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Don’t Become A Joker Broker
Two Things To Take Note Of If You’re New In The Business
I’m excited to be here cracking up about some of the stupidity that I’m seeing out there in the world. What I wanted to talk about in this episode are some of the stupid things on how to be more coachable in the note and real estate business for that matter. I had some crazy things happen and I’m chuckling to myself that people are willing to help themselves. What do I mean by this? First and foremost, we’ve got to get started. If you’re a brand-new investor, we all got to start somewhere, putting your pants on one leg at a time, your underwear on one leg at a time through the hole. What we have to realize is you’re going to make mistakes. Honestly, just own up to it. Be direct about things. Don’t try to overcompensate. Don’t tell people I caught a fish this big when it’s really this big. Don’t be one of these people out there that are taking lists and blasting them across saying, “That’s the first.”
When it comes to being a real estate investor, don’t take a list of assets and then just blast it across the country. You don’t want to do that. That’s a bad thing. Don’t take individual assets and say that you have it under contract when you don’t have it under contract. That’s the big faux pas. We’ve seen that happen. Some new investor posted an asset that they’ve got supposedly for sale looking for partners, looking to wholesale the deal. Sure enough, somebody else had it under contract. That person that had it under contract saw what the other person was doing. They posted it to Facebook, LinkedIn and another group. They got booted from a couple of groups. They got blacklisted because they’re posting a deal that they didn’t have under contract.
I get that everybody’s trying to hustle and like, “I’m too scared to put something under contract, but I’m trying to blast it out like I would a traditional wholesaler.” This is the note business. This is the big league. You’ve got to put your big girl panties on, your big boy panties on to get rocking. You have to be careful that you’re not out there doing stupid crap because people do a lot of stupid crap out there. If you don’t want to be doing stupid crap, ask, “Is this okay to do this or should I do this?” The biggest thing is you should never post an address of property if you don’t have it under contract. That’s the first rule. That’s the first thing. If you don’t have it and you don’t control the asset, don’t post the address.
I understand you want to post a picture of a property, trying to build a buyer’s list, trying to find somebody that’s interested. We all get to start somewhere, but wholesaling is the least effective use of making money in real estate. It’s the easiest, but it’s also where the person should walk with the least. You’re going to walk with just a flat fee. A good wholesaler would put the property under contract. That’s the thing about note investing, you’ve got plenty of time often to do a lot of due diligence on assets. Put it under contract and why not some wholesaling, why not be man enough or woman enough to go and put it under contract. Ask if it’s available, put it under contract, and then go from there or start marketing out in other ways.
Don’t Be A Joker Broker
There are a lot of things that you can do to market out assets because a lot of people screw crap up and that stuff falls out. Whether it’s through due diligence or it’s a toxic asset or it doesn’t turn out to be what it is, you have to not be stupid to post something that you don’t control. That’s the easiest way to get blacklisted not only by other investors or kicked out of groups because I’ll do the same thing. If I find somebody who’s a joker-broker, I will remove them from my group. I won’t deal with them. I’ve had occurrences where I had my own assets being sold back to me. I was selling off a list of assets. Suddenly a joker-broker called me, “I’ve got a list of assets.” I was like, “It’s my addresses. It’s my assets that I actually own. You don’t own these.” They go, “I’ve got them under contract.” No, you don’t, idiot. Get a clue because people do some stupid stuff.
Another thing that we’ve seen a lot of is people calling and it was frustrating because that guy called me and said, “I know that you’re interested in nonperforming notes. I’ve got some that are available.” I was like, “What have you got?” He was like, “I’ll send you the list.” I didn’t get a list. I had also been out of town and the guy called me, “I saw that you were out of town.” I guess he follows me online. I was like, “I was out of town.” He goes, “I want to talk to you about the notes and stuff.” I was like, “What do you want to talk about?” He goes, “I have a $5 billion tranche. Do you know anybody who would be willing to fund that deal?” This is after he says, “We’ve come across some good stuff with our network across the country,” and he was just botching it. I get it being new. I started laughing and he goes, “We get some of this other smaller stuff. What are you looking for?” I started laughing. I was like, “Let’s cut the nonsense.” I’ve been doing this for ten years and kudos to you for getting started. I’m never going to bash you for taking the first step, but I said, “What are you trying to do?” Everybody has a network and if I’ve been doing this for ten years, it isn’t because I’ve been waiting around for you to give me a phone call.
If I’ve been doing this for ten years, this is because I’ve done a lot of deals. It’s not that I’m waiting around for one person, that one magical person that called me. I go out and make my own. There are ways these days to build a network. I said, “What are you trying to do?” He goes, “I want to be helpful.” I was like, “That’s BS.” I go, “Are you trying to make money? Are you trying to wholesale? What are you trying to do?” He was like, “I’m trying to help somebody,” and I was like, “Help doesn’t help. I don’t want to deal with somebody who just wants to help. I want somebody who wants to make some money. If you want to help, I’ve got plenty of people that I can get help from. I want you to be honest and tell me what are you trying to do? Are you’re trying to wholesale some assets? What’s your background?” The guy got combative. I was like, “Never mind, if you’re not going to be coachable or allow somebody who’s got ten years’ experience train a ton of people in the industry how to do this, then you’re an idiot.”
There are a lot of people out there that aren’t coachable. They think they know everything. They come over from the fix and flip side or the wholesale side. They’re brand new in this investing and they’re trying to wing it. You have to be coachable. You can’t come out and start saying in the first conversation, “I’ve got a $5 billion tranche.” No, you don’t. You don’t control that. You completely lost all credibility. It’s like saying, “I’ve got a $1 billion fund and you’re the guy making phone calls to asset managers on a one-off basis.” There’s nothing wrong with making phone calls, but you have to be realistic. “I’ve got a $250,000 to invest or I’ve got $500,000 to invest,” and get started because everybody starts at some point. We were all beginners at one point. There’s a lot of stupidity out there. A lot of things happen with people out there and it’s frustrating when I see something. Some things would have been smarter.
If you’ve got a list of other assets and smaller stuff, pick out an asset or two that you think makes sense. I’ll give you an example. When I first started, I got this huge list of assets from Capital One, 33 pages, six-point font. It was almost overwhelmingly huge. I was like, “I can’t buy the whole thing.” The asset manager on the other line said, “You don’t have to buy everything, just buy something.” I went through the list. That’s what I was trying to get to this guy. If you have that list of stuff, start looking through things. Don’t sit here and start bragging about your network across the country. As I told the guy on the phone, “I don’t know if you’re trying to pitch me on deals or you want me to give you my assets to sell. I can’t tell you because I will not give you both,” that’s a big red flag. You always have to come to the table with the agenda.
If you’re making a phone call, what’s my agenda? If I have a meeting, what’s my agenda? What’s my outcome? What’s my desired output from this meeting, this phone call, this email? What is it? I would pick out one asset and that’s what I did. It was a big tape in. I picked that one asset. I flipped through San Diego, find a hot market in San Diego, Miami, Houston, whatever it is, find a hot asset in a hot area and work through that asset. Talk about that asset. If you want to make money, nobody wants somebody to be helpful. Tell me what you want to do. I want somebody motivated to help. Break down the asset. Find out what the value of it is. Is it a good property? You get some photos. See what the situation is. What’s the price point? What’s the value? Add some value to the conversation versus cutting through the conversation, “I’ve got some other stuff.” That’s frustrating. Who runs in with a joker-broker? Feel free to throw in some of your comments up there about some of the stupid things you’ve seen from joker-brokers and things like that as well.
I’d love to see them and have them in the conversation. People do stupid stuff all the time or they market it out as they own it. We had this other guy. He posted in our The WCN Crew Facebook page, which is our members only, “I’ve got an asset list of twenty and I have a contract. Who wants to help me take it down?” He listed addresses and all these people started posting their emails. If I were a brand-new investor, I’d be like, “There are 40 to 50 email addresses that people have posted out there. I added 50 people to my buyers’ list.” I don’t post. You’ve got to quit doing that unless you see something that makes sense for something like that, otherwise, it’s just lead gen where they can pull lists. I get a phone call. I’m not joking, and it’s an asset manager. I don’t talk to them very much. I actually don’t buy much from them.
For purposes, we’ll just call him Mr. D. I was like, “Mr. D, how’s it going?” He goes, “I have somebody who told me that they listed their assets for sale on your website. I’m on your website and I don’t see them anywhere.” I was like, “Because nobody can do that. Are you talking about the portfolio you emailed out?” He goes, “I’m talking about that.” I was like, “I didn’t make any offers on it because I didn’t think there’s anything that made sense for me and on your pricing structure. I think somebody posted, are you talking about Mr. M?” Mr. M is the joker broker in this case. He said, “He said he posted that.”
I said, “He didn’t post the assets.” What he did is he went in and said, “I’ve got these assets under contract.” He doesn’t have them under contract because he’s looking for people who don’t take the list down and says he has it under contract. He goes, “No, he doesn’t have it under contract.” I said, “I’m going to remove the post. I’m glad to do it,” and I make sure to take it down. He goes and says thank you. He’s lucky that I’m in a good mood to let him slide, otherwise, I would blacklist him. I was like, “I understand that totally. See you later, Mr. D.” He goes, “See you later, Scott.”
If you don’t have something under contract, if you’re not going to take the next step, don’t be posting stuff for sale. If you don’t have something under contract, don’t post it. That’s the easiest can be. It’s okay. Here are some of the things that you can do. If you’ve got an asset, you’re looking through your assets, it’s okay to say, “I’m working through some of these assets. I’m making some offers.” That’s okay because if you’re making offers, that’s normal. When the buyers come back, they say, “I’m under contract or I own that one,” when you may not have used it as a learning mechanism, “I will remove it then.” If you have it under contract, great, no problem. A lot of times, sellers will bid people against each other and so it’s a no go. That’s the thing. Don’t be sitting there posting address, posting photo and say, “I have it under contract. Who wants to fund the deal?”
The Daisy Chain
That’s a no go. You have to be smarter than that. Otherwise, you’re going to get in a lot of trouble quickly. Laura Blunk says, “I had a joker-broker tell me the buyer pays his percentages, then when I agreed to pay him, he spent two weeks pestering the seller for a percent from him too.” Trying to double dip, the normal double dip. What is familiar that you’ll see a lot of times is when sellers are moving assets, or you have joker-brokers who are going to send a list out in a daisy chain. You don’t want to be a daisy chain. Let’s say I have a list of assets for sale and I send them to Laura to take a look at it. Laura doesn’t like them, so she sends them to Chris. Chris doesn’t like them, so he sends them to Gail. Gail just blasted out your whole database.
Let’s say that Pierre likes an asset and sends an email at Gail, “I want to buy this asset.” Gail then reaches back to Chris. Chris sends it back to Patty. Patty sends it to Laura and I lost myself already in this daisy chain. It gets back to me and I give him a price. Everybody starts adding on points. Scott wants $0.45 of the unpaid balance. It’s $0.45 plus $0.03, now it’s $0.48 plus $0.03, now it’s $0.51 plus $0.03. When it gets back to Pierre, it might be $0.57 plus $0.03, which is that plus $0.03, everyone wants to make three points along the way. By the time it gets to Pierre and he sends it back to me, maybe I’ve moved that asset off to somebody else, maybe I’ve sold it. The thing that happens out there is people do this stuff all the time and it’s frustrating.
It used to be a lot more rampant years ago when everybody wanted to get on a conference call. That was a waste. “Let’s do a conference call on the buyer’s rep. I’m the seller’s mandate.” What? You’d have joker-brokers in between the two sellers or the seller and the true buyer. It would just be aggravating, “Let’s get on a conference call.” I got on a conference call who’s supposed to be the seller of an asset. It’s the seller’s rep like, “My partner and I.” I was like, “What do you mean your partner and I?” It’s literally you’re like three remove, three degrees of Kevin Bacon. I’m not wasting my time with phone calls like that but you would have that happen too. People are trying to make points on both sides.
There’s nothing wrong with wanting to make money. Make sure that you’re doing the right thing and getting the point. Make it clear, “Can I make some points on this?” Don’t go back and try to pester the seller if you’re in the middle trying to make money on it. It’s funny seeing people do that on a regular basis. They don’t stay in the business very long because they build a bad reputation and nobody takes them seriously. Eventually over time, anytime you get tapes or assets, you start thinking that they’re not direct with their three removed. I’m not opposed we make any fee for direct, but I’m not going to deal with the joker-broker. I’m not going to deal with three remove, not four remove.
What’s normal, “Give me your fee agreement. I’ll sign it and step away.” I’ve dealt with some brokers. I finally deal with some brokers, especially we have some Wall Street guys that I deal with. They’re making three points on the whole trade. That’s fine. You know what they’re doing. We’re signing a fee agreement for two years. If I buy anything from this source for two years, they’re going to pay me three points. That would be nice. Let me buy something from you. You pay me three points. No, I’m paying them three points on anything that I end up buying from that source and I’m fine with that. They’re disclosed. They’re along the way there. Do you need help to get this closed? Do you need more information? Is the seller forthright with the collateral files and all that good stuff? What do you need with servicing? I deal with a broker on assets and they’re like, “Here’s that, how do you need to close?” You’re going back and forth. I have no problem dealing with brokers. I’ll broker some deals occasionally from time to time too, but make sure you’re direct. When you start getting two, three, four removed, that’s not a good thing. You need to be coachable and listen when I’m telling you this, if you do this, if you get involved in daisy chains, you’re part of the problem. You’re not part of the solution.
The Worst Thing You Can Do In The Real Estate Note Space
If you don’t have the way to put an offer on the assets yourselves, then step out of the deal. It’s 2019, no offense, but joker-brokers, wholesalers, we don’t need much of you out there anymore, unless you do have direct sources. What you’ll often have, you’ll have some funds that take stuff under consignment. They make money that way. That’s totally fine if you’re going to take it and help the seller move the whole tape. That’s great. We have done this in the past where we’ve helped market their assets for sale. They made their bids directly to us. We then submitted the bids back into the seller. The seller went on the deal with 100 people. My staff is negotiating with the highest and best bids. We submitted it. We got paid a commission. It’s up close. That’s trade. We did a good job with it because we’ve got great marketing and that’s what I’m trying to get at. If you can learn how to market these days and you can reach out to people and ask what you’re looking for, that’s great. That’s adding value, but don’t just throw spaghetti against the wall and trying to see what sticks.
How To Be More Coachable
It’s one of the worst things that you can do when it comes to being in the real estate note space. Nobody likes that. Be a buyer, be a true seller. First and foremost, when you’re trying to be a wholesaler and you’d been a wholesale buyers’ list, why don’t you just reach out to those people and see if they would fund your deals. Once you see if they would be willing to instead buy an asset from you, bringing you on, pay the percentage for you to learn along the way. You learn while you earn. There’s nothing wrong with it. I know a couple of things about being coachable. When it comes to marketing, get to know your database. If you’re building a database, I’ll give you an example. When I would go to a networking event, a real estate investment club or something like that, one of the things that I would do is I collect business cards. I think we all do this. I collect business cards and I would always look at what state you’re in or where are you looking for assets.
I’m glad if I come across an asset on a tape that’s in their state. I would then reach out to one individual asset. One deal, not a $5 billion tranche or 100 assets. I’d find out one asset in one state and work with them that way. “I’ve got a deal in this neck of the woods that you might be interested in.” I would just close. “Are you trying to wholesale this or trying to broker that.” Especially to my buyers, it’s better to know that at front-end. I’ll say, “I’m trying to wholesale this. I’d like to make something.” We’re glad to pay fees if it makes sense. If the deal makes sense and you’re direct, great. I’m like, “Where did you get that from?” “I got it from my buddy who was a wholesaler and he got it from his buddy who was a wholesaler.” I’m like, “I’m not interested.” I’m not going to waste my time being three or four removed from the source because it’s never going to happen.
I’ve never been in one of these conferences calls with everybody on it because if you have anything happen about it, “Let’s talk about doing business together.” You’re just taking a bigger bite out of my profits by having four people in the between and it gets confusing. Nobody wants to give up their connections. Nobody wants to give up the relationship supposedly. It’s not really a relationship if it’s your best friend and you have never talked to the buyer. I’ll give it $500 wholesale fee or $500 fee to move out of the way. “I can make more.” That’s great, go make some more. In nowaday’s world, if you’re going to be a wholesaler, you need to know your audience. You need to know what they’re looking for and you need to narrow your list down. Water it down, squeeze it down tight to specific states, and specific assets people are looking for.
Don’t waste people’s time calling them out of the blue and say, “I’ve got all this other stuff.” It doesn’t help without even asking, “What are you looking for?” If you ask what you’re looking for, then make notes of it and then when you see that, reach back out to it. One of the things that we do with our list, we ask what are the top three states that they’re looking for in assets in that way if need to be, I get a list in those three states. I can send them something. If I get a list in, then I can control it directly from the source. One thing that I’ve reached out to in the past, I’ve reached out to hedge funds that have a bigger list and say, “Do you mind if I market this for you?”
The quick dollar is not always the best. Wholesale is not always the best aspect of it. You can make a quick dollar if it’s a true deal, but you leave so much money on the table. Honestly, wholesaling is not investing, you’re just transacting. You constantly have to go out and try to find another deal of the wholesale. You’re trying to find a deal. If you’re buying a note deal in an investment, you can get cashflow, you can get money upfront, you can get long-term cashflow or you get stuff on the back, it’s a much bigger chunk than trying to wholesale.
There are too many wholesalers out there. Everybody thinks they can wholesale these days. In the note business, you’re not doing the BRRR aspect of things. If you want to be a note investor, you’ve got to become the bank and take the property. You take the property back and sell them off, that’s fine. Do that here, but being a wholesaler, no offense, you lose them out. You lose a lot of profit. You’re going to spend all on this marketing for the least amount of money. You’ll make $1,000 or $5,000, but why wouldn’t you want to make $20,000 or $50,000 by taking that property back. If you’re making $35,000 to $100,000 on a wholesale deal, that’s a different story. Oftentimes there are too many people throwing stuff against the wall and it’s just a big mess out there for most people. It’s sad.
We all want to make money in this business. That’s why your relationships and your marketing is what will separate you if you want to be any effective wholesaler. If you want to be an effective person who’s moving assets, know your list and know your markets. I’ll give you an example. We posted this Francis Oklahoma REO across the board. We did a short little two minutes and 45 seconds Facebook Live. Watch some of the numbers on it and we’re trying good. We moved it. We upload the video on YouTube. We posted it on LinkedIn. We live streamed it on Facebook and then shared it across six different groups. I posted it on ActiveRain. I went to BiggerPockets Marketplace and posted it there. I sent an email blast out to a database of investors I have. We completely blitzkrieg that. I’ve got four people looking to buy the deal, looking for more information, very interested in the deal. I’ve done some due diligence on it. I shared the rent rates. I shared what the market rent value was. I shared that needs some work. I shared that it’s on a decent part of the town right across from the post office. I shared a lot of stuff. I figured it’s the right thing.
Best Source To Find Active Deals For Marketing
Somebody asked here, “What is the best source to find active deals for marketing?” Reach out, dial for dollars like with anything else. Many people are trying to take somebody else’s deal as they take the low hanging fruit and try to mark it up. If it’s there easy to find, I guarantee you, nobody else is looking. You have to go find other deals that will make sense. Going back to this deal, we had this deal that we’ve taken back. We’re trying to sell it, but we posted it across multiple areas, so we’ll get four people to call us, get the phones ringing. I control that asset. I’m willing to pay somebody a referral fee of $500 if they bring a buyer to me. What you have to realize is I market it. A lot of people will just post one thing and that’s it.
I don’t want to go after the low hanging fruit. Everybody’s seen the list from the Condor or Grants and all those things like that. Nobody wants to waste time with those. Go find something valuable. If you’re looking for deals to go market, do some marketing yourself, dial for dollars, send an email blast to asset managers. Those are two of the easiest things that you can do, but most people don’t want to work. Most of them want to take the low hanging fruit, the first stuff that comes in that everybody’s seen, and they want to blast it out, which is a big waste of time.
Somebody says, “If it’s a good wholesale deal, then it’s good enough a deal to take it down yourself.” Exactly, if you’re going to be a wholesaler and you understand what’s going on in the deal, “Here’s what needs to be done.” Chris says here, “If you can make $10,000 assigning it and you can sell it, so then it will be the fastest way to make money. Flipping can take a lot of time to make money. If you can flip and make three times that, we can sign but we close and flip for BRRR.” Chris, you’re in traditional real estate. We’re talking about the note business here. Our biggest goal when we’re buying, since we’re buying it a lot cheaper than most of the traditional fix and flippers and especially if you’re buying an occupied asset, just try to get it re-performing and go from there.
Tools You Need To Be More Marketable
You’re talking traditional real estate, but when we’re talking notes, it’s a little bit different language. That’s right. You’re correct on your side with that said. If you make quick $10,000 assignment fee, that’s great. That makes sense but you’re still just churning and burning. I’m under the impression that you have that stuff under contract first, Chris. You are correct. If you have it under contract and you can wholesale that contract, it’s a great thing. We’ve had some people here who are trying to flip stuff that doesn’t have a contract. The seller doesn’t even know that they’re trying to flip it on their behalf. No problem. That’s where we’re trying to get, there are some tools. If you’re going to invest in your business, what are some of the things you need to invest in to help you make more marketable?
You need some email service provider like MailChimp, Infusionsoft or AWeber. Those are probably the three most well-known. I would not be using Constant Contact or iContact. They do not like real estate investors. They’ll tell you that directly. Use MailChimp, Infusionsoft or AWeber where you can upload your list too. You can see what your open rates are. It looks more professional than when sent from a Gmail or Yahoo account and hoping that you can see who opens it. The reason you always want to do something like that, you invest some money in that. It’s going to cost you $50 a month. As your list get bigger, it can cost you more. Use that thing. We use our Infusionsoft account with our daily marketing, we’re talking about webinars or doing something to drive people to our website or to our webinar, to our Facebook, whatever it might be. You have to do this stuff on a daily basis. That’s the first thing.
The second thing is be professional. If you don’t have it under contract, don’t post it. Do you know what a great thing is? Take some time. Talk to your contacts. Talk to the people. What are they looking for? Maybe send a survey out. That’s one of the things that we’ve done in the past quite a bit. SurveyMonkey, send a survey out. Ask ten questions. What are you looking for? What are your top three states? Are you looking for residential? Are you looking for a commercial? Are you looking for performing? Are you looking for non-performing? Are you looking for REOs? Those are some very important questions that you want to ask. Is there a deal that you’re looking for? Are you funding with your own money or other people’s money? That’s another thing as well.
If you’re trying to wholesale assets because you don’t have any money, then go find a deal, break it down and do the due diligence. Check the values online. Check what the area looks like. Use Google Maps. If it’s nearby, go drive by the property. Take some photos. If not and if you know a friend there, see if they can drive by for you. Pull the rent rates. If it’s a commercial building, try to see if there are leases, see what comps are going on there, talk to your realtor. If you’re a realtor in a different area, jump on any RPR and try to pull an AVM. See if it’s multi and if it’s occupied. See if you can find information on it. If it’s for lease, find the management company, find optimal rent in the area. Put those things together. Check the taxes, check the tax roll. If it’s a nonperforming note, can you get a copy of the collateral file to take a look at it?
You can look at LoopNet to look for commercial properties, but you’ve got to be careful because often LoopNet is like a dead end zone. It’s where commercial deals go to die. What I like using LoopNet for is I’ll use it to help me find comps. I’ll also use it to find if the commercial properties have ever listed before because oftentimes the commercial brokers are often great. If they’re coachable, they’ve got a list of buyers in their pocket that they can move stuff because then you have these buyers, they’ve worked their list. They’re not going to post them in LoopNet. I use LoopNet to find deals that have been dragging out for a little while in the past. If we see an asset on LoopNet, it’s probably distressed or it’s a short sale. We’ll jump on and talk to our title company so we can pull who the current lender is, reach the lender and see if we can buy that debt directly versus I have to go through a broker. There are some good things about that but that’s what we like to do with that aspect of things. Be smart and learn how to market. That’s the thing that defines all of us.
It separates everybody. If you can do a little bit more than the rest of the crowd, you’re going to stand out from the crowd in a good way, but you also can do it in a bad way if you do it badly. You can do it badly if you stand out from the crowd doing something wrong like posting an asset for sale that you don’t have under contract. Don’t post the address if you don’t have it under contract. That’s the biggest thing. Asset managers get irritated. I had it happened before because asset managers are going to look at your marketing. They’re going to see you. They’re probably going to connect with you especially if you’re on LinkedIn. They’re going to connect with you to try to see what you’re doing. Are you’re moving deals? Do you own deals? Do you close stuff? That’s the thing too.
Another thing is never ever do this. I’ve had this happen a couple of times where people said they worked with me and they represented that they worked for We Close Notes or Inverse Asset Fund to a seller. That’s not a good thing because the first thing, most asset managers are going to do is google you, find out and then make a phone call and drop an email, “Do you know this guy?” It always comes back. I’ve had two people do that in the past where they made offers on behalf of me, unbeknownst to me. I got a phone call from the asset manager, “You put these bids in Detroit or put these bids on these assets. Are you going to close on these?” I was like, “I have no idea what you’re talking about. Who put this in?” “So and so put these in.” That’s a very interesting come to Jesus meeting that we have then very quickly.
That’s one easy way to get blacklisted very quickly from everybody else out there as well too. Keep that in mind. Don’t do that. Do the golden rule. There’s nothing wrong with being green or being brand new in real estate. We all start somewhere, admit it. If someone is trying to give you words of advice, take it. Listen to them. Don’t be argumentative with them. If somebody calls you out on your stuff and they’ve got a lot more experience, just admit to it. “You’re right. I’m brand new. What do I need to do?” That’s one of the strongest things I can tell you that’s helped me over the years. I was coachable by people who are a lot more experienced than I was.
What can I do? How can I be smart? That’s not saying I’ve done some stupid things. I’ve made my share of mistakes like anybody else has out there. The thing you’ve got to realize is if you make a mistake, own up to it, admit it and don’t argue about it. Take it and run with it. Make it a learning experience. You will always learn more from your mistakes and you’ll learn from your successes. That’s one of the biggest things. I’m going to talk back here a little bit. Things to do that would be smart. The do’s and don’ts. Do ask if you could market an asset before you do a lot of times. Do ask your people, your database what are they looking for? What’s their price point? What are their top three states? Those are some great questions to ask.
Another thing is to invest in your deal. Invest in learning the due diligence of aspect. Pull the numbers, check the online stuff. Pull as much information as you can to make that deal valuable to your list if you’re going to blast it out to your list. Don’t post the address if you don’t have any contract. Don’t say you have it for sale if you don’t have it under contract. Don’t lie and say that you represent somebody when you don’t represent somebody. Don’t try to squeeze as much out of the deal as possible if it’s a skinny deal. Learn that making something is better than making nothing. In some cases, I’ve cut my commissions because I knew it was a skinny deal. I know that the seller was being difficult and on higher prices, so I reduce my commission to make sure that the deal went through.
I’ve done that with a lot of our students where we charge $1,000 or $2,000 to make a deal happen and I’ll reduce my commission to make sure that it’s the closest. The seller wants this, the buyer wants this, I’m somewhere in the middle, something’s going to get squeezed. I’d rather make $2,000 versus nothing on a deal. That’s what you’ve got to realize. Just because you want to make $5,000 on a deal or you want to make $10,000 a deal, it doesn’t mean it’s always going to happen. Like our buddy, Jeffrey Wolfe said, “If the deal makes sense to wholesale, take it down yourself.” That’s one of the biggest dues that I highly recommend that you do. If the deal is good enough and you’re trying to wholesale it, once you market to your database and see about they can’t buy that asset or it can’t fund your deal, market to sell your asset, market to fund it. You’re going to make the most amount of money that way first and foremost than anything else. It’s always an interesting day in the note business.
It’s always an interesting day in the real estate business. People do a lot of stupid stuff. If you’re the person doing stupid stuff, then admit to it. Be apologetic, admit to it, ask forgiveness and say, “How can I best fix this?” Sometimes you get to eat a little crow pie from time to time. Sometimes you’ve got to be humble and you’ll learn more from it, so you don’t make the same mistake in the past. I’ve done some stupid stuff in the past where I’ve sent an email out a little racier and some people were irritated, or I sent an email poking fun at somebody and it came back on me. There are a lot of times I do something that I know what’s going to happen and I’m willing to bear the brunt of it if it’s good or bad. Sometimes it’s worth making a splash just to get people chuckling and go from there. I’m willing to risk a couple of things every once in a while, but I’ve got ten plus years of credibility behind me. If you’re brand new, you don’t want to probably do that. You want to probably stick to the middle of the road there and make something happen. Where are some great places to go to if you’re going to build a list? Go to your local real estate club. Go to networking events. Take plenty of business cards.
If a lot of people are going they’re brand new, they don’t have business cards, make sure you take some blank ones. Take some stuff or take your cell phone, have your cell phone ready to go if you’re short on business cards. Scan one, that way you can text it out to people, but don’t throw up on people. If something’s there to network, just talk with them, “Do you mind if I give you a phone call afterwards?” and go from there. One of the most important things that you can do and you should do is when you get home at night, take all the business cards of people that you’ve met. Especially do this on the front end when you’re brand new, drop them a short little email, “It was great meeting you at this event. It’s great seeing you. Do you mind if I add you to my buyer’s list so that if I come across something, I can send it to you? I won’t bother your time with stuff that doesn’t make sense.” Do you know what’s going to happen? 90% of the time it will be like, “It was great. Awesome. Sure, add me to your lists.” Most people don’t do that, most people don’t drop an email out after they’ve met somebody. Even when I go to big events, sponsorship and stuff like that, we’ll send an email out, “What’s up? It’s great to meet you. Here’s what we’re all about.” Others don’t send an email at all.
Part of it comes from most people that are going to expos, vendors or employees, they’re not actually the people running the event. They’re not even the people running the company. They don’t understand the market. They’re just there to pass out flyers, have some drinks, free Chick-fil-A or something like that. They don’t really give a rat’s butt about taking that list. Every people you come in contact with is either a buyer, a seller, or a funding source and everybody’s a funding source, one or form or fashion. They’re either going to fund the deal themselves or they’re going to refer somebody to you. That’s one of the big things. When I went to Dallas for a DFW REIA Meetup, I saw people I hadn’t seen in years. It was great seeing them. “What’s up? Good to see you.”
I’m always a little afraid that we might market a lot. I don’t want to irritate people with too much marketing. I’m like, “If you don’t want it just unsubscribe, it’s not going to hurt my feelings.” If people come, “I love what you’re doing.” I’m like, “Are you a note investor?” “No, but I like listening to your stuff. I like watching your stuff.” Great, then we’re doing something right. What’s funny is when you get started getting phone calls and emails from asset manager like, “It’s the green email, the green logo and the green background,” when it kicks into place, that’s what you want people to do. If you do that over time, you brand yourself as being somebody who’s honest, direct to the point and knows what’s going on in a deal, that’s a good wholesaler. That’s a good broker at that point.
The broker is exactly that. They’re often broke because they’re making a quick dollar and they do not know anything long term. They’re not investing in the asset or the deal. It has to be a great amount of money. You have mortgage brokers, you have real estate brokers going on and they’re making their 3% or 6% and their points in the deal and yields prepping, whatever. Every month is a new goal, “I’ve got to sell this much.” In our time, you get burnt out relatively quickly doing that. Don’t burn yourself out. It’s ideal to make quick money because you don’t have any type of attachments if the loan is done or the house is sold, or the asset is moved. That’s great. You can move on.
If it’s good enough to wholesale, if it’s good enough for somebody, maybe it’s good enough for you to take down. Maybe it’s good enough for you to be an investor versus a broker and buy some deals. Leverage your network, leverage your audience and say, “Just change your message up a little bit.” Change the message, “Instead of me bringing you this deal for you to buy and pay me a fee, I don’t want to be your waiter anymore. I’m not here to take your order. I want you to invest with me. I want you to fund this deal. Let us be working together because I’m tired of making peanuts when I could be making a lot more in the note business, in the real estate business or in the brokering business, whatever that might be out there.”
If you want to listen to another podcast out there, check out The Travels Wins on iTunes. It’s such a great show, a great way of interviewing people. There’s some interesting stuff out there. Give a chance to check it out. You won’t go wrong with it as well. Our shows are available on all podcasting platforms. You can always check us out. Our video replays are usually on Facebook or YouTube.com/WeCloseNotes, our main channel and you can check us out at WeCloseNotes.com. If you’d like to get more information on buying or selling notes or education on what note is, especially a nonperforming note, you can check out our website and also sign up for our online training at the NoteBlueprint.com. As always, thank you so much for participating. Thanks for those who asked questions. If you like this episode, give us a like, give us a share, give us a five-star review on iTunes. We’ll be glad. Make sure you subscribe over there as well. Otherwise, go out and make something happen. We’ll see you all at the top.
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