Is your rental portfolio bleeding cash every month? In this episode, we sit down with Derek Blades, the "Kansas City Owner Financing Chief," who shares his raw and honest journey from owning 120 rental homes to nearly losing it all. After finding himself underwater by $15,000 per month, Derek discovered the power of note creation and seller financing to turn his business from deep red back into the black.
Whether you are a seasoned landlord feeling the "teeth kick" of property management or a new investor looking for a scalable model, Derek’s "Build-to-Finance" strategy and his mastery of Contract for Deeds in the Kansas market offer a masterclass in modern real estate investing. We dive into why he’s selling his 38-note portfolio, how he qualifies buyers without traditional banks, and why he’ll never go back to the traditional rental model.
Key Takeaways from This Episode:
- The Rental Trap: Derek explains how he scaled to 120 houses using commercial lines of credit but ended up losing money due to high maintenance, vacancies, and ineffective property management.
- The Pivot to Paper: Why shifting from being a landlord to being the "bank" through seller financing eliminated the headaches of "flushed rubber duckies" and shifted repair responsibilities to the buyers.
- The "Build-to-Finance" Model: How Derek and his wife are building 3,000-square-foot custom homes for 75% of their value and seller-financing them to high-income earners who can't get traditional bank loans.
- Contract for Deed vs. Foreclosure: A deep dive into why Kansas law makes Contract for Deeds a superior tool for investors, allowing for a two-month cancellation process instead of a year-long foreclosure.
- Underwriting for Success: The importance of using RMLO (Residential Mortgage Loan Originators) and third-party underwriters to ensure "stay and pay" buyers.
- The 1% Rule Myth: Why the 1% rule is dead in flashy markets but thriving in the Midwest Rust Belt, where you can buy for $75,000 and rent (or finance) for $1,200.
- Exit Strategies: Insights into selling a portfolio of notes for 85 cents on the dollar and how to create an attractive yield for institutional and individual buyers.
About Our Guest: Derek Blades
Derek is a Wichita-based investor who specializes in distressed debt, owner financing, and new construction. Along with his wife—the construction mastermind—he has built a pipeline of properties that move from acquisition to owner-financed in as little as three days.
Connect with Derek:
- Website: ownercarrykansas.com
- Facebook: Follow Derek Blades for daily vlogs on his latest projects.
Don't forget to LIKE, SHARE, and SUBSCRIBE for more deep dives into note investing and real estate strategies!
Take action today—because as Derek learned, sometimes you have to get "kicked in the sack" to find the strategy that actually builds wealth. See you at the top!
Watch the Original VIDEO HERE!
Book a Call With Scott HERE!
Sign up for the next FREE One-Day Note Class HERE!
Sign up for the WCN Membership HERE!
Sign up for the next Note Buying For Dummies Workshop HERE!
Love the show? Subscribe, rate, review, and share!
Join the Note Closers Show community today:
