There’s a sudden rise in self-proclaimed talkers who don’t walk the walk. This has been occurring in the note industry more often, which makes it an alarming threat to actual real players or genuine newcomers off to a good start. Bear in mind that business is always evolving. Factors include pricing changes, market conditions, foreclosure laws enacted, and things get delayed. The only way of truly understanding this on an expert level is to literally be on the grindstone on a daily, weekly, and monthly basis. If you want to be respected in the industry, you have to continuously make offers and work through assets. Scott discusses the importance of closing deals before you become an online expert, which is a pressing topic, now more than ever.
Listen to the podcast here:
Walk the Walk Before You Talk the Talk: A Guide to Closing Deals
Our topic is a little bit about something that I see going on in the note industry on a pretty regular basis. It should be very concerning to everybody who’s an actual real player or actually somebody who’s brand new in the industry is looking to get started looking to learn stuff like that. It is the sudden rise of the talkers who don’t walk the walk. They talk a good game but they don’t walk the walk on their business. You have to be very concerned about that because the fact is this business is always evolving. It’s always changing. There are pricing changes, market conditions changes, foreclosure laws enact, things get delayed. There’s a whole variety of different things that change. The only way you can understand this is literally have your nose to the grindstone on a daily, weekly, monthly basis. Making offers, work either assets. It’s an important facet of what we do.
Unfortunately, I see more and more people springing up that haven’t bought anything in a long time and they’re pivoting. It is okay to pivot, but they’re pivoting to try and become an expert and talk about the market, teaching as if it was the market from a year ago, two years ago or three years ago. You can’t do that. We understand businesses have changed. I’ve had to evolve my business definitely over the last ten years. I had to change it up a little bit in the last year where we start seeing notes, individual or smaller notes get bid up. It makes sense why I evolved to start buying a lot of contract for deeds. I evolved, I changed my business model a little bit to help stay in the game. I bought thousands and thousands of deals over my ten years. If I were to stop now, what I have to say will be relevant for a little while. Of course, it would but at some point, whether it be three months or six months, if I’m not buying anything or working through things or making offers, I should shut up.
Unfortunately, I see a lot of people that haven’t bought anything there. They’re evolved, they’re like, “I’ll write a book about what I’m doing or I’m going to start teaching or I’m going to start offering advice.” I’m like, “You can’t do that. You’ve got to keep buying assets. You get to keep working in this business.” If you’re working on assets, that’s great. You’re totally in the game. If you’re making offers, swinging in this or getting encounters, I am not talking about you. I’m talking to people out there that haven’t bought a note, had been doing this. It might not be in a long time, not brand new but they’ve been in the business and they aren’t buying anything. They stopped buying anything but now they’ve become an expert. The only way that would make sense is if you become an expert in specific niches of what you’re doing.
What Have You Closed Lately?
Rob Hytha has done a good job pivoting from working for USMR to FIXnotes.com with this collateral company and his due diligence aspect of it. He’s working through that. That’s a great pivot. I’m not going to name anybody else out there doing bad pivots. There’s a guy a year ago who hadn’t bought a note, hadn’t bought a first note in some time but he was going to write a book about first note investment and I go, “When’s the last time you bought a first lien?” “Five years ago.” I’m like, “You can’t write a book about investing in the first liens when you haven’t done it in five years. The market has changed dramatically in the last five years.” The thing you’ve got to keep in mind, we like to coin the term, #whathaveyouclosedlately and what we do.
What have you closed lately? Let’s get some photos up on there, deals that you closed on a regular basis that you just closed recently. That’s an important thing. If you haven’t closed anything lately, you can’t do it if you’ve bought a note a year ago, but haven’t bought anything or made bid offers, you can’t do that. You have to be very careful too because I know a lot of people love the marketing aspect of what we do. Don’t get me wrong. I love marketing, thinking about the best of what I do. I enjoy that but I love it more when I have actual real deals at work with their case studies and things like that. We’re going to have a whole lot of case studies rolling out here on stuff that we’re coming to the end of our workouts on, stuff has been performing for a while. Stuff that we’re working through, evictions, foreclosures on, so that we’re selling off. Lots of case studies. T
That happens as you start buying a portfolio. I know you’re in the weeds or up to your ears in collateral files and workouts and attorney fees and things like that. I get that. You have to be careful. I see this happening more and more and it’s very concerning. It’s very alarming, especially when you have different Facebook groups pop up or you get invited. I get invited to so many freaking Facebook groups. I’m like, “Who is this guy? Who is this gal?” I’m like, “What do they know?” There’s nothing wrong with building a community. I have nothing against that. I think building communities is one of the strongest points to the note industry. It’s what you do with that community. If you’re using it to try to promote your business, that’s not a good thing because the community is all about the community. It’s not about you.
When we created the WCN Crew Facebook page, that is not about Scott Carson. Do we post our webinars there? Do we post updates? Yes, we do that but that is more so about our community. It’s about our students. It’s about growing relationships and enhancing the networking that we believe is important in this industry, the community. When I set out ten plus years ago, when I sold everything I had in Austin, Texas and started driving across the country, I was putting my money where my mouth is. They’re going to get out, visit assets, visit banks, visit asset managers, make offers, bylaw stuff. I did exactly that. It totally exploded my business in so many great ways and involved me to where I’m at. I would have never imagined myself doing that for three years, traveling nonstop and buying assets and speaking and doing all that stuff. I’ve toyed with the idea of jumping on the road and taking a week to drive around and take a look at assets. Do that again. It’s about telling you to look at some assets we have available.
The thing I want you to keep in mind out there is be careful who you’re listening to. There’s nothing wrong. I’m a very big caveat here. I see an increase in webinars, which I love that. I think it’s a phenomenal thing. There are enough vendors out there to do a ton of webinars across the board. Try to be original with your webinars. The only reason I say that is it’s important to you. If you’re doing webinars, be original. Don’t copy something we’ve done. Don’t copy something else has done. Do an original webinar because that is where you drive traffic. If you’ve done something or had somebody on who’s been on something before, you’re not going to see a very big increase in your opt-ins or tenants because they’ve already heard that same old story. I’ll give you an example. A lot of people have heard my three Fs: Find, Fun, Flip presentation all across the country. That’s why they don’t usually repeat a real estate club REIA more than once a year because it’s the same thing. It’s a great presentation, it gets tweaked a lot of times.
I’m always constantly tweaking it with new deals, new updates and solutions for wherever I’m speaking at, deals in that market or deals close to that market or what’s going on in the news. You have to adjust your business. Unfortunately, if you’re at a point where you’re not making any offers, a lot of seconds investors are evolving into the first, which is great because there are still plenty of deals on the first side. There are plenty of contract for deeds. There’s plenty of deal flow out there for everybody. You just have to evolve. If you don’t evolve, you are going to be extinct like the dinosaur. You’re going to be out of business before too long and I’m seeing some bigger names. They’re making a pivot and that’s great. Pivoting from notes to traditional real estate.
Go Out and Make Offers
They’re pivoting from second to first. There’s nothing wrong with that. If they’re pivoting from first to contract for deeds or they’re pivoting from apartments to residential stuff. A pivot happens all the time in this world. You have to be flexible. You’ve got to be agile. As my high school football coach my freshman year, Ken Shaffer, used to say that you’ve got to be agile, mobile and hostile. Until we did. We called it in the morning. Agile, mobile, hostile, getting stretched out so you could be ready for whatever we’re going to practice that day.
You have to practice what you preach. If you’re talking about first, you’ll be buying first. I’d rather talk about contract for deeds. You’ll be buying contract for deeds. You’re talking about the note business. You need to be making offers. You need to be closing deals because that’s what it all comes from. We have enough people out there and that’s what always drives me bonkers. We have enough people out there who are educators doing the business. We don’t need people coming in, “I’m the best.” “How many deals you’ve closed?” “I’ve closed on two.” You can’t do that. You’ve got to keep buying assets for your portfolio. You’ve got to keep doing. You’ve got to keep making offers.
That’s the most important thing I could tell each and every one of you. Go out. Make offers. If you’re not having success in what you’re doing, drop me an email at Scott@WeCloseNotes.com, my main email address. Yes, I do open my own email. I do answer my cell phone. It’s best to send me a text message on my cell phone than it is to drop me a voice message because I’m pretty busy through out there. I’m usually checking my voicemail at 2:00. I had a lady email me, “I need a script for calling banks and asset managers.” I’m like, “Go to this video we did or you can sign up for a virtual workshop or it’s in the virtual workshop manual.” She’s like, “No, I’m not paying for that.” You’re not going to pay for the stuff that we put out there. That’s completely fine. You can try to learn off a video. I get people being strapped financially. That’s why we put so much content out there for you to watch. Sometimes you want to go from zero to 60 in six seconds, not six months.
The biggest thing I want to stress is deal with people that are walking the walk, not talking it. If they walked the walk, they usually don’t have to talk because it automatically comes out and I love the posts that I see from people, “I just closed on this deal. I just closed on this asset.” That is a beautiful thing. At some point when you’re buying enough assets, stuff happens. People get to know your asset managers. Your vendors all know who you are. That is a gorgeous thing that leads to more business. It leads to pocket deals. I have plenty of people that send us deals because we close on a regular basis. I have one pop up my email a minute ago. What I’m trying to get at is to easily look at where the market is. It’s evolving. We can agree to that. You’ve got to be ready to evolve with the times and the only way to do that is to keep your nose to grindstone. To keep buying deals. To keep moving on.
There are people getting out of the business or people getting into business every day, “This business is too hard.” I hear that too. That’s fine. “I don’t want to do that much work. I’d rather write a check.” That’s fine. “I’m going to go back to what I was doing before because I find a little bit easier.” That’s fine. There’s nothing wrong with that. If this business was easy, everyone would be making it a business. It is not the easiest business out there. I got one deal that is going for year two and a half in Chicago. I’m waiting for an email from attorney because you have to go to court to try to evict this on his last straws and trying to sue everybody who from the beginning to the end, we offered one month.
Work Your Plan of Attack
We offered a short sale to this guy and he does not fall through anything in the last two years. That’s why I hate Cook County. The judge gives another extension. I’m going to fly to Chicago. I want to have some words with a judge. Hopefully, my attorneys got some good news for me on this one because this is a big asset that has been a fricking ball and chain around my ankle for the last two years.
The reason I know about Chicago is I have assets there. They’re the reason I know about contract for deeds and what’s going on because I’m buying assets on a regular basis. You guys can do the same thing too. Obviously if you’re brand new to the business, the best thing you can do is have some game plan. Every game plan is going to be completely different and so be you. Play your game, be who you need to be and work your plan. Work your plan of attack, not anybody else’s. Let me give you an example. We use the whole $250,000 in twelve months example because it works if you are going to work it like that. Let’s say you need $5,000 coming in of cashflow to cover your bills. You need $5,000 coming in. Let’s say you don’t have enough money, you’re going to use your partner’s money. Somebody you know or you’re going to use JV money. You’ll basically pay double, let’s say $10,000 you need to come in. You developed that $10,000 by $500 a month average cashflow based off of payments or open principal interest payments added a little bit, so $500 a month is coming in on average. Divided by $10,000 what do you get? That’s twenty deals.
We all know that every offer you make is not going to get accepted. Most investors have about a 10% approval rate when they make offers. You make twenty offers, you probably get two accepted. Take that twenty notes times ten and that’s 200 bids you need to make. Two hundred bids should result roughly about twenty approvals initially after the due diligence once all that works down. Two hundred bids divided it by twelve months. It comes out to eight bids on average. Eight times twelve is sixteen. About seventeen assets you need to make a bid on each month. You divide that by four, that’s roughly four offers a week you need to be bidding on.
Many people make the mistake and only going to bid on three or four assets at a time. Stretch yourself. Go big. Make an offer on ten if you’re used to making one. If you’re used to making them a ten make it twenty. Because things will fall out, things will get bid up. You’ll eliminate bids because of due diligence flaws, more taxes, values, condition of property. There are a variety of things to do that. Realize that you have the opportunity to do that. If you’re making that, if you work that system, trust me, you’ll be closing deals in twelve months. I would love to say that all twenty of your assets you buy on term interpret your performing assets. I would love that.
We all know that’s not true but half of those probably won’t be great performers. It doesn’t happen but that doesn’t mean you’re not making money because those are the ones who you’re either foreclosing on, you’re getting beaten lose Cash for Keys. The thing to keep in mind, those will probably be bigger checks whether you’re selling those off, wholesale them or taking it and enlist them to the MLS, REO sales. You probably see about $10,000 if not more, hopefully making more than $10,000 on your side of the split. If you’ve got ten, that’s $100,000 on those ten deals.
Make Offers or Get Off
The other ten are bringing in $500 a month. You’re paying your JV partner well and you’re making money as well too. If you’re adding a little bit extra, having a borrower who’s getting to re-perform a little bit extra to the table, $2,000 usually, four months of payments to begin with. This is what we try to get. $1,000 at least if not $2,000 at least, that’s an extra little bit of extra scratch going in your pocket as well. Keep in mind if you’re working a system, you’re working in a model. If you’re working through your bids and you know what your numbers need to be, work them. You’re walking the walk.
If you don’t bid, you are a person that attends something all the time, but it’s not making offers, you’ve got to make a decision at some point. Make offers or get off. You’re only wasting your time. I know some people like that, the itch of hanging out. That’s great. There’s nothing wrong with it. I get that but at some point, you’ve got to either start walking or stop talking. If you’re walking along, talking about your business, share it. It’s a beautiful thing. If you’re not walking in it, you have to quit talking and you can’t be talking and walking. Because we’re walking. I’m not trying to jump on a soapbox too long on this. It cracks me up when I see people talk about online, “I’m going to start offering a charging for my time.”
If you’re doing the deals, by all means, go ahead do it. Unfortunately, most people are going to pay for time until they’ve seen you close things on a regular basis. They see you doing things on a regular basis. Honestly, there are a lot of time vampires out there. A lot of time vampires who don’t want to pay for anything, they don’t want to take any action. They want to be what I call an EI, an educated idiot. Unfortunately, it is. There are plenty of educated idiots out there that aren’t doing anything. We need to focus on those that are taking action and making things happen. As Laura says, “There are walkie-talkies.” It’s okay to show up, I get it but honestly, if you’re making offers, you’re getting accepts or counters or declines. You’re much happier than not doing anything. When we don’t make offers for a week or so, I start getting antsy here in our office. We’ve got to get some offers. I’m always constantly trying to have at least twenty offers available. We slowed down a little bit, taking vacation, ramping back up, giving them some more offers out. We’re going to be making a bid on a chunk of assets, a pool of assets here. That’s the thing I’m trying to get at everybody. You’ve got to realize that this business, there’s only about 5% of people do anything.
All the workshops that we do with all the online stuff, only about 5% of people actually take action and I wish it was so much more than that. I wish there were a lot more people taking the action. There are people that are learning. There is the other first cusp of that, but making offers is the second big step. The third thing is you half the market. I talk to people every day, “We’ve got a little money in our 401(k), we owed them money in our IRA. We’ll use that to get started,” and they don’t start marketing. You’ve got to market. Trust me, those that market that had don’t have a problem raising capital, they don’t have a problem deals closed or finding deals because they market. Those that refuse to market only make their entry into this business or the success, they’re only delaying. They’re only delaying their success because they don’t market for what they do.
You’re marketing. You’re talking, you’re making offers. You’re walking the walk. I could go on and on with people that are closing deals on a regular basis or they’re funding deals. Other people out there, they’re doing things to explode their business. There are so many different ways to make money in this business, either I’m going to be a passive investor, be more of an active investor, I’m going to be a vendor to help out the special services, lost mitigation, whatever. There are a lot of ways to do it. Whatever you pick, walk it. You’ll be much happier, versus talking.
One of the best things I could tell you is if you’re not making offers, I guarantee it’s probably eating inside. It’s probably aggravating you on the inside if you’re not doing the things that you need to do. I get it if you’re working full-time, by all means, you were in a different avenue than most people that are here at this full-time. Part-timing, maybe your offers are showing up. You’ve got a job 40, 50, 60 hours a week. I get it. Plus, you’ve got family. I get it. What I’m talking about, those guys out there that are not taking advantage of the opportunities, not taking advantage of the time that they have to make things happen, the Cody Coxes who are juggling work to make things happen.
Always be Marketing
I understand sometimes we bite off more than chew. I’ve had several investors reached out to me recently like, “Scott, can you help me sell these assets? I bought off more than I can chew. I’ve got too many irons in the fire.” Not a problem. Let’s dive on there. Let’s reach out to this individual. Let’s see if we can’t get these things move for you to what you have to do on a regular basis. Rinse and repeat. Always be marketing. Always be making offers and always be looking at assets. Reaching out for asset managers. Reaching out for capital, raising capital. Three things. Everybody falls into one of three categories. Everybody’s a buyer, a seller or everybody is a funding source. Everybody in one of those three categories for the most part. That is why your market is important. If you’re making offers and you’re having a hard time raising capital. If all you do is complain, and this is what drives me bonkers. I see this all the time. I see there are some bigger pockets. I see this on LinkedIn. I see this on Facebook people bitching and moaning, “I can’t find deals. The price is too expensive. The shysters are bringing too many students in what we do.”
Get off your ass and go do something. If all you do is saying negative, you’re the problem then. You don’t think negative things happen all the time to everybody. Crap happens. Deals get delayed, funders walk away, bids get countered. Borrowers trash properties or borrowers delay evictions foreclosures. It happens all the stinking time. Bids get countered back and you’re like, “Are you smoking crack over there? Pass the crack pipe.” Things like that happen all the time. You can either choose to brush it off and have the next mentality and keep walking. Are you going to sit here and be a Debbie Downer and bitch and moan about everybody else?
There are too many Debbie Downers out there at the point where I unsubscribe, unfollow, unfriend, block. If you’re a Negative Nancy, all you do is bitch about things and you’re not doing anything to make your business better and you’re only complaining you’re the problem. Honestly what’s funny is you can either choose to allow that into your life, into your business and that affects how you walk, it affects how you talk or you refuse to have it and you will see a difference in how you talk. You see a difference in how you walk. You see a difference in how you approach things. If you’re constantly looking at the negative things, you end up spending your nose on your phone versus doing something.
If you look at of one of the most effective tools that was ever used in one of my jobs that I ever worked at was a list. We had an hour by hour list. One of the first jobs I had this at a list of track my daily habits was I was a pool technician. First job after my freshmen year in college, I was a technician down in Port Aransas, Texas at Port Royal Condominiums. We had an hour by hour chart of what we had to track. We do that well. We turn in that chart in every day. I used to think we were sitting around doing nothing. Sometimes you’re on pool slide watch where you sat there for four hours making sure kids weren’t doing something stupid or standing up on the slides or diving into the shallow end.
As a pool technician, I had a lot of things to do. Running around, picking up trash, organizing things, making sure the salinity was right during scrubbing, you had to put that down there. It kept me on track. It kept me on task for everything that I needed to do. I worked at a Chase Bank as a branch banker. We had a daily point system. If you guys don’t know this, most of your assets, your most of you bankers at banks are paid a commission, paid a flat salary, and then also commission. Most of the times a flat salary is somewhere in the mid-30’s. If you got a degree, any type of a securities license, insurance license and things like that, you’re probably going to be making somewhere around $35,000. It was $33,000 to $35,000 when I started over twenty years. It’s probably up closer to $40,000 who knows. You have these huge opportunities to make profit on the products you sell; credit cards, mortgages, investments, cross selling. That was one of the best sales train I ever had as a banker.
You keep track of that because when the month came out, when you had your commissions, you match up with what you supposedly sold with what you’ve got credit for. There are always errors and they always left stuff off. You had to track this stuff. On a daily basis we track, “How many accounts did I open up? Who did I open up? Did they get them set up with this? How many investments? How many credit cards that we get people approved for?” It’s literally a day by day basis of what to do, what I focused on. That way I knew what to expect coming into them. I wasn’t surprised if my check rolled in.
One of the things that I’ve done, and I’ve seen that in the real estate industry, is when our buddy, Roland Frasier, I had a chance to spend some time with him years ago. He came up with a 30×30 matrix to help you walk the walk. Basically, it’s a calendar on one in days of the month down and actions across the top. You had little boxes to check off, “I sent an email blast out this day, I sent a postcard and asset managers or to IRA investors,” all these 30 plus items across the top for traditional real estate investors. What I did is I tweaked that about two years ago and we turn that into 30×30 matrix. That helps you identify, what can I do to and you’re not going to do all everything every day. That’s impossible.
If you look at your calendar and you start tracking how effective you are each day, if you’re doing three things in a day, Facebook posts and email blast, maybe do a short deal video or something like that., you’re doing a variety of different things to keep it fresh. That’s walking the walk, that’s sharing what you’re doing. That’s marketing. Eventually at the end of the month, if you did three things a day times 30 days, that’s 90. You’ve got an A. I guarantee you, if you did that for three months, you’re going to be inundated with potential private investors and then also deals with your marketing out to asset managers or things like that. Those are the two biggest things that determine if you will. It all starts with the marketing; all starts with what you do.
Unfortunately, most people don’t know how to market because they come from a job. They don’t know how to hold themselves accountable on a daily, weekly, monthly basis. We get sidetracked with Oprah. We get sidetracked with our email. We get sidetracked with Facebook. We get sidetracked with family and drama, politics, CNN or fake news or sports or whatever like that. You watch movies all day long. We get sidetracked with that stuff. It’s very easy to. I get that. If you need help learning how to walk, there is no yellow brick road to lead you to the Land of Oz. If you need a path, what I would do is check out the video, just go to our WeCloseNotes.TV series and do 30×30 matrix. You’ll see it pop up. It’s a great video we talked about but it’s very simple to create a spreadsheet. It’s the days of the month from the first or the 31st across the top, write 30 things that you should be doing and could be doing in your business or your real estate business.
I guarantee as Laura Blunt says, “It allows you to avoid the drift and avoid you to stop drifting in your note business because the fact is you’ll be focused.” We’ll stay on task and you always have something to look at your calendar. Which I know some people put it right by the calendar. We’ll do something special in the episode for the 30×30 matrix. We’ll talk about those 30 things you can do, a great episode for everybody and we’ll go from there. People that are most successful, the ones that are more focused on just specific things and they get this specific thing done versus drifting. We all struggle with drifting. Yours truly as well struggles with drifting.
Stay focused, go out and make things happen. Make offers, market. Walk the walk before you talk the talk. Trust me if you walk it, you won’t need to talk. Basically, walking and carrying a very big stick of deals to send your message out to everybody out there. That’s all. Go out and make something happen. Seriously, take action. That’s what I love about the note business. There are plenty of people taking action that can outdo those that are Negative Nancies out there. See you later.