EP 339 – How To Avoid The Clusters As Note Investors

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NCS 339 | Avoid The Cluster

NCS 339 | Avoid The Cluster


At some point in our business careers, we will face a number of clusters that prevent us from just moving forward. And sometimes, we become oblivious to them that we can’t find our way out. As note investors, it helps to look back at ourselves and figure out whether we ourselves are holding the business down. So Scott discusses the importance of untangling the “Christmas lights” that we all face and how to eliminate the confusion that we all face from time to time as note investors. He talks about the basic things you can do to avoid the cluster when you’re just trying to get rock and rolling, asking us to ponder into ourselves as well as giving great tips on building your lists in this business.

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How To Avoid The Clusters As Note Investors

I’m excited to be here as always with you. It’s nice to sit down and visit, talk about the market, talk about deals, talk about marketing and trying to help people overcome obstacles in their note business. That’s what I want to get at this episode’s topic. I want to call it Overcoming Clark Griswold. If you know who Clark Griswold is, you crack up a little bit about this. Every Christmas, one of our favorite movies is National Lampoon’s Christmas Vacation. It’s a true Christmas movie that you have to watch. If you haven’t watched it, I don’t think you’re American. It needs to become a staple in your Christmas list. One of my favorite scenes is when Clark is out putting lights on his house. Rusty came out and helped him. Rusty’s pulling the lights out of the box and it’s one freaking knot of Christmas lights. It’s a cluster F. Everybody goes through that at Christmas. No matter how well you organize your cords or organize your lights, you end up with a cluster. That happens in the note business.

I asked what struggles people were having. You can’t struggle with everything because what happens a lot of time is people get so scared of where everything is at. We have so many different moving parts in the note business and people often get confused and they’re like, “Where do I begin?” I’m showing up, I’m listening, I’m watching people. Sometimes over analysis paralysis of where to begin. What can I do? I may not be the most technologically or marketing savvy individual, where do I begin? That’s what I want to talk about is what are the basic things you can do, simple things to help you avoid that freaking knot, to avoid the cluster that comes when you’re trying to get rock and rolling. I know it’s extremely easy to run into that. It seems like I’ve got to do everything.

Don’t Judge Yourself On Where Others Are At

Let’s make one very big clarification. You don’t have to do everything. Don’t do everything. You run a couple place and once you’re good at a couple place of things, then you add something new. Once you get rock and rolling on some stuff, then you add something new. What are the basic things that you can do to get things rock and rolling? First and foremost, don’t judge yourself to where I’m at. Don’t judge yourself to where others are at. You’ve got to run in your own lane. Focus on what you can accomplish, not what everybody else was doing because that’s the first thing to drive yourself bonkers. Just because the idiot next door is putting out $20 million Christmas lights doesn’t mean you need to try to beat him. You may like to have one single strand around your door or no lights at all, and that’s completely fine. You are your own Christmas vacation story. Avoid the Clark Griswold mentality, “I’ve got to do everything.” You don’t have to do everything.

Quit thinking you have to be me. Quit thinking you have to be Eric Hyde, Chris Seveney, Gail Greenberg, Jay Tenenbaum or Wayne Snell. You run your own race. You were only competing with yourself. The fact is that as long as you’re doing one thing every day, you’re growing your business at least 1% and one little bit extra each day, you’re getting better. You’re getting better at your craft. That’s what you have to work on. You have to own your craft on a daily, weekly, monthly basis. The first thing that you need to do that’s more important than anything else in your business, you have to start with a list. This is the opposite. I know everybody is like, “I want to look at deals. I want to look at assets. I want to look at tapes.” That’s the last thing you need to focus on. Don’t focus on the tapes. Don’t focus on the assets. Focus on building a list of people.

Three Lists You Need To Build

Whatever happens in the long run with notes or fix and flips, one thing that is going to identify and unite you with everybody else out there is your list. Your money comes from your list and there are three lists that you technically build in this business. The first thing to look at doing is building a general database of a list. The first thing you want to do with that is where you want to spend some time at building is your LinkedIn profile. Go to LinkedIn, create it. It’s got a great prompt to walk you through with that. Your LinkedIn profile, once completed, can work as your website initially. In the long run, you’ll need to put a website together in this business. Initially, a LinkedIn will work so well with you. It will help you find people. You connect your email to it and it’ll go out and find people in your Gmail that you’ve emailed out to. Help you find people that you’ve communicated in the past and connected with. That’s an easy place for you. If you’re afraid of email, it’s a great place to go there to start finding real estate investors. That’s the first thing you need to do.

The second thing you need to do, if you’re getting started and you’re trying to, “Where do I begin?” Go out to your local real estate club or go to an event. Go out and network with people. If everybody that went to the event was smart, they would jump on the Facebook group or the Meetup group and connect with everybody else that showed up, “It was great to meet you.” When people are passing out cards, that’s great. It was an intimate location of that when I saw people sitting by themselves, I was like, “Don’t go sit by yourself. Go talk to people. Go sit next to them.” If you want to plug in, plug in to the energy of the group, plug into the network of the group. If it’s a well put together list of people that you’re united with or around with, that can get a lot of momentum going in your business and get a lot of things started. It’s one of the best things I’ve talked about in the past that helped me boost my business to that next level. We’ve got some few assets, but not as many positive things happening as I would have liked to.

NCS 339 | Avoid The Cluster

Avoid The Cluster: You’ll have a lot of people come out, but not everybody’s going to fit into your space.


I went on to a note-specific event. I met with a bunch of people there. Passed and got a lot of cards. I immediately went to step number two. Step number two, avoiding the Chris Griswold in the note business and start emailing them. Start putting these people that you’re meeting into a database. Take their business cards, take their email address and put it in a database and email them on a regular basis. It doesn’t have to be every day. That was impossible a lot of times for many people out there, they’re like, “What am I going to do with every day?” Until you’ve got to the point where you’ve marinated your brain to be able to come up with something on a pretty regular basis. Focus on sending an email to your database at least on the bare minimum once a month, preferably once a week.

Taking that database, putting in something that you emailed initially, and starting a Spreadsheet. Send an email out to everybody, maybe you don’t meet 50 people. Maybe you meet five or ten quality ones. Sending an email out to the people that you meet is a great thing to do to touch base or to follow up, “It was great meeting you. I’d love to meet for coffee. I’d love to jump on a conference call. You’re in Tampa? Let’s meet in Tampa at some time.” I’m the biggest believer that the community is one of the things that you need more so than anything else in the note business. There are not as many of us out there, there are other things. It’s a pretty tight-knit community of people making things happen. You need to plug into people, you need to plug into the group.

There are other people that are doing events in different parts of the country. We’re so excited for everybody else because that’s bringing the community together. It’s bringing people together into a place at least where people can get recharged. Let’s face it, if you’re working a job or you’ve got other things you’re working on, the ability to get recharged is a very big event, is a very big need to get out of the negative energy. Ryan Harper is in a great job. We talked to him about building communities. He’s doing a great job with Propelio and Facebook Lives building a very large community online with his real estate meetup groups. He was in Episode 325.

What I’m trying to get at is it doesn’t have to be 500 or 900 people. When you go generic, a real estate investor Meetup, that can be big. You’ll have a lot of people come out, but not everybody’s going to fit into your space. Not everybody’s going to be a good fit for your space because if they’re doing a variety of things, it’s not going to help you. Being a niche aspect of things of what you’re focused on. The Orlando Note Closer Group usually averages twelve to twenty people, but it brought people together. That’s what you sometimes need to do is start off small, have an accountability partner or partners in working together. Don’t be afraid to reach out to people and communicate.

First, build your list. Second, start contacting that list on a regular basis, “What’s your focus? What are you looking to do?” One of the biggest things that helped me immediately in avoiding the craziness of looking at everything is identifying how strategic partners or other note investors are looking for specific things. When I got in a list of small apartment complex notes that I could take on, I knew four or five people that would buy and fund those things pretty relatively immediately. I can make money fast. I knew what they were looking at and what their focus was their states, what are they looking for, and able to take that when I got it listed. Instead of being a cluster of Christmas lights, “Where do I begin with this tape?” I was able to say, “Let’s untangle it a little bit here. Here’s who I know is interested in this list.”

Going back to creating a list, it’s good to identify what they’re looking for. A lot of times, what we love to do is we’d like to store people, other top states to invest in. Their top three markets to invest in. That’s a great thing to do. If they’re in here in Florida, they’re probably looking for Florida assets, but what are the other states they’re looking for? South Carolina because it’s nearby Georgia and Tennessee, Ohio, Michigan. Knowing what your people are looking for, your database is looking for. It’s one of the biggest, most important that we’re looking for? Look at what they’re interested in funding.

First is community, second is building a list, third is knowing what their focus is, where they’re going and then four is, “Are they looking to fund deals like this? Are they looking to buy stuff?” There’s a difference in that mentality. When people want to write a check and have you do the work, which is great for joint ventures and other people are more activist investors. They want to deal. They’re still going to write you a check for the lead source. What you want to do and get away from doing on a regular basis is something we talked about. Some people are like, “I’m looking to wholesale deals.” “Why wholesale?” “I make quick cash in wholesale.” Yes, but you don’t make a lot of cash. You don’t make a lot of money unless you’re buying for your own portfolio. Buy for your own portfolio first and work to convert your wholesale buyers, your investors to become funding partners or partners on the deal. You do a ton of work on finding these assets, you should get a bigger piece of the pie because you’re doing all the heavy lifting. Those are a couple of things that are very important with you, “I’ve got to look at deals. I’ve got a market. I’ve got to raise capital. I’ve got to make sure my vendors are all in place.”

I know it can be scary. It’s a little bit more difficult, but don’t overthink things. Don’t think they’ll make things more complicated than it needed it to be. Get rid of that Clark Griswold in your brain and start segmenting the list down. Little things don’t take that long. Let’s be honest, one thing that’s going to help you is to know who your team members are. Meaning to know who you turn to when it happens. The more that you can talk about your partners, especially if you’re brand new in the business, the more you can show that you have a bigger team, you might still be a single person in an office working through things, but you’ve got your attorneys, you’ve got your servicer, you’ve got your partners, and you have your community. The more you can talk about that, that is a great way to help you delegate deals that you don’t think you’ve got this huge ball of light all wrapped up, when you have the small little ball that’s pretty easy to untangle. That’s the big thing is going back to your community and finding out vendors that you’re using, but others are using to help out with things.

The 30/30 list we talked about is a marketing aspect of things. You’ve got 30 days in a month or 31 days of the month, then you have different marketing things across the top. It’s things that you can do for your note business. Taking different marketing things and organizing them for what you want to focus on, what your focus is, makes it a lot easier. You will be able to, “What have I done this week? What is the one time a month thing I needed to go to the real estate club? Send an email out to asset managers.” Whatever that might be that helps you organize so you don’t get so confused, “I need to be doing something but I don’t know what to do.” That’s a big thing, “I don’t know where to begin.”

Start with simple things, joining your communities and building a list. Going out there and identifying what people are looking for and figuring out are they funding partners or are they wholesalers or buyers that you can sell to? The thing you want to avoid, you don’t want to be a bird dog for people, no offense. A lot of you start as bird-dogs, they learn things. They get $5,000 fee for being a bird dog. You are all beyond that. Everybody here at the Note Closers Show is beyond a bird dog. You are all capable of getting a list and finding funding partners. You don’t have to be the wholesaler. You can find funding partners by doing those couple of simple things to do.

One of the best things I can recommend for you to do as well is literally going to Facebook and type in Orlando Note or Chicago Note. Start looking for Meetup groups, either Facebook groups that meet in your area or go to a Meetup and looking for Note Closer groups in your city. We started about 55 specific Meetup groups across the country for our students to network with. It wasn’t something we were running. It was something that we opened up to a lot of people, so they could connect with people. A lot of people weren’t doing live Meetup groups. We’re doing webinars every Monday to those groups just to get everybody unite, identifying, to grow, so they can put together a live in-person thing. Meetup shut us down. If you’re not having regular Meetups every month on this stuff in person, we’re going to go in and shut you down. We had 50 groups that had at least 50 people, some at 400 to 300, some others have 200 people and Meetup shut most of them down over 30 days.

We moved that to Facebook groups. Not quite as organic growth. You’ve got to know them usually from somebody recommended, word of mouth advertising is what I was trying to get. We see those groups growing across the country, which is great. They’re growing and people are doing some big things, which is great. It’s all about community. The note space, especially if you’re coming into it new, it can seem that big ball of Christmas lights of Clark Griswold. When you started talking to people, you start finding little specific things that they do. You start carving down, carving out states, carving down their focus, carving down their specialty. Three-bedroom, two one-bath, built after 1990. Start focusing on that stuff that will make you a little bit less crazy person. Less of like, “Let’s go tie knots.” You don’t want to go tie knots in your business. You want to make it streamlined. You want to try to compartmentalize as to your business make it easy to do.

NCS 339 | Avoid The Cluster

Avoid The Cluster: At some point, you’re going to become the problem in your business.


Doing Everything Yourself And Valuing Your Time

One thing I will tell you this, everybody runs into this is you’ve got a growing business. At some point, you’re going to become the problem in your business. Many of us get used to doing everything ourselves. Just when you’re starting off all, “I can’t afford to hire an assistant. I can do this. I can do that.” That’s fine that makes sense. When you start closing notes on a regular basis, at some point you’re going to be the bottleneck. You will be your biggest problem. Your head will be the biggest problem in your note business. You can’t do everything. As you evolve, as you start doing things, you have to start delegating tasks that are below your pay grade. It’s not telling you that you’re bad, but you guys and gals out there should not be doing so much due diligence on the frontend of an asset. You should be doing due diligence once you get the approval of things.

If you’re doing all this due diligence on the front end, especially when you’re looking at taking your numbers are a big thing, you can’t do as much initial due diligence. After you get accepted, you’ve got to start putting systems in place. You have to hire people to do the due diligence. I know there are a few control freaks that are here. I had some conversations with some great people, “How do you overcome that?” I’m like, “You’ve got to delegate. You’ve got to hire people out.” You’ve got to have staff, either locally or virtual staff or virtual assistants that are taking on some facet of your note business to take it out of your hands so they can run with it. I’ve seen comments from people, “I’m my own problem.” It happens and that’s a good problem to have because that means you’re doing things. It means you’re taking action.

Once you’ve got past that first initial phase of untangling the lights like Clark Griswold is when you get to that point. You have to look at evaluating your worth and your time. If you’re working a job, your time is limited even more. You have to say no to things to get yeses done in your business. I say no a lot of the time to things, “I want you to do this or I want to do this.” I’m like, “No. I’m not going to do that.” I had somebody reach out to me, “This is a great tool for your students and we want you to help market it.” I’m like, “No.” They’re like, “Why not?” “I’m focused on things. That doesn’t add any value. That price point for what you’re trying to do something is way below our time value.” Valuing your time, you have to look at your time and figure out, “How many hours I have to put into things? If I want to wrap things up, how do I need to get where I need to be? Who do I need to bring on?” A full-time assistant should make you six figures.

I’m not talking about your family. I’m not talking about hiring your son, your daughter, your niece, your nephew. That’s great. They will totally flake on you. You have to hire somebody who’s depending on you to truly paying them. You don’t need to start off at 40 hours a week. Maybe it’s ten, maybe it’s twenty. Start off with those basic things that you can delegate off to make it worthwhile to have somebody that runs around to do the things that you don’t want to do. What are some of the things that you can delegate to help alleviate that? You are turning into your businesses sometimes because you’re running all over like a crazy person. Make a list of all the things that you do. Initial due diligence should be one of the things that you probably delegate off to. Somebody’s like, “Due diligence on the frontend? I can’t control that. I’m a control freak. I’ve got to make sure everything’s perfect by the essence.” Chill. If that’s you, if I said that and you’re tightened up, “What? I have to give due diligence to somebody else?” We’re talking initial online due diligence.

Maybe you’re using Noteproz.com, that’s not hard to show an assistant how to upload your addresses into it, where to pull the Spreadsheet and you take that and combine it with your Spreadsheet in your given parameters, “We’re not going to do this. These are what we’re looking for. Anything that falls outside of this, we’re going to kill.” That’s a very simple thing that you can use to save you hours of your time using Noteproz and then writing a couple of formulas. Base it off to twelve months of paying the P&I divided that by the rough cost, it gives you 30%.

One of my proudest days was when I was traveling on a cruise and my staff ran initial due diligence on over 400 assets and narrowed it down to the top 100 we made offers on for a $1.6 million offer. Did we close on all those assets? No, we sure did not but it was getting it done in literally minutes, which would take a lot of you hours to do. Then submitting the offer to see what come back. Out of that 100 that came back, we closed on 30. It went from 100 to 60 to 36. That’s the easy thing. Another thing is you can outsource, checking taxes, jumping on and checking Tax Association. Checking the rent rates, you can outsource it to somebody else.

At some point, if your goal is to close on twenty, 40 or 100 deals a year or a month, whatever your numbers might be, you may want to have someone come in and do ten hours a week for you. Not only can they do it with that, but they can also help with reaching out to your collateral companies. Reaching out to those vendors. They can help you get things organized and do little things, grow your networking list. It lets you grow your list of context. Spending some time on LinkedIn. There a lot of great things that you can do to avoid you being a Clark Griswold in your business, you being a bottleneck of your business. Hopefully, what we’re talking about, you start to see that big ball of crazy Christmas lights. They’re all tangled up. We’re slowly untangling a few of those things. We’re getting them out individual strings. The things that you can delegate off to somebody and feel comfortable.

Reaching Out To The Community

Delegate little things off that ball because it’s a lot smaller and you’re not such a crazy man like Clark. Learning to say no is a very valuable thing. Saying no to yourself, “I’m not watching the game as I get to spend some time working on systems. I’m not going to make any offers this week because I got to focus on start to finish of systems in my note business.” That’s what I’m trying to get at with you. Another thing that is important for us all to do to help us with a delegation of stuff is literally don’t be afraid to reach out for help. One of the best things that most people could do initially, a lot of time is reaching out to their fellow note investor. That’s why the community aspect is so important in getting things done. It’s so important to talk with other people to see how they’re overcoming their problems, their objections or their issues and making things happen in their business. That’s where you’re going to learn the most from.

It’s good to have a mentor, someone who’s educated, you go through a workshop and learn some things, but everybody is unique in how they approach something. Everybody is unique in getting things done. There are people that were at the event that do some things that are great. They’re awesome. People are running other businesses besides note business and that’s fine, “I’m so busy with my existing business.” There’s nothing wrong with that. If note investing is a hobby for you, not a full-time thing, rejoice. I’m the first one to tell you if your main bread and butter business is booming and you don’t have a lot of times for your hobby or your sideline with notes, that’s okay. As long as you’re happy, that’s all that matters. You don’t have to defend yourself or say, “I’m sorry.” Don’t apologize to me. You had no need to apologize that you’re not doing more things. I don’t walk in your shoes. I’m not walking in your day-to-day life.

My goal is to help you overcome obstacles, to help you shoot squirrels as you need to be. My goal is to help you get organized so that when you are focused on things, when you need to put that pedal, you’ve got a clear path, an outlined path to help you overcome those obstacles. My biggest thing is all about joining the community. You’ve got to network and join communities. Second, you’ve got to grow your list. Third, you’ve got to segment that list out to people. What are they looking for? What stage are they investing in?

The first list that you’re going to have, you’re banking the asset managers. The second list is going to be your contacts, your other fellow note investors and things like that. The third list is probably private investors. Who’s got money, who’s shown interest in that and now you’re going to have other lists that you add along the way. If you go out to a networking event, you go to an expo or you go to Note CAMP or you go to one of our Virtual Workshops and you’ve got a list of people that are going or a part of that that you’ve been provided. Just keep that list separate for a little while, but then also take that list to your LinkedIn list and then put that into your master list of people. That’s something that you market out to on a regular basis.

NCS 339 | Avoid The Cluster

Avoid The Cluster: Learning to say no is a very valuable thing.


You don’t have to send an email three times to your three lists. Send once to your master list and go from there and ask, “What type of assets are you looking for? What are you looking to invest? How much are you looking to invest?” Those little things will clear up the dysfunction junction taking place in your brain for you out there. There’s a lot of stuff of stuff that we can accomplish in the three plus months left in the year. Somebody was nice to say, “I’m struggling with everything.” I’m like, “If you’re struggling with everything, it means you’re not doing anything.” If you’re struggling with everything, what you have to do is filter out all the crap and start doing something. The basic thing you do is join your groups, build your list and start communicating with your list. Those are the three basic things you can do.

Go look at assets. Everybody loves looking at assets. If you haven’t done A, B or C, looking at assets is not going to help because you’re not going to have people to reach out to, people that are going to fund it. I’m talking about those that need funding. If you got your own self-funded, you’ve got your own JV partners, fine. You still need a list though because at some point, you’re going to need a list to communicate and start marketing out to. If you can see other companies marketing for raising capital, marketing for doing things, they’re usually doing bigger things in one-off assets and that’s great. They also have a lot of investors that are doing one-off assets that are still marketing out there. Those guys and gals are getting ahead of everybody because their putting in that foundation now on the frontend instead of waiting on the backend to start marketing where it’s too late at that point. They’re too far behind the eight ball to make things happen. When you wait until the very end, you might as well start putting that foundation in place, start communicating with people, start talking with investors, and start going out and networking so you have an amazing audience when you need one.

That’s all that I’ve got for you. Don’t be afraid to take that big cluster of a lightbulb bundle and start untangling that a little for your business and keeping the activities very simple. Simple activities lead to a great business. Have a great day. Go out and make something happen. I look forward to seeing you all at the top.

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