EP 511 – Cashflow To Financial Independence

NCS 511 | Cashflow To Financial Independence

NCS 511 | Cashflow To Financial Independence

 

Are you stuck in your 9 to 5 job and wondering when is it all going to end? In this episode, Scott Carson discusses and breaks down some of the numbers behind building financial independence through performing notes providing regular cash flow. Learn what small steps you can make right now to expand your network and knowledge so you can take action on your financial goals.

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Cashflow To Financial Independence

This episode is something that a lot of real estate investors strive for. I should probably classify real estate investors, which is such a very broad niche of people out there in two categories. You have the cashflow guys and gals, the landlords, the performing note investors, also the nonperforming note investors in there, the Airbnb individuals, the subject-to guys, the owner finance guys, that’s all about the cashflow. You’ll also have the bigger check guys and gals, the wholesalers, the fix and flippers, people that take the property, those kinds of things that they’re buying, selling and flipping. Those are two different completely types of transactions for the most part.

I’m not saying that there isn’t some crossover betw­een the two. You have a lot of landlords that will buy properties, fix them up and keep them for cashflow. You have a lot of non-performing note investors that buy the debt, work it out and it becomes a performing cashflow on the other side of the balance sheet for them. You have a lot of people that wholesale assets, they may get a quick buck and they evolve into taking the assets over. I’m a big believer that true financial freedom comes in having cashflow, no matter what your game is, of having cashflow coming in. If you wanted to take the month off to go travel, you can. If you want to take the month off to travel around summer league baseball or preseason or do all those things. You’ve got the cashflow coming in on the one side.

Whereas the fix and flippers, the wholesalers, the people that are buying are constantly having a buy to generate those bigger checks. It’s a little bit longer timeframe than, “I’m buying a property and I have a cashflow coming in.” We’ve all heard cash is king. I like having both sides of the equation. We had an asset that has been cashflowing for about twelve months and the borrower fully paid off their mortgage. It’s a good day. They own the house free and clear now. They’re good to go. There are a couple of things that I wanted to discuss with you. Many people are starting to evaluate and look at what they have or have not accomplished. Looking to 2020, your hindsight is always 20/20.

Start Planning For 2020

If you can, the best thing you can look at for those that are taking action and those that aren’t taking action is to have your clear plan of what you want to accomplish because I’m a big believer that a lot of things have taken place and a lot of things are going to take place in 2020 as well. We’re still in the early stages. The last quarter of the note business is always the busiest time of the year. Banks are evaluating things. It’s hard to believe that the year is already 67% of the way down, almost 75% here before too long depending on when you’re reading this episode. You have to realize that now is the time to start planning for 2020.

We’re not saying goodbye to 2019. That’s not what I’m saying. You have to look at what you want to accomplish because my goals have changed over the years. They changed from the fix and flip big check side to let me turn to the cashflow side. I would rather have cashflow coming in monthly where I can do what I want versus the bigger checks. In some situations, I’ve got to cash out of some deals because those deals offer bigger checks. Whether you’re refinancing out your money or you’re refinancing out investors’ money or you’re trying to take down a bigger asset.

I’m going to give you a great example, 1031 exchanges. People are catching up selling those assets off than they have a limited amount of time to identify another property to move that money into. They can’t go buy notes with the 1031 exchange. As our friend, Dave Foster, who was a previous guest on the show, talked about how a lot of people can use their cash to buy into another investment property if they’re using all the cash to be free and clear. They can then take out a line of credit against the property and use that money to buy notes and leverage their funds at 1031 exchanges that way.

We have Merrill Chandler on a regular basis talking about using lines of credit from banks and how to become more fundable and more f*able as he likes to say. It’s a great way to use that to build lines of credit to go out and make some things happen too for you. What I’m trying to get at is you have to start preparing now for what’s going to happen down the road. You can’t wait until the last minute, wait until December 28th, 29th, 30th and 31st to start planning for 2020. You’ll be behind the eight ball and you’ll be a month late. The sooner you can start the better. What am I trying to get at with this episode being called Cashflow to Freedom? I want to say that the present is where to look at. Cashflow is a great thing. I’ve seen some of my best friends who have been big and hitting the fix and flips, buying and selling houses and realizing, “I should have kept some of those.” Jason Bible will often talk about it, “If I held onto the real estate, I’d be cashflowing $1 million a year off the cashflow. If you’re in a job and you’re looking to leave your job, one of the things I always talk about is to pick what number you need to have each month coming in so you can take that month off or take whatever off you need to do.

I’m not talking about the skip and buy. I’m not talking about a staycation. I’m talking about a true vacation. What do you need to pay your bills? What do you need to pay everything, your office, utilities, you’re putting away monthly things and your retirement, whatever it might be? What are the things that you need to be doing as far as an amount to get that money coming in so that you can say, “See you later?” Being an ex-financial advisor, financial advisors like to say, “You’ve got to have $1 million, $4 million or $5 million saved by the time you retire to be able to live the way you want to be.” Because your income’s going to be less as you retire. Your tax bracket will be less when you aren’t at where you’re at now. I can get that. I can respect that, but that’s a backwards way of thinking, especially if you’re in the real estate game.

If you need $10,000 a month coming in to live what you want to do, that’s $120,000 a year. That’s a pretty good living in almost any part of the country. It might be a little light if you’re in San Francisco or New York, but if you’ve got $120,000 coming here, $10,000 a month, you break that down. That means if you need $10,000 a month, you divide that by $500 a month on a mortgage payment of deals that are coming in, something that’s paying you monthly $500 a month, whether it’s a rental where you’re getting that net or a note deal or you’re an Airbnb. Something that you’re getting $500 a month above what your costs are, your investments are, that means you would need to do how many deals? Our magical number is twenty for that.

Twenty times $500 is $10,000. If you want to have your number to be $400 a month, that’d be easy. That number is 25 deals. Those are some of the numbers you’d need to look at. If $5,000 was what you needed to say goodbye to your job, that would be ten or roughly twelve to thirteen. That’s a number that’s feasible, you don’t need to be scared about and run screaming that you don’t have $4 million in the bank. That’s the beautiful thing about real estate. You can leverage what’s going on. You can leverage the deals they have to have. That’s the thing to look at. Cashflow is king. Let’s say you’re buying more valued assets. You’re getting $200 or $300 a month coming in. There’s nothing wrong with that. I would make sure you’re getting at least $200 or more, especially in the note space because your servicing cost is coming with a chunk of that. You want to calculate that. Let’s say you’re getting $250 a month. You need 40 deals. That can still happen. If you build the plan and you look at working that plan and having a little patience. It’s a whole lot better than trying to go out and sell dish soaps or veggie bars or whatever it might be.

It’s a lot more effective to do these things than it is trying to run an MLM. If you want to watch an interesting series, Showtime has one with Kristen Dunst called On Becoming a God in South Florida talking about the MLM and the Amway thing of doing things. Most of our entrepreneurs have been part of some multilevel thing trying to get rich. You’d love the entrepreneurial spirit, but it’s a pretty funny show and pretty spot-on on some things they say and other things. We’re not talking about that. We’re not going out and telling you that you have to recruit your family, your friends and recruit everybody you come in contact with to be that annoying MLM person. We’re talking about something that you can do in the real estate space. You got to have the numbers behind it. Cashflow is king.

Let’s say the number is $10,000, $500 a month or $400 a month, taking the $10,000 and divide that by the average number you’re getting in. Let’s say you’re going to see $250 a month above taxes and interest, splitting your payments, paying off your investors on that stuff. That’s $250 a month. That means you need to do 40 deals if you need to get $10,000 or twenty deals if you need to get a $5,000, whatever the number that you need. Take that number that you need deals and multiply it times ten. We have seen that a lot of investors have about a 10% closing ratio. The thing to keep in mind is if you make ten offers, you get one accepted, you’re doing well.

That’s going to be different for notes. It’s a little bit different for your price points you’re playing in and where you’re coming at. Assuming you’re in with the market and you’re making ten offers to get one accepted, then you may get ten accepted right out the gate. Through the due diligence and working through the deals, you may identify that the collateral doesn’t look good or it’s got an issue in the neighborhood. You may end up eliminating 90% of your deals, but 10% is still not a bad closing ratio. If you needed to do 40 deals at $250 in cashflow coming in and get $10,000 on the cashflow, that means how many deals you need to do?

NCS 511 | Cashflow To Financial Independence

Cashflow To Financial Independence: The beautiful thing about real estate is you can leverage what’s currently happening and the deals you need to have depending on your cash flow situation.

 

If you needed to do 40 at $250 to get $10,000, it means you need to make 400 offers to get the point. The whole goal we’re shooting for here is we have our runway. We’re starting at zero. We’re working towards that liftoff and we’ll say the end of 2020. If you take 400 offers you need to make between now and New Year’s Eve of 2020, what does that come to? The math is not that hard to figure out, 400 divided by fifteen months, that means you need to make roughly 27 offers a month divided by four weeks on average in a month is seven offers, six and two-thirds offers every week. It’s basically one a day. Are you going to be making an offer on Monday through Sunday? No. What we’re talking about is that you see portfolios come in and you start seeing deals coming in. You’d be making more than one offer.

Start tracking how many offers you’re making and getting accepted. The big thing I would tell you is to keep this number where you can see it somewhere. See that $10,000 number parked by your bed, in the mirror. Keep the goal where you can see it on the fridge, on a chalkboard. As you’re closing deals, share that with your spouse or with your family, “We’ve closed ten note deals out of the 40 that we need to do. Our cashflow is that we’re at least 25% or more or roughly on our way to getting there to get to the point where we’ve got this stuff coming out on a steady cashflow base.”

Secure Your Safety Nets

I’ll cover a little bit here in a second because let’s face it, not everybody’s going to keep paying their mortgage for 30 plus years. You’re going to have some cash pay off, get some foreclosures. Other things are going to happen along the line. The idea here is that you get that point, then you can make the decision. You don’t want to go cold turkey and quit your job because that’s not a smart thing. If you don’t have reserves or money in the bank or other income coming in, quitting your job is one of the worst things that you can do as an investor. It’s one of the worst things you do for your family, for your spouse. If you’re a mama bear or papa bear, you want to try to make sure that they’re safe and protected. You’ve got plenty of ramps so that if something does happen, you’ve got some money stocked aside.

Cashflow is king because it comes in on a regular basis. The first of the month or the fourth of the month or every two weeks is great. That’s something that you can start looking at and start planning that stuff out. Those are the things you can look at and start putting where you’re going at. “I need to close 40 deals or I need to make 400 offers. I have made this many offers so far.” You can start seeing your closing ratio. As you get closer and better skilled, better equipped at your bidding process, your due diligence process, your closing ratio will go up. It will improve from 10% to 15% to 20% to 30%.

It’ll also depend on what deals are available in the markets you’re looking at too. That’s the thing you want to look at. I’ve had a lot of people reach out to me say they are doing in the Western States. I’m like, “Sorry. If you’re looking for stuff in California, Arizona, and Nevada, it’s probably going to be more of a part-time basis.” I’m not saying that they don’t have distress debt out there. It’s overpriced for the most part. You should wait a little while and hope the market recover. The market has taken its turn like it’s doing too in different areas. Start celebrating those things. Start putting, “I’ve got a goal,” and give yourself a little ramp-up.

Say that by the end of the first quarter, 2020, I need to be at least 25% because your first 90 days is a big learning curve. If you get some stuff closed, you’re working through that, but you have to expect it. By the time you a note, especially a non-performing note, it’s going to take 90 days to get that note re-performing, service, transfer, docs, all taken care of to start stuff rolling in for the most part. You shoot for a better than that but budget 90 days to make that stuff happen. Process of things. That gives you that ramp up so at the end of the day we’ll run some numbers. End of the first quarter, 2020, you’ve got $2,500 a month coming in.

You grow to the point where at by mid-year, you’re halfway there. If you’ve got $2,500 by the first quarter and you grow that to $10,000 to $5,000. Technically you should have made, if we do $2,500, $5,000, you should have roughly at least $10,000 to $15,000 sitting in reserve. If you’re working in a job and you have money coming in, do yourself a favor, socket to the side. Don’t try spending it. You want to celebrate a little bit. Maybe you need to give a day at the spa or a shut-up check to your spouse on something that comes in, but don’t be living hand in the mouth if you can. Try to sock that money away and put it away a little bit reserve.

I understand you’ve got bills. You’re going to have expenses. You’re getting some legal stuff. We get that for the most part, some repairs that’s going to happen. Hopefully, you’ve calculated that into your funding amount because you’re buying at a discount for the most part. Have a little bit extra funded towards those things in your total overall budget. What I’m trying to get at is that if you’re building this up at the end of year one, if you’re starting out and in fifteen months you’ve got $10,000 a month on average building up to that, you can make that decision. Should I stay or should I go now?

If you’re doing a great job, you’re diligent, you’re adding assets to your portfolio, you’re bringing in cashflow. I know it’s easy to say, “I’m going to quit my job at year-end,” but do yourself a favor, maybe continue to work both places so that you do build a little bit more reserved. You get a little more honed in. You’ve got your systems honed in a little bit better because your systems can eat you alive. Getting to 40 deals in your first year, that’s a lot of deal flow. Your numbers probably aren’t going to be exactly at 40. It may be less because you may have bought more than an average of $250 cashflow or $300 or $400. You can figure those numbers in and see where you’re at roughly.

We’re trying to make it easy and simple here for everybody with the math. Getting the cashflow aspect of things, now you’ve got some stuff rocking and rolling. That’s the biggest thing that I see in most note investors who jump in full-time. They don’t have the cashflow to cover their bills. They don’t have things covered on the home front before they make that deep dive into the end of the pool. I guarantee you’ve never heard me, “Quit your job and become a full-time note investor.” Make sure you’ve got your numbers right before you become a full-time note investor. Make sure you’ve got things right. This is not saying that you’re not going to dabble in other things. Every note investor I know deals in performing and non-performing. It is what it is.

The only people that don’t dabble in especially you get a lot of people that only buy performing, at some point, they’ll deal with non-performing. Which exit strategy they go through? Whether it’s foreclosure or deed in lieu, Cash for Keys, short sales, whatever, it’s up to them. There are other ways to deal with assets than performing. Maybe you take the asset back when you deed in lieu, cash payoff. What I’m trying to get at with you guys and gals out there is knowing that you have that 40 might seem like a daunting number and that maybe it ends up being 25 or 30. You take some assets back where the borrower walks away into something for the bigger check side of things. Take that profit and sock it away. Time to yourself.

My dad was ordained. He went to school to be a minister and tithing is always big. People tithe to the church. What happens a lot of times is that people will spend all their money tithing and helping others versus helping themselves. When the good Lord wants you to help yourself, make sure everything is covered first and feed the world with your overflow. A mindset that a lot of people have is we put a lot of others first before we put ourselves first. I know I’ve done that before. I put others first when I should’ve probably put myself first. It happens. When you have a big heart, that’s one of the things you do. You have to look at, “What do I need to do? Do I need to shrink things in a little bit? Do I need to take care of what we need to get covered first and be able to give a lot more, give exponentially more afterwards?”

That’s something to think about. It’s going to make more sense for me to focus on this for 90 days and do more later on or 120 days or 150, 180. If you put some solid work in your first six months and work out well, it will exponentially help you grow your 2020. A lot of people are like, “I’m going to wait until the first year. I’m going to wait until I get this all cleared up.” I can understand that and I understand being busy, but even you can spend an hour at night or an hour every other night working on your note business in some fashion or putting in systems in place, working your due diligence or working your marketing. That stuff pays off exponentially in the long run because in this business, they get the cashflow. It comes down to two things. First and foremost, you’re going to need capital, but you’re going to need the deal flow first.

NCS 511 | Cashflow To Financial Independence

Cashflow To Financial Independence: Going out to your local REIA clubs or BNI groups is great for knowledge, networking, and raising capital.

 

Don’t let that, “I need 40 deals, but 40 deals at 25 means I need to raise $1 million.” No, it doesn’t mean that. We’re talking that very easily, you can eat that elephant one bite at a time. You can take down that big number and bringing it all in. If you needed $1 million to retire and making 8% interest on your money is how much? It’s $80,000 a year in interest. Either you’re in a year divide that by twelve months is basically $6,700 a month coming in cashflow. That’s roughly thirteen, fourteen deals to get to that number in cashflow.

Expand Your Network

That’s average of closing roughly one deal a month for twelve months to get to that point where you can have that number start coming in where it’s $90,000 a month, $80,000 a year coming into hit that $6,700 number. That’s reverse engineering versus, “I’ve got to put away $100 a week or 3% of my paycheck and my 401(k) to have it matched.” There’s nothing wrong with that. If you’ve got a 401(k) matching, it’s the cheapest money and best ROI your money will ever going to see matching. Use that, leverage that, but make sure that you’re understanding the numbers to hit that cashflow. Understand the deal flow, understand the closing ratio. Some people believe, “I only have $50,000 in the bank. That means that I can take down a note and I’ve got to wait for that.” That’s a narrow way of thinking that we like to call stinking thinking. No; get out and talk to people. Get out and network. Go the different events that are taking place. Go out to your local REIA clubs, go out to your local BNI groups, make the rounds, talk with people, share what you’ve got going on and you’ll be a lot happier in the long run because you’ve built a good foundation in place. You’ve built some great things.

Going out to your local REIA clubs are great for knowledge and raising capital on some things. Here in Austin, Texas, we’ve got a couple of REIA clubs that meet. They’re not focused on the note space. They are focused mostly on the market or other markets around Austin, San Antonio, San Marcus and New Braunfels. They’re not a great place to raise capital. They’re not a great place to find those deals for me here locally. That’s why you’ve got to look at where you’re at your market and go identify those things. If you’re in a market that is a target-rich environment for deals like Ohio, Indiana, Illinois and Michigan, Tennessee, South Carolina and North Carolina, maybe you can find special interest groups or small groups in there that are networking there locally.

To find the biggest bang for your buck, let’s take it one step further and find another deal. You need to make 400 offers to get 40 deals that you end up closing on, basically accepted at a 10% closing ratio. How many emails do you need to send out or how many phone calls do you need to make? That’s a number that you have to look at. The only way I can run that by you is what you would expect if you’re making phone calls three times a week. If you make 50 phone calls, you’re probably going to talk to thirteen or fourteen people. You’re probably going to come across on average one to four lists with those numbers. It is what it is.

I see open rates on your asset manager emails are going to run around somewhere between 9% and 15% over time, sometimes higher depending on the list that you’re working. That’s what you have to look at. If you’re getting 50 phone calls in, you’re going to have that ratio. If you keep doing it on a consistent basis, I’m not just talking once and never calling that investor or the bank back. I’m calling back four or five times. If you’re over a five-week period, you’re going to start seeing some activity. That’s three days a week if you could make 50 phone calls. It can take you two to three hours and dial for dollars and have success in that aspect or you’re leveraging LinkedIn at night.

That’s the thing we’ll look at. You probably need to make 400 personal connections with asset managers. Have personal connections one-on-one. You connect with them on LinkedIn, you share an email back and forth, share a phone call. Somebody’s looked at your stuff at least 400 times. 80% of sales are made up of the fifth contact. That means you need to probably solidly have 80 connections that you’ve connected with them or communicate with them at least five times. 80 to 100 asset managers can often feed you enough deals that you’ll need for the entire year depending on where they’re at and who they work with, their banking, their lending portfolio and things like that.

If you start leveraging tools like LinkedIn, Lane Guide, Borrower Financial or Distressed Pro, that can increase your close ratio and can narrow down the number by using those things as a target. I’m still a big believer that you should batch shotgun approach things and those that have some that will come back to you. You narrow down your list off of those that have responded or clicked on your email or showed some interest in your emails and your contact as a way to work those lists a little bit smarter. We’ve got a workshop coming up that we’ll talk a lot about that and the smart way to build an asset manager email list and contact list to be able to reach out to.

I can guarantee that not every deal that you bid on is going to be a re-performing note. You may be re-performing for a while but it may be turned into nonperforming or it’s a scratch and dent. I wish every deal we got performing stayed performing. It’s not going to happen. You’re going to have some deals that you do end up foreclosing on. You’re going to have some deals that you get deed in lieu, cash for keys from, some deals where they filed bankruptcy. I like bankruptcy when it turns into either a performing note or a nonperforming note that you take the asset back. If you need to make $80,000 a year, that can technically be eight flips and making $10,000 on average profit off of. If you’re making $5,000 wholesale deals, that could be sixteen wholesale deals. You’re leaving a lot of money on the table and you’ve got to do a lot of work to make that sixteen wholesale deals especially you’re finding deals and making things happen. Look at your numbers. Look at where you need to be. Look at where you’re targeting. Are you in a target-rich environment or not a rich environment?

I sent an email about assets on South Bend, Indiana. Two guys in California called me, “I want to buy the asset.” I’m like, “You realize this is a noted deal, not a property deal.” They’re like, “What’s the difference?” I am like, “This is not ideal for you.” They’re like, “Why was it not ideal?” I’m like, “There’s a borrower involved. There’s a borrowing paying on this deal. This was a contract for deed.” They’re like, “I couldn’t understand. We want the property.” I’m like, “It’s not going to work that way.” If you buy it, you’ve got a borrower in it. They’re going to be making payments to you until they either pay off that loan and it’s their house or they go non-performing and you evict them or start foreclosure to take the property back. There are strategies for everything.

What you have to look at is real estate is only going to get more expensive for the most part. We are going to see a downturn. We’re starting to see it in different markets. You’re going to see that more on the higher end side and the lower value assets, $150,000 or less for the most part. We’re going to stay pretty solid because of the needed inventory, the demand. I’ll give an example here in Austin, Texas and other areas of the country, that first time home buyer in the area. That area is still very hot. It’s the higher-priced assets you see a bigger default on. You can see some commercial assets or we’re starting to see that stuff going to fall.

You’ve got to figure out which price point you’re playing in and realize the higher the value of the asset, the lower the strategies you have. That’s why I liked $100,000, $150,000 assets or less. You have a lot of different strategies. That’s get to the point where it’s a maximum of the rental it makes and you’ve got to take it back. You still got the wholesale, fix and flip if you need to. It still can make sense if you’ve bought the note cheap enough that you’ve got a good spread between what you paid for the note and what their mortgage payment is that turns into a good yield spread of at least 15%, 16% or 20% or greater more is what we’re trying to look at. Preferably, but at least you’re seeing that number and you’re going from there.

Expand Your Knowledge

Cashflow is king. Let’s face it, we all want cashflow. Those are working jobs, you’ve got cashflow coming from a boss that’s paying you $5,000, $6,000. The beautiful thing here is that your side hustle can replace your full-time gig if you want to. If you love what you’re doing, by all means, keep doing what you’re doing. Nobody’s saying you have to quit. If you dislike what you’re doing, it’s time to start making changes to what you want to do. That’s the important thing to keep in mind. We all hold the keys to the Ferrari. It’s a matter of whether you want to get into it and start it up and drive it. Our mind is an amazing vehicle. The knowledge that’s out there through podcasts, YouTube videos, trainings and things like that is phenomenal.

You’ve got your own Indie car pit crew ready, willing and standing by to help you if you wanted to. It’s a matter of you got to call them into it, put on the fire suit and spend the time practicing and driving around the lap. Figure where you need to be at and figure out the numbers and do the work. That’s where it all comes down to people. There is no magic red pill or blue pill. Morpheus is not staying there telling you to take one so you can wake up from the matrix. You have to wake up. You’ve got to start taking those actions, making offers, marketing and reaching out to banks, dialing for dollars. I wouldn’t say mailing letters because I don’t believe that’s an effective use in the note industry. It’s leveraging LinkedIn, Lane Guide and using those tools to reach out to those that have the assets.

NCS 511 | Cashflow To Financial Independence

Cashflow To Financial Independence: Resolve to make changes and make things happen. Make the year 2020 the best for your real estate career.

 

That’s the thing that I love about what we do, sourcing for deals. You either have individuals that have individual properties or you have banks that control portfolios of assets and they control the debt on that. That’s why I like the note space. It’s a much higher target-rich environment for us as investors because you’re going to see nonperforming. You’re going to see probably vacant properties that you can take back and fix and flip, add to a portfolio or wholesale it to other investors if you wanted to. There’s a lot of variety of things that you can do to make it a win-win across the board. It’s a matter of focusing on what you want and accomplish and make things happen.

If you’re all over the place trying to do a million other things, trying to do all of it, you’re not going to have as much success. You’re going to struggle for success because you’re trying to be this and this. Try to focus or partner with somebody who’s tackling the one thing and maybe you’re profiting off each other’s things. I wouldn’t necessarily say partner. That’s the stuff that may be a joint venture agreement or something affiliate where you’re working together to make it a win-win across the board. What’s important to realize is it’s going to take time. It’s going to take vendors. It’s going to take people out there and you can’t do it all yourself. You can try and you can be that mom and pop investor and do one deal of time. If you want to do that, by all means. If you want to use your own funds for stuff, it’s totally up to you. You’re going to have a slower pace of getting where you need to be. You’ve got to learn to leverage time, leverage resources, leverage OPM to step into that light, to step into where you want to be and accomplish those big deals.

If you look at the biggest firms, banks, they’re leveraging other people’s money to make things happen. Warren Buffett is using OPM to take down things and other assets or other banks are leveraging OPMs, borrowing money from Warren Buffett to make things happen. You’ve got to realize if it’s good enough for them, it’s good enough for you. You still have the capabilities and the networking that often make it easier for you. As always, you’re going to want to talk to your attorney, advisers and accountants to make sure you structure things good. That’s why we like to have Aaron Young from Laughlin Associates on here on a regular basis. That’s why we love to have a Merrill Chandler on here. We’d love to have other people on here that represent those types of companies because they’re here to help you keep your head out of your orifice when you’re doing something stupid to drive towards staying compliant, staying out of trouble and make things happen.

Let’s face it, you’re going to run into issues and that’s why you want to have vendors and people are going to help you out in those situations. Is every deal going to go smooth? No, at all. The more deals you do, the more likely that you’re going to have something that goes wrong or sideways. It happened. God knows we’ve had enough deals go sideways that we have to work through. The thing that solves issues is doing more deals. I learned that from my mentors early on and with their downturn, they went out and bought and sold houses. They went and bought fixed and flipped and paid off debt. They paid off old investors from their fix and flips and other things. It’s going to happen to all of us at some point. It happens.

Many of us said, “If we weren’t fix and flipping, we had our property values drop or based foreclosure or laid off with everything that happened.” It doesn’t mean that those people are bad people. It means that life happens. Sometimes life’s a big crapper sandwich that we’ve got to take a bite from. I encourage you all, the best actions you can do here is take some time. Look at where you’re at. Look at what your year’s turning out to be. Look at where you want to be, where you want to go. Where do you want to live? Our friend, Michelle Young, loves to talk about thinking of ourselves where we’re going to be at in three years. Think of where we want to go and think about what we want to accomplish and writing down exactly what we see. The thing you have to realize is things are going to change.

If you’re out there struggling right now, keep your head up, keep your chin up and keep working. You’ll come through it. You’ll be a stronger person. What doesn’t kill us makes us stronger. Keep that in mind that there’s plenty of people out there. Maybe if notes are not your thing, reach out to the landlord. If fix and flip is your thing, reach out to flippers. If wholesaling is your thing, reach out to other wholesalers in other markets. There’s plenty of markets out there that you don’t have to be competing against each other. Reach out to the experts in your peers and take the time to seek counsel. Don’t ask for advice from somebody who’s never done it. Reach out to people that are out there doing it, going to work every day, doing what you’re doing week in, week out. They have been doing it for a while, not somebody who’s talking about it.

Bad things can happen across the board. That’s the most important thing that I can tell you out there. If you want to get from where you’re at, to where you want to be, you have to get outside your comfort level because what you’re doing right now isn’t helping you in any sort of fashion. That’s the thing that I see. I’ve taught so many people and we see those that are the most successful are the ones that get out of the comfort level. They’re the ones that go do what we teach them to do. There are a lot of people that want to learn, but they don’t want to take action because they’re nervous or scared. That’s fine. You’re never going to success that you want to or you may, but it’s going to take a whole lot longer until you do find it or do decide that, “I’ve got to take the actions.” What actions? These day in and day out activities, night in, night out, whatever side hustle activities to get cashflow.

Look at where you want to be to figure out what that number looks like. We’re not talking about barely getting by, but looking at what you need to do to replace your job and also to do what you want it to look like. Take some time and talk with your spouse. Don’t wait until the beginning of the year or the end of the year; do it now. Start putting those things in place so that they become habits. You start doing those things on a daily basis to find that success because it takes 66 days to build a habit. We know what happens on Thanksgiving. You start figuring holidays, vacation, things that go on with that stuff. Take the time right now, look at your cashflow. Do you want to build a cashflow for financial independence? Figure out your numbers, look at how many deals you need to do on average. Figure out how many bids you need to make offers on and figure out how many banks and asset managers you have to reach out to on a regular basis to start building those relationships between now and end of the year.

If you start building relationships now, that phone is going to start ringing as they’re looking to move those assets off their books. I encourage everybody to do that. Feel free. Drop me an email at Scott@WeCloseNotes.com. We’re glad to jump on the phone with you in five, ten, fifteen minutes. We’ll send you a calendar link and schedule a time to visit and see what’s going on with you, how we can best help you and what we can do to help you hit your goals and achieve the success you want to in 2020. Let’s make 2020 the year that hindsight happens. Let’s take a look at the mistakes that we’ve made over the last two, three, four years or things that we have not done and try to implement them. Dust yourself off. Pick yourself up, get back in the fire and get back in the frost. Get back into the fray of doing things, going out and making things happen.

We’re changing some things up on how we’re doing business and we’re always constantly tweaking things. Everybody is capable of accomplishing big things. It’s up to you whether you want to do it or don’t want to do it, whether you’re in your comfort zone or outside your comfort zone. I know you can do it. I’ve seen it happen. I’ve seen so many of our students who are stuck in a comfort zone and finally get out of the comfort zone. It was an eye-opening, amazing experience that helped them go to the whole next level. They accomplished so many things. They let something big be a mind block and dead weight on them that they’re dragging around. We sat down and realized and came up with a game plan for them and realized we can take advantage and knock this thing out. It’s your goal in the next twelve to eighteen months to the point that you are smiling. You’re dancing. You’ve got a little bigger step in your gait and making things happen out there.

Not only changing your life but also changing your family’s life, your kids, your friends because they will notice that life. They may give you a hard time to begin with, but they’re going to start seeing changes. If you stick to it and you share with your goal, “I’m working towards this goal. This is what I’m working to accomplish.” Share it because if you share a goal and somebody laughs at you or they make fun of your goal. They’re never were your friends if that’s the case. If you are sharing something that you’re working towards and they’re truly your friend, they’re going to support you. They’re going to try to help you in any way. I know that’s what I like to do with my friends. They can give me a goal and what they’re working, “How can I help? Talk to this person. Have you thought about this?”

I don’t like to talk down when someone’s got a goal and dream if they thought about it. That’s the worst thing you can do. You could give some counsel if you’d been down there and say, “I’ve been through that before. Have you thought about trying this?” There’s usually more than one way to achieve your goal. There’s more than one way to get your numbers done. You’re buying some notes and you got an opportunity to buy a rental and bring in some cashflow. Throw that in your deal flow. Maybe you’re going to start off by renting your spare bedroom as a way to build a little extra cash. There’s nothing wrong with that. There are multiple ways to get things done and I highly encourage you to do it.

Take action, get started and use what we have left in 2019 to make 2020 not the year of hindsight, but the year of foresight where you can see that goal. You can see the actions, you can see the light at the end of the tunnel for you to hit that financial freedom and how you make your cashflow goals something that you accomplished and make it a goal and a dream that comes true to live a life that you want to achieve. If you’re going through a tough time, making through the next 90 days to get out of that, to get beyond that or get you’re almost wrapped up. There are so many things that you can do to make things better on yourself. Maybe you need to trim some expense, maybe to cut some costs.

Maybe you need to look at the activities that you’re doing on a daily or weekly basis and realize, “I need to tweak what I’m doing and take things to a whole different level.” I encourage you to do some amazing things. Everybody’s capable of accomplishing things. I don’t care if your goal is $1,000 a month or $2,000, $5,000 a month or $10,000. You can work on those goals. I guarantee if you work hard and stick to it, follow through with your goals, set specific things, know what your KPIs or Key Performance Indicators are and surround yourself with like-minded individuals, counsel, mentors, and coaches to help you get there, you can get there. You can achieve amazing things in 2020. You can go out and get that foundation in place and start paving the road to your cashflow of success. Feel free to drop me at Scott@WeCloseNotes.com. I love to hear from you. Please click on over to iTunes and leave a review or Stitcher. As always, feel free to subscribe to our YouTube channel to get alerted when we have new episodes available. Otherwise, we’ll see you at the top.

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