EP NNA 37 – Building A Perfect Note Business

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NNA 37 | Perfect Note Business

NNA 37 | Perfect Note Business

 

A perfect note business varies for each one of us. Identifying what you need to do and what to focus on will help you create one. Defining success, having a business plan, delegating, and seeking advice are some of the things required in order to achieve it. Also, never forget family because that’s the greatest asset you can have. Provide them the things they enjoy and communicate as well in order to have them support you on things you are doing. Learn how you can build a strong foundation to put things in place to create your perfect note business.

Listen to the podcast here:

Building A Perfect Note Business

We have a ride of people who are on. We have note and real estate investors or people looking to get into the notes, people interested in investing in notes. You can always catch the replays on our YouTube channel. Go to WeCloseNotes.tv to be able to take advantage of those or what we also do with Note Night in America is we post these directly as well to iTunes. We have our own Note Night in America podcast as well replayed webinars besides posting the videos straight to YouTube in our Vimeo account. I’ll also encourage you if you’ve stepped out, you’ve missed a couple of weeks, you can look at what we’ve got available on there. As always, we encourage you as well to also listen and download the Note Closers Podcast.

This is our 50,000-megawatt blow torch, about every Monday through Friday for the most part. We usually average somewhere between three and five episodes a week. You can get these also on our YouTube channel, but we’re under 250,000 downloads. We’d love for you to review and subscribe. If you do leave a review, please leave your name in there. If you’ve got something weird iTunes name like 3456785, I don’t know who that is, but I want to thank those that have left reviews. I would love it. You’ll never know, I might surprise you. Go on and leave a review and leave your name. Trust me, I’ll surprise you with a nice either a book or some swag or something.

Go to iTunes, leave a review and subscribe to it. We’ve got lots of great episodes with content interviews, guests and vendors as well me teaching on a variety of things. I want to hit the event calendar for you to mark your calendars. For those that are interested in learning more, we have our Fast Track Training on March 15th through the 17th. We’ve got two spots. The next one after that is going to be April. We put this one on the calendar, April 19th through the 21st. I know it’s Easter weekend, but we have plenty of people that want to do it. We’ve got a few spots left available for March and only two or three spots available for April. We have Note CAMP 7.0 that’s online. You can sign up at NoteCAMP.live for that. Our Note Mastermind is going to be here in Austin, April 26th to the 28th. We signed with the Hilton Garden Inn downtown right off of Sixth Street. We’ve got some fun, some new stuff we’re going to be focused on for the Note Mastermind. We’re talking about legacies and things like that. We’ve got some cool stuff that we’re going to focus on a little bit different this mastermind around than what we’d done in the past. That’s our event schedules.

We’ve got a lot to cover. We’ve got a lot going on here, not only travel but speaking and then also providing great content. I have one chapter left available for Loan Tales. If you’re interested to get your story told, if you’ve wanted to have a story published about you and any of the cases that you’re working on, this is the thing that we are prideful on. We’ve filmed about a dozen chapters already with some of the students. We’re going to be focused on case studies. We’re going to be marketing this everywhere to asset managers online. Every time I go speak the REIA club, we’ll be offering this. If you’d like to have your story told thousands and thousands of time, this is a thing for you.

What’s great is also each person has a chapter. It will be on the Note Closers Show podcast as well, talking about their deal, talking about their story a little bit longer than reading it. I give you Eric Hyde. He did a podcast episode with me over 2,500 downloads. He’s raised about $1 million in private capital. Dan Deppen has been on once before. He raised quite a bit of money. Laura Blunk has been on before and has raised some money from what we do. I’d love to have you all be on if you want to take advantage of the chapters. There’s one you can’t dilly dally. If you ever wanted to do something, get your story told. This is what you need to do. I will be distributing this to asset managers. You’ll have your own eBook that you can use to market across the board.

Do you know how much I loved the market? Imagine my team behind, you telling your story, your case study and helping promote you as well. Literally, it’s $599 per chapter. I don’t have fifteen. I only have one chapter left. Please take time. Get signed up for it. Do yourself a favor. Sign up now at LoanTales.com. This will probably be the last you hear me talk about this on the webinar. I’ve got some RSVP as well for some people that are finishing up and they need an extra day. If you don’t get to sign up for that one, you may not be able to get a chapter. It’s all I can do for you. Go to LoanTales.com to get your story told.

Our topic is all about building your perfect note business. I’m going to start off not perfection. I’m going to start off with failures first. I’m going to tell you, I am far from perfect. Many of you know that. The thing is I can laugh at things because when you make mistakes, you learn more from your mistakes. As I said, I am far from perfect. I continue to make my fair share of mistakes on a weekly basis. It’s not as often as I used to, but I’m making different mistakes now. It’s a little bit more advanced mistakes than I did on the front end as a brand-new note investor back in 2008. I made my share of mistakes.

In 2008, 2010, it was the Wild West back there because so much stuff was going on. What we do now didn’t exist. You had the ability to buy one off notes, owner financed notes. That’s where the majority of the business came from for a lot of note investors, owner originate, buying a partial, buying an owner finance note. Occasionally you buy a nonperforming note from a bank and hedge fund, but now it’s different. You can buy a lot. It’s been a lot of different mistakes. I’ve learned more from my mistakes than my wins. I’ve learned a lot from the things I’ve screwed up on. Hopefully, you realize that I’m pretty open about my mistakes. I’m pretty open about the things that I screw up on, especially if you’re in my mastermind group. I’m like, “Don’t do that or do this.” I’m passionate about promoting you when you have a home run or you hit something out of the park or you closed on a deal. I’m so wanting to help those that are willing to take action.

I look back and run some numbers. It’s less than 10% of anybody that does anything from those that have gone through a workshop and gone out and done something. That’s less than 2% for those that are closing on ten deals or more. That’s not to bash anybody, it’s that people drift a lot. People are scared to take action and that’s not what I want. I want people to take action. Luckily a lot of our mastermind students are going on, closing on tremendous amounts of the deal. We’ve all learned more from mistakes and wins. I will tell you this, I have never been scared to fail. There are some things I’ve taken some big hacks at. I got kicked in the teeth, kicked in the shins. I’ve been more scared of not succeeding. That’s the thing that has always driven me.

When Steph asked me what I am scared of, I don’t like snakes. I’m more scared of not succeeding, not sticking to what I’m focused on and not continuing to grow as an individual. That’s the thing I’m scared of, not continuing to keep going. Knowing you all, we have peaks and valleys. We have good times and we have bad times. Those things will sometimes hit you up blindly. Things come and things going. If you’ve been an entrepreneur long enough, you’ve seen that. Let’s look at the people that work for the government. They were in a pretty tough time, furloughs and unpaid furloughs and things like that. A lot of people are like, “I work for the government. I always get paid.” That’s not always the case.

I will tell you this, my definition of success has changed. I’m still a long way away from what I consider my success. I’ll share more of that with you. Don’t get me wrong, I’m more successful than I ever thought I would be looking back several years ago. It’s hard to believe thinking about graduating high school in ‘95 and graduating college in 2001. When I look back at the last years, I’m like, “This is a whole lot more different than I ever thought in a good way.” Here are some of the mistakes that I’ve made and you may want to write these down if you wanted me to clarify them or I’m glad to clarify them.

No Business Partners

Here are one of the things, no business partners. Here are my mistakes. The mistakes I’ve made is when I brought on business partners. The first one was brand new. The second one, “Oh my gosh.” The third round of business partners, I should have known better. You don’t need business partners. Don’t get me wrong, if you share blood, share a bed or share an entity with somebody, you’re in business with them, obviously. Bed, blood, name, that was the third thing. It wasn’t an entity. I’m a big believer you don’t need business partners. Every time I’ve had a business partner, it went south. It’s not bad all the time. Sometimes people had a different direction they wanted to go. Others were toxic. Others were out for their own agenda and didn’t pony up. You don’t need business partners. I’ve seen people come into my office here. By the end of the weekend after Fast Track, they weren’t in business anymore because they were horrible business partners.

You can either add vendors or hire assistants to do probably what your partner was going to do for you. Unless it’s family or you’re married to that person, you don’t need a business partner. That’s the biggest thing that I’ve made. It’s the biggest mistake I’ve made. It was right off the bat, no business partners. You want to be long to hire and quick to fire, take time to find good people to bring on board. If they don’t work and they drag things out, be quick to fire them. If they’re Negative Nancy or if they’re Debbie Downer, they can be toxic to the rest of your organization. Maybe it’s an organization of two, maybe it’s an organization of five, who knows what it is initially, but be quick to fire if they’re detrimental. I would go back and spend more on legal and asset protection initially. That was one thing that I ran with a little bit more and got me in trouble with a couple of bad deals. That’s okay. I would spend more time and definitely more money on legal asset and asset protection, to begin with. You want to keep the mind crawling before you walk and before you then run.

In some cases, I bit off more than I could chew when I was first as a real estate investor back in the 2000s, especially right off the bat. I should never have bought those properties straight out of college. I thought I knew everything. I learned. I should never have bought these big heavy rehabs here in Austin. I was used to doing $150,000 flip. I should have stuck to my business model. I should have grown my note business before taking down a large portfolio. I think every real estate educator deals with this. There are peaks and valleys when it comes to education and deals. There’s a line that runs with it. One thing I’ve always prided is the fact that the whole thing we aim, we close notes and we close deals. That’s when we focus on. I’m spending time daily with mail or I’m talking about assets or things like that or going through on stuff here in the office. We’re working for deals.

Start Early

There is a time that my education grew and my deal focus shortened and then vice versa. You have to go with that when you’re trying to do too much yourself. That’s been a mistake. Literally ’13 and ’14 for the most part, education was a big focus. We were growing like crazy. A lot of people were getting into the business and I let some of my deals slide. There are peaks and valleys. I had great deals. I also had some valleys that fell through there. It happens. I wish I had started earlier in buying and saved more in my self-directed IRA originally. Whenever you are going through tough times, ’08, ’09 and ’10, I wish I should have done that but looking back, I don’t think there’s too much that would have changed. When you go through a divorce, that’s a tough time. You go through as everybody did with short sales and losing money and losing houses and things like that. You’re going to tap into your IRAs. I wish I’d started a little bit earlier in the note space. I was in a mortgage company and coaching, which I started buying a few more assets a little bit more. I wish I had put more weight in my self-directed IRAs and started them a little bit earlier.

NNA 37 | Perfect Note Business

Perfect Note Business: Doing everything will stunt your growth, especially if you’re working full time or having other priorities.

 

Believe In Yourself

Another thing that’s been a mistake is believing more in others than they believe in themselves. We’ve had some people, we, I mean that plurally. Stephanie and I and people that we’ve had in our organization here had been big parts that we believed in them when they didn’t have the faith in themselves. No matter how much you pour into somebody, if somebody doesn’t believe in themselves, they don’t have the confidence. They’re ultimately going to end up doing something wrong. We’ve been burned a couple of times by that, believing in others when they didn’t believe in themselves or they had alternative motives. That’s why I say don’t bring on business partners or bring on vendors and assistance and go from there. You have to realize at some point you have to quit pouring water into a cup if it keeps overflowing if they don’t drink it. That’s technically waterboarding. You could be knowledge-boarding. You have to learn, “I’m going to cut my losses and move on.” Not that I’m not going to love that person or push for that person to do more, it’s that I had to focus on myself. Sometimes you have to go like, “I wish you would do that.”

Focus On Non-Performing Note

If they don’t have the belief in themselves and they don’t have faith in themselves, it’s a mistake for you to spend time on it. You’re wasting your time. What else did I do wrong that I have learned from that I want to pass onto you? I should have bought more assets earlier on. I still think to this day of all the stuff I got from Wells Fargo Financial back in the day for pennies. I should have bought the whole thing. I didn’t have the money. I should have been on the nonperforming side. I should have been a little bit more focused on it versus what I was trying to do. I was a jack of all trades for a while. For a couple of years, they’re trying to figure out what I wanted to after I got divorced. I should have started focusing on nonperforming note stuff earlier. I’ve fallen into this before. I fell onto the, “I don’t have my own money lie,” early on, “I don’t have my money. I don’t have that. I can’t buy.” It’s not the case. I was trying to wholesale a few assets and that didn’t work out. If I had worked on buying those assets, I could have bought a lot more money with other people’s money.

It’s one thing on here too, if you’re looking to get in the note business just a wholesale, that’s what you want to start off with, do yourself a favor and go ahead and log off. Wholesaling is an exit strategy. You could do this, but if that’s all you’re focused on, you are part of the problem out there and not part of the solution. Sorry, that’s how I feel. I have people who are like, “I want to wholesale.” I’m like, “Don’t come to my class.” She goes, “What do you mean?” I was like, “Sorry, I don’t teach wholesaling.” If you want to go wholesale, there are wholesale properties in Dallas or DFW. Not Jackson, Mississippi, not Detroit. If you’re going to be buying, take the deal down in yourself and do something there.

Don’t Let Loyalty Affect Your Business Decisions

Other things I did, I let loyalty affect my business decisions like bringing on a partner, the fact that they brought me into a situation. I was the one doing all the marketing and the one doing all the letters and doing all the other reach outs. I wanted to bring them into the deal because I felt responsible. They brought me and I want to keep them involved when I didn’t need them. It turned out when you’re doing 90% of the work, loyalty gets expensive pretty fast. I talked about this before, I bit off more than I could chew. In 2008, I was doing higher-end rehabs. I was trying to do more than what I would normally do, the bigger house does not always mean bigger profits. Sometimes it means bigger problems.

Foreclosures Versus Modifications

I bit off more than I could chew and that left me in a bad position because that one deal ended up affecting other deals that should not have been affected. I look back, if I had not done that big deal, I would have been fine with everything else. Keep that in mind when you’d look to bite off a bigger trade or bigger assets. If your other stuff isn’t rocking and rolling or they’re insulated, you can get in a lot of hurts quickly. I wasn’t as focused as I should have been on my first couple of years, 2007, ’08, ’09. I got divorced in 2008. I let the mortgage business the end of that year. In 2009 is when I went gung ho 100% in the notes space. I should have done it earlier. I’ve eliminated a lot of the other things that I was doing. I eliminated the higher rehabs, eliminated the wholesaling and eliminated raising capital for fun. I should’ve been more focused. Another problem I made when I finally got in, I focused more on foreclosures versus modifications. When you have the market being like where it is, people are walking away from the house, they’re upside down. You’re going to have a lot of foreclosures taking place. I should have earlier on. That’s the thing that hurt me is I went into that thing in the real estate business. It’s one of the things I harp on for everybody out there. You’ll understand what I’m talking about, don’t log off, don’t go anywhere. This will come back. I should have focused more on the performing stuff or the nonperforming stuff initially. I also had a couple of toxic people in my life that determined my worth.

Toxic is a couple of things. Maybe not so much determined my worth as one person, but I also talked to relationships. I was a single guy. I get some crazies out there. I’m going to be the first one to say that. I wish them all the best, but when you have toxic people around you, it’s very difficult to get anything done when you’re walking on eggshells or you take one step forward and then two steps back. You can’t get ahead in life having toxic people around you. Some people are family. Some people are friends that I’m close with or was close with. You have to realize at some point you have to cut the ties with the Debbie Downers out there and move on. Toxic people will kill you. They’ll poison your business. They’ll poison your relationships.

Educate Yourself

I had one that was extremely toxic. It was literally poisoning relationships, vendors and fellow investors because of their dark soul. They’re a dark hole of the heart. If you’ve got somebody around you who is Negative Nancy, best thing I can do is try to nip it in the bud as best I can. Let’s quit talking about the failures and mistakes. Let’s talk about what I’ve done right when I first got rocking and rolling. I was an information sponge. I was continually learning as much as I could about the real estate industry between 2004 out of college, out of the bad deals originally, but got my ass to have a sling. I was trying to learn as much as I could to educate myself. I implemented new things. If I went to a workshop or I went to a seminar or I went to a meetup group and learn something new, I tried to implement something new within 72 hours. If you’re not going to implement it in 72 two hours, you’re probably not going to do it. That’s one thing you’ve got to keep in mind. I implemented new things. I still implement new things. It’s part of the reason that I’m going to Traffic & Conversion Summit in San Diego.

I called banks. That was one of the things that most people still don’t do to this day. I picked up the phone and I dialed for dollars. I dialed. I called a lot of banks and it helped me out make those relationships. I was doing things that other people weren’t. I’m marketing. I use Facebook. I use YouTube. I use video to market for years before anybody else was doing it. That helped me build who I am. That helped me build my business brand, helped me market myself besides the deals that I was doing. That belief in my marketing helped me turn the page, turn the corner on the whole, “I don’t have the money thing.” If I know how to market, if I learn how to market here and I implement this stuff, good deals will find good money. I still believe that to this day.

Travel

Another big thing that most people could not do, would not do is spend three years traveling all across the United States. I have to thank all my friends and family and extended people out there that allowed for me to crash at their place or rent a room to me or who showed up when I was traveling the country. That was one of the best things that I did. I learned more about myself, more about the note business, more about markets and other things than I could’ve ever done by being stuck in Austin, Texas. That led to me buying a lot of assets outside of Austin, Texas. I made money versus starving in Austin, Texas. I’m a big fan of traveling still, but we do it a little bit differently now.

Let’s talk about where would I begin again? If I had to build my stuff before and I’ve done the podcast before starting over from scratch, how would I build the perfect note business? I would have started sooner while I had a paying job. For those of you that are coming over that are still working and having a job, that’s okay. That’s an asset to you. It’s not a negative. If you’re working 60, 70, 80 hours a week, you’re working on a job that you hate, it’s difficult and not fun. I get that. You should use that time, whether it’s six months or a year, a year and a half to start putting some things in place in your side hustle. Take the time. Look at what our buddy, Wayne Snell, did. Wayne Snell worked full-time flying internationally, working 60 hours a week with stuff, but being able to buy assets. This business can work. If you put ten to fifteen hours a week into it, it totally can.

Put A Business Plan Together

My buddy, Paul Cooper, is doing that. He’s working full-time. He’s building up his reserves. He’s building up his deals. He’s getting things done while he still has that steady paycheck. That would have been something that I should do a whole lot sooner. It gives such a resource. Paul says, “I like lights and health insurance.” I understand that. You’ve got a wife. You’ve got a kid. I understand that you want to make sure and cover that. Some people don’t require that. Everybody requires lights and health insurance. You get what I’m saying. For those that don’t have a paying job, sorry, you should’ve started sooner, but that’s okay. One of the best things that I’ve ever learned going to college was putting a business plan together. Many of you have never put a business plan together. You’re out there like the Wild West. You don’t know what your focus is. You don’t know what you’re looking for. You don’t know the timeframes.

I know that some of you are coming over from something different, “I’ve never been a real estate investor. I’ve never been a fix and flipper.” If you’re a dentist or a doctor or working at high tech, what would you do if you were to start a new company? You’re going to put a business plan together. That’s what I would recommend. Put a business plan together. It doesn’t have to be 30, 40, 100 pages. Start with a SWOT analysis like we’ve talked about before; the Strengths, Weaknesses, Opportunities, Threats and build from there. What do you want to focus on? What are your goals? Start with the end in mind.

Create LLCs

From attending the intensive bootcamp that CreditSense put on, this is a thing that hit me upside the head repeatedly is I should have changed the name of my company. We Close Notes is great but it’s not an effective title. Inverse Asset Fund, Inverse Investments, I need to change my entities. Also starting off early on, I would set up multiple LLCs. Not trying to squeeze everything in one because that’s the one thing I hear from people, “I have an existing LLC from when I was a dentist or my dad had one rental property. Is that going to work it off?” It all depends on what you have in there. I highly encourage you to check out the episode with Brent Buscay in the Note Closers Show. Brent does a lot of the entity structuring and the Rockefeller strategies with the Laughlin Associates. We talked a little about this. If you have some big goals, you may want to create a couple of different LLCs depending on what your goals are. You need to quit going to all the education and start doing it. You are all over the place going to event after event, but where are the deals? You’ve got to start implementing some of the things you’re learning. Here’s the thing. If you’re doing rehabs, you’re going to foreclose on an asset, you probably need to have in one specific LLC.

If you’re going to ask some performing notes on the side, probably a different LLC. We’ve got some nonperforming initially. If you’re going to have in some rentals long-term after you take the property back or you’ve got some CFDs you’re converting, you probably need to be in that. If you’re doing a JV deal over $250, spend the extra money. I know it’s $800 a year if you’re in California or $300 for new LLC if you’re here in Texas. It’s a cost of doing business. Those would be the things that I’d add a few more in the beginning. It helps you keep it separate and I spent a little more time on asset protection to begin with. A separate LLC for each deal, that’s over $250,000.

Basically, if I’m funding $1 million and I had an investor bringing in $250,000 to the table, I would do a separate LLC for that investor. That’s what I would have done. The beautiful thing is what I have structured or maybe you’re using a series of LLC here in Texas, which would solve a lot of that for a lot of people. I’ve had it for a few years now, but initially at first, if your state doesn’t recognize that, you probably want to have maybe a couple of LLCs out there for different things. You’re going to want to talk to an asset advisor or talk to somebody. What you have going along long-term, this is a separate, if you’re using your self-directed IRA and if you’re taking some things down. We have a question, “Do you take back REOs into holding LLCs if you’re in the note business?” If you don’t sell it at the foreclosure auction, you may want to move it to a different LLC and have your investor who’s on that house or as a funder may put them on a first lien, slap a lien on the property. That’s one thing you should do. Let’s not bog down into everything here. You’re only closing here budget-wise. You need at least one LLC. If you’ve got funders coming in with $250,000 or more, go ahead, don’t try to squeeze it on everything else. Put it on another LLC.

NNA 37 | Perfect Note Business

Perfect Note Business: The most important asset you can have is your family.

 

When I talked about my name, it’s completely different. One of the most valuable things I learned is there are a lot of things I should have said differently with my entities, to begin with, to make them more fundable. I’ve been in business for quite a few years. We run a lot of capital through our accounts and here are some of the things that you should not be putting. I did not even know this as a banker, but I learned this weekend, red flag words. Real estate, property, resources, estate, holdings, equities, credit, stocks, money, finance, investment, securities, savings, capital, assets, wealth, funding and prosperity. Those eighteen words are red flag words when it comes to FICO and banking. I did not know that. I got something like inverse asset funds. I should change that up. You want it to be something that’s more marketable like consulting or marketing or consultants. That was one thing that I learned. What I’m trying to get at is a lot of people get so bogged down like, “I’m going to have my LLC.” They wanted to sound something like in the note business. I’m like, “You should probably change it.” See what’s available and go from there. That’s a big a-ha that if I want to begin again, starting all over, I would take that into consideration. I want to pass it on to you all out there.

Focus On Covering Cashflows

That’s a nugget that I wanted to share with you. The question I want to ask is how many of you are taking the time to create a business plan yet? You don’t have to answer that because I know the answer is no for a lot of you, some of you have and that’s okay. A one-page business plan is better than no business plan. Another thing that I would do initially and this is what goes back to the whole modification side, instead of focusing on foreclosures is I would have focused on covering cashflow. What I mean by covering cashflow, most of you that are working jobs, you have cashflow coming in. You’re working and you get a paycheck. You’re on salary. You’ve got a steady paycheck coming in. I should have initially focused on covering cashflow. I need $10,000 a month coming in. I got to work on that number one way or another.

If I’m buying performing notes or I’m using other people’s money to fund it, I need to cover that cashflow first and foremost. This is why I talk about focusing on occupied assets. Those are the most likelihood to re-perform for you versus vacant assets, which is what I focused on initially. Figure out the replacement cashflow numbers and deals. This is the whole making $250,000 in 2019 that we’ve done. That’s one of the best things I can tell you is a business plan is an idea to figure out what your numbers are each month and then add some stuff to it. Don’t cover them, “I’ve got to cover it. It will survive.” That’s no fun. Add in what it is to live.

If you’re making $5,000 now a month is what your take-home is. That’s $2,500 every pay period, figure it out. You probably need to bring in $6,000 to $7,000 because then you can live. You can take some trips. You enjoy some of the fun things in life. You’re going to fund your IRAs on a monthly basis. Instead of focusing on 30 states, I would probably focus on one to two states, to begin with. Something with a Southwest hub. What I mean by that, something that I can fly to you within two hours with Southwest Airlines.

Texas is nice because I’m halfway in the state. I looked at my portfolio, it’s Missouri up and then over now to the East. I don’t buy anything in the West anymore. I haven’t bought anything in Texas here in a while. I take it back. I’ve got a couple. I haven’t bought as nearly as much as I used to. I’m talking about note business here. If you’re buying an owner finance notes in Phoenix or Dallas and that’s all you want to focus on, by all means great. Those are two states. If you’re looking for nonperforming stuff or stuff that you can buy, focus on one or two states in the major markets, Ohio, Michigan or Indiana. Figure out what the top five or six cities are and that’s where you focus and stick to it. Fly out on a weekend if you can afford to but do it. Fly out and meet with a couple of realtors, meet with some brokers, drive around. You’ll learn more from driving. Learn more from driving assets than you will ever do from looking at it an online. You can do most of this online but literally drive. If you’re in New York, New Jersey, get out of town there. You’ve got so many other places versus New York or New Jersey. I should have hired Madison Management a whole lot earlier.

Another thing, the reason I say that is I went through servicers not quite as often. I started off with FCI, “I’m going to go the cheapest route.” That will screw it. “I’m going to go to New View then.” They were okay until then they got bought by Land Home and then their servicers were like, “Meh.” I’m going to transfer everything to Peak. That was a debacle. “We want to visit with you.” “Great. We want to get out in the note business. We’re not going to do servicing.” Thank God, I have Madison Management now. I’m very happy. They’re not paying me to say this. They’re not a sponsor. I should have gone with Madison Management a whole lot earlier because I love it. Their customers are saying, “If you’ve got a different servicing company that’s totally fine that you’ve got a good relationship with. I’m very happy with what Madison Management does for me.” I should have gone with them a whole lot earlier. I screwed up on plenty of things. Let’s talk about some more of the foundational do’s that you need to be doing when building up your things.

Hire An Assistant

Here’s one thing I see a lot of people as it stunts their growth. I would highly recommend that you hire an assistant at least part-time. I mean by part-time, twenty hours a week and allow that to grow into a full-time position. You doing everything is stunting your growth, especially if you’re working full-time or you’re having other priorities. It’s stunting your growth, especially if you bought ten assets or you’ve closed on six or seven. There are a lot of things that can go on. If you’re working a full-time job committed or you’re traveling and you want to travel to different workshops, you’re not having time to focus on your business, hire an assistant.

They can do a lot of the paperwork filing, checking your email, follow your schedule, going to your dry cleaner, running deposit checks to the bank. They can do a lot of things that will help you. Due diligence. They can do so much in a part-time that will help you. They literally will add six figures to your bottom line if you delegate them. A good assistant will bring $100,000, an extra six figures to your bottom line. I guarantee it. I see so many people out there who say, “I can’t do it. I can’t afford it.” You can afford it. Everybody can afford it. You can afford paying somebody $15 an hour, paying $300 a week. I know that’s $1,200 a month or $12 an hour or $10 an hour to do a lot of things, especially if you’re going to be focused on things. They can help you with your marketing. They can help you with your social media.

Hire A Good Real Estate Attorney

There are so many things you can have them do that is below your pay grade that you need to be having somebody else do. Hire a good CPA. Quit trying to do it all yourself. I’ve seen so much of this. I see people like, “I’m going to have my bookkeeper help me set up the books and I’m going to do it all myself.” I’m like, “That’s the stupidest thing you could ever do.” It’s like, “I’m going to go be a realtor.” No, you’re not. “I’ll go do my own title work.” No, you’re not. Quit trying to do it all yourself. If you hire a good CPA and a bookkeeper, they will help save you money. They’ll help you stay out of trouble too. When I see people, “I’m lazy. I’m going to do it all myself.” That’s the stupidest thing you could do. I’ll be the first one to say that. Hire a good attorney, somebody local to that you can talk to. This is different than hiring like an entity attorney. You need a good real estate attorney that you can go talk with, somebody you can put up and visit with. Take them to lunch. Somebody you can visit with on a regular basis, who’s also got a real estate mindset to talk with some things.

I’m a big believer that you’ve got to hire somebody that could handle the paperwork on your entities and stuff. That’s why I say hire Laughlin Associates. They’ve got different attorneys. I use Laughlin Associates all the time. I couldn’t pay somebody to do it. My CPA and bookkeeper don’t have time to do all that stuff. They don’t know what it is. They work constantly with what’s going on in our office to help identify opportunities that they say we’re going to be looking at. Did you know that you could award a bonus of $1,600 and give it to somebody in your office as a safety award and they’re not taxed on it? Did you know that? Probably not. That’s one of the little things I learned like, “I did get somebody $1,600 safety bonus. I’m not taxed on it.” They’re not taxing because it’s a bonus. I’m not quoting this right. There are a whole variety of things. If you’ve ever seen Laughlin Associates go through that slider, Aaron Young, talking about all the slides, all those close notes need to be filed.

That was one thing when I went to the Magnify Your Wealth Summit the first time. Steph and I walked out of there like the first hour like “We’re doing everything wrong.” Aaron was like, “No, you’re not. You’re doing okay.” It’s like an onion you have to add. The most important thing that you can do early on is to build down in place. You have time to go back and peel back these layers, trying to fix the issues. It was one of the best things that I could have done. We were going back and filling things out, getting things taken care of. That’s one of the things, your bookkeeper, your books and your CPA will thank you along with your attorney because they’re not going to do all that stuff for you. That’s a foundational do. It’s one of the big reasons we have them come to our workshops all the time. I want to attend more asset protection training.

One of the great things is you have the John Hyres, the Geoff Watsons, they’ve got amazing stuff about things going. I listen to everything I can from Quincy Long. It’s asset protection because you guys work so hard, we all work so hard, we don’t want to give it away. There are also things we want to structure so we’re not paying the big taxes on things. It’s a big thing. I would attend the CreditSense Bootcamp Intensive. I absolutely loved it. I sat through 95% of it and it was phenomenal. I learned so many good things about what I should do and can do. For many of those that went through, I’m sure they’re agreeing to the same thing. Charles Wilson mentioned something. Laura Blunk mentioned on there.

Pay Yourself First

The other thing that you should all be doing as well is paying yourself first. You should be tithing to the bank of you. Taking at least 10% of your profits and putting it away, putting it aside account, put it in a savings account. Also setting up that your self-directed IRA, you’re paying that monthly. As I said before, add that amount to your budget. If you’ve got to bring in $60,000 a year to replace your job, what it’s going to take for you to add $5,000 to your IRA at 65? I need to do for me and my spouse both 70 now. Make that part of that monthly deposit. We all know we have ebbs and flows, some big deals. A lot of us will fund our IRAs at the end of the year. It’s usually what we do. I’ll wire money in before April 15th to fund for 2018 or you start putting money away.

The thing is if you’ve ever read The Richest Man in Babylon, these are foundational do’s that you should be doing. Steph has heard me say this, “Put 10% away from that check that came in and make sure to wire it in. Put it in an account I don’t see.” We made $80,000, throw $8,000 in an account we don’t see. We can do fine living off the rest. It’s a little Dave Ramsey for you. I believe you’ve got to pay yourself first. A lot of us don’t put our own benefits first. We put others first. The only way to survive a hiccup is sometimes you’ve got to put down other things, work on your stuff and work on what you need to focus on so you can grow into that person that’s up here. Because a lot of us, to get where we’re at, where we want to be in the long run, we’ve got to grow into that person. You can’t make $200,000 if you’ve never made $50,000. You can’t make $100,000 if you’ve never made $50,000. It’s a whole different mindset when you take it to the level. I look back where I’m at now compared to where I was several years ago, I’m a whole different person like most of you are.

Schedule Regular Calls

I looked back to where I was a couple of years ago. I’ve learned a lot in the last couple of years of things I need to structure differently and started to do structured things in a way. That’s okay. You’ve got plenty of time. The thing is to start now. You are not going to complete it all in six months or twelve months. The idea here is to be knowledgeable enough. The more you bring on experts, the more you bring on people to help you out with, the better off you’re going to be. The thing here, if you’re wanting to build a perfect note business is you have to schedule regular calls. What do I mean by regular calls? If you’ve got to ask what you’re working through whether it’s 6 or 60, schedule regular calls with your servicer, your asset manager. Discuss strategies, “Where are we? Are we doing well? Are the borrowers doing well? What’s the issue?” You want to communicate timetables, “If they don’t hit this, if they don’t respond in two weeks, I want to go ahead and do this.” This is one of the most important things that you can do and as you get busy, this is going to slough off.

NNA 37 | Perfect Note Business

Perfect Note Business: You’re perfect note business runs with or without you.

 

Trust me, unless you’ve got one asset, that’s all you’re focused on. We start growing assets and buying assets on a regular basis. Things are going to go to the side a little bit. You’ve got to communicate on a constant basis with your servicer. This is why having an assistant can help you grow into growing more deals because they’re going to understand what’s going on. They’re not going to miss things like you might be if you’re still working on the full-time job. You’d want regular calls with your attorney regarding the deals you’re working on, any closes or closes with their office too. We’re also helping to create any contracts or paperwork that you might need along the way. This is separate than the paperwork for your entity. You’re going to want to have constant conversations with your CPA, with your Laughlin if you’re using them, Quest Trust or self-directed IRA. Get on the phone, pick Ingrid or Rebecca or Beatrice or Nate or Nathan. Talk with your CPA, “Where are we headed? Am I getting the right discounts? Do I need to start any HSA? Do I need to start any ESA? Should I start a 401(k)? What should I be doing to help maximize the amount of that I can put away?” Pay the less amount in taxes. Do you know what you need to do? You probably need to get them all on the phone at some point.

Communicate To Your Family

The most important asset you can have is your family. This is all great to put us together, but if your family doesn’t know what you’re trying to put in place, your spouse doesn’t know, your family doesn’t know where you’re headed, that’s a tough time. One of the easiest ways to get a non-supportive spouse on board with them is to go somewhere and have it financed by your business. Scheduling them, schedule your vacations, go ahead and put in the calendar, schedule it, pay for an advance if you can, take the time to pay off a cruise four months before you go or schedule a trip to the rat land, whatever. Schedule them. Make them part of your budget because that’s one of the greatest ways to help turn a spouse into a supportive spouse is by doing something that they enjoy. Maybe your husband is not supportive, so you’d go to a college football game, “Let’s go to a college football game or NFL or NBA,” whatever it might be. Communicate to your family what you’re working towards. Communicate while you’re working those extra ten hours a week on the weekends or at night, two hours at night working on some things. Communicate why you’re working on some systems so you can spend more time with them once you get through some things.

Too many times if you’re the only person doing this and you’re working full-time, your spouse is going to get upset because you don’t have any time to spending time with them, him or her, your kids too. I need to hire somebody, pay somebody to do it. Trust me, it will be helpful. Some of the systems that you need to put in place obviously add systems of finding deals. This should be pretty easily done with either email out to the asset managers. We preach on a regular basis at least once or twice a month or also having a virtual assistant relatively cheap. Your assistant doesn’t always have to be in person. It could be virtual. Jump in on LinkedIn, contacting asset managers that way, sending direct messages.

Put Systems In Place

There are a lot of things that you can be doing. You also had systems for marketing like Buffer and Hootsuite. You can do direct mail if you’re going to do something like a postcard mania or emails. I had all that stuff from working on a regular basis as you did for asset managers. I’ll give you an example. Shannon and I literally sat down, “What’s going through our Twitter accounts on a monthly basis? Go ahead and preschedule 30 days out. Let’s go ahead and set this stuff up easy to Texas, about an hour for me to identify it.” She’s implementing it in 30 minutes. It’s faster for her than it is for me to do. I’m glad I pay her what I pay her.

You want your assistant to review assets, maybe it’s using a Note Pros. Maybe have your assistant go through and teach exactly what states, what areas you’re looking at and scrap everything else. Your assistant can do due diligence besides reviewing, due diligence like checking taxes, calling the utility departments, doing other things that can help you with identifying assets so you’re not wasting your time running through deals that you’re trying to put a round peg in a square hole. I’m talking to the agents out there on this one. Many agents get into this businesslike, “That’s a deal for everybody. Everything is a deal.” No, it’s not because there’s a lot that you’re not going to buy. Get rid of it. Cut it down. If you’ve gone through the Virtual Workshop, you’ve heard me talking about getting rid of stuff below values or getting rid of things above value. There’s a ton of equity, get rid of it. If it’s a small town like 5,000, let’s get rid of it. Add systems to your due diligence, inform your staff what you’re looking for and they’ll work. One of the greatest things I’ve ever done was when I’m buying assets is have my staff go through, carve out the list and they literally, out of 400 assets, we have 100 that we’re bidding on. That’s one of the best things you do. It’s not that difficult to do. You have a VA do it. I know a lot of people here are trying to be a solopreneur. If you’re the only one doing it, then you are the issue.

I know there are all these fancies, what if or bring them out or they’re all sorts of little applications that will match up with this. That’s great. You use Podio or whatever you want to use. There are all a variety of different things you use. Ultimately, if you’re still the person who has to manage all of that, you get a 50-hour a week. You got to work extra. You have a family issue, then you have a problem. An online system is great, but you still have people things. An online system is not going to mail a letter in that you’d get from the portfolio. An online system is not going to take and get an assignment recorded.

You want your business to work when you aren’t there. One of the greatest things that happened for us is transfer everything at Singer Law Group, who’s a big asset for us because they were getting things done. I’m getting text messages, emails, “We’ve got a couple of loan mods. Do you want to approve on these?” I’m like, “Why did I have to get phone calls? Didn’t they tell you, if they’re paid more than $300 a month to bring that cost $100, $200 extra a month, we’re okay?” You want money to be made when you weren’t there. I get this. You’re still working full-time, still trying and closing on your first couple of deals. I get it. You’re in a unique position though to set up some things.

As you’re going through things, you’re taking that checklist that we provide through the workshops, taking those checklists and making them your own. Taking those checklists and creating your KPI, Key Performance Indicators, also your SOPs, your Standard Operating Procedures. Those are so valuable. You can’t be a jack of all trades because stuff won’t get done or your family will eventually get mad at you because you’re spending all your time trying to be control freak. If you closed down more than twenty assets, you better hire an assistant because otherwise you are dangerously going hit burnout or your family is going to get upset. You don’t want that. It comes down to two things. Are you the person on the assembly line or are you the person in the office like Henry Ford?

If you think about this, Henry Ford made an assembly line, one of the best entrepreneurs early on. He got a phone on his desk and somebody asked him a question and he was like, “I don’t know but I can find out.” The question I want to ask you is how many of your vendors, how many of your teammates are in your phone? What’s on your phone? Are you able to control this with a phone call and figure out what’s going on? If you’re the person that’s to go do it all, that’s the problem. You talk about building your perfect note business. Your perfect note business runs with or without you. Preferably it runs smoother without you because that allows you to go doing the things that you want to be doing. It’s going to give you the opportunity to go out and close more deals. This is a simple business of rinse and repeats a lot of times.

Define Success

If you’re the person having to do it over and over again, that’s the wrong thing to do. The ultimate thing that many people have to do initially is you have to define success. Every success is different. Mine is different from all of you. Dezi’s is different from Laura’s. Paul’s is different from Carolyn. You define success, is this a hobby? If it’s a hobby then great. You’re fine doing things in the side. This is a hobby. You can do whatever you want. It’s totally fine. I’m happy. I like to dig into it. That’s fine. It’s a hobby for you. If it’s going to be a business for you, you don’t want to replace one foolish business or one foolish boss for a crappy boss with you who looks a whole lot like you. I mean this coming straight from the heart. I’ve had my peaks and valleys where it’s like, “I hate this right now. I’m not enjoying this.” What do I have to do to get back to where I fell back in love with notes? Is success going to be replacing your income? Is it going to be helping you financing your retirement, your kid’s education, bringing mom and dad home, retiring your spouse? There is no wrong answer here. It is whatever you want it to be.

The question is if you have not figured out what your definition of success, you run all over the place like the Wild West. I don’t care if you’re going to be closing on ten deals a year or 100 deals a year or eventually closing 1,000 deals. Your definition of success is totally up to you. You are the person that controls it. Nobody else does. You control it. Not your boss, not the government, you control it. Whether you show up to work or you don’t show up to work. You control what you want to happen by what you’re doing in your spare time. If you’re sitting at home watching TV on a Saturday, Sunday, by all means, that’s okay. If you’re shooting or out plowing a field, that’s totally fine. There’s nothing wrong with that. You have to look at what the actions you’re doing. Do they equate to where you’re going to be in the future? Think about this. Would a temporary stressful time, temporary of you putting the notes down and getting things done, putting away your toys or putting away the softball leagues, trivia leagues or whatever it may be for 60 days or 90 days.

How much further along would you be in your business? I have stopped going to conferences because they are not helping me get any closer to success. I hate to say that, but it is. I’m not going to DME. I’m not going to NoteWorthy. I’m not going to IMN. There’s nothing wrong with people going to those. The thing is you have to look at where you want to be. What is success to you? I’m not going to conferences. It doesn’t make sense. Everybody knows me there. I’m not the dumbest person in the room. I want to be the smartest person in the room. I want to be the dumbest person in the room. I want to go find new channels. I want to go and find new things. That’s what my success is because I have a bigger number than most people and that’s what you have to look at. My number was small to begin with. I’m divorced. I’m single. If I made $3,500 a month, does that cover my bills, my rent? Am I going to be able to have fun? What’s your number? I got a five. I got to ten. My number now, it’s a pretty good size of where I’d want to be.

I want you to think about what would success look like to you? I’ve talked about what success looks like to me. I’m not a big car guy. I love my Dodge Ram. I don’t like it. I love it. I enjoy my truck. I don’t need a Tesla. I don’t need a Mercedes. If cars are your thing, that’s great. I like to travel. I like going to new things. I like the vacations and stuff that I take. I like going to new places. I like experiencing new things. I want to do that for a while. I would love to travel the globe for a year. I would love to hit 100 different places in a year. That would be awesome. The things I would have a VA doing on a regular basis. I would have them doing my email blast. I would have them do due diligence. I would be having them pull new IRA leads in different counties. There are a whole variety of things that you could have your VA do for you. You can set up your website. There are a variety of things. It’s not difficult.

If you’ve never sat down and thought about what success would look like to you, and then you started running the numbers backward, that’s the way to get there. You reverse engineer your dreams. You reverse engineer your definition of sex. That’s how you build a perfect note business. The perfect note business to you is different than where it is to me. It can be ten. It could be 100. It could be 1,000 deals. Whatever that is, that’s okay. It’s up to you. You have to put the experts in place, the legal, the books, the assistants that are doing the things that you’re not an expert at. A perfect note business is where you’re doing the things above your pay grade at or above your pay grade and everything else below your pay grade is delegated. Not everybody is there.

I want you though to take some time thinking about what success looks like and write it down. Describe it, talk about it, think about it and then write it down. Share it. Print it out. Put it up on a dream board. Put it up on your fridge. That’s what you’re working towards. I get it. It’s doing some of the things we talked about takes money. It takes money, $1,000 roughly. You have the corporate veil of protection for your asset. It takes money hiring a CPA to do your books. It takes money to talk to some of these people. That’s all right. That’s okay. It takes money to put together a fund. It takes money to create LLCs. Start putting things away because let’s face it, we all waste a lot of money on stupid things that we don’t need to pay for. In planning your success, figure out what your focus is. You can’t be a Jack of All Trades. Focus on your areas, focus on the states, focus on the type of notes you’re buying. Henceforth, go after the sources. Who’s selling those assets? Who’s lending in those states? What servicer has assets in those states? Focus on funding. I’ll pull IRA investors in those states. I’ll direct mail or I’ll raise capital in my local people.

NNA 37 | Perfect Note Business

Perfect Note Business: In planning your success, figure out what your focus is going to be.

 

I want to put together these systems so they’re going to do what I need to be. Systems aren’t going to be perfect. You’re going to hone them. They’re going to work better for others and they won’t for you. Put as many systems in place as you can and then structures. This needs to move over into that asset. That needs to move to this LLC or refinancing that. We’re moving them up from a joint venture to slapping a lien on the property. There are a variety of things that you can do with that. We need our legal team, our accountants, our attorneys to put those things in place. Here’s what I want to do and here’s what I want to happen. Let’s go ahead and get it done. Ultimately, you should start with your family. I should’ve put that up a little higher. Here’s what I want to focus on. Here is what we could do. If you could do this, what would that look like? If you could go somewhere, what are you wearing? What does it look like?

For a lot of us, success is a whole different photo than what we’re used to seeing. It’s a whole different image. Do you want to be somewhere like in Hawaii with a pineapple drink in your hand, looking at the beautiful ocean on a sunny beach and that’s your idea of success? I get to spend like that getting suntan or watching the pretty girls or the suntan guys get by, whatever it is. You have to plan it. Get a plan and put it in place so you can hopefully find what that image of success looks like to you. We worked hard to go on a cruise. We worked hard to get some things. The biggest thing I can tell you is to seek counsel, not advice. If you’re making a play or working through something, feel free to pick up the phone and ask somebody, “Here’s what I’m focused on.” Give full information. The one thing that always frustrates me is when somebody is like, “Here’s a deal.” I’m like, “Give me all the information. What’s the location? What’s the value?” Don’t give me generalizations. Also, don’t call me asking questions if you don’t know what the pricing on an asset is.

If I don’t have the spreadsheet, don’t ask me what comps mean. Take a little time. Use a little common sense out there. Look at the spreadsheet, spend some time. A lot of people get a spreadsheet in. I had a guy call me. He starts asking me all these questions about a spreadsheet like, “What are you looking at? Where did you get it from?” I’m like, “Don’t bother me. If you’re not going to give me all the information, I can’t help you,” because I don’t have all the information on what you’re working with. I’m going to give you false advice and then you’re going to get upset. You’re like, “You said this.” I’m like, “Yeah, but if you didn’t give me all the information, I can’t help you.” If you want to find success, you have to put all the information in there. What do you want? What does it look like? Who’s doing what for you? There’s a cost to it, but you can grow into that cost. You can grow into the systems as you grow your note business. That’s how you’re ultimately going to grow a successful and a perfect note business that works perfectly for what you have in mind, what you’re wanting to do.

Take your plan. First few things I would recommend if you have not done this literally, I’m so excited about what Merrill did and his team did at CreditSense. I was on it. I enjoyed it. I absolutely got a ton out of it. I can’t wait for him. I’m working on some things here. Check them out, EpicFundingSecrets.com, Bootcamp Intensive. Trust me, you will not be disappointed. If you sign up for work and you’re at the end of the first day and you don’t want it, he will refund your money back. No questions asked so you have nothing to fear. Stick through the first day. It’s so well worth it in the personal side. The second day on the business side, there’s so much great stuff. EpicFundingSecrets.com/BootCampIntensive. I was so blown away. This will not be the first time you heard me talk about it because it was so valuable.

The same thing, the next Laughlin Associates Bootcamp, the Magnify Your Wealth Summit is in San Diego. They’ve got a special code. Use the code, Notes, to get a discount there. This is the only link that Merrill is using just with us. You don’t need a special code for that. It’s $97 or $197 or $497. Get signed up, Magnify Your Wealth. You will raise capital to go there. They’re such a great wealth raising event in San Diego at the Dana on Mission Bay, April 11th, 12th and 13th. I’ll be there. I absolutely love it. I learned something every time I go there to hang out and picking up with my attorneys, Kevin Days, Aaron Young and his friends, all sorts of great people out there that I enjoy.

I met phenomenal people there at Magnify Your Wealth. I love Aaron. Aaron has been one of my great resources, a great friend. I highly recommend those two events for your business. If you want to put things in place for your business, you’ve got to start with a foundation. I don’t want you to mess up by setting up the wrong foundation, the wrong entities or doing the wrong things. It will affect your fundability later on in life. Two things I would recommend right there: take a photo and share it. You cannot go wrong with either one of those. I totally guarantee you can’t go wrong on either one of those. Hopefully, you enjoyed this and got some great stuff out of it. Go get something done and we’ll see you at the top.

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