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The Crystal Ball Of Mortgage Defaults with Brecht Palombo
We are honored to have my buddy on here. It’s been a while since we’ve had him on a podcast or a webinar. It’s been too long but we’re excited to have the man, the myth, the Distressed Pro legend, Mr. Brecht Palombo, join us.
Thanks for having me, Scott. I appreciate it. I’m looking forward to having that chat on here without all of the pressure. Usually when we’re talking, I’ve got something I’ve got to present over an hour and crammed it in there. It’s nice to come in here and have fun.
I’ve been on your podcast before and vice versa here. We’ve exchanged emails and I know you’re as busy as I am working on things. It’s finally nice to get connected and be able to share what’s going on. There are a lot of changes going on the market out there. Why don’t you share a little bit of who you are if in case they don’t know you? The reason why they need to know you if they’re in the note business.
My name’s Brecht Palombo. I’m the Founder of DistressedPro.com. I had my nine-year anniversary. I opened the doors on that August 30th in 2009, then we had our first customer in October. Mark Ostroff was his name. I sold the thing from the front, the real estate investor and went in the back and took a check for $80 for a subscription to service that now has developed. We’re now four versions later. At that time, we were just doing REO and note reports on banks. Now, we have arguably the largest database of bankers and special asset managers that there is. We have every bank and every credit union. We’ve got 98% coverage on decision makers. I have a full-time staff dedicated to finding contacts and decision makers and then we pair that info with a non-performing note and REO sale indicators for every bank. That’s DistressedPro.com. The software is called Bank Prospector. We have some training around that for folks who haven’t done that type of work before. It’s been a lot of fun. We’ve grown a lot. We’re now serving a lot of people and that’s pretty exciting.
I should say probably how I got started with that. I started in real estate in 2000, 2001 right after I got shot out of the dot-com bubble in 2001. I said, “I can sell things.” I want unlimited product. I don’t want to go out there and be like beholden to some dot-com who doesn’t have a product and vaporware. I won’t want to do that again. What can I sell where it’s unlimited product? The answer is real estate. That came up pretty quick. I started with that and did really well. Around late 2006, I started seeing these weird deals going on. Everybody with a hammer and a van was a developer. You could go out and you get 100% financing. It didn’t matter. I had this deal where there are competitive bids from two guys who basically had hammers and vans and they were going to flip an old folk’s home into condos and both of them had zero down financing. There are a million too that do the whole thing. Both of them were doing this with no money.
I was like, “Something’s happening here. We might be getting there.” I got an auctioneer’s license and I said, “Here’s what I’m going to do. As this thing goes sideways, I’m going to be prepared. I’m going to go work for the folks who are in control.” When you’re in a crash like that and you were talking about collateral and housing and property, the folks in control and the folks who own the debt, that’s the banks and that’s where I wanted to be. I did that and I had a number of successful years there. I sold assets for banks, hundreds of them mostly commercial, some residential through 2012. Then this business took off enough that it didn’t need to do that anymore. That’s how I got here on your show.
You missed one part there. You’ve helped a lot of note investors and real estate investors, helped to focus in on opportunities in the market and then take away a lot of the hunting aspect that they know where to find. Your stuff is amazing. The way you target it, the way you teach how to identify opportunities. I’ll give you an example. We’ve had Joe Bayarena on here who is a client of yours as well, along with Jamie Kubiak and Adam Adams. They used Distressed Pro to reach out to a local San Antonio Bank. He bought a portfolio. Adam Adams helped them get funded and turning it out to be a phenomenal deal. We’ve used it on a regular basis to track down banks and asset managers too. Everybody is always curious about where the product is and what’s going on the market. We talked beforehand. You’ve got some things that you’ve been looking at and seeing where the markets at and commercial being asked for a little bit more so. Why don’t you look in your crystal ball and tell us what to expect?
I feel like I’ve been calling the top for so long that I should stop calling the top. The problem is that you look at the data and a lot of the booms that we’ve had over the years didn’t make a lot of sense to me. The fundamentals really weren’t there but things drove on. To be perfectly honest, I missed out on how you bought for stocks but I would say, “There’s no way this thing’s going anywhere.” I probably could have gotten it much earlier than now. However, we’re getting there. For those of you who don’t know Ray Dalio, he is in-charge of Bridgewater. It’s the largest hedge fund there is in the world. He is calling the calling on the top. There are lots of folks are calling through him. I’m going to run through some data. What I’m hearing out there, the kinds of deals that a lot of folks are coming to me with are commercial deals. They’re coming to me with construction or preconstruction or development deals. I’m hearing about hotels. A lot of different commercial notes, commercial paper.
One of the things that strike me is a lot of times when I’m talking with people who are getting involved in the note business, it seems like it’s really narrow and in some ways that makes sense. You want to know your product and you want to know how you work and you want to understand the asset class. On the other hand, if you’re the type of person who is going out there and finding deals, especially if you’re going institutional direct deals, which I recommend you do. You’re going to uncover stuff that isn’t in your box. You’re going to have stuff presented to you where you’re like, “I wasn’t thinking of that.” Here’s what we know. We’re ten years into the biggest run-up. We are officially now the longest bull market ever. One thing we know is it’s never gone on for forever. At some point, I don’t know if it would be this fall, I don’t know if it would be next fall, maybe three years from now. We don’t know.
At some point, things are going to change. At that point, how are you going to be positioned for whatever it is? A lot of times when we are in these boom times, one of the things to do is to really hone your skill. To do whatever you need to do in order to continue to profit no matter what’s going on. I know for me, on the bus, I was so leveraged. I had opened a commercial real estate brokerage. I had a bunch of agents in there. I had leases on copiers for hundreds of dollars, which is something people used to do. I had all of my income, all of my assets, all of it was in real estate 100%. Even though I had gotten myself positioned to be working with the banks, that was no easy time. I took a beating because I wasn’t diversified. I didn’t have a good understanding of even with that meant. Right now is a good time to get yourself up to speed so that no matter what happens, you’re ready for it.
If that means understanding different asset classes or whatever it is. If it means picking up new skills like prospecting skills so you can go out there and find your own deals, whatever, you should be doing it now. That’s the first thing I want to say. Here’s what is going on right now. US home sales rose in August. It was after it downwardly revised in July. We’re seeing this data come out and we’re seeing backwards revisions going in the wrong direction. You’ve got to watch out for that. It can lull you into a false sense of what’s going on there. These are our new and existing home sales. The way that this works is not a straight line up, it’s not a straight line down. It goes around. We can see that we are getting into a place where things are turning a little bit.
This is one of the things that I love about you. You’ve always got some great charts and graphics out there that help paint the picture.
I live by the data. If I can see it graphically, if I can visualize it, I get my head better around what’s going on. Our US new single-family existing and impending, we can see they’re all trending down. They’ve got a little spike up but for the most part, they have all made the turn. Total of new home sales, meaning new home sales price has also taken a turn. Pending Home Sales Index is down. End of the global housing boom. This is on Bloomberg. It’s not just local. It’s London. It’s Sydney. It’s Beijing. It’s Manhattan. It’s all over. There are a bunch of indicators here indicating a crash. Is it going to be a crash like we had in 2008? Probably not. A lot of folks are saying it isn’t going to be, at least not particularly the housing.
Everywhere you look, in Southern California, Bay area, all of it. This is delinquency rate on single-family residential mortgages. It’s hard to see like, “It looks like we’re going down.” For years we’re still 247% higher the delinquency rate than it’s been historically for years. For decades and decades, you hear things like, “There’s no more product or there’s no more REO.” There are people out there who are saying things like these. The fact is that more stuff is going into default. Not only that, more stuff is going into default now than was even pre-crisis. Is it like 2010 where we were 11% and 12%? No, but we’re 250% above of what it was pre-crisis.
I remember we had 3.5% or 3.6% in the default rates and stuff like that. If you look at the default rate and then you look at the number of loans that are being originated or people getting refinanced, the default rates on that, that still leads to a chunk of loans every month. A brand-new product or existing product that goes into default.
There’s been a rush to cash out again for a lot of folks who have built up some equity. That spells trouble. I don’t see any way that it doesn’t spell trouble. This is an older slide, but is the US facing the mother of all bulls? The fact is if you look around and you’re looking at stocks and everything else, we’re high. Everything is historically high by every measure. It was fringy saying this stuff and then it’s mainstream. There was CNBC and Bloomberg and Forbes, all these guys. The thing is bubbles always pop. Whatever is going to happen here, how do you profit now and then continue to profit when the bubble pops? Honestly, mortgage notes is the best investment in the market because where else can you be invested in collateral where it’s secured by real estate.
You’ve got recurring revenue without the three Ts. You’ve got numerous exits that you can make from it, especially if you are educating yourself on how to do more diverse deals. I encourage you to educate yourself on commercial stuff as we go forward because that’s going to be a scary place for a little while. Companies are taking on massive debt. Cap rates are at all-time lows. There’s a guy who is a locally-famous real estate educator back in Massachusetts when I was on the CCIM track there. He would talk about what’s the magic cap rate is? What’s the cap rate that works in any market? It doesn’t matter what the interest rates are. It’s 9%. You know what cap rates are now? 5% lower.
If you don’t know what a cap rate is, the lower the cap rate is, the higher the relative value to the cost of the property. In every way, we’re at the top in many things. We know it’s safer than equity. People are catching up. It’s a much more desirable class now than even when I started. I remember the first time I discovered you could even buy the note as an auctioneer. We’re foreclosing on an office park. We did a lot of big projects and he was like, “What I want to do is buy the note.” I was like, “Can you do that again?” I had to call my lead guy on that and I was like, “Can he do that?” He was like, “He can do that.” Now, more folks are into that. That means more opportunity. The question is, “Where do you want to be in the capital stack when it hits the fan?” If you’re up here, if you’re coming in with skinny margins and a lot of debt and things change, you’re in trouble. A much safer place is to be down here. That’s what I want to talk about with that.
You and I speak the same language because we’ve been seeing more commercial deals come across the boards. I always tell people, “Wait a little bit. You don’t want to take on something that’s overpriced right now, overpay for something especially this time. If it drops 5%, 10%, 15%, how is it going to work as an LTV for you in the capital stack aspect of things? What’s funny is, I will agree that there are more note investors out there. I call them the Diaper Dandies, the one and done. They get into it for a little while. They think it’s going to be like buying an REO or buying a property or fix and flipping and it is not. It is more work. There are more evaluations. There is more due diligence done, especially on the commercial side. You get a lot more due diligence in the commercial side than you got on a residential side because it’s like you said, “It’s all about the cap rate. It’s not about the true value of it.” We all know that values can be changed by appraises and things like that. It’s all about the cashflow and stuff.
Some of the opportunities that people have brought to me when I asked them, I say, “Show me the exit on this.” That’s something you want to be able to do. If you’re sure there are more people in it, sure there are some jokers or whatever. Most of those folks aren’t going to do any work. They might come in with a little bit of money and they might make a purchase. If you’re a person who can go and you can find a deal and then can explain to someone why it’s a deal, then you’re in the cap rate. Most people can’t do that.
Most people aren’t going to invest the time to educate themselves on that thing. It really is more and more what you’re going to need to do is you can’t put an opportunity up in front of somebody. You have to say, “Here’s this and this is why it’s an opportunity. We’re buying it at this much below market because if we do this, we can turn around. Even if we have to foreclose, we’re way down here in terms of value.” More and more we’re going to need that. You’re going to need to sell your deal. The other thing is that I find a lot of people won’t do the work to find the deals. If you are somebody who is willing to go out there and actually do the work, you’re in a very powerful position if you do that. Most people won’t.
People love to do the bare minimum. They like to find them, but they don’t want to work through them. They don’t want to figure out the exit strategy. They don’t want to do the due diligence on them. It’s like the whole thing we see with wholesalers, “The property only needs $5,000 and paint and carpet or you need a full rehab or it’s got a true lien on it.” It’s an interesting time, I’ll tell you that. In our time, I’m starting to see the phones ring a little bit more from asset managers. We’re starting to see emails get opened up a little bit harder. I’m starting to see email open rates tick up a little bit especially as we do. That’s one thing that we’ve done for a while is the cost of retail. We used Distressed Pro to build a big list and just following up with people on a regular basis. Half of it is in the follow-up, “What do you have?” Why don’t you talk a little about how banks build returns up for the end of the year?
A lot of banks do so on a cycle and for a lot of them, it’s the end of the calendar year. I’ve worked with others where Q2 is a popular time to liquidate and the end of the year is the fragile time. Since these transactions tend to move faster, I don’t know what level of experience we’re talking to folks out there, real estate can take a little while. Notes tends to move a little bit faster. You’ve got plenty of time between now and the end of the year to still go out there and find deals. Banks work on a quarterly basis. They have to file all reports. What they want to do is they want to be able to file reports that make them look good. Especially when we’re coming to the end of the year, that’s an excellent time for them to sell. A lot of times you’ll see your lowest pricing and your highest volume of deals during your October through December.
You track the reserves growing too? It’s a sign too.
We do. One of the things you can see in a bank prospector is you can see when lenders sell a non-accrual. For the uninitiated or wherever there’s banks report, 30 to 89-day late loans, 90 plus and still accruing and then non-accrual. When a loan goes into non-accrual, there’s no longer any hope of that being repaid according to the terms. Banks have to report a couple of things. One of the things they have to report is money that they’re setting aside for losses on those loans and the other thing that they have to report is the sale of those loans. They’ll have non-accrual loans sold. One of the things you can do bank prospect is you can look back and you can see, “When do these folks sell out?” You’ll see every third or fourth quarter or whatever it is, they have a cycle.
The main thing is to be there when they sell. A lot of folks will pick up the phone or dial it a few times and then they get worn out. They maybe don’t have the stamina to do or don’t understand what it takes, but it takes being there at the right time. I had Gary Keller’s strategy, which is 8×8 and then 33 Touch. If you don’t know what Gary Keller’s strategy is and you can call this a 6×6 if you want to, you call it a 4×4. His is an 8×8. Eight touches over eight weeks in order to introduce yourself to whomever your prospect is. By the end of that, they know exactly where you are. That can be calls, it can be email, it can be direct mail or it can be a personal meeting.
He then talks about 33 Touch. It is how you stay there no matter what for the rest of the year. At some point, they’re going to have something to sell. If you’re not in there, then you’re not getting the deal. At 33 Touch is where you say, “I’m sending this guy or gal a birthday card. I’m going to send them a box of chocolates. I’m going to send them a Christmas card. I’m going to email them. I’m going to make introductions to them for people who might be useful for them. I’m going to send them an article that might be relevant for something that they’re dealing with.” What you want to do is you don’t have a relationship. Scott, you get a stack of files and you go, “It’s November. Here’s Brecht. I hear from this guy consistently. He’s ready to go. I’m going to call him.” That’s what I suggest you do is that you get some things in place so that you can you can ride through this.
It’s totally right because it’s the biggest thing. We talked about, “We find them on LinkedIn. You send them an email.” If they’ll connect with you, they’re great. Then you can send a direct mail. They can be exported and connect to the email or a follow-up email if they open up. You then take that email list, upload it to Facebook and send them a message on Facebook. I’m not a big fan of direct mail these days, but still a birthday card, I didn’t think about that. That is brilliant if you could find that information because that will stand apart.
If you can do direct mail now, you’ve got to be strategic about it. Don’t send them a postcard, don’t print off a letter. You’ve got to send a lumpy mail. Take the nickel in it. There’s this thing that we do. We’ve got a letter and you get a set of Buffalo nickels and you take the nickel in there. You can send them keys. Send them a set of keys in a puffy envelope. There are a lot of different ways you can do that. Make it look personal. Make it the kind of thing where their assistant is going to drop it on their desk and they’re going to open that thing to see what’s up there, even if it’s just to start a conversation. One of the things that I did back in the day was I had a tiny safe and then I put a pen in it. I locked the little safe and then I ship the safe to people. If you want to know what’s in the safe, give me a call and I’ll come in. It costs $25 or $30 to do that deal and have that delivered per piece. When you get in there and you have to sit with one of them, you’re on a different level once you do that. I wouldn’t totally disregard direct mail.
I love the lumpy mail. I’ve got a friend of mine who used lemonade. She would say in the mail, “Let’s turn your lemons into lemonade.”
They put it on their desk, they move it around. Probably they will throw it out. It’s not the thing that happens like that. The main thing is, have a plan. Don’t come in this and you’re like, “I’m going to go look up a name and now I’m going to send an email. I’m going to think about what I’m going to do and then maybe I’ll circle back with this.” No, get a list of the banks that you’re going after. Get a list of the prospects who are the people, the targets, the decision makers at those banks and put them in a system. They all get the same treatment. Put them in batches. You go out, you get maybe 50 or 100 contacts and you say, “I’m putting them all in the 8×8.” That means 50 or 100 people now are getting an email. Next week, they’re getting an email. The next week, they’re getting a call. The biggest thing that happens to people who try to do this is the analysis paralysis. They get there and then it’s like that phone weighs 1,000 pounds and they are trying to think about, “I don’t want to mess up this email.” Don’t think about that. Think about that before you’re going to do it and then when you sit down, just do it and you get it out. Then you look at your numbers. If you need to make an adjustment, you make an adjustment. You don’t know what that’s going to be if you’re going at it all willy-nilly and make it happen.
Have a script, know what you’re going to say, follow up with it and just be diligent about it. I preach this, 80% of sales are made after the fifth contact. Most people never get to the fifth contact. They say that only 2% of salespeople follow-up more than once. That’s a sad thing. Let’s face it, asset managers, marketing professionals, they are busy. They’re not going return phone calls most a time unless you’ve literally blown up their phone or you’ve given them a reason to follow-up with you more than anything else we’re just talking about.
I’ve got a friend of mine. He’s a top salesperson at a big tech company. He is making a ton of money. He is making almost $750,000 a year as a salesperson. He does only relationship stuff. Find out what their spouse’s name is, find out what their favorite liquors and send it over and send flowers. That’s it. They won’t go anywhere else. Take him golfing. Go to the ABI, the American Bankruptcy Institute. They have symposiums. You can go and meet workout officers. You can go to the TMA, Turnaround Management Association. I highly recommend that for anybody who’s in this business and then you get to put a face on the name. You could do that too.
That’s some good name dropping for everyone out there. Anytime you can go to a national or a conference that the Big Leagues are at, it’s well worth it. DSNews puts on a good event, Five Star as well and Mortgage Banking Associations, we all have gone to that. That’s what separates you from a lot of the people out there looking for people. A lot of people are going to invest that extra $1,000 or $1,500 for a ticket. It’s well worth it. One contact will pay for that easily. Most people don’t know that a banker or an asset manager can legally accept a gift worth up to $100 at least once a year.
I didn’t know there were any rules on that.
There are rules on that. As an ex-banker, if we had people bringing in gifts, we could accept up to $100 value. One of the things I did early on my life when I was traveling around Florida, buying a lot of Florida assets and I was speaking to asset managers, is I would take them to a Miami Heat game for $100. That always did well because they were the first ones to call me when something came across their desk.
The nice thing about things like that is the ABI and the TMA have these symposiums. One that happens up in Cape, another one happens in Vail or Aspen and they’re pretty reasonable to get to but you’ll sit around a bar with the decision makers. They’re all there. It’s going to be commercial workout folks a lot of the times, but they know the residential workout folks are if that’s all you’re interested in. Definitely, I would invest some time in that.
What is your focus over the next twelve months? I know we’re looking at this bubble here. What are you working on? I know you were talking about doing some overhaul and doing really great revamping to a bank prospector and adding new stuff. What’s your focus over the next twelve months?
We’re trying to help people stream around this and take away a lot of the clutter and confusion and overwhelm. We’re trying to make it easier for people to take action and get out of the studying and into the doing. That is a major focus for us right now. In terms of personally investment-wise, I like debt and I like cash. We’re going to like cash a lot soon. That’s trying to have just dry powder because I feel like it’s any minute. I’ll give a few tips from eating shit in 2008. A lot of times people think that the credit that they have will continue to be there and the fact is, it won’t. You could find that for no reason or good reason overnight if you are relying on certain lines of credit. It can disappear. I had all of our lines before default, before or late payments or anything like that. Suddenly the amount that I had available to me was less than what I had already bought. I’m immediately underwater because of a decision that they made at the bank.
I remember going in and I was like, “I’m going to get a line of credit just to get through this little time.” They were denying all applications for a whole class. Anybody in real estate, there was nothing. It’s a good time to leverage. It’s a good time to take stock of what you have. If you think that you will need more credit, go get it now. It’s much easier to get it out even if they cram you down. You’d rather have it now and get crammed down later than trying to get it later when you need it because you won’t get it. Reducing any extraneous monthly expenses that aren’t helping you to create more income. If it’s not helping you to make more money, then what is it doing there in your business. You need to evaluate that. Aside from that, have cash as much as possible. Put it aside and have cash. I would not get into anything speculative where you’re speculating on price appreciation. I do none of that at all but that’s just me. I could be totally wrong.
You could but I echo that because history repeats itself. I can remember the same thing happening to me. Lines of credit getting shut down and credit cards reducing the available money. I remember I was out traveling and we’re going to use the credit card and somebody come back like, “Why is my card getting declined?” “They cut your line.” “Why?” They’re like, “The bank decided to do it across the board.” I’m like, “With no notice?”
I remember we had one card at $25,000 total limit and they cut it down to less than half. We were already like a little higher. It’s a real thing and it happens overnight and it does happen without notice. You need to be prepared.
You said something about the importance of trying to get people to take action because that’s the biggest thing that drives me bonkers. When I see people at workshops all the time or the same events and they haven’t bought anything. They’re not making any offers, they’re not doing marketing.
We try to encourage people that if you’re going to sign up, then use it. I have full-time staff finding contacts. In addition to that, we spend almost $1,500 a month on tools and software for finding contacts. In terms of the value that you’re getting, the volume of leads and whatnot, nobody is going to match us. If you don’t do anything, then it doesn’t matter. I’m on the entrepreneurial circuit a little bit too. Having started this business, I talked to other people who were looking to start similar businesses with notes. The human condition is that a lot of times, it’s very hard to get past your own inertia of not doing anything.
The biggest thing I can say for that is a house on fire and screaming crisis, that will always get you moving. Short of that is some written goals and a schedule. Not like, “I’ve got an idea. I want to make more money next year. I want to hit six figures,” or whatever it is. A goal is like, “I’m going to make this money by this time by doing this,” then you have to do that and you have to track it. Everything I track and measure goes up. Peter Drucker said, “That which is measured improves and that which is measured and recorded improves exponentially.” Put something up on your wall, maybe it’s on your desktop or wherever it is but keep track it. A lot of people will write to me they’ll say, “I’m not getting any responses to my emails.” I say, “How many did you send?” No response back.
They sent five emails and they don’t want to tell me, “I sent five emails.” If you’re not putting the numbers in, then nothing comes out the other side. Let’s suppose you have a 20% open rate on your emails and you get 5% reply rate. If you send out five emails, you’ve got one dude or gal that opens your email. If you send 100, now you’ve got twenty people who have opened it. You have five now and maybe you’ve got one on the hook. It is a numbers game and what you need to do is you need to begin with volume and then find your bottleneck. Is the bottleneck that you’re not sending enough? Is the bottleneck that they’re not opening enough? Is the bottleneck that they’re not replying enough or that you’re not closing? Which thing is it? If you don’t have numbers, you can’t know what it is. If you want to make it work, you’ve got to put in some numbers. There are a lot of ways you can do that. There is a lot of software out there. There are virtual assistants who you can hire who can do stuff for you. There’s no excuse for the volume, for getting it done it. You can spend your time or you can spend your money.
You really did a good thing about there. I think every entrepreneur needs to go on a regular basis and look at what’s outgoing, new tools. That can add up. A drop in the bucket can fill the bucket relatively fast. We can save the money and put it on other things. A lot of people that don’t have the time have the money. That’s why joint venturing with people that are going out networking, finding people that are hungry and are going to do the work with the burning house behind them to get things done. We preach to them to have a plan and focus on it. Everybody loves Gary Vaynerchuk. He loves to preach that everybody usually has from 7 PM to 2 AM to get something done as well.
I did the opposite of Gary Vee. He drives me bananas. I get that, that will make people successful but you can also work smart. You don’t have to be everywhere all the time in sixteen hours. My business is built on systems. I traveled full-time for almost a year and a half. Then when I stopped traveling. I’ve got 90 days skiing over here in our new place and things continue to go up. It wasn’t just because it’s some magic, it’s because there are a bunch of systems in place. There is so much technology so cheap these days to get a global workforce working for you. To have people out there doing work that you couldn’t possibly afford to have folks stateside do and they’ll do it well. If you figure out how to do that, put in some systems and then get some people in place to operate those systems.
Maybe I’m getting a little bit advanced for some folks, but it begins with you doing it to figure out what that system looks like. Go and do it and then ask yourself, did I do this in the best way? Is this the best way that I could have done this? If I had to explain to somebody else how to do this, what would that look like? Write it down. I have all kinds of standard operating procedures for everything. Everything from filing a bug report, to creating an article, to publishing a video. It doesn’t matter what it is. There’s a checklist. There’s a video explaining exactly how to do it. There’s a document with all the resources on it and when I bring in somebody new to have them do that work, I say, “Here’s the role. Go learn how to do this right and tell me when you’re done.” Then I give them the assignment and they do it. If you haven’t done it enough to know what the thing is that you should do, then obviously that’s not going to work. You’re going to have to find some time. If you don’t have time and you don’t have the money right now, you have to take a look at what you could rearrange. If you don’t have time or money, then your priorities are out of whack.
You’ve got to reprioritize. You’ve got them in the wrong place. “Are you watching TV? Did you play any video games?” There are things that you did that you did not need to do, that do not add value to your life where you wasted time. I don’t accept that as an excuse. When I started this business, I was doing the Gary Vaynerchuk. I was driving 1,500 miles. I was up at the door at 7:00 AM. I was driving and foreclosing on properties all over the place, calling auctions. Then I come home at 6:00 or 7:00 at night. I eat quick. I had two kids and I work at night until 2:00 AM. I get up and do it again. I don’t have to do anymore but sometimes in the beginning, you have to do that. There wasn’t time for TV. I live in Boston and the only thing you do in Boston is drink beer and watch the Red Sox or the Patriots or whatever. It’s a three-and-a-half-hour game. If you’re sitting in front of sports and you say you don’t have time for your business, you’re shooting yourself in the foot. You’ve got your priorities jacked up and you ought to have a look at it.
That’s a good stopping point for everybody out there. What’s the best way for people get ahold of you or reach out to you to get signed up for Distressed Pro and take a look at bank prospecting?
If you go to DistressedPro.com, we’re going to try and get you right to where you go from there. If you want to go right and check out the software right away, DistressedPro/bankprospector. If you have any questions for me and you want to connect with me individually, I don’t take calls but I do reply to every email. We have a full-time support staff. If you email Support@DistressedPro.com. Anything that is for me will get to me and you will get a reply from me.
It’s a smart thing about not taking phone calls. We all know that people can take a 50-second question and turn it into a 50-minute conversation. Email is the best way to do it. Thank you so much for joining us here. I know you’ve got a busy life.
Thanks for having me. I appreciate it.
Brecht gave you some great nuggets on there. Take some time, take action, prioritize your schedule and you’ll find the time. It will give you planning opportunity to use the 8×8 or 6×6 or 4×4 or whatever you want to call it to go out and make some things done. Take your time, market it. Have a plan of action and you’ll find success out there. Go out and do something and we’ll see you all at the top.
- Distressed Pro
- Bank Prospector
- Joe Bayarena – previous episode
- Bloomberg article
About Brecht Palombo
Brecht Palombo is the founder of distressedpro.com. He’s a licensed auctioneer and real estate broker in a number of states. He’s been involved in nearly $200MM in distressed assets sales of mostly commercial, multifamily, and construction projects. he’s worked extensively with lenders in the disposition of assets through foreclosure, note, and REO sales.