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Zig Zag Investing
This episode is a little bit based on a conversation. I got on the phone with one of our investors talking about the zig and zags and how everything changes over the years. That’s what this episode is all about because you have to evolve with the market. You have to evolve with the times and sometimes history repeats itself. Sometimes you’re going and doing one thing, and suddenly you’ve got to switch. I call it zigzag investing. You’ve got to duck and cover a little bit in your real estate investments out there because the market is changing. I’ll think back to when we got started in the note investing game back in 2008, 2009 and 2010. It will run up through the last few years, a lot of especially when I was traveling and teaching workshops across the country, we’d have 50 to 100 people at a workshop. Everybody kept asking, “When is the market going to change? When is the market going to end?”
Increase In Market Value
We would have Joel Markovitz there. We’d have Val Sotir. We’d have Jack Krupey. We’d have Marc Gold. We have others that would show up from time to time like Brett Palumbo. We always kept saying, “We thought it was like a three to five-year market.” Who knew what would happen? It was longer than three to five years. The market has changed a couple of times. I think back to the different things that I have done in the last couple of years. When you see the market increasing in value over time, it affects a lot of people. The first round of people that had to do a lot of zig and zagging were people investing in seconds. They had to zigzag because when you have equity increasing in a property, your value is increasing. It gives you equity now versus being on over encumbered on a second lien position. You can change, but it means the pricing has gone up. There was less of them being created especially on a junior lien, second lien positions and their work on their first liens since the beginning for the most part.
Especially in the last ten years, there’s been a lot less originated than what was done previously back between 2004 and 2010. That’s one of the big zigs with that. People that were doing a lot of short sales had to zigzag because there were less of those assets available. Those that were marketing to the foreclosure lists had to evolve and change things because there were less foreclosures. You look at some of the different counties, especially here in Texas. I was talking to somebody here about Travis. I can remember when there are 500 plus foreclosures each month a year and has down to less than twenty. That’s what you see out there. You see fewer results from the things you’ve been doing or you see a lot of people playing in your space, you either got a zig or zag.
If you keep doing the same thing, you’re going to have difficult times. I talked to other investors out there. I’m like, “I bought from Candor. I bought was from Granite Loan Solutions.” If those were your only sources when everybody else found them, flocked to them, started buying from them and you’re getting outbid, or you were complaining about pricing being too expensive, you had to zig. You’ve got to zag. When people complain, “There’s Scott Carson and he’s teaching too many people, prices are too high,” you’ve got to zig. If you’re going to sit there and be stubborn and not market to move or to go find assets in other areas, you are just going to get run over by everything. A lot of us, real estate investors, are cows. We’re going to flock to one area and you want to flock to another one. You have to evolve. I think about the markets that I have invested in the last couple of years that has changed. I used to be high in God’s waiting room, Florida. I bought a lot of stuff in Florida. I don’t buy anything in Florida in the last couple of years because most of it has been overpriced.
It didn’t make sense for me because that market has rebounded strong. I had to evolve. If I stayed where I was buying in Florida, then I wasn’t buying a lot of stuff unless I had wanted to go trying to door knock or take over some twos. I was talking with a real estate investor, I won’t mention his name. We were talking about the note business and talking about some other things, especially in the Florida market. He was like, “That’s all I buy in Florida.” I was like, “Have you changed your business model? Have you just slowed down in buying?” He goes, “I didn’t buy much stuff in the last 12 to 24 months because the price has gone up. Yes.” It was because you’re not seeing as much stuff. We’re still seeing some stuff. We’re still doing some originating.” I was like, “That’s great.” It’s not the same thing as if you’re buying the nonperforming stuff out there. Markets have changed. Texas, it’s always been expensive here. California where we used to see some stuff there, we don’t see anything out there. It means we’ve evolved.
Choosing The Right Educators
In the last couple of years, we bought a lot more contract for deeds as a note product versus the traditional first liens because there was a lot of it available. We went there. We started buying before. There are a lot of crowds going in there now because they realize that’s not a bad product. Sometimes when people are scared of a specific product or niche, that’s a good thing to be in as long as you understand it. You’ve developed and built your market, you’ve built your teams. You’ve built your business model around that new niche. The same thing comes with what we’ve seen in the market out here. You start seeing educators come out of the woodworks. Larry Harbolt and Tyler Sheff and The Cash Flow Guys podcast had an episode on that. It cracked me up. I agree with that. There are a lot of people that are like, “We’re weekend warriors. We’re going to teach everything now.” You’re still working a full-time job. Unfortunately, an employed person cannot teach a self-employed person how to be successful because they have different needs.
A self-employed or an entrepreneur needs to learn from another entrepreneur because as long as that person who still has the job, they have a safety net. It’s a different mentality when it comes to making offers. It’s a different mentality on the urgency. It’s a different mentality for how many bids you’ve got to place in to hit your goal for the year. I’m not minimizing the knowledge of people that are working full-time and still have a job. What I’m talking about is there are different things when it comes to services, vendors and what you’re doing on a day out basis. If you’re working full-time, you may only have ten hours a week to put towards something that you’re working on. If you’re self-employed, you have 40 to 60 hours. What you are doing in that 60 hours can’t be taught by somebody. Somebody who’s a $17-employee on the phone can’t advise somebody who is a $0 employee trying to make it in this world. The worst thing that you can do is if you are working a full-time job is to take the advice of somebody to quit. Don’t quit your job until you have your systems in place, your cashflow in place and everybody having things in place rock and roll going forward.
I see that happen a lot. I see somebody who has a different job trying to educate people on something. You can teach them nuggets. You can teach some basics, I get that but when there are a million different things going on, a million different workshops and many different things that breeds two things. One, people aren’t buying stuff or they should be or that specific area is over saturated. That’s why you’ve got to zig. You’ve got to zag. I’ve zig-zag several times. I’ve always thought we were ahead of the curve a little bit because we went from buying in Florida when nobody else was buying in Florida for the most part. We moved from that to buy in other states like the Carolinas or South Carolina. We zagged there. We start buying in Indiana when other people weren’t. We zag to buying in Michigan and Ohio when a lot of other people weren’t doing it. We zagged when we stopped doing hotel workshops and doing online workshops. We zagged when we focused on our Note Mastermind or we zagged with our coaching going from in-person for the four days to eight weeks of webinars with people to our Fast Track.
Evolving Your Business Model
You have to evolve your business model to make things different. We’ve zagged here in the last months of being focused on a podcast. We speak in other people’s podcasts. When you start seeing things different, either you have to increase your marketing or you have to find alternative sources to make things happen. A lot of people are talking about, “I have been using Facebook Ads to mark it and now it seems it’s not seeing nearly as much traffic.” You’re not going to see as much traffic with Facebook Ads. That’s why I don’t spend hardly any money at all on Facebook Ads unless it’s something that we’re doing because the price has gone up. It doesn’t make sense a lot of times and then also the algorithms with Facebook controlling how many of your followers or friends to see your stuff, I think it’s crap if they only allow 10% of your audience or 5% of your audience to see exactly what you’re talking about, to see what you’re sharing. The thing you have to realize too is if you don’t change your marketing, you don’t change what you’re focused on.
People have gone from sending out thousands of postcards now to yellow letters or going from that go back to door knocking and that history repeats itself. I see people door knocking out and I crack up because a lot of people won’t do that. They’re too scared to do that. The hustlers go out and do that as long as they’re safe. I would not always recommend it for everybody and every neighborhood. What you have to realize is everybody has to evolve or you’re going to evolve out. There was an interesting article that came out in USA Today about how they found another offshoot of homo sapiens in some cave in India or some other place where they were like a hobbit, three-foot-tall people. A cousin of ours, as you could say. They eventually died off because they didn’t evolve. They didn’t leave. I don’t know whether they lost their food source or stopped breeding but that’s the thing. You have to evolve or die. You have to zig when others are zagging or zag when others zig. You have to go out and do things differently.
This is why we harp on so much with our marketing aspect of things, especially when we’re talking with people at our mastermind or through our Fast Track training. We go, “Here are a variety of ways to go out and locate deals. Here are a variety of ways to do it.” Sometimes you’ve just got to pick up the phone and start dialing for dollars. I know people who want that. As the technology evolved and sources, you’ve had more listing websites like Madison Management sales platform, or you had Watermark Exchange or you did have Granite or Candor. We’ve got Paperstac. You have to evolve to keep up with the market because that market, it’s constantly evolving. I see this on a regular basis, the things that we do, things that have been working great and other things like, “Why is it not so much working anymore? Are we going to keep putting money or time into this thing that’s not working or do we need to evolve and put in something that’s working?”
Sometimes it doesn’t make sense. You start seeing many, and over and over again, different workshops coming up. There are a few staples out there about over flooding of events and that doesn’t make sense. You don’t want to be the fifteenth or twentieth person doing something. You want to be in the top two or three or maybe number one, doing something different. You have to evolve differently. That’s one of the big things that’s helped us out dramatically. I’m starting to see more people doing online events because they realized it’s working and not many in the note space.
We’ve had a couple that people have done one online event and they never followed back up with it. It is what it is. People don’t put this seriously. Maybe they don’t see the impact of it. I look at our friend, Ron Happe, who did NoteCon. They did it once and they didn’t follow through with it. They did it once where they prerecorded everything. It was over two weekends of prerecorded webinars. I don’t think that works because you don’t have that live interaction. People don’t feel that connection because it’s a recording. You want to try to capture their questions when they’re live with you. Not doing a recording aspect, you might as well just knock it all out in one or two days. It’s the same thing I started with Troy Fulford. He did one online summit and nothing since.
You have to realize that as technology evolves, as we get smarter, our attention spans get shorter, things get more expensive to travel. It gets more expensive to put on events. You have to evolve with the times. You have to evolve what’s going on. There are a lot of real estate investors out there trying to do the same thing as beforehand. It’s not the same market. Each state is going through different things. Market values are changing. Dallas is different. Austin is different. Houston is different. You’ve got to look outside of your backyard in some cases. When I spoke in front of the Quest Trust Company for the Trillion Dollar Investment Mixer, I asked a question from the audience. I want to put this out there to everybody that’s reading this in Note Nation out there, how many of you would buy a deal an hour away? For some people that’s like South Austin or North Austin? For South Dallas to North Dallas or South Colorado Springs or North Colorado Springs or South Vegas and North Vegas, you get what I’m saying. Most people, I’ll do a deal with an hour. What about two hours? For us, that’s the distance from here to San Antonio.
Some people are like, “I want to do it outside of two hours.” What about three hours away and some people, “I will do three hours.” Won’t you invest in Dallas or Houston from Austin or invest in a three-hour radius? That’s unfortunate if you can’t find deals in your backyard, no matter what market you’re in, for the most part of us especially you here in the central part of the country. I’m basically three hours from each coast. I can jump on a Southwest flight right now and in three hours be either in Tampa, Jacksonville, Miami, DC or Baltimore. I can fly north of Chicago. I could be in San Diego, Vegas or Denver. A little bit north of that is a four-and-a-half-hour flight to Seattle. I’m not quite that aspect of thing but what I want people to realize is your market is a lot more than just what you can drive to. Some people are like, “I’ve got to go out and touch it.” If you can go out and touch it, you better get used to flying Southwest because Southwest is still pretty cheap. You can still jump on a plane, go out and fly back the next day for the most part or fly that same day in some cases. Fly out early and fly back at night. You’ve got eight hours of a drive around and look at assets, put a team together and things like that. If you coordinate things, you can make this happen.
Exploring Promising Areas
That’s what many people probably need to be doing is if you’re in an area like Austin or other parts of the country, they’re overpriced or the price to get in is exorbitant. You have to start looking at other areas. I know a lot of people from California for years have been looking east, that’s why Vegas and Phoenix have boomed so well. It’s also why you see Albuquerque in New Mexico doing well. Denver is booming. Denver hasn’t been a pretty good market, but you have a lot of people from the West Coast coming to Florida. Those that went a little bit further to Missouri, to Saint Louis, Kansas City or to Indianapolis in that area have done well. You start seeing this wave of people moving to find deals to go a little bit further. I call it the whole like boom sooner aspect of things. It’s the Great West migration that the United States went through in the 1800s where people were moving west to try to find and make a new name for themselves. It’s that same aspect here as real estate investors, as an investor specifically, is you have to be looking, I won’t say necessarily going west but looking east. You have to look in different markets and different ways of finding things.
You have to evolve. You can’t keep drinking the same thing or eating the same thing if the lines are getting short. You’ve got to switch things up in your business, your marketing and your focus. Maybe you need to go commercial, maybe you need to quit looking for multifamily deals that beautiful thing and start looking at buying some distressed notes. Look at mixed-use or going to smaller units versus a Class A, 100 plus units. I laughed but one of the biggest things I can tell you right here, right now, if you’re a real estate investor, says you specialize in everything, you specialize in nothing actually. By saying, “This and this, I specialize in a lot of these things,” you scream joker broker or Jack of All Trades. The Jack of All Trades is a master of none. Anybody should know that by now.
Where do I see things going? When I’m talking to people because I’m constantly trying to keep my ear to the ground. When the market turns south as we’ve already seen in a few markets, it can’t keep going up. It’s got to change and turn south at some point. We already see parts of that area. Miami is going to be hit hard. Dallas is going to be hit hard. Denver is going to be hit hard. There are parts of California. I don’t think San Francisco is going to be hit hard because there’s too much money out that neck of the woods. There’s going to be a bit of a blip. San Diego is going to get a hit harder in San Francisco. LA will do okay. What’s going to happen there is you’re going to have to see Phoenix and Vegas take a bit of a hit as well. I don’t think you’re going to see too much of a hit in sub-$100,000 assets.
What To Do When Subprime Lenders Start Feeding Their Default
The low priced stuff is going to continue to do well and be strong. It’s your higher echelon houses, your $500,000 homes or greater because those are dragging out. You’re going to see those drag-out days on market are already starting to increase in those properties across the country. CoreLogic came out with some new numbers that our default rates are less than they were a year ago. Our 30-day defaults are down. Our 90 days are right at the same. I’m interested to see what happens when some more of these non-prime members started seeing their default rates start to kick up a little bit. That’s going to be the biggest thing. Charting is one of the biggest things that you have to do. We’ve gone back to charting those. We’re going back, looking and targeting a lot of those funds that are on the origination side. If they’re selling all their stuff off, a lot of them are selling their stuff off to some of the bigger banks or to Wall Street.
They may not hold on to that paper. That’s totally fine, but somebody is going to have to hold that pie. Somebody has to hold that hot potato, that hand grenade with the pin pulled and where does it end up? Does it end up in Wall Street again? Does it end up in insurance companies? Does it end up with us? Are you going to see an increase in FHA, Fannie Mae foreclosures and HUDS again? Probably so. I don’t think that means you’re going to see REOs. They’re going to continue to sell the assets off in portfolios as they’ve done, they’ve learned, they’ve zigged with the zagged. They are trying to solve individual ones. They sold the pool of notes off. They become into it. The biggest opportunity lies in those that were going to take the time to reach out to the funds that have bought these portfolios over the last couple of years from Fannie and Freddie who’ve already exceeded their twelve-month period of working out the loans, of trying to avoid foreclosures. They’re selling that chunk of the assets off. They’ve made their money back with that 25% of the portfolio. They’re making their profits on the middle 50%.
There’s still that bottom 25%, which some people say, “That’s the dregs, that’s the bottom of the barrel.” I still think there’s an opportunity for local investors because if you can get that stuff cheap, you have the opportunity that if you know what that property is worth, you know what the true market is. You have a little more flexibility being a boutique investor than you do some big company, who’s got a huge overhead and has to focus on specific numbers if they’ve got to hit. The minute those assets aren’t going to hit those numbers, they’re going to look to move this. It’s a big opportunity. If you start checking and tracking those companies that bought those large portfolios and I’m talking about Goldman Sachs, too. Goldman Sachs bought a bunch of stuff off there at the point where they probably can start moving some of that stuff off their books if it didn’t follow through. They’ve got a unique position of being able to get dollar for dollar discount off of their big billion dollar fine for every dollar that they forgive in loan modifications, which is rigging the system, I believe. That’s giving Goldman Sachs basically free money. I wish we would have that deal as investors, but that’s not the case.
Tracking the entities that are handling their aspect of things, it seems that that’s what you have to do to get by. You’re going to see some buying clubs. You’re going them coming together to buy in bulk, which there’s some opportunity there. I believe the people that are going to hit the worst in this change for the next six to months are going to be your smaller investors that are trying to get in the market. It’s going to be the day the people buying one off, two off deals for the most part and something that makes sense. It’s dried up. You’ve got to come back to the table where you’ve got to have $500,000 or more in private capital to buy something that makes sense to get a discount. I had an exchange with an asset manager. He was like, “I can sell this stuff at $0.80 on the dollar.” I was like, “If you could sell it at $0.80 on the dollar, by all means, go right ahead and do it.” That’s the way it is. I’m not going to sit here and hold my breath and close on a deal that is overpriced because you think it’s worth something and that’s fine.
You have to realize there are a lot of funds that are smoking a lot of cracks out there. You have to leverage yourself differently to the point where buying one asset at a substantial discount isn’t going to play well. You have to realize you’ve got to do something different. That means probably buying more assets to get a discount. Buy some of the dregs to get a discount. You’ve got to do something a little bit different than what you were doing six, twelve or eighteen months ago. A lot of people are getting excited about buying portfolios and contract for deeds. You’ve got to evolve. What does that mean by evolving? You’ve got to change the marketing that you’re doing. That means you’ve got to find different sources. Maybe you’re pulling assignment on mortgage list from a county clerk site and looking to see what’s bought and been sold there. Maybe you’re pulling asset manager lists and dialing for dollars making those unique connections. Maybe you’re calling the subprime niches and finding out who they’re selling to and calling those buyers to see what’s going on with them.
Market More Than Anything Else
What you have to realize is this is a different market. It’s a different ballgame. You’ve gone from being in junior high, to high school and to college. If you’re trying to getting in the pros with writing things in the note game, you better expect to put your helmet on, tighten up your chin strap and be focused on getting some things done. You have to market more than anything else. Dan Zitofsky posted something that people are like, “I can’t find deals. I can’t raise capital. I don’t know how to go about that aspect of things.” When it comes down to more than anything else, it becomes a fear of marketing. Those investors that know how to market themselves whether it’s using Facebook, LinkedIn, video or direct messaging through different variety of things or knowing how to use Facebook Custom Audiences to target people and avoid having to use expensive Facebook Ads or Google AdWords. There are things that at some point, you’re going to have to evolve into the 21st Century. You’re going to have to evolve and realize it’s a new generation.
That’s the thing I want you guys to focus on and be honest with yourself. If you haven’t made a lot of offers, you don’t know where to begin. If you’re making a lot of offers that are the only way to get to find out where you’re at, you may have a lot of offers if things are getting countered back high or you’re seeing things selling. It doesn’t make sense to one-off investors. A lot of one-off investors that bought assets are overpaying for some stuff are going to be the ones that you can end up buying stuff back cheaper later on. You’re going to see a lot of that stuff happen in the next six to twelve months, especially if people are buying houses as investments and suddenly, the market turned south on them through a variety of reasons, you’re going to be able to pick up some stuff relatively cheap.
We’re going to see that in the apartment complex. People overpaying for assets thinking they’re going to get cashed out or refinanced out in three years with traditional financing. I don’t think that’s going to work. You’re going to have a lot of people that are going to be hurting. I could be wrong and I have not been known to be wrong, but if that’s not your strategy, you’re going to just keep using other people’s money and that’s fine. You’re looking to sell the asset off. You’ve got to be prepared what happens if the market turns south again? What happens when things dry up in your specific little niche or your market, your backyard? Are you still considering banging your head against the wall trying to get things done or are you going to evolve? Are you going to zig and zag? If you see every flooding in an area, it’s time to pull up your tent and move to a different area. You could fly into that area. There’s time to pull up your tent and move to a different area. It’s important.
When It’s Time To Pull Up Your Tent
You have to realize that if you are number 100 going there, you’re probably behind the eight balls already. If you’re number one, two and top ten or something like that with some branding out there and you see success, keep knocking it out. Buy as much as you can when you’re getting stuff at a discount. Do the things that you need to do. Those that market themselves more than anything else are the ones that are going to end up having deals sent to them and have to do less work versus those that don’t market. If you are sitting there still relying on others to send you stuff versus going out and finding our own sourcing. If you’re the one going out and finding stuff, you’re in a much better position because you’ve got stuff built in. You have the ability to turn that nozzle on or turn it off as you go. If you’re one of these reactive investors, you’re going to be priced out of the market because money right now is cheap. You may want to be a lender.
That’s the thing we always see too. I was talking with Darel Daik from Noble Mortgage company seeing all these hard money lenders showing up trying to make money on a hard money lending and that means cheap money. I’ve seen some hard money lenders who have pulled their funds out because they were not going to drop below this. “We’re going to focus on our acquisition side of things and let that evolve, let that grow versus lending the money out for little things.” I could understand that. If you’re not evolving, you’re struggling right now. Look at what you’re doing. Are you trying to do the same things that you were doing 6, 12, 18 and 24 months ago? If you are and you’re not evolving, or you start putting new feelers out to do things, you’re going to be hurting in the next six months. Some people are like, “Scott, where do I begin? How do I get started?” The thing you’ve got to look at is, where do the other opportunities lie? Commercial note space is great. Residential notes space is still great but you’ve got to do things a little bit differently.
I have to give a big shout out to everybody, our buddy Joe Tomko out of Pennsylvania on the phone, dialing for dollars. He called me up and said, “I’ve got a bank. They’re sending me a list of residential/commercial notes they’re looking to sell.” I said, “Great. How did you get ahold of them?” “I just dialed and followed up.” I was like, “Great.” They’re a bank that has never sold loans before but they’re definitely interested in doing it. He’s actually building a relationship with somebody who’s never sold before as a way to help them. I was like, “That’s phenomenal. You’re ahead of the curve there. It’s a great source. Don’t give up that source. Don’t tell me who it is but that’s phenomenal. Here, send them an NDA. Let’s make it look good for you to help walk you through the door on that aspect of things.” He’s objective about that. I would be too.
Sticking With A Steady Marketing System
I think that’s where the biggest strength is going to be in the next six to twelve months. Those that are calling the banks, identifying a default, looking at banks or lending institutions, and who are having some defaults and then reaching out to them directly, and just being consistent in your follow-up. Be consistent in sending an email out the first of the month. Be consistent in sending another email out to those who opened their email up a week later. Be consistent in sending email to those that didn’t open the email 24 hours to 48 hours after you’ve sent the first email. There’s a system to your marketing that you need to be doing. If you’re not doing this on a regular basis and I guarantee, less than 1% of property note investors are sending emails out to asset managers. Even less are making phone calls to banks to talk to him. Most people are lazy. They won’t listen to them. They don’t want to do the heavy lifting.
If you’re not going to do some heavy lifting over the next six months, you’re going to be on the sidelines wishing you were in the game, wishing you got started ahead of it and being behind the eight ball. That’s the big thing that helps separate us, is we’re constantly willing to zigzag. We keep evolving, keep finding new ways to do things. Keep finding ways to make things happen and that’s one of the things that we’re excited about. We’ve got a mastermind in Austin. We’ve got a great group coming together and that’s one of the big things we’re going to talk about is zig and zag. You are zagging when you need to zig and zig when you needed to zag.
Identifying those other opportunities in the market, those markets, those lenders and all sorts of great things that we believe are going to lead to helping him finding deals and staying busy, productive and profitable in the next 6, 12 to 24 months out there. There are lots of things and lots of moving targets. One of the things that we have been doing here is, we have been tightening up, getting rid of things and getting rid of some stuff. I have to thank Steph for this specifically doing a lot of that, look at it and saying, “What’s this charge for? What’s this coming up? Can we cancel this? We don’t need this anymore. We don’t need that. Let’s get rid of it. We’re not using it.” Everybody does that. Everybody signs up for using something and if we don’t get into using it, you forget about it and keep telling you. It’s like a gym membership. If you’re not using some things, it’s time to move some of this stuff off your portfolio, off your bank account and start using that money wiser.
It was also part of the reason we’ve been tying down our budgets and traveling less out to different events. If it’s not going to be a productive event, can I leverage my time to be here in Austin? Can I leverage my time to kill two birds with one stone to get stuff done? In my time and my team, for a lot of you from your seven to two, that will be smart. There are a lot of people that are either flying out or in Las Vegas for the Paper Source Convention. There are also people going out to the Laughlin Associates event for the Magnify Your Wealth Summit.
That’s a phenomenal event to go to. It’s a great place to meet and greet. What you have to do, you have to be aggressive. When you’re at an event that you make it worth your time, you can’t be somebody who’s introverted, who doesn’t talk to people. You’ve got to get off your rear and go talk to people. You’ve got to get out and meet people, shake their hands, take business cards, share what you’re doing and provide some great content and just a resource to people. Build your database, build your network, find out what they’re looking to get. Is everybody a buyer, a seller or funding sources? Those three things, everybody either got assets, they’re buying assets or selling or they’ve got money or know somebody who’s got money, who’s looking to invest. That’s one of the big things I want to leave you with. Everybody is a buyer, seller or funding source, one of those three or two out of three or sometimes three out of three.
Everybody though is at least a funding source. Maybe it’s not their fund but maybe someone they know or their network. Get out, talk to people, build those relationships or build rapport. One of the great things Jillian Sidoti talked about, an SEC attorney, is you’ve got to develop a preexisting relationship. You’ve got to build relationships with these people that you’re talking to. I know that they’ve watered down a little bit on their message with the JOBS Act, but they still want you to talk with people. They want you to build a relationship. Talk about the three-step approach. I’m saying in front of the audience of, “Fund my deal.”
That’s illegal. You can’t do that. You have to talk to people and get to know them. “What have you invested in the past? Let’s talk a little bit. Let me get a chance to know you.” That’s the biggest thing people struggle with. Too many times people go to events and they sit on the sidelines and do nothing. They go to the REIA Club and sit in the back or the very front and they don’t go out and network. It ends up hurting and affecting them in the long run in a very bad way when it comes to having those relationships, having people you can pick up the phone and talk to. Having people where when you pick up the phone, you can say, “I’ve got a deal. I need $50,000 to fund that in the next 48 hours.” That’s not going to happen. The best thing you can do is spend time talking with people, getting to know them, going to lunch, going to breakfast and going to dinner. Especially if you’re traveling an event, you should probably be having dinner with three different people or having a meal, breaking bread, especially if you’re brand new in this industry.
Get out and talk with people. Join the conversations. You see groups of people standing around. Be a bowling ball. Come and get involved. Elbow your way in because everybody, especially at an event you’ve got something to instantly be in common with them. You’re at the event for a reason. You have the same current concerns and things like that and people are looking for more knowledge. They know when to zig and when to zag. This is part of the reason that we have looked at different events than what we have in the past and stopped going to a couple of events and gotten some new ones, so we can learn how to develop what we’re doing a little bit better.
How can we market a little better? If you’re in your home, if you’re just in your home 24 hours out of the day or 23, you basically are creating your own solitary confinement. You’ve got to get out and talk to people in some sort of fashion. You’ve got to be speaking. You’ve got to be talking. You’ve got to be going out and sharing what you’re doing. You’ve got to be doing that in this market. Even if you’re a smaller guy, get out and share what you’re doing. That’s one of the biggest things that helped us early on. It helped me become the note guy with the fact that I was sharing videos when nobody else was doing it. I was talking to somebody like, “You’ve been using YouTube for eight years?” I was like, “Yeah.”
Increasing Social Media Presence
We believe video is the wave of the future. Everybody is doing a video. Everybody’s developing video. You’ve got Facebook, Instagram and Twitter. LinkedIn is adding that aspect now. Instagram has been having that. You have to realize that’s the wave of the future. You’ve got to zig. If you’re not doing some sort of thing, great. Facebook is great but if that’s the only place you’re marketing, only 5% or 10% of your audience is seeing what you’re doing. It doesn’t become effective. You’ve got to cross-pollinate. You’ve got to get out across that web through a bigger web across the internet to help you market to get the word out.
I had two realtors come by to the office. They were like, “Can we learn more about this note investing stuff? We do not see my stuff here in Austin. We have some money to buy some stuff in some different areas.” I was like, “You’re getting out of your backyard.” I also had the same guy come in and say, “I’m not going to buy anything out of Austin.” I was like, “I can’t help you.” “I want to fund some of your deals in Austin.” I was like, “I don’t buy anything in Austin.” Take yourself and a lot of times we’re all guilty of having a narrow mindset. We’re all guilty of having sometimes limiting beliefs that affect our ability to evolve, our ability to market, our ability to reach out and things. We all struggle with that. Even I struggle with that from time to time. We have to realize that sometimes it’s best just to step away or ask to get some outside opinion and get some outside counsel from people. See what others are doing in other industries that can help you move your business along and move it to the next level.
I crack out because a lot of people are doing podcasts now which is great, the more the merrier in podcasts. What’s going to separate a lot of people though is those that get to the 10 episodes, 50 episodes, 100 episodes or 300 episodes, that’s rare. You have this podcast episode, it’s episode 440 or something like that. The first 150 were Facebook Lives we did before we launched the podcast. We come up in that magical 300 episode mark on iTunes. We have more than across the board with Note Night in America and our Note CAMP podcast. We’ve been cranking a lot of stuff. It’s helped us build a name, but that’s the thing. I don’t care what you’re doing. If you want to do that, then you’re going to have your niche. That’s a different way of marketing. That’s a different way of making things happen. We had Gail Greenberg and Chris Seveney, and they’re doing it. They’re getting things out. They’re cranking out a couple of episodes every week or a month. It looks like Kevin Cordell and Shante Duffy from Madison are doing the Madison Note Network podcast. Go out and film some more. I was talking to Eric Nevins. Eric is a fellow podcaster. He has a podcast called Halfway There. It’s a Christian podcast. He focuses on Christian’s journeys and things like that. Eric called me up and he’s had to evolve. He’s visible but he’s like, “I need to make some changes here. I’ve got to figure out some other ways. I’ve got to make some income. It’s adjusting what we’re doing in the church.”
We talked for 45 minutes on some things, and he’s evolving and using some of his marketing and podcasting to make things happen. I want you to know if you’re going through a bit of a struggle, if you feel like you’re in that between phase because a lot of investors, I talked to are in this weird limbo or they feel that this weird uneasiness. That’s your spidey sense telling you that things are evolving. You are at that precipice where basically you’re probably at a crossroads on your journey as a note investor. You’ve probably got to take a right or left. You’ve got to make a different change where you’re going. I love note investing because there are so many different niches you can do it.
You can do owner financing and the performing and nonperforming, institutional debt for seconds, partials, residential, commercial, many different states. You may have to make a change. You’re taking a left or a right or maybe you can’t see the turns in the road because there’s fog in front of you. What I will tell you to do is just don’t stand where you’re at. If you’re in a tough position and you’re in a tight position, the worst thing you can do is stay where you’re at. You have to keep moving forward to go through and I know you can’t see. You may not be able to see where it is but zigzag. Look at doing something different. Sit down, take some time, pick up the phone and call me. Drop me an email, Scott@WeCloseNotes.com.
We will be glad to talk to you if you’re looking to get started in notes. Our audience out there, note family across the country, you can always pull out your smartphone and text the word NOTES to the phone number 72000. That will get you opt-in to our system. You have some great educations, videos and a PowerPoint you can download to get rocking and rolling for you. Everybody that I’ve talked to is going through something at a given point. You are not alone. The best thing I can tell you is don’t stand there by yourself worrying about things that are only going to make it worse.
The best thing you can do is move forward and you’re going to make mistakes. People make mistakes all the time. I make mistakes daily on everything. The best thing that you will find from making mistakes is you’re going to learn a whole lot faster than trying to read something in a book, on a video or listening on a podcast. It’s great info. I’m not knocking books. I’m not knocking videos. I’m sure not knocking podcasts because we do all of those. What I’m trying to get at is if you learn to pull the trigger, take some action. Try some stuff out, learn video, pick up the mic, pick up the video, pick up your phone and learn something new. Go out, find something because if you’ve got fear of something, we all know what fear stands for, False Evidence Appearing Real. Don’t let fear limit you. Let fear be a motivator to go take your business to that next level. Evolve, zig or zag depending on where you’re going whether it’s your markets, your sourcing, or whatever you’re doing to make sure you make some things happen.
It’s a bit of encouragement for everybody out there who are maybe struggling or going through something. A lot of people are doing that. A lot of people are evolving. Some of my closest friends are tweaking what they’re doing to help them overcome some things. Go out and make something happen. Zig and zag. We look forward to seeing you all at the top. Thanks for reading. Thank you for being just great. Thank you so much for all the emails I’m getting from our audience. I love that. If you’ve got a question or comment, I’d love to hear from you.
For our friends on BiggerPockets, on LinkedIn, on Instagram or on YouTube, anyway we can help, please don’t hesitate to reach out to us. We’re glad to help out there. Our big Note CAMP Commercial, that’s a 5% commercial based note online workshop with the cream of the crop. Read the previous episode. Find out more information about it but you can go to NoteCampCommercial.com to get signed up on our extra early bird, 50% off seats. Once those extra early bird seats are bought, the price goes up. Take advantage of it. It’s NoteCampCommercial.com. That’s on July 26th, 27th, 28th and that’s an online event. Go make something happen and we look forward to seeing you at the top.
- The Cash Flow Guys
- Note Mastermind
- Fast Track
- Quest Trust
- Noble Mortgage
- Magnify Your Wealth Summit
- Note Night in America on iTunes
- Note CAMP on iTunes
- Halfway There – iTunes