EP NNA 14 – Business Base Hits & Home Runs For Successful Note Investing

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NNA 14 | Successful Note Investing

NNA 14 | Successful Note Investing

A successful note investor is like a professional baseball player who uses five of the best tools in his arsenal: somebody who throws, catches the ball, plays defense pretty good, runs the bases, and has his eye trained on the ball like a hawk on its prey. And when it comes to real estate and note investing, scoring base hits and home runs early on can boost your financial standing among your peers. Home runs are great. God comes with big home runs, big checks – and what causes big checks?

You either bind the right price or the property has appreciated over time frame, or hold on to that note through foreclosure. You end up negotiating, maybe you speed up a foreclosure time frame and are able to offer cash for keys or the hedge fund messes up on the value. Then you see the value that you find is a lot more than what the seller believes it is, and you’re right and they’re wrong. But I’ll let you in on a secret: when you swing for the fences, when you’re constantly swinging for home runs, you’re likely to strike out more. If your deal is a home run, you’re going to make a whole lot more offers.

Listen to the podcast here:

Business Base Hits & Home Runs For Successful Note Investing

This is all about base hits and home runs. Before we do that though, we like to stress what our big goal is here at We Close Notes. Our biggest goal here for the next five years is to help educate and create 10,000 note investors and we’re on our way to doing that. The only way we can do that with all of you is if you help share the message, share what we’ve got going out there, so do me a favor and hit the share button, share to your page, share to a group you’re a part of. Let’s see how many people we can get to see this thing because this is a very valuable episode of Note Night in America, so help us hit our goal of 10,000 new note investors over the next five years. Trust me, there’s plenty of inventory to go around.

Who’s on Note Night in America? A lot of active real estate investors, note investors, people looking to get in to notes. You can catch these at two places. You can catch them at WeCloseNotes.tv or you can catch the recording by going to iTunes. Each new episode takes about four days for it to get up on the iTunes for you, so if you miss this, you’ve got a bug out soon or get strike out by something else, you can go back to iTunes and listen to the replay in a couple of days or go to WeCloseNotes.tv and catch the video in roughly about 48 hours.

As always, we do have Note CAMP 5.0. Each session is uploaded on iTunes and Stitcher as individual podcast episodes, so you can go on there and listen anywhere from Sharon Lechter to Alan Cowgill to Rhonda Britten to Nathan Long, and Kristie Whites talk about some great stuff on Note CAMP 5.0. That’s over 1,500 downloads. It’s doing some good stuff.

Most importantly, thank you. My big applause goes out to everybody. I want to thank all of the audience of the Note Closers Show. We hit 100,000 downloads. We hit it literally on a nine‑month goal of when the first episode came out in iTunes, so I’m very stoked about that. We’ve got some big numbers that we want to hit, but that’s one of the first goals that we plan to hit. We wanted to hit 100,000 downloads before our first year. We did it. We need to reset our goals and strive for some bigger things. I’m not getting out of the park with that.

NNA 14 | Successful Note Investing

Successful Note Investing: We need to reset our goals and strive for some bigger things.

Speaking of notes, the Note Closers Show, we are taking a little bit of a siesta. Myself and Steph are headed out on a little bit of vacation, some fun here, but we are not going to leave you hanging. If you have not listened to the episodes in the last couple of weeks, go out and check a few of the newest episodes we uploaded but we did not want to leave it vacant for three weeks. We’ve got some great guests. Hosts are going to be taking over the Note Closes Show. A big shout out to Bill Griesmer, Gail Villanueva, Eric Hyde, Gail Greenberg, Chris Seveney, Katie Moton and Patty Ped. They are all going to rotate through, sometimes two, sometimes three times, over the next couple of weeks for you. They’ve all got some great stuff lined up. They were all pretty excited. We had a call to discuss scheduling, so you’re in good hands and great new content. We’re going to shake it up a little bit. It’s always good to learn. It’s always good to get some fresh meat on the show. Most of these people have been on the show. There are a couple that haven’t yet, but they’ve got some great things to provide anywhere from Gail’s closing on her first few notes, Patty’s closing a couple of notes, Katie and Bill closing a few notes, Eric having closed 20 to 25, Gail in the upper 30s, and Chris has over 45, close to 50. We’ve got some great stuff to learn from and topics that we’ll be discussing, so roughly about fourteen to fifteen episodes with guest hosts for you.

Our main content is base hits and home runs. That’s what everybody likes to talk about: a hitter, a triple, a double, and single home runs. That’s the analogy aspect of it, but I always like to ask, “Were you a five-tool player?” You don’t have to be around me long enough that I absolutely love baseball. I’ve got three different bats: Bo Jackson bat, Kirby Puckett bat, a something here with dirt from every stadium. I love baseball and every time I go to a baseball game, it’s my way of relaxing a lot and taking it. I get a lot of inspiration from games. I get a lot of ideas and lots of great stuff out there when it comes to baseball. There’re so many business lessons that come with it, but when I’m talking to people, I ask questions about them as a real estate investor and a note investor because if you’re going to be successful in this for a long term, you’ve got to have the five tools around it.

In baseball, when they talk about a five-tool player, it’s somebody who throws. This is one of the first tools: fields well, catches the ball, plays defense pretty good, runs the bases well, and they don’t get picked off there. They are speedy. They can go from first to third base. They hit for average. By average, I mean over 300 batting average, or they hit for power. We always like to say, “Chicks dig the long ball.” Those are the five tools and you’re probably thinking, “How does this all fit in to the note business?” I’m going to give you an example. If things go well, it’s all about marketing. It all literally starts with marketing. Nothing happens in baseball until somebody throws a baseball. First pitch, second pitch, nothing happens until somebody is pitching. I see so many analogies between that and marketing.

The second tool, they field well. It’s all about due diligence. It is all about loss mitigation, seeing what’s going on with the deal and being able to play defense on that aspect. Running the bases well. I’m a big believer that’s a delegation of duties to the experts. You’ll be able to run the bases well and you can go from first to third, but most of that comes from giving people the right tools or the right direction so they can make those decisions and those pitch runners run for you versus you trying to do it all yourself.

Hits for average, these are people that get consistent ROIs on deals. We’re not talking home run deals, but in most traditional real estate investing, there seems like 12% to 25% ROI or yield on their investments because they’re doing things on a consistent basis. There’s nothing wrong with getting 12% to 25%, whether 12% for your own investments or you’re splitting a JV deal and shooting for the 25% range. Then hits for powers, these are the guys or gals that are swinging for the fences, deals with big numbers, or they’ve got big ROIs lined up and they are trying to hit it out of the park every time. I’m also a big promoter that your bigger checks, you’re out of the park once you end up probably foreclosing on and turn REOs, or you hold onto those reperformers for a while and then sell them off as reperformers in twelve to eighteen months.

Let’s talk about throwing the rock. Let’s talk about the first thing you have to do being a baseball player or in the note business. As I said before, the games don’t start until someone has to throw a pitch. Pitch can be a variety of different things. As a pitcher, if you’re like Mad Dog or Madison Bumgarner there, you’re enticing someone to either swing at a pitch. He’s got a wicked slider, a curve ball, fast ball. Big Hickory or Big Country, as they call him, is from Hickory, North Carolina. He is going to throw a fast ball. There is a variety of pitching.

The analogy of pitching somebody is you’re also throwing a ball down the middle, trying to swing it to either fund your deal or sealing a deal. If you think about this, the analogy is this. There are 27 outs in baseball. Nine innings, three out each to finish the game for the most part unless it goes to the next range. There is no pitcher out there that has thrown a game that’s been 27 pitches. There have been games where they had a perfect game where they only pitched to 27 people, but they still had to throw more than 27 pitches. Nobody’s perfect. You have to realize this in your pitch. What you’re doing as a note investor, you’re not going to be perfect. The average baseball game has about 146 pitch average per side. If you figure 27 outs of 146 pitches, that means you’re only getting out roughly about 18% to 19 % of the time, which is pretty normal as a note and real estate investor. You’ve got about 20% closing ratio. You get 20%, you’re doing awesome.

I wanted to bring on one of the best pitching coaches that I know. Our pitching coach who shared something with you on the best ways on how to throw some things out there before we dive into the rest of the information is our good friend, Kristie Whites. One of the big things that we were talking about is everybody’s got different pitches that they do, especially being a starting pitcher. We all have things. We’re all the pitchers in our business. We’ve the guy or gal up there throwing heat, trying to get people or investors to swing at either deals or funding things, stuff like that. You and I talked a little bit about the basic things that are most attractive or the easiest for investors to do. First of all, before you dive into that, for those that don’t know who you are, why don’t you take a second to share about who you are, what Serving Social is, and why you’re such a badass at what you do?

I am Kristie Whites. I am the CEO and Founder of Serving Social where we make marketing simple. Our goal is to make marketing simple for you through education, through resources, through tools, whatever it may be. I love it, I live it, I breathe it. I’m hard to watch TV with because I keep dissecting the commercial. It is lot of great fun. We’re a husband and wife team. My husband’s my business partner and we are nomadic, so we are called #DigitalNomads and we travel around in our RV around the country. We work with business owners in different towns in different states.

NNA 14 | Successful Note Investing

Successful Note Investing: Social media is never going to stay the same and that it constantly keeps changing the rules.

You are helping entrepreneurs not just locally but all across the country to throw strikes in their business. We talked about how a lot of times, there are three simple things that people can do to get their pitch rock and rolling. Throw a couple of things to make it simple, a fastball, curve ball, or change up. Everybody can throw fastball. What are some things that everybody can do to help them in their game?

They have to first recognize that it’s going to change, that social media is never going to stay the same and that it constantly keeps changing the rules. Anytime anything switches or changes around, you need to know about it so that you can be at the forefront of it, like people practice their pitches, they practice their fastball. You need to be practicing and knowing what’s going on with the network. I would say the biggest thing that you can change is start integrating in 30 minutes, if you can, to educating yourself on what’s going on within each network. Social media is a great resource. Serving Social is a great resource, but you need to find what you’re passionate about. If it’s Facebook or you’re Instagramming, find the network that’s going to give you the information you need to stay up to date about it. That is the quickest way that you’re going to figure out what you need to be putting into play.

Staying active. What I’ve noticed is that people are starting to get the hang of scheduling their content and so then they schedule it and they make the worst mistake ever of never going back and checking any of it. The staying active part is an every single day thing. It is engagement. It is going out and reaching out and talking to people. It’s not only replying to the people that have engaged with you but going out and seeking out people to engage with. You can join a new group. We make rules of engagement so that you are actively participating every single day. If you set a goal like, “I’m going to talk to three new businesses. I’m going to find five new note investors,” whatever it may be, you’re actively paying attention to that every single day and executing it.

That’s a good idea. They’re out there getting started, whether it’s posting to LinkedIn or posting to Facebook or Pinterest, whatever, they identify where they see the most amount of good from, whether it’s doing Facebook Live or recording video on LinkedIn. You see LinkedIn is getting on the page of uploading videos.

LinkedIn is applying hashtag. They’re actively embracing it and allowing it to be part of their search and their results, so definitely talking about my first point of it will change, there is the proof of it. The quickest things, the things to pay attention to, for Instagram is Instastory. That was all what Snapchat was all about, these stories. A year after launching it, Instagram is pretty much dominating the short story feature, paying attention not only to posting to Instagram but posting your story and the same thing with Facebook. They have your story as well that lasts for 24 hours and disappears. Those have been very beneficial and very quick results in terms of engagement.

Another feature is leveraging live video. If you know that Twitter and Facebook want to go in the route of YouTube, then you need to be preparing yourself in that type of content to be putting it out there, whether it be prerecorded or live or anything. Just start pushing video out and getting used to it. It’s not going away. Another element is chatbots. Scott, you and I learned a lot about that. It is drilled into our heads at Traffic & Conversion, but with social media, you can’t be sitting here answering every single message every single day. It’s going to become overwhelming at one point in time, especially if you decide to run ads, which are something that I’m going to suggest that you do to. Normally, I was anti-ads all organic, but things are changing.

That’s the curve ball that’s been thrown instantly. When we’re at Traffic & Conversion, they did talk about chatbots. Facebook changed up their algorithms, changed how they allowed chatbots into it. I know most in the audience are like, “What the hell is a chatbot?” You want to explain what a chatbot is before we dive too much of that curve ball, Kristie?

A chatbot is a way of having automated communication, so it is a way of taking that artificial intelligence element and incorporating it into your everyday communication in an efficient way. Take, for example, a chatbot in Facebook. You have direct messages both in Twitter and Facebook and it is called Messenger inside Facebook. If somebody messages your business page or messages you, enacting a chatbot would allow for an automated response to reply on your behalf. Then you can direct the communication and the conversation to how it goes from there. If somebody instantly messages Serving Social, it can say, “Hi, thanks for reaching out. We’ll be right with you in a moment,” or it could say something more advanced, like the same thing, “Do you need help with social media, website, email?” and then I can take them down a specific pathway and conversation that’s all automated to the point where we find that human interaction needs to be put in play. That’s when we tell them to give us a call. It almost interacts as a pre-qualifier for some of our leads, but it also aids them and gives them information right then and there that we might not be able to.

That’s the most important thing. There’re things you can do like doing a Facebook Live video or doing a live stream straight from Facebook where you are having people leave comments. You say, “If you’re watching this, do #Bot or #Deal.” Do you want to get the details of the most recent deals? You do #Deal and literally, AI takes over, starts asking you questions, and based on your answers to the questions, it gives you information like, “Are you interested in this deal in Ohio?” “Yes.” “Great. Do you want to get the details?” “Yes.” “Here’s the UPB.” “Here’s a picture.” “Here’s what we found out.” You literally automate through chatbots a variety of things. What I’m so excited about is we are doing a huge overhaul with chatbots where we’re focused on in the note business.

We’re going to revolutionize the real estate industry with our chatbot stuff that we’ve got working on. We’re excited about. That’s a bit of a curve ball that we’re throwing, but there are ways for you out there starting off to be able to use that with your pitches. If you have your deals or if you’re talking or mentioning something on a Quest IRA call, “Send me a message if you’re interested in seeing my deal” and people can opt in from a Quest IRA where they comment on you or they private message you. The idea that Kristie mentioned is all bugging the individual conversations that are automated up to a point that the AI filters through the conversation so that you’re only spending time talking to real serious people.

That’s the most important thing. It is giving yourself back time but also being productive at the same time. You want to make sure that if you’re going to put it there, that you’ve taken the time to build out that user flow of conversation. You don’t want to throw something up there and see how it goes. You want to direct them all the way through or you won’t get it tested effectively. I’m excited to see what you’re doing. I love that. I’ll test it out and break it a little bit.

I totally expect you and a bunch of other people on here to do that as well, so that’s a bit of a curve ball. Let’s talk a little bit about change up. What should people do if they’re doing something and they’re not getting the same results that they were getting a month ago or a week ago or they’re not seeing the type of results that they’re wanting to get? What do you think? A lot of people get frustrated that they don’t see instant gratification. As a marketer and things like that, when somebody is pitching, what should they look at as far as a timeframe before they start seeing results?

If you’re actively consistently doing all of the elements, keep in mind that is a whole big thing. Your marketing is not just about one thing, it’s about multiple things working together. It’s a matter of setting goals is how you’re going to be able to see and get that gratification that you’re looking for. Before you start to do anything, for example, if you decide “I’m going to start doing Facebook marketing,” fabulous. What’s your goal that you want out of it? In what timeframe are you hoping to achieve it? Without that, you’re not going to get any gratification. You’re just going to feel like you’re working and working because you never set endpoints that you wanted to strive for but say that first. The other thing is to embrace something that you might not have ever thought to try or something that you might’ve thought was dead. You always hear that email is dead or you hear the practice of SEO is dead and yet it’s not. It just changes how you use them.

NNA 14 | Successful Note Investing

Successful Note Investing: Your marketing is not just about one thing, it’s about multiple things working together.

SEO was the biggest thing at one point in time. All you needed to do was build links and do all of these things, and now it’s not about that anymore. It’s very low on the totem pole of necessaries. It’s something about embracing that element that it will change and how can you pivot for it, but you have a goal in mind that gives you that achievement that you’re looking for, that check mark. That’s why if you’re going to engage with people, for example, get online and communicate with people, try to set a goal for it so that you know that you’re reaching your numbers. By the end of the week, if you liked five people every day for seven days, you can imagine how many new followers you’ve now interacted on your end at the same time.

A big thing is to set some realistic expectations. There’s some audience of Note Night in America who, two weeks after they take a class, are getting frustrated because they’re not finding note deals or they don’t have anybody like, “Nobody’s stepped up to fund my deals yet.” I was like, “You’ve got to give it time.” You’ve got to go through your pitches. You’ve got to get through it. It’s a long game. It’s not going to be you throw one pitch, it’s a home run, and you walk out winners.

That would be great, but not realistic. The other element I would say is to talk about social ads for a minute. We all want that organic reach, but it’s nonexistent for a lot of people and it’s not there. I’m not huge on social advertising, but when done effectively, when you take the time to plan it out, to figure out who your audience is and how you plan on engaging with them and what the goal you want out of it, it can be very effective, especially when you have a great piece of content that you’re trying to boost. Every single posting that you’ve put out there, you need to curate a great piece of content and then boost it. If you’re going to boost date and you’re going to run an ad for it, where’s it going? Is it going back to the landing page? If it’s not, don’t do it. You’re wasting your money because you’re not getting them back to your website or you’re not getting them on the phone with you or you’re not getting them to email you. There has to be a direct call to action at the end.

The ad engagement and community element are going to be the two things that you need to pay attention to. How am I building and getting people to engage with me and building that community? How much am I reserving of my budget to start getting myself out there more? It’s always time versus money, so you need a little bit of both even if it’s only $25 a month. I’ve done amazing things with $25 a month, but I had to put the time into it to make it work.

You’ve had to put some tools into your tool belt with aspect of the marketing to get better. Using Canva images or something that’s better versus an ugly photo of something and it’s blurry and something you took on a phone that’s not high quality or high def.

You need to put a great visual out there because people are visual. I’m going to skim right through your stuff but your image is crappy or your video has poor sound. It comes down to quality. I’d rather you put out one great piece of content a week than put out six other pieces of crap. I’m not going to look at it and you’ve wasted all your time and energy building six other pieces when you could’ve been building four high quality pieces and targeting and spending time on those. Quantity is not always the thing in social media. People think, “I need to tweet five or six or twelve times a day.” One person said 25 times a day, they were trying to tweet because somebody told them they needed to. I was like, “Why?” Pick one conversation you want to have on Twitter and have the one targeted quality conversation and be done with it, and then come back to it later when you have another one. They’re like, “I never thought I could do that.” You set the rules for your time, but if you’re expecting a big result out of it, then you need to allocate what you’re putting your time into. Everything starts with marketing.

Whether it’s an email blast you’re going to send out to your database, take some time to write it. If you’re going to do a video once a week, take some time, script it out, focus on it, use a good camera, and don’t rush it. Getting it out there and sharing it is so valuable to tweak things up. I like to say fastball, curve ball, change up here. What’s important is to realize is not every pitcher throws the exact same pitch every stinking time. Sometimes it’s high, sometimes it’s low. They’ve got to mix it up to keep the batters on their toes to see some things out there. Otherwise, they’re sitting there and they know that you’ll constantly going to throw over their head, they’re going to sit there and take a walk. You out there, change it up, throw a different aspect in it. You don’t have to have twenty different things to do but do a few different things to mix it up and keep the game interesting.

We don’t want people to get bored. That’s why creative content is so important and you’re a great example of that, Scott. All these things that you’re intermingling in with what you’re doing to make your content more inviting and more creative and more fun. If you were talking about the same theme, notes with the same graphic every single time, I’m going to get bored after a while. By you changing up the themes and creating more unique content and giving it to me in multiple different ways, you’re like, “Here it’s on the blog and it’s on the podcast and you can find the video on Facebook,” like you gave it in multiple ways. You took one piece of content and you broke it down. You weren’t duplicating your effort six times over. It is that creative content.

We think of so many great note marketing things for Han Solo. Same thing like Deadpool. We had so much going on with like Note Pool when the first Deadpool came out. Things are lined up. An audience says, “When boosting on Facebook, is there also a way to put a contact form, so they go straight into the database?”

Those are third party integrations. It’s not something that comes standard with Facebook ads. It’s something where if you want them to go to a form where you collect information, you need a third party that’s collecting that information. If I have a link that goes to a landing page where they enter in the information on the form, perfect, that’s what you want. The idea is you want that click through to another page so that you can record that quick. Also, you are making sure that you’re not getting all these people clicking on it. You can track it back to your site that’s having them enter in a form where inside Facebook wouldn’t serve you the same way.

The biggest thing to keep in mind too is if you’re going to boost a post or create an ad, it does ask you, “Where do you want this to go?” so you could very easily go to MailChimp and then create a custom list that gives you a link and put that link into the thing, but you’re going to be effective in communicating what you want, “Get on my buyers list” or “Get on my investor’s list” and you have to have an effective photo to get people to click on it. When they click on that link too, it takes them to that landing page and MailChimp or something like that. You want to make sure that’s good looking as well and that is well designed. Honestly, the biggest mistake I see a lot of people do is they ask for everybody’s bio when they fill out the information, like first name, last name, email, full address, Gemini sign, and date of birth. It’s different if you’re asking a survey, but if you’re trying to get somebody to go on, would you go up to a guy out to the bar and say, “Give me everything about you, your blood type, your shoe size, everything else,” or you could say, “What’s your name? Can I get your number? How you doing? Would you like to get on my hot list?”

It is all about user experience. One experience might leave you taking someone home. The other experience might leave you on the floor because you’ve got hit, whatever that might be.

NNA 14 | Successful Note Investing

Successful Note Investing: It is all about user experience.

You could have them running in horror away from you.

You should keep in mind user experience all the time and everything you’re doing. If you’re creating something that you’re having somebody click through to or a form that you want somebody to fill out, think about if you would fill it out, “Would I click on this? Would I want to fill this much information out?” It’s not about what you want to collect, it’s about what your users are willing to do and what value are you giving them to get them to do it. User experience is big.

You see a lot of people offering eBooks. It is something that we do, “For $1, buy 52-page book on note investing or get access to this video series or get access to my one-page report,” or something like that. That’s effective because you’re adding value. A name, an email, a phone number, that’s not a lot. People are often willing to give that to get access to a one-page report as long as that report is the eyeball or something like that.

We will let you get back to the bullpen and get your honey bourbon going on.

Thanks for having me.

Let’s move on to the other aspects of being a good five-tool investor. One of the things besides throwing is you to be able to field the ball or catch the ball. This is one thing that comes from practice, practice, practice. Fielding well, I’m a big believer, is all about breaking down deals. It’s all about going through them. Think about how many ground balls or how many fly balls a first baseman or an outfielder literally do on a regular basis. Think about how many they do on a regular basis before they ever get in the game, before they ever go from little league into the game or tee ball or to freshman league, junior varsity or high school in the eight ball. Think about how many practice swings they do. How many times are they fielding? What do they do with it? Especially when they’re having a game and they get the ball and hit them away, what do they do with it? Just stand and hold the ball or do they need to throw it to first base to get the guy out or they need to flip it to the second baseman if they are playing short term too? There’re a whole lot of scenarios that go with fielding well.

I’m a big believer that is a good analogy for note investors. We get a deal, what the hell am I going to do this deal? Does it make sense? Do I need to throw it away? Do I need to catch it and get rid of it? Is it an out? What base do we need to throw it to? Do I need to throw it to my attorney? Do I need to throw it to my servicer? Do I need to throw it to the insurance company? Can I make a double play on this deal? Can I pick up another asset fast? There’s a whole lot of analogy as well.

If you think about this, I ran a search on the average fielding percentage. They fielding breakdown at every Major League team for last year. They were averaging 0.984 average. That means they were making still sixteen mistakes out of a thousand. Of a thousand plays, they were averaging about sixteen mistakes. They make more than a thousand plays because you figure 146 pitches, who’s got to catch, you’ve got a pitcher throwing it, you’ve got a catcher catching it, hits, things like that. There’re a lot of plays that take place especially in 162-day season. With us as investors, it’s a 365‑day a year business for the most part. As you’re practicing, you’re breaking things down. You’re going to make mistakes. What you can’t be afraid of is to get in the game and throw the ball.

Rick Ankiel is a great player. He was a Cardinal but he broke into the big leagues at age nineteen or twenty as an amazing pitcher and then he had one horrible outing into his first or second year a couple of years into the league where he was wild. He couldn’t throw a strike. He threw it above outside, like a wild thing, and retired. Then Tony La Russa, who was managing the Cardinals, called him back and said, “Why don’t you come be an outfielder because every time you’ve got up to bat as a pitcher, you were still hitting it. We can convert you to an outfielder.” He came back and played for a few more years as an outfielder. One of the great stories of somebody went from having the yips to having the yeses, but he screwed up a lot and he didn’t give up on himself. He came back.

Unfortunately, a lot of note investors make one mistake and they get down on themselves. They make one mistake on due diligence and like, “I can’t do this. I’m too scared to take steps.” The only way you’re going to get better at honing your craft is by doing things over and over again, breaking down deals, looking at assets, looking at tapes, making phone calls, doing the things that we’ve talked about.

Fielding the ball on a regular daily basis, taking grounders, just throwing the ball, playing catch, getting better at your craft. Getting your 10,000 of expertise out there as you get better as a fielder or better as a second baseman and shortstop, whatever your favorite position is. It’s all about doing it over and over, wash, rinse and repeat, doing it over again. That’s the only way you get better. These guys in the Major League are still making mistakes. They’re still dropping the ball. They’re still throwing the ball high. They’re still throwing it to the backstop and wild pitches. It doesn’t mean you’re perfect but it means you get better every day.

The last thing you want to have when it comes to fielding is the whole “don’t hit it to me” complex. People get in the game, like “I’m in the game. I’m standing outfield. Shit, don’t hit it to me.” You don’t want to have that.” You want to get into a game. That’s the only way you know how and how well it is. I see friends that get in the game for the first time and they’re all shaking, swinging at the ball to him and fall over crazy. Don’t do that in the note industry. Don’t do that as real estate investor. You want to hit it to me. You don’t want to be like Dan Deppen who says, “That was me in Little League. Don’t hit it to me.”

Let’s go on to the third tool. This is all about running your bases well. They run the bases well out there. I’m a big believer, you get on base, you get a hit in, you don’t want to get picked off by tax, you don’t want to get picked off by something stupid, missing something in title. It’s important too that you can also, when you get on base, steal a base or two. You can turn a non-performer into a trial payment plan with a phone call or a lender or getting a mod agreement from making sometimes a simple phone call or a simple letter. Those are great ways to steal a base. One of the things that we always get when we have people come in here for Austin for the Fast Track training is when we share the trial payment plans or basic letter that we sent up, they’re like, “Is this it?” I’m like, “That’s basically it. That’s got a 60% success rate.” “I’ll take it.” It saves us thousands of dollars on the assets we buy.

Another thing about running the bases too is you want to be aggressive in getting the deals to legal if the borrower is not going to play ball with you. Don’t be afraid to send it to a legal. You should not be trying to do everything yourself. If you have no experience, then don’t be trying to steal bases or take two bases when you probably should be standing on the base versus trying to steal. You also have to know your situations. When is a good time to steal and when is it not? Do you have a potential big deal there that you don’t want to risk getting tagged out? Your big deal could be a home run or you do something stupid.

A story I heard through the grapevine or something that was in the mastermind in Dallas, they were up making an offer on some property. They hit it off because the homeowner was in the military. They had a deal. They had agreed on a number the guy is going to buy the house at. The next day, the guy went back to and he got greedy. He said, “I need $10,000 more to make this deal work.” The buyer was like, “Screw you. No, forget it. It’s off,” and he went back and talked to my buddy, Jason. Jason was like, “Was it a deal at the $10,000 above before you went back?” He was like, “It was a great deal.” “Then why did you try to get greedy and ruin a good deal?”

NNA 14 | Successful Note Investing

Successful Note Investing: You’re never going to get off of home base if you’re worried about the worst possible situation.

I see that happening. I see people that want the perfect deal, it’s got to be exactly this. When you look at things, are you overanalyzing? Are you looking at your numbers like the worst possible situation? We’ve had people come in like that, like, “I have all my due diligence based on the worst possible situation and we don’t bid above that.” I’m like, “If you’re worried about the worst possible situation, you’re never going to get off first base.” You’re never going to get off of home base if you’re worried about the worst possible situation. Sometimes you’ve got to get in there and get dirty. If you get in there and get a little aggressive, you’ll be amazed at some of the things that you can do to score some extra runs.

There is no perfect deal but keep chasing it and that will take you things you don’t like. I’ve seen that happen. I blew a couple people out of my mastermind like, “We want the perfect deal. This is a great deal. Why are you not pulling the trigger on this?” “Because it’s not perfect.” I’m like, “Nothing’s going to be perfect. Fine, screw it. I’m taking the deal. I’ll do the deal if you’re not going to do it.” I’m not going to get a good deal go to waste and eventually blew them out because the fact is that they were uncomfortable. They could not listen to coaching. They weren’t coachable. That’s one of the big things you want to keep in mind. You want to be coachable. You want your coach to be able to know which situations you’re in and when he does call for you to be a little more aggressive or call for you to be a little less aggressive on things. All comes from practicing, giving around and getting in the game.

Hit for average. Tony Gwynn from the San Diego Padres was one guy who was not a big home run hitter. He was all about singles and doubles. One of the best contact hitters in the game. He was a little bit a thick around the middle. If you think about going for contacting, if you get three hits out of every ten, and you bat 300, that’s a Hall of Famer average. If you hit 300 for your lifetime, you’re going to make it in the Hall of Fame. That’s one of the things that we talked about. What we see is our closing ratio, the time that we get hits and doubles, is roughly about 30% of the time. If I make ten offers, I’m probably going to get three to four that come in there somewhere where I get accepted and run with those. The other 50%, 60%, 70% of stuff that we bid on that doesn’t go through, you may have overbid or outbid us or the deal gets pulled.

There’s a whole variety of things. The thing you’ve got to keep in mind is that there are a lot of deals out there that you can hit for average. You can do some performing notes if you’re looking for a decent return. Dan was talking about that. He’s buying some performing notes for a self-directed IRA. Great singles, great doubles, making 10%, 12%, 13% in his IRA, so kudos to you, Dan. Don’t ever talk down about your deals. There are some people who struggled because it’s not as sexy as a 30% yield. If you’re making 12% or 13% and you’re happy, kudos to you. You’re winning at the game of notes. Reperforming notes is another thing. People like to buy stuff mainly for reperforming. It’s one of our big game plans. We’re buying non-performing with the goal of getting it re performing or we also like to buy a lot of contract for deeds with low default days where they’ve got less than six months they’ve default on or they’ve made a payment in the last twelve months or less.

Those are some things that we can hit for average and return a pretty decent return to us. There’s nothing wrong with singles and doubles. You could hit singles and doubles and you’ll be sitting in the Hall of Fame when it comes down to it. Singles and doubles is one of the best things you can literally do in your real estate and note business. You don’t have to try to hit it out of the yard every time, trying to hit a grand slam, and there’s nobody on base. I see that, “I’m going to out and hit 50 home runs this year. I made 50 deals this year,” like you didn’t close one yet. Let’s get you closing on one or two or three and then let’s start talking about then hitting for power.

I’ll repeat the first four before we get to five, about throwing well, pitching, fielding, running the bases, and hitting for average. What would you think the fifth tool is? The fifth one is all about hitting for power. Barry Bonds, the all-time home run king, some people will argue that Hank Aaron is the all-time, or Eric King. I’m not going to argue with both leaguers. I’m just a big Barry Bonds fan growing up, big San Francisco Giants fan.

Hitting for power, chicks dig the long ball. Home runs are great and they’re going to have that. What comes with big home runs, big checks. What causes big checks? A variety of things. You either buy at the right price or the property has appreciated over a time frame while you held on to that note through foreclosure time frames. We’ve done a lot with that. You end up negotiating. Maybe you speed up a foreclosure timeframe and are able to offer cash for keys, for deed in lieu, or consent of judgment. You get something going or taking place or the hedge fund messes up on the value. Then you see the value that you find is a lot more than what the seller believes it is, and you’re right and they’re wrong.

When you swing for the fences, when you’re constantly swinging for home runs, you’re likely to strike out more. You’re likely to miss a lot more because you’re swinging or adjusting your numbers so that your deal is a home run. You’re going to strike out more, you’re going to make a whole lot more offers versus adjusting your number so that you’re hitting singles and doubles. I’m not talking about overpaying for assets. I’m talking about stuff that makes sense for you if you stick to your numbers. If you’re swinging, coming out of your shoes, trying to hit a home run every time, you’re going to strike out a whole lot more.

If you do a search for home run hitters versus strike out hitters, there are a lot of similarities between the two. Great home run hitters aren’t always the guys that are hitting for average either. That’s why I’m a big fan of Barry Bonds. He’s always hitting for average, always doing great stuff like that. At the end of his career, he didn’t get a lot of good pitches to hit that, but he was still hitting them out. He only led the Majors in home runs twice in two years, the year he got 73 and then another in 2001 when he was still with the Pirates.

The big thing here, hitting for power is great. You’ve got to know when to turn on and you know when to pull it up and then when to swing for the fences on it. If you’ve got a great deal that you know is potential for that, then dive into it. The way you do where you get ahead in the game though, for the most part, is playing small ball, singles, doubles, bunts, spun hits, sacrificing some deals. The way to be a good baseball player is doing all the things well, not just one. If you only focus on one thing, you’re not going to be successful and have better stuff. That’s why we talked in the beginning about Mike Trout is a true five-tool player. There’re people going to the Hall of Fame, Frank Thomas, great five-tool player. One of my favorites, Jeff Bagwell, who recently when to the Hall of Fame was a five-tool player, except for his last years where his shoulder was demolished. He could hardly throw the ball but he can still hit and the funky backswing.

NNA 14 | Successful Note Investing

Successful Note Investing: If you only focus on one thing, you’re not going to be successful and have better stuff.

Look at what other people are doing and model of them, would be coachable, listen to your pitching coaches, you’re batting coaches, things out there that are telling you what to do and what not to do and don’t go out trying to hit a home run every time in the play because it doesn’t happen. You also have to be very careful of taking advice from people that aren’t closing deals. There’re plenty of people out there who are supposedly educators now because they can’t close deals, so they’re going to teach you now how not to close deals. Do you want to take advice from somebody who’s closed to a thousand deals are closed on 30 deals or ten deals or five deals? I’m not saying you can’t learn something from somebody who closed on five or ten or 30 deals, but somebody who wants bigger things, you’ve got to be going for those bigger shoes. Be coachable, learn what’s going on and go out and make something happen.

Those are the five tools to help me get better base hits and home runs, how to make more money in the note business. Focus on your tools, be a complete investor in what you’re doing. Don’t just focus on one thing. You’ve got to be all encompassing. You’ve got to be a great pitcher, great marketer. You’ve got to be good in fielding, that’s due diligence. Run a good base run, knowing who to throw it to, who to run to, what to do, and how to delegate that out aspect of it. Then knowing and being able to hit for average. Nothing wrong with hitting for average, and of course knowing when to pull out the big stick and hit it for the big bomb when it’s worthy of and time to pull out the big dog.

Hopefully, this was helpful. I like to shake it up a little bit. I try to think of something a bit different. It’s very easy to get the same type of rut and doing the same things and get burn out, especially when you’re burning the candle at both ends for those of you that are working full-time jobs and note investing on the side, trying to figure things out, shake it up a little bit. Sometimes take a day off. Don’t be afraid to throw a curve ball every once in a while to see what happens. Take advantage of a lot of the education, a lot of comments, a lot of the videos we have out there. There’s so much great education. We want you guys to take action. We want you to close deals because we believe there’s plenty to go around and go out and make it happen.

Thank you again for always being here. I’m glad you enjoyed it with Kristie. We’ll see you at the top.

 

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