EP 420 – Realistic Expectations

Scott CarsonBlog, PodcastLeave a Comment

NCS 420 | Realistic Expectations

NCS 420 | Realistic Expectations

 

Coming into the note business may not as easy as it sounds. Far from what people think, it takes a lot of marketing and time. Keeping your realistic expectations in check, Scott talks about the reality of the note business. At the heart of it, what the industry requires is patience paired with consistency. Scott gives some great wisdom to think about when coming into the real estate space and imparts some advice about marketing techniques.

Listen to the podcast here:

Realistic Expectations

I wanted this episode to be a little bit different. I wanted to talk about realistic expectations. What I find humorous and I have to laugh about it is I see people all the time that come into the note business or they come into real estate and they don’t understand the realistic expectations. They don’t understand that it takes marketing. It takes time to build a business. It takes time to have deals closed. It takes time to get deals sold. It takes time to have a bank send your assets. I see this over and over again. People are like, “I sent my first email, where are the deals?” I’m like, “Where did you send it to? Is it your first email you send out? Did you do a follow-up email?”

Time

You sent your first email, great. 80% of sales happen after the fifth contact. I always find it humorous when people send out emails, but they then also don’t send it to me to review as well, especially if you’re a student of mine. I would love to review your email so as to make sure you’re not shooting yourself in the foot. This is one of the hardest things new investors have. They don’t realize that it takes time and we all know it takes time. I wanted to bring something up. I posted something in our Note Night in America webinar that we had. You can always go over to our YouTube channel and watch the replay by just going to YouTube.com/WeCloseNotes or catch it up at WeCloseNotes.tv as well.

What’s funny is people don’t realize, they think they can make ten phone calls or make ten offers and they’re going to solve everything. That’s not the case. I don’t know why we have such a lack of patience in this country, but it’s the same thing. You have to realize it takes time, it takes marketing, it takes building this thing and doing rinsing and repeating and realistic expectations. If you send out an email, you’re only going to have about 20% open rate at the best of the emails that you send out. That’s to asset managers. That’s to private investors. That’s to your database. 20% is the pretty nominal open rate. For bankers, it may be a little bit less like 15%, once you combine your first and second round of emails. Send it to your database. If you’ve got a very short and small database of warm contacts, it could be 30% to 35% maybe. If it’s to your 5,000 or 10,000 LinkedIn connections or others, it’s going to be probably somewhere between 10% and 15%.

What is mind-boggling is I always get emails from people like, “I can’t find any deals.” I’m like, “How often have you been sending stuff out? Are you networking?” The lack of patience is understandable because we all have a lack of patience. God knows I don’t like to stand in lines. Nobody likes to sit and wait. We want things to happen now. We’re very spoiled that way. The thing you have to keep in mind with everything out here is there is a time to it. There are realistic expectations. If you just send your first email out and you’re following up with phone calls, great. You’re going to get more from making phone calls than anything else. I mentioned on Note Night in America about the fact that my first time around of calling banks, I didn’t have an email list. I was dialing for dollars and I made 55 phone calls and got 55 noes before I got my first yes. If calling banks, calling asset managers, calling secondary marketing professionals is something you want to add to what you’re doing and you have the time to do it, great, but let’s set some realistic expectations. You’re probably going to make 50 phone calls.

It’s a normal afternoon. If you dive in to call them between 10:00 and noon and then 2:00 and 5:00, the asset manager’s time is not your time. It’s five hours. You can knock out about ten phone calls in an hour. That’s 50 phone calls. Out of 50 phone calls, you’ll probably talk somewhere between ten and twenty people. It’s an average, probably around thirteen or fourteen to be more precise. Out of that, you may get a couple of nondisclosure agreements. It just depends on who you’re calling. It depends on the value of the list that you’re calling off of to. If you’re calling Lane Guide, that can vary. If you’re calling off DistressedPro and you’ve done your work, those might be higher valuable contacts because what Brecht does on DistressedPro is identifying some percentages if you’ve gone through his training. If you’re just dialing for dollars off the Texas Mortgage Bankers list, you don’t know what you’re going to get. Consistency is the game here. If you’re not willing to put in some consistency in this, I’m sorry, you probably should go back to doing something else.

Mailing

One of the things that a lot of people teach is if you’re mailing out postcards, you have to expect a 1% to 4% response rate. You send out postcards and get a 1% response rate. If you sent out 100 cards to get one response, it doesn’t mean it’s a deal. I know from years of experience of doing this between 2002 and 2008 is when I dropped postcards or letters out to borrowers that were in trouble of foreclosures, I was lucky to get 1% to 4% response rate. I was lucky that they weren’t calling me the week of the foreclosure or the week after the foreclosure auction. People just honestly need to realize that people aren’t going to fall over and give them deals. They’re just not going to fall over like, “Take my deals.”

That’s not the way this business works. That’s not the way real estate works. If you’re brand new to real estate, I understand that you don’t have the patience for it. I get that this is new to you but literally, you got to realize that it’s going to take a little bit time. You’ve got to put some patience into what you’ve got to give your marketing time to work. You will wait for it to marinade. You have to realize too that depending on when you send your email out, it’s all going to vary on how effective an email. If you send it out on a Friday afternoon, that’s horrible. If you send it out on Monday morning, horrible. Your best time to reach asset managers is sending it out between either at 11:00 AM or 2:00 to 3:00 PM and say on a Tuesday or Thursday and then rotating that.

NCS 420 | Realistic Expectations

Realistic Expectations: You’ve got to put some patience into what you’ve got to give your marketing time to work.

 

If you sent originally the first email on a Tuesday at 11:00 AM, send it on Thursday at 2:00 or 3:00 PM. Then flip flop. If you first sent it on Thursday at 2:00 or 3:00 PM, send it on Tuesday at 11:00 AM and rotate. If we realize that 80% of sales happen in the fifth contact. If you’re sending an email out once a week, the follow-up email doesn’t count to those. You’ve got to send original emails out at least five times straight. If you’re doing it once a month, that’s five months. Twice a month, that’s two and a half months before you start seeing stuff. That doesn’t mean you’re not going to get some lists along the way. You may get some lists of contract for deeds. You may get some lists of some other one-off stuff. You may have a joker broker, depending on where you’re pulling your list from.

You may get some people that send you some stuff under consignment. I bought assets under consignment. That means you’ve got a broker or a fund that they’ve got a list from a seller that they’re selling on behalf. They’re brokering that deal for that seller. I’ve seen a lot of portfolios pop up, especially in the last few weeks where there are different assets available. Even somebody says that they get the whole tape under contract and I’m laughing. I’m like, “You can’t have the full tape and the contract because I got 64 assets of that tape and the contract. You’ve got to have patience and you have to understand that it takes a little bit of time to make things happen. You can’t be like, “It’s got to happen right now.”

Marketing

I don’t know everybody’s situation. I know sometimes people are struggling materially-wise. I had one guy originally signed up for my training at the end of the last year. He called me up on a weekend like, “I need to make money now.” I’m like, “No offense, then you probably need to get a job.” If you’re trying to get into real estate investing and you need to make money now or the next week or two, you probably need to get a job. I hate to say that but real estate takes a little bit time on marketing. This doesn’t matter if you’re a wholesaler, you’re a fix and flipper or you’re a landlord. In wholesaling, you can make some quick money, but it still takes time for you to develop this list and to find those deals.

You have to put your marketing in place. You’ve got to give it time for the sauce to marinade across your list. You’ve got to give your database time to realize, “You are changing what you’re doing.” This is why we talk about the importance of emailing out to your database and doing it now and consistently. You can’t do it once a month. I had a great guy come into my office a few months ago. He’s like, “I’m marketing it in my database. I sent an email once a month.” I’m like, “Once a month? That’s too little because your database, your investors, they’re forgetting about you. They’re not seeing you in front of them on a regular enough basis of once a month or once a week at least.” I think everybody should be sending emails at least once a week to your database. We outlined some things on Note Night in America. The simple things like sending out an email at least twice a month to asset managers.

Tuesday, Thursday then two weeks later. There’s nothing wrong with that. That’s a great thing to put in place and follow up with on a regular basis. Those that open your email, those are the ones that go into your call list if you want to call them. If you’re going to make phone calls, and this is something that you’re serious about doing, you could make 50 phone calls. You can do 50 phone calls out in a week pretty easy. You do it a couple of days. You do it one day a month where Wednesday was your hump day. You called the 50 people that opened your email on Tuesday and you start dialing for dollars in those 50 people. You’d figure that if you did that once a day, it’s 200 phone calls in a month. That’s not bad. That’s a great start.

What you don’t want to do is be one of these yahoos and makes ten phone calls, gets ten noes and then hangs up all, “I’m not going to do this again.” I have had people reach out to me and say, “I had one bad experience.” One bad experience out of 5,000. That’s like if you’re a guy and going in for the first kiss on a girl and she slapped you. Hopefully, you have a better time than that or you stepped on a girl’s shoes while dancing and you leave like, “I’m not doing that.” You can’t be like that. You’ve got to have a little bit thicker skin. You’ve got to be willing to stick to it a little bit. Realistic expectations, it’s going to take a little bit of time. Give yourself some time and build-up on what you’re putting in place and just get better each week.

Social Media

Eventually, over time and it could be soon or it can be later. I don’t know what your marketing schedule is. Hopefully, it’s like I said, email to your asset managers twice a month and email out to your regular database at least once a week. Those couple of things will breed to you to finding deals and then raising capital when you have something available. Let’s not forget the third thing of posting at least once a day to your social profiles. Plus, you want at least once a day at bare minimum to your LinkedIn and to your Facebook. Your bare minimum of posting across the board like that, at least once a day. That’s not hard to do. Actually, they use the same freaking thing and reshare it across by using Buffer or Hootsuite, one marketing piece.

NCS 420 | Realistic Expectations

Realistic Expectations: You have to learn realistic expectations. Signing up for a class doesn’t make you a note expert.

 

You can literally log in to DSNews.com or HousingWire or USA Today Real Estate or whatever. Find something to start sharing with your database. You can share your golden nugget. Our buddy, Garrison Gilbert, posts Multifamily Mondays. He posts tips or solutions for multifamily investors through his Facebook profile. It’s a great thing. It’s targeting directly what he’s focused on. You have to realize, there are so many ways to do this, but it all comes down to blocking and tackling the basics and you got to set realistic expectations. If you don’t understand this and you don’t have experience, then you have to look back at what you’ve been through.

Realistic Expectations

If you’re constantly going from one thing to another thing to another thing and you’ve never fully implemented one thing, that’s the problem. I have people that are going through our online training or watching the replays and I can guarantee they’re asking questions. I know that they’re asking questions or they haven’t watched all the videos. They haven’t watched all the videos because they’re asking questions that come in day two or that come in day three. They’re getting way ahead of themselves. “I don’t want to learn the nuts and bolts. I want to go straight to the asset managers.” No offense, go back and watch the videos. You have to watch our videos and our Note Buying Blueprint or our Virtual Note Buying Workshop because they build-up on each other.

You have to learn to have realistic expectations. Signing up for a class doesn’t make you a note expert. A lot of people think like that, “I’m going to sign up for wholesaling class, but I’m not going to do any of the work. I’m just going to be a wholesaler.” That’s like saying, “I’m going to go to college but I’m never going to go to class.” When I was in college, I didn’t go to classes sometimes. It depends on what’s going on. There were other classes I could go that I just show up for the test and I would be fine or those that I would just sit through class. I would never read any of the things. As long as I read once through class, I was fine. You have to understand, “Wake up, America. Wake up, note investors.” Your expectations are not realistic and maybe you need to ask somebody if you think you’re going to make money in the first week.

Somebody emailed me and said, “I’m only seeing contract for deeds.” I’m like, “A lot is going on right now. Are you reaching out to banks?” “No.” “Then reach out to some banks. Reach out and call someone. Reach out and touch someone.” I can’t help you if you don’t have patience. I can’t help you if you’re not going to follow the plan in place that many other note investors have used to go to success. It’s not difficult. It’s simple as emailing and following up and posting on social media. You have to start changing the way that your tribe starts to see it. We all have a tribe of friends, family, colleagues, peers that surround us, that see us in the line, especially if you’re working a full-time job. They see you as Steve, the mechanic. They see you as John, the social worker. They see you as a Leah, the counselor or whatever it may be. That’s okay, but you have to start sharing, “Here’s a little thing that I’m working on a side hustle. Here’s the little thing that I do in my spare time.”

Everybody’s an investor. I think we can agree to that. Everybody is an investor of some sort whether they’re thinking about retirement or they’ve got a 401(k) that they’re trying to get to work or they’re trying to pay for kids’ education or they’re worried about paying for mom and dad’s long-term care or vice versa. Let’s face it, retirement isn’t cheap a lot of times, especially if you’ve got health issues. It’s very expensive. You have to start planning now for the future. Everybody is an investor of some sort. Everybody is looking to get above average return than a certificate of disappointment. You have to get the word out of what you’re doing. The best way to raise capital is to have the deals that you’re working through and to have a list of assets that you’ve gotten from a bank and asset manager or hedge fund, whatever it may be.

Just start marketing. You can go join different lists in LinkedIn and reach out and see what lists are available. Just realize that there are multiple ways to find deals if you will just do the work, whether you’re dialing for dollars, whether you’ve gone to LinkedIn and just did a search for special assets, secondary marketing managers, whether you are just jumping on Lane Guide, whether you’re using DistressedPro. Those are the basic ways that you’re going to find banks and contacts to do that. You could download the Texas Savings and Mortgage Bankers list. You could go to the National MLS. You could start calling servicers to talk to their business development guys. There are just a variety of things that you can do to find assets but it’s running in different places.

I’ll give you a great example. You didn’t see either one of the teams running a fullback dive in every play. They’re running a different play in the Super Bowl. They’re running different play in the NBA. They’re throwing a different pitch in baseball. The reason is they have to switch it up. You have to do to the same thing when it comes to your marketing as a real estate investor. If that’s what you’re focused on, great. If you’re looking at, “You to listen to me on wholesale and make some money,” great. You better be building your buyers list. You better be creating a seller’s list to find some things. You better be reaching out and blitzkrieging your contacts to find some things that are available to you. You have to pick your poison. Pick which way you want to go. Do I want to call banks? Do I want to email? Do I want to talk? Do I still work full time?

NCS 420 | Realistic Expectations

Realistic Expectations: Anybody that’s successful up there in the note business will tell you it’s all about consistency and dedication.

 

What you have to realize is if you’re going to reach out to people, you have to give it time for them to sit in. You have to give them time to read your email. They may not have something every month. They might not have something every week, but every bank, every hedge fund that we ever dealt with has had something at some point. The fact that they sent it to us first and foremost was because we never went away. They kept seeing the emails and my face on it. They keep seeing my logo at the header of an email. They keep seeing me on LinkedIn as I post. They check out our website. They do a lot of things like that but a lot of it goes into that. You just have to have realistic expectations that it’s going to take some time and a little patience and run with that and rinse and repeat.

That’s what it comes down to. Anybody that’s successful up there in the note business will tell you it’s all about consistency and dedication. Finding a couple of three or four things that you enjoy doing that work while you were scheduled, that you can systemize it, where you could almost set it up on autopilot, whether it’s posting, emailing, dialing, hiring a VA to jump on LinkedIn, you can send direct messages, whatever it might be, use it. There are a variety of different ways. There are so many ways to find deals. You just have to do it and do the work. Rinse and repeat and eventually, your realistic expectations will kick in and you’ll see deals like, “This actually does work.” You can’t be doing one thing and say, “This doesn’t work.” That’s the case where you will never find success in anything because you haven’t given yourself enough time to be successful.

As we said many times before, success is not an overnight occurrence. As Daymond John said overnight success for him was an eight-year experience. For me, 50 phone calls before I first got my first tape. I had another round of call in one bank 70 times before I got into the right department. Put a plan in place, write it down, rinse and repeat and give it time to work and you’d be happier. Go out and make something happen. If you’ve enjoyed this and you’re watching this on Facebook Live, feel free to share it. I’d love for you to leave a review. I’d love for you to share it. I’d love to hear from you as always out there. If you are a looking for something, feel free to drop me an email at Scott@WeCloseNotes.com. We’re glad to get on the horn and visit with you and see if we can help you find your way to the top.

Important Links:

 


Love the show? Subscribe, rate, review, and share!
Join The Note Closers Show community today:

 

Leave a Reply

Your email address will not be published. Required fields are marked *