people may not have thought of.
Quentin (22:02)
Mm.Yeah. Listen, y’all heard it. I mean, he just gave you some free games. Listen, I love it. Listen, since you’re giving away free game, maybe you’re willing to do it in the future. If someone wanted to reach out to you, connect with you, collaborate with you, what’s the best way for them to reach out to you,
Dan Deppen (22:23)
Yeah.Yeah, the best way is just to drop me an email at [email protected]. And then if you’ve got, you know, questions on seller finance, other things you want to know, we’ve got a lot of resources on the website at calltheunderwriter.com. But yeah, it was like emails the easiest way to. To reach out and get me.
Quentin (22:55)
Listen, I love it, sir. Thank you so much, Mr. Dan, for coming through. Thank you for your time. Thank you for your story. Thank you for your perspective. I know this has been a valuable, valuable podcast episode for our viewers. And so I really appreciate you coming through, sir.Dan Deppen (23:12)
All right, well, I appreciate you having me.Quentin (23:14)
Absolutely, absolutely. Well, listen, y’all heard Mr. Dan, he’s giving you nugget after nugget, things that you can think about, things that you can chew on, even giving you his information if you wanted to reach out. So definitely reach out to Mr. Dan, but definitely make sure you are subscribed here. You do not want to miss out on this content and people that we keep bringing up, I tell you, just keep getting better and better so we don’t want you to miss out. So thank you, Mr. Dan and everyone else. We’ll see you on the next time.
