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Getting To The COREE In Columbus with Bill Griesmer

I’m joined by the man, the myth, the Ohio Buckeye legend, Notes King of Ohio, Mr. Bill Griesmer. Welcome, Bill.

Thank you, Scott. How’s everyone doing?

Everybody’s rock and rolling a little earlier than normal, but that’s okay. We want to get an early start because the fact is that we’re out here. Steph and I flew out here to Ohio. We have been driving around looking at assets. We’ve looked at 35 over the last two days. We started out in Columbus looking at a few assets. We went east and hit a few areas there. Then we went north up to Akron in that neck of the woods and came around through Cleveland, Elyria. We hit Toledo, looked at about a dozen assets in Elyria, Sandusky, Toledo. Then we hightailed at south to be here for you, Bill.

You did a great job. We have a monthly note subgroup meeting here in Columbus and Scott was gracious enough to join us. He rocked the house, got a great response, educated everyone about non-performing notes, and had a lot of audience engagement. It was a good time. All of us had our good times. It was fun.

I had a good time. It was a good group. Bill runs this special interest group in Ohio called COREE, Central Ohio Real Estate Entrepreneurs. It’s run by Vena Jones-Cox and Bill runs the group here. It’s a great opportunity for you. It’s about 200 people, but it’s a very niche aspect of people who are looking for notes.

At every meeting, we’ve had consistently twenty to 25 people. For just getting started, we’re doing well. We’ve got a lot of people who are expressing more and more interest. People have come up to me wanting to know more. That’s always good. I like sharing information and working with other people and it’s been growing. It’s been a great experience so far.

I’m glad to hear that because we had a good response, good questions, which is always a good sign and most people stayed to the end too. We had a few people that had to head out at an hour at least at the 8:00 PM mark, but most people stayed around until 8:30 PM, 8:45 PM. What I love is you’re a doer. A lot of people run meetup groups for different reasons, but you’re doing it to help you with your note business and helping other people along the way as well to put their money to work. You’ve closed on a couple deals. There were two deals. Where are those two? Let’s talk about the first one. Is it here in Ohio?

COREE: Getting a good response and some good questions are always a good sign.

No.

How many total deals have we closed so far?

Nine now.

Nine’s a magical number. Almost a double-digit mark. We can get you one more by the Mastermind. You had a third one that you’re supposed to work on the two, correct?

That is correct. That shows the value of making sure you do your due diligence. Everything looked good. The numbers were good. I had a BPO. I had an O&E search done. I went through all the steps. I did see something on the O&E that was a little bit concerning, so I used my attorney, Franco Barile, who does a great job. He said, “This is definitely an issue. Your instincts were right.” He didn’t recommend that I buy it.

What was the issue? What was the little thing?

There was a title issue, and something wasn’t filed right by someone. It wasn’t a guarantee, but there was a high chance that that would cause a problem if I did have to foreclose. I didn’t want to take a chance and buy that now and just assume that I would be able to reinstate them if something did go wrong down the road that could just be setting myself up for a headache and problems later on. I thought it was better to pull the plug. John Keith who runs it there was very understanding and said, “Let me try to see if I can fix it.” I wrote back and said, “That would be great.” I put some research into this. I spent some money on due diligence. It didn’t work out. That’s fine but if there’s a way to fix this, I’d certainly be back in and willing. The terms and everything looked good. I just need to make sure I have a legally enforceable lien.

Was it a non-performing or contract for deed?

That was a non-performing note.

That’s definitely important. We see a lot of issues with the contract for deeds where some contracts get filed and they will get officially canceled before they go out and resell the property. That’s a title issue that sometimes pops up. Franco’s phenomenal and Tony at Sottile & Barile. You closed on two assets, so the contract for deeds, non-performing notes. What were these two assets you closed on?

These are both note mortgages and these two are performing assets. They’re both good. One of them is located in Selma, Alabama. This note had the very best pay history I have ever seen in three years. I think it’s a little lady. She pays consistently one month ahead of time every month. I don’t know if she’s just saving for a rainy day and if something happened, she will miss a month, but she pays one month early consistently. Even buying the note, she’s paid one month already in advance.

Did you get this from a bank or hedge fund?

I bought this from another note seller and this was a result of my marketing. They reached out to me and she says, “I see you’re doing lots of stuff here. This is like a fire sale. I need to sell this in order to buy another thing.” It was one of those, “If you can close by seven days, I will sell it to you for this.” That boosted my return up to 14.9%. With that pay history and I did still go through all the steps. I still had a realtor go and look at the property and make sure the BPO, the home value was there. I still ordered an O&E. I still went through all those steps, but it was a really good opportunity.

What kind of value is on the house?

On that one, the fair market value was 55 and the unpaid balance was 32. I paid in the low twenties for the notes.

That performing, are you using other people’s money or joint venturing or you’re using your own?

So far, it’s just on my own, but there’s a chance that I could bring someone else in on that deal. There’s a lot of meat on that one.

You said a couple of nuggets there. A lot of times investors are selling us to raise capital for a better deal, a bigger deal, a better deal for them on different things. It’s an opportunity. The second thing is the fact that you could close in a fast time, seven days to get a better pricing, which is awesome. Thirdly, you got it because you were marketing. That’s a big good thing. Was this an email blast out the database? Was it posted on Facebook? Do you know what was the critical marketing nugget that helped you find this person?

Email, definitely, at least on that one. I didn’t know the seller. They just saw that I’ve been taking action, doing things and speaking. I send out an email once a week to everybody about all the activities we’ve been doing. I have increased that. I started off just once a month. Then I increased it to every other week and now, I’m up to weekly. It’s a result of email and marketing. The reason Scott pushes this stuff is that it does work. You don’t have to be a master rocket scientist marketer. You just take some simple steps and start slow. There’s someone I was talking about just all this is too intimidating. I understand I’ve been there. That makes perfect sense.

COREE: When you’re trying to raise capital, you have to take action and do things.

We are talking about it because that’s a big thing people often come across. It’s intimidating to do all this marketing and putting yourself out there. It is a little like Match.com because you want to get matched up with good people who think the same way and are similar to you. That’s the beautiful thing about marketing. Unless you put yourself out there, nobody’s going to know what you’re doing and see the success that you’re having.

The only way you’re going to get better is to make mistakes. That’s the truth of it. Be willing to take some chances. Live life, live a little, carpe diem.

Seize the day. That’s the first one. I see a marketing piece already for that one. You’ve got your picture, you’ve got to put the whole, “Just closed” thing on that. Picture the house. Send them with red letters like the movie, Selma. The thick red block, “Just closed, Selma.” Then talking about how you found that one, that would be a good marketing piece for you.

I like that. I appreciate that.

That’s the first one you closed. Let’s talk about the second one you closed on.

The second one is located near St. Louis, Missouri. This was part of the same deal. This was the results of my marketing and then being in the right place at the right time. Having the resources and also knowing what you’re doing. People want to work with people that are doers and that can execute. It sounds so simple, but people that do what they say they’re going to do. That one’s located in near St. Louis, Missouri and that one is worth quite a bit. The fair market value on that one was like 160.

You picked it up for how much?

24, 25.

Was it a contract for deed or NPN?

That one is another performing note.

Do you know the unpaid balance on it?

I want to say like 60 something on that one.

It’s definitely a lot of emotional equity there for the borrower to pay on time.

That’s the little one that I posted on Facebook that someone wanted to move in. Hopefully, they keep paying and you don’t have to. That house is nice to look in. A lot of emotional equity there. You’ve got a homeowner with a lot of pride in ownership there, which is what you want especially on a performing loan. That was a good opportunity.

What kind of return are you going to see on that one on the performance side?

Slightly less than the other one. That one was 13.9%, almost 14%.

Do you use your own funds still?

Yes, that was part of being able to close in seven days. It might have taken longer to bring someone else in. The whole key to that deal was speed.

I like to look at things if I can make 12%, 13% in my IRA, my own funds or something like that, secured with a lot of equity, it’s almost a guaranteed deal done. That’s good. Don’t you have any borrower’s check? Are you keeping the loan with the existing servicer or transferred over?

No, it’s with FCI and I did not have an account with FCI yet. That’s going on. I’m going to keep it there. That way there’s less of a chance of borrower’s getting confused. That’s another tip and nugget for anyone reading if possible and it all depends. You want to be with people you want to work with, but if you can keep a note with the same servicer, you just save time and you save possible confusion. You save headaches. FCI is pretty reputable. I know Dan Zitofsky does a lot of work with them.

A monkey can do a performing loan. That’s all you have to worry about. That’s fine. If it was non-performing, I’d say probably move it somewhere else, but since it’s performing, you’re golden there. I agree. If you can and you’re happy working with them, by all means, that’s a great nugget there, Bill. Don’t try to just transfer anything now. In some cases, some servicers are going to have a specific loan amount but if you’ve got FCI, it’s fine to keep it there. If you’ve got a couple of notes there, it’s great. What are some of your goals for the rest of the year?

My goal is to buy more notes and also get to the point where I start selling and bringing other people in on deals. There are several people now, again as the result of marketing, that we’re working with now. Going through a whole process and making sure we do this the right way. Making sure we listen to folks, making sure you have a good match, that you’re a good fit. Whatever we’re bringing to them, that it matches their goals and situation and their risk tolerance. That’s one thing that’s important, at least how I’m going to run business, is making sure we’re always the good fit with whoever it is we’re working with.

COREE: Make sure you’re always a good fit with whoever it is you’re working with.

Let’s be more specific though. How many notes do you want to close by the end of the year? The goal is great. Everybody wants to close more deals, but if you have specific numbers, it helps us out. You’ve got nine. What’s the number for you to get for the rest of the year? I’m going to hold you to this.

He’s going into the smart goal direction here and this is very specific and measurable. Let’s say six. I think that’s reasonable.

I challenge you to ten.

I knew whatever I said you are going to up it.

If you said twenty, I’m like, “That’s a good number.” You’re still working a full-time job. You’ll be leaving here and going to your full-time job. Then you’ll be driving down to Mason in Ohio, which is about 110 miles Southwest to here. Let’s get this ten done because you can do that. It’s only two and a half a month and that can definitely happen especially here in Ohio. There are a lot of deals here. A lot of note, non-performing notes, a lot of non-performing contract for deeds. We always see stuff here or in Michigan which is nearby, which is also a great state. You better do ten before the end of the year. Let’s grow that number to almost twenty if we hit that total goal there, twenty before the end of the year because I know from sitting down with you and Heidi, that is roughly pretty close to the number that you need to be at if I remember correctly.

That’s getting close.

I’m not saying that you hate your job or you want to leave your job. It’s not what we’re trying to say because you enjoy what you do. You’re good at it. You’ve been doing it for years. That’s an opportunity. You’ve got two boys going to school, college pretty soon?

Yes, I do. My oldest will be leaving for college soon.

I think Heidi is saying, “Let’s do twenty.” She’s not here, but she’ll probably agree with me anyway.

Heidi was probably thinking, “Get off the couch, make it 30. Scott’s thinking too small.” How often do you hear that?

I’m going to talk about that in Dallas, about the extra 5%. Do a little bit extra each and every day that adds up and you’ll see a lot bigger numbers go in there. I know we look at things especially with being busy with having a full-time job and balancing the immediate group. It can be turned into a little bit of a job if you have to grow it if it becomes big enough. The thing to keep in mind is don’t be afraid to push yourself. Set specific, measurable, actual goals so that you can go out there and have success with stuff. A couple of things that we’re excited about, you’re speaking at the Midwest Notes Summit as well.

I’ll have a fantastic presentation on due diligence. I felt a little honored that Vena asked me to speak on that one. Let’s face it, that’s the foundation that sets up the stage for either success or failure later on. If you do it right, you greatly minimize your chances of failure.

Also, you were thrown into the fire. You’ve got a couple of deals you bought in that weren’t in such great condition.

A couple but I overcame them. You’ll learn more from your mistakes and from working through things. I bought several at the same time and I had one just pretty much go off without a hitch and that’s great. You like that, but I didn’t learn very much on the one that went off without a hitch. It’s the other one, my problem child that turned into a great learning experience both for me and for others because I’ve been able to use that in marketing and say, “Don’t do this. This is what I did. That didn’t work out so much.” That’s a little bit of my presentation.

You’ll be speaking on due diligence, going through some of the things that you’ve learned. Taking stuff that you learned from us and other places and combine them all together, which is the right stuff. You’ve been a note investor for how long, Bill?

Almost three years.

With you running a special interest group here, you see a lot of different things. For somebody who’s reading and learning, what’s been the biggest a-ha moment for you over the last two and a half years?

I would say the importance of just taking action. This is similar to what I said. The other thing, one aid to that would be in general, the note community is very gracious. Sometimes in business or other real estate investing it’s like a close-knit category, people don’t want to give you the time of day. I can’t say everyone is like that, but the vast majority of folks like myself, I tell people all the time, “Let me know if I can help you.” Gail Villanueva, Scott’s other students, even the veterans, I’ve developed friendships with and the vast majority of folks are very welcoming and say, “If you’ve got any questions, let me know if I can help you with that.” Even like those assets that I closed on, I’ve got the realtors from Cody Cox on one of them. People are willing to try to help you out. That was a big a-ha moment. You’re not 100% on your own. This isn’t you out in the woods with a Swiss army knife. You have some teams, some backup and some folks that will help you along the way.

COREE: People are willing to try to help you out. You’re not 100% on your own.

One of the biggest things I think people can understand from this is a lot of people like to try to talk about, “I’m going to do 30 or 50 deals my first year.” Honestly, unless you’re focused on it, that’s not going to happen. I know a lot of people come in with great big numbers, “I want to do this.” I hear this all the time. I’m like, “Let’s get you a couple of deals closed. Get them under your belt. It’s going to take time because you’re going to learn more from your problems.” I will definitely say that. When you have done hundreds of deals, thousands of deals, you’re going to have problems from time to time, deals that drag on and things like that. It’s a matter of overcoming those and keep moving on to the next one.

There’s a term that Mr. Joel Markovitz coined a couple years ago when he came to one of our mastermind groups for the first time. It’s hard to believe we’re coming up on our sixth year of having a Note Mastermind. We’ve been doing it for a while. It’s number eighteen, nineteen we’ve done. He coined the term coopetition. We’re all competitive looking for deals around portfolios, but we’re also realizing that there’s enough out there that you can cooperate and share realtors, share vendors, share, “Avoid that neighborhood because of this.” That’s the beautiful thing about it. I keep track of our episodes. I’m a huge analytics guy. I’m always looking at numbers, how can we improve things, closing ratios, balance, stuff like that. Did you know that two of your episodes are in the top ten for the last 90 days?

I knew about 30 seconds before we went on air.

You’ve got two episodes in the top ten for the last 90 days. Eric Hyde, our buddy, is the number one, but the one thing that he did, he actually took the episode link that was emailed out to him and he put it in his email signature. He’s getting ten, twenty downloads extra a day just from a little extra marketing. Have you generated any feedback or any capital off of those episodes?

Yes, absolutely. We’re working through the process with some people. That’s the result of taking action and putting yourself out there. I’ve learned a tremendous amount. I’ll go back to your previous question. One other thing is the importance of a growth mindset and always being willing to open your mind to new things, new possibilities, new ways of doing things. What you just said is a perfect example. That’s another little thing that I can do that’s going to help me in the long-term. Pay attention to things like that. If you ever start thinking that you know everything, this is something I appreciate about Scott. He’s accomplished obviously a tremendous amount, but he still goes to conferences and such where he even says, “I’m probably one of the dumbest people in the room there.” That is awesome. You want to go to places where you can learn things and learn from other people. Having that growth mindset is important. If I’ve had some success with that and people being interested, it’s because I tried to portray that in everything I do. I’ve got to the point in life where I am looking at everything as a learning experience, what can I get out of this and how can I help both myself and other people as well? That’s one other thought for everyone out there.

I do love being the dumbest person around, which comes naturally. It’s a thing as you grow. I learned something new and we talked to some people at the COREE event. I always try to highly recommend this. Going out to this event basically allowed us to kill three birds at once, two speaking in assets. We were able to see a lot of parts of Ohio. The thing that I’m trying to get at is if you’re going to go someplace, come out and spend an extra day earlier if it’s an area or a market you’re interested in. You’re going to learn so much more about driving some of the assets, the neighborhoods.

I reached out to an asset manager and said, “What do you have in Ohio there?” and we take a look at. We mapped that stuff as best we could to try to maximize. We’re going to hit some more assets before we make our way down to Mason. The important thing is that’s one of the best ways. You can hire realtors to go out and take a look and we could totally have done that. We are going to do some of that in the outliers. I was like, “I’m not going to be able to make those two assets. We’ll send a realtor to take a look at that.” Anyway, that’s what I’m trying to get at. If you can, take some time, come out a day early, drive around.

That’s something I did. We took a vacation out to Arizona and this was the second time. I took a little bit of time myself. I grabbed the newspaper there and just did some little research. We were in Sedona, Arizona, which is a very nice part of Arizona. It’s beautiful with the Red Rocks. I took some time to look at their real estate market and learn a little bit while I was out there. There’s no substitute for being there on the ground. The old boots on the ground. There is something to be said for that.

COREE: There’s no substitute for being there on the ground, the old boots on the ground.

There are so many great little markets. If you’re in a state like Ohio, you can but if you want to just invest in your backyards in the state, you could. Everything’s two, three hours away from everything here. You can drive across Ohio in three hours.

That’s one of the beautiful things about living where I do in Columbus. The whole span of Ohio, about three hours even up to Ashtabula County.

Those experts are willing to spend time with you, talk with you and meet with you, if you’re going to be buying in the area, especially if you’re a note investor. They often realize that you’re going to find deals cheaper than they can with most retail buyers, that way and they’re often glad like, “Let’s talk about something.” I’ll give you an example. If I can buy an asset, being on rehab, a note deal in all and rehab and if it’s not too bad for 25, I’ll look at it anywhere in Columbus even the rougher south-central sides of town.

No city is perfect. Even Austin’s not perfect. We had the package bomber a little while ago. There are some rougher parts of Austin for the most part, but there are a lot of areas too. You drove by an asset for me before. We brought this address up in class and it looked a little rough. People were like, “You’ve got to be careful.” I was like, “There’s a lot of rehab going on.” We almost had like a Battle Royale over this asset. I’m feeling extravagant there, but people were like, “That’s good. No, that’s bad. No, that’s good. No, that’s bad.” It’s like back and forth. I’d buy there or let’s sell the house. I was like, “I don’t own it yet.” I can’t necessarily sell it to the group, but it depends on what your long-term exit strategy is. Dan is a good component of this. Dan is big on the turnkey stuff and getting stuff up and putting rentals in there. One of Dan’s biggest things, he likes to say, “What happens if we’ve got to do a rehab?” I agree with that. That’s why we don’t buy vacant properties. If you try to always be occupied, you’ll look at some things off because every deal could get shot of the park with the rehab costs.

Every deal could be shot out of the park unless you buy them extremely low. When you remove a lot of those things like you find an asset, some assets you’ve found recently. They got a lot of equity so if you do have to repair them, there’s plenty of room and meat on the bone there. You’ve got somebody who’s got a lot of equity, who’s paying well below market rents. Getting up the house rented for rent readiness is different than moving by readiness.

That’s real estate 101 there.

You’re not going to go with the expensive carpet that you want to lay on. You’re going to go the cheap four-pound FHA gray. I think they call it roasted mushroom. We’re talking about how the non-prime lenders are back. They’re doing sub-prime loans and that stuff again. You’re going to see more of this stuff hit the markets. It would be more default for everybody out there.

I had the chance to have dinner with Vena and Bill Cook and that was something they talked about a lot. One of Vena’s points was she’s a big wholesaler. She called herself and other wholesalers like a canary in a coal mine. This was totally not planned, but one of the points Vena made was exactly the point that Scott made, just that time on market is now starting to increase for some of the higher-end properties. It was interesting that Vena and Scott both made that connection and that observation, totally independent of each other. I had the opportunity to listen to them both and the things that make you go, “Huh?” That two smart people are already picking the same information. One thing is that change is coming,

If you invested in a higher market, you may want to drop it down to a lower price range. If you invested in a 250 range, maybe you want to bring it back to 225 to 200 range. If you’re investing in 100 range, maybe you want to bring it down a little bit. I won’t say the 150 or below market is going to be hit as fast as the higher end stuff, but just be prepared. You want to keep that in mind. I would not be counting on ARV, after repair value, in any of your bids. You’ve got to be going off of as is value, not ARV. That’s when I fixed it up, what’s it going to be worth? I know if you’re a fix and flipper or a rehabber, that’s one thing you look up. Buy it cheap, put some money into it, this was going to be worth. I would start deducting maybe 10% off your ARV as a cushion or go into notes and don’t do fix and flips. Instead of being a fix and flopper, be a rehab the borrower. Any final thoughts, Bill, you want to leave them with?

There’s so much value in working with others, meeting other good quality folks and making connections. There’s no substitute for knowing people. It’s something I was even teaching my sons. My older son, he has a good gift for connecting with people and that is important. Patty Ped, a God lover, it was one thing she talked about. I told her I was speaking. She was like, “Your charisma is going to carry it through.” I was like, “What? My charisma? What are you talking about?” Just being able to interact with people in a positive way. It’s a lot to be said for it.

COREE: There’s a lot to be said by just being able to interact with people in a positive way.

This was put on by Vena Jones Cox, who runs the COREE group and this is her first time of doing this. She reached out when she planted the idea here. She runs a big event, this central Ohio Real Estate Expo that takes place every November, which is a phenomenal event. How many people they had last year? I remember they had 500 plus?

They usually have 400, 500 or 600 at that. This isn’t as big as that, but it’s a good event.

We’re expecting somewhere around a 150, 200 but I would rather be at an event that’s niched down than something where they’re just generic.

If you want to come and learn and in even a smaller group setting, especially if you’re trying to learn smaller. It’s not going to be as big as that. It’s still going to be a good medium size, but it’s still going to be a big opportunity for you to talk with Scott, myself and the other speakers.

Go do something, make something happen. I want to thank Bill for taking time in his busy day to come to join us here on the show. I’m always glad to have you. Challenge yourself and remember we’re all going to hold Bill accountable to ten deals done before the end of the year. You can do it. You could do two, four, six and then four more in December.

You’ve got to do a goal setting. One last thing, work backward. You hear that all the time. Begin with the end in mind. That’s something I’ve learned from Scott is think about where you want to be and then work back. That’s essentially what he did. That’s how winning is done in the words of Rocky Balboa.

How is your Facebook Lives going? You started increasing your views or your videos though from once a month to once a week at least.

They’re going great. You’d be amazed. You put something out there and you make it good quality and people will listen. You provide good content. My views on almost all my videos, I’m up to almost always more than 100 now. My max was 223 or something on one of them. It grows over time and it’s funny. Even my everyday life people are saying, “I started looking in the note investing based on your video and such. I admire what you’re doing.” People admire people that take action and do something to improve your life. I’m rewriting my life here. I’m making it up. It’s all about setting goals and taking action to do that, but it’s just my everyday life. People notice when you’re doing stuff.

It’s good to hear that. A little bit extra marketing, easy to do and it’s adding some value to his business. Go out and do something. Make something happen. Thanks for joining us and we’ll see you at the top.

Thanks.

Important Links

• Bill Griesmer
• Central Ohio Real Estate Entrepreneurs
• Match.com
• Eric Hyde – previous episode
• Ohio Real Estate Expo

About Bill Griesmer

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