Paige Panzarello of Cashflow Chick

By Christina Suter on Feb 24, 2018 at 08:36 AM in Real Estate Issues
Paige Panzarello of Cashflow Chick

This week I had the privilege of interviewing a fellow investor and friend, Paige Panzarello. Paige and I met over two years ago and bonded instantly when we shared our real estate stories as well as what it takes to keep going and to be brave when your backside has just been handed to you. Paige has been involved in real estate investing for over 25 years and is an expert in her field and is currently focusing on non-performing notes. She teaches the Building Wealth with Notes workshop and she's created a community of people who are learning about and teaching about transformation, freedom, and abundance. Paige also educates people on the importance of Passive Income, deal evaluation, money management, how to wisely interact with money, and what a profit and loss and balance sheet should look like.

Paige kindly shared her backstory and how her real estate journey has gone thus far. "My story begins in 2007 when the real estate market crashed. I was fortunate to be liquid and have a lot of assets to sell, but the people who owed me money couldn't pay me, so I pretty much had to fire sale everything to pay my people off. It took me three years to do and I didn't have to file for bankruptcy and walked away with nothing. I lost a total of 20 million dollars which is a huge number and I don't mean to be cavalier about that, but I share that because it's a large number and it's something that can come back if you have the will and support system. I was fortunate to have people around who supported me and after a break from investing, I came back to it because it's my passion. I put myself in the position to start again and help others from what I learned."

I am a great believer in people having that or a similar backstory, maybe because it happened to me, but I trust people who've had it, lost it, and got it back again and Paige exemplifies that. Paige said she agrees and that it's not only a matter of clarity for you and your investing, but a loss and rebound shapes who you are as an investor. She hammers that point home when talking to people because they need to know their risk tolerance and how much time they want to involve. Knowing who you are and what your risk tolerance is will dictate the medium by which you use and invest. Paige says she has a very low tolerance for risk and calls herself "risk adverse" because she's been there, done that, and doesn't want to do that [lose money] again. Because of her risk tolerance awareness, she does everything in her power to invest in mediums where she has control in order to minimize that risk. 

Despite Paige being risk adverse, she deals heavily in non-performing notes which she agrees, the two things are in contrast to each other. She says that she got into the note space knowing it was important to her to first, have different exit strategies to mitigate risk and secondly, to have control. She said "When you're in the note space, it's really important to say that as the bank, you have a lot of control. I don't have to rely on borrowers to perform. I prefer it, but I don't have to rely on it and the important distinction there is I don't have to rely on anybody or anything for my outcome. We do extreme due diligence and buy non-performing notes at a substantial discount and we do that not based on the unpaid principal balance, (the amount of money the borrower owes) we buy on the current fair market value of the house. I only buy first position non-performing notes, never seconds.When you're dealing in seconds you rely on and evaluate the borrower. As the bank in first position, evaluate the collateral that is securing my investment dollars. I only have to rely on the current market value of the house, not the borrower. We have people take pictures of our properties and comps (CMAs) and we buy based on that price. If the market drops we're okay because we build in a cushion of equity."

I asked Paige, once she's purchased a note, what does she do to make it perform? 

"If we have a misstep we look at whether we can make a correction if we have an 'oops'. We generally only use our of our available twenty-three exit strategies. One is to work with our borrower by not directly dealing with our borrower because we aren't licensed debt collectors so we employ a team of licensed debt collectors. Those collectors reach out on our behalf and contact borrowers. When the borrowers are contacted, most of them are glad to hear their new bank wants to work with them to help them stay in their home. We can then modify their loan by lowering their interest rate or lengthening the loan. We don't give up our rights in a permanent modification because the borrower needs to prove themselves and come up with a little chunk of money and perform for a certain period of time (usually 8-12 months). We call that seasoning the note and when they do that, we forgive a portion of their debt (prinicpal reduction). We incentivize borrowers to pay on time every time and they get to stay in their home."

Do you season the note to sell it? What do you do after a year or two with that note?

"We have control of our destiny, so yes we can sell it to another note investor and reduce the purchase price to them. Once a borrower has paid on time or a year there are certain government programs through FHA that will allow us to refinance our borrower out so we help them get a new loan to pay us off. Or we can just keep going, cash flow for a few years, we can sell a partial, which is a front-end piece of monthly mortgage payments."

Is there was a such thing as a bad note? 

"I don't believe there are any bad notes, there's only buying notes badly (not doing due diligence)."

2. What some of the returns people can make on non-performing notes.

"This varies. Generally speaking, the norm is about 15-20% and we do better than that. There are riskier investments that generate higher rates of return, but we try to mitigate our risk and create great returns."

What's a tip people need to do and not do?

"Due diligence, due diligence, due diligence."

I second Paige's answer and would add to that— work with someone who knows how to do the due diligence. As a new buyer, you may not know what the due diligence should look like in that space.

Paige can be found at where she does a live monthly webinar and you can ask questions there. She also teaches a 3-day workshop three times per year and that info can be found at Paige's website is and there you can schedule a free 30-minute call.

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