EP 532 – Are You Cut Out To Be A Note Investor?

NCS 532 | Good Note Investor

NCS 532 | Good Note Investor

 

Being a note investor is not for everyone who simply wants to earn. Scott Carson reminds us that whether we like it or not, some of us will not succeed in investments especially when we enter the industry without a full gear. Today, he talks about what makes a good note investor and highlights some characteristics of someone who’s cut out for the profession. Still, anyone who does not pass these still have hopes of becoming successful so long as they are coachable.

Listen to the podcast here:

Are You Cut Out To Be A Note Investor?

I am excited to be here. In this episode, I thought I’d ask the question because I got this from a realtor that I was talking to, somebody that I’ve been networking with. I had to chuckle a little bit because she asked me, “Who’s the right type of person to be a note investor or a real estate investor?” She’s an investor-friendly realtor. She will be a future guest on the show and I like working with new real estate investors. I went, “There are a couple of caveats there when it comes to people that are real estate investors or note investors. As a note investor, they are the next evolution or in some cases, mutation of people evolving into who they are like real estate investors.” I’m a big believer that not everybody is cut out to be a note investor.

Let’s start off with some of the caveats here. I’ve worked with a lot of real estate people, I coached a lot of people from wholesaling to door knocking to yellow letters to fix and flipping to hard money lending into the note aspect of things. I think there’s a gradual maturity growth of real estate investors as we get educated, as we move up the chain or the food chain into different aspects of real estate investing. A lot of times, we all have a very similar start. Let’s go that route before I start talking about who’s a good fit, who’s not a good fit and some of the characteristics of good note investors.

The first one is most people when they start off, they get excited. They’ve read the Rich Dad Poor Dad. They watched Flip This House. They watched HGTV. That’s a very common thing. What do I know that? Because that was my way. As I’ve talked to people and I bring that up in different places where I speak, that’s always a common denominator in a group. There’s also the second part of people, who have come from a real estate investing background. They come from a family who’s done that from the get-go. Those are two different animals. One comes from a real estate investing background, their parents do it or their relative or they worked to that aspect of things. It’s different than somebody who’s coming from an outside niche, outside job or outside career in real estate.

Education

How is it different? One big thing is education. Those coming from a real estate background, where they’ve been educated by family, friends or people that share some things, that’s a beautiful thing. They’re probably very well educated in their niche of things, but they may not be fully educated on all the aspects. If they’d got from some aspects, they understand the basics of comparables, rehabs, repairs or after-repair value or hard money. That’s a great big thing for somebody who’s coming into a real estate investing side versus they’ve got some background. The difference about those that are coming in from a different career that has no experience as I say is education. They don’t know what that means. They don’t know after repair value. They don’t know the fix and flips. That’s why the education aspect, whether it’s an intro workshop, going to the local investment club, learning that stuff on a regular basis or reading books are great ways to get started with stuff. You can learn a lot of stuff by watching videos on YouTube.

Basically, in the evolution of man, people started off as chimpanzees. They’re learning and they’ve got opposable thumb that can wrap around the hammer. They’ll get the idea of doing it. They go out and drive for dollars. They like the tangible aspect of things so that they can touch and feel because they’re seeing some results. By seeing, I mean, literally seeing. They are driving by and look at properties. They are mailing out letters or using foreclosure lists to start off with. That’s always a big thing of the tangible act because they’re doing something by walking to the post office, depositing those postcards or they’re driving around looking at things. That’s a big thing.

The first niche of investing and a lot of people dive into oftentimes is they get into the aspect of wholesaling or being a bird dog. Bird dogs are people that will go around driving. They’ll see distressed assets. They may find leads and they’ll forward them to somebody who will determine if they’re a good lead. They will determine if it makes sense. Bird dogs are going to make $500,000 or more per lead that’s closed or actual good lead. They get ten properties and the only one you end up closing and that’s only one lead that closes. That’s all they get paid on. Bird dog’s very quick transition that should be into converting from a bird dog to a wholesaler.

NCS 532 | Good Note Investor

Good Note Investor: Don’t go for different niches. Focus on one thing.

 

A wholesaler is somebody who’s going around getting leads. They are the spaghetti kind of investors. They throw spaghetti against the wall to see what sticks. They get these lists. They get these leads. They try to get under contract to try to get the numbers behind it. They try to blast it out to their database to get somebody to buy it. I’ve got three emails this morning from wholesalers that I’ve unsubscribed from, who keeps sending the same stuff like, “Here’s the deal. You can pay it at 60%.” They may not always get the numbers. That’s the most frustrating thing is that there are two evolutions of a wholesaler. A brand-new wholesaler who throws everything against the wall and the more mature wholesaler who understands the real numbers, the real repairs, real exit strategy and the real numbers that need to be if it’s a skinny deal or a good deal.

A good wholesaler is hard to find if you’re a new investor, for the most part. Bad wholesalers are easy to find because they will throw crap against the wall and try to get you to overpay or squeeze much profit out of it. They’ll often put in their required profit amounts, which will kill the deal because there may not be that room for a $5,000 wholesale fee. Maybe they only have a room for a $1,000 wholesale fee. If the investor’s buying the asset, they’ve got to do a lot of work and rehab costs or foreclosure costs. If we’re using wholesaling notes aspect of things. They need a longer timeframe for foreclosure or it needs more work or those kinds of things. The bird dog to the wholesaler usually happens when the wholesaler gets to the light rehabs, the people that don’t have a lot of investment. That’s why a lot of people get scared and want to be a wholesaler because they don’t have to go out and raise capital.

The next evolution is somebody who takes over subject to deals, owner finance deals, which are still viable out there. Especially when you have a downturn, you’ll see a lot more subject to deals. Owner financing is still viable in every city. There are still people trying to sell on their terms, which is totally fine. Light rehabbers are often the next thing up there. Wholesalers are people looking for a substitute to or then you get into the light rehab. We’re talking about painting and carpet, very minimal, new appliances and landscaping. That’s what they want to do. They don’t want to do anything heavy.

After the light fix and flippers, then you get into the heavy thing that people love to take out the burnouts. They like to strip it down to the studs, do heavy rehab, add a room and add a floor. They do some major changes. They add square footage. A lot of that happens here in Austin, Texas for the last decade. People are taking shacks on the east side of Austin and then converting them from a 900 square-foot house to a 2000 square-foot house and two stories versus one story. That’s the next evolution stuff. What happens a lot of times is people start making money. They get tired of going to work, so they move into the money side of the business. They either become a private lender and lending money out, a hard money lender or the true evolution is they get into the paper side and become the banker. They like the paper side.

If the hard money lenders are lending money out, they’re literally in the paper game. They’re lending money out. They’re lending paper out. They’re working on the paper side. That’s why a lot of people want you to be the banker. The bank is always the biggest. They’re the ones making the most amount of money, making points, they’re making spreads. They have the ability to take the property back via foreclosure. There’s a whole lot of different things. That’s why it’s awesome to be the banker and be the man in charge of paper in the deal and going from there. One of the things that I always love to see is people transitioning.

Oftentimes, people will have their fingers in a couple of different buckets. They do a little bit of wholesaling. They do a bit of landlording. Landlording would be among those that do light rehabs vendors versus the heavier rehabs. A lot of people don’t want to do multiple things, but some people like to do other things. They want to try to be a Jack-of-all-trades. They limit their earning possibility because they’re trying to run all and they are trying to do all the things. I only say this because I experienced this myself. They try to be a landlord. They want to be fix and flippers. They’re going to wholesale. I’ve been in big masterminds of people that were running themselves to death because they were trying to do too many things at once.

NCS 532 | Good Note Investor

Good Note Investor: In your marketing, you can’t get everything perfect. Deliver is better than perfect any time.

 

Focus

That’s the first sign that probably you would not be a good note investor. You can’t be a Jack-of-all-trades in this business. You can’t try to do everything yourself. You’ve got to put systems in place and you need to be focused. I’m not saying that when we buy notes that it would end up with REOs. It will end up with some people. You may be able to do two strategies. I’m not saying you will do occasionally here and there dabbling and stuff, but to be a good note investor, you have to be focused more than anything else. You have to be focused on that one niche of buying debt or the one thing about buying performing notes. That’s where the people make the most. The happiest people that can be focused on one thing, they got enough money coming in and they go that route of being happy. They are focused people. They are the evolution.

I got a realtor who’s talking about her dad who buys and invests in mobile home lots. That’s all he wants. He’s got 13 to 20 mobile home lots. Not the home on top of it, but basically in the channel aspect of things where he’s running with the land. Sometimes for several years, people are putting their mobile home on it. If they don’t pay, he hauls it off and let somebody come in and move in it. That’s what he likes is the cashflow from it. It is pretty easy. There’s not a lot of repairs. There’s not a lot of work done to it. He’s able to work through that aspect of things and it’s a nice little cashflow.

That’s what he wants for retirement. That’s a brilliant strategy. He focused on one thing. That’s why it makes him happy. He’s not trying to do too many things at once. He’s in the paper game but just a little bit different. He buys notes. He takes the property back on the lots and turns around and rents out the land to mobile home people. I did this episode with the idea that says, “Do you think you have the characteristics of a good note investor?” I almost want to say characters of a bad note or real estate investor. That’s what I’m trying to get at here is that there are things and signs that people aren’t cut out to be in this space.

The first sign that somebody is not cut out to be a note or a real estate investor. They are going to everything they can possibly go to. This is the thing that frustrates me the most. When I’ve had people come in who have fallen into this. They’re constantly going to everything to be the educated idiot. I say that because that comes from a place of love that I want them to focus on something. When people are constantly going to the trust thing, going to the special assets thing, the note deal or they’re running off to the rental thing or they’re running off to self-directed IRA thing. They’re constantly going to all these different things such as apartments, self-storage, mobile home parks and long-term care, you will never be successful trying to major in twelve things.

When you go to school, they will tell you to pick a major. The only time they tell you to pick a double major is when it’s accounting and finance because they go very well together. Other times, when you’re trying to do different things, you would never graduate. That’s one of the things that you have to focus on in the school of real estate, you’ve got to pick your major. You can be on declared for a while as you’re learning and going from there. That’s great, but at some point, you’ve got to plant your flag and you raise it on your direction. If you keep trying to change your majors, you’re never going to graduate into a true note or real estate investor. That’s why I tell people, “Notes are great if you have a full-time job. The notes need to be your side hustle. If you’re trying to do too many things and notes are not going to work for you, you’re going to be frustrated. You’re not going to focus on one thing. It’d be all over the place, the shiny object syndrome and move around.” That’s the big thing.

If you find you’re either one of these people that signed up for a Master’s program in real estate that takes you to 10 to 20 majors, you find yourself attending something on the real estate every weekend that’s different. They are different niches, you aren’t cut out to be a successful note or real estate investor. You aren’t cut out because you’re one of those people who’s going to waste time, waste money and who will never implement anything because you never have time to put the things you learn at those workshops or those conventions into actionable items. That’s one of the most important things I could tell you that you have to do. Be focused and give yourself time to be successful.

NCS 532 | Good Note Investor

Good Note Investor: Don’t make one or two offers. Make a big offer and worry about the due diligence after you get pricing and stuff.

 

Another characteristic of people that aren’t going to succeed is, it is good to have an attention to detail, but if you’re overly anal and have to be a perfectionist in everything you do, in every marketing piece, you’re not cut out to be a real estate or note investor. You may want to go into staging. You may want to be a mortgage broker. You may want to be a real estate agent. I don’t count those people as investors. They’re vendors that work in real estate. They are not a true real estate investor because if they have to be perfect about the sign and perfect about crossing every T’s and dotting every I’s, I’m sorry, every deal in real estate investing, whether it notes, fix and flips or whatever there are going to have issues. There are going to be mold in a house. There’s going to be an AC that gets ripped off. You’re going to have a garage burnt down like what happened at one of my properties, one of my notes. The kid was out in the garage playing with matches. He burned the garage down. If I was a perfectionist, I’d be flipping out, but it doesn’t work.

Deliver Versus Perfect

In your marketing, you can’t get everything perfect. Delivered is better than perfect at any time. Here is the best analogy I’ve ever heard. If you have an Apple iPhone, its software is on version 14 now. They didn’t go around to get perfect. They went and delivered it and they sent updates out. That’s what I tell people, “If you’re in marketing, don’t worry about everything being perfect. Get at least the email out and if you messed up, then welcome to the club.” It is your opportunity to grow. You’ll see people that will say, “Your first emails were looking ugly but your second-round emails look better. Your marketing pieces or the deals that you’re working on look a lot better.” You’re honing in on your skills. You’re spending time going in that right direction, passing economics, passing the business law aspect of your career, your education or your major in your niche of real estate. There are learning curves along the way with everybody with experience.

The first six months of any type of focus are going to be the longest and sometimes, the most frustrating. Some people will find deals and it takes some time for things to kick in. It took me weeks. I made 70 phone calls over three weeks to find the right person at Capital One before I got to the right person to send me a list of stuff. I could’ve given up many times. It took me 53 notes before I got my first yes in dialing for dollars to asset managers the first time around. I kept track of it. That’s a lot of noes. Most people give up for five or ten and not done anything and moved on to something else or try to do something else. That’s the next phase.

People that aren’t patient aren’t cut out to be a note or real estate investor. If you’re getting huffy or puffy about little things, you need to build a thick skin when it comes to note investing, if you’re dealing with contractors, vendors and things like that. You have to realize that things don’t always happen as fast as you want. If you’re having a problem with somebody taking longer than twelve minutes returning an email, phone call or text message, you probably don’t have the patience to be a note investor. I see this happening all the time. People get all excited. They want to get something set up and send an email and they don’t get a response back by the end of the day.

They don’t think about how that other person or the vendor may be busy. Your email is not the top priority. Maybe they’re dealing with a fire burning a garage or maybe they’re dealing with boarding things or stuff like that. That’s one of the things you always have to give your vendors, a little bit of leeway because you’re not their only job. Unfortunately and a lot of times, especially new investors think that their job was the only one around. There’s a good mixture and you’re going to learn to manage as you go through something. Another aspect of things is over-analysis paralysis. We’ve talked about perfectionists where everything’s made perfect. When you send them an email, delivered is better than perfect every time. The first market is better every time. You could build a mousetrap, but if it never gets to the market, you’re going to lose out in the market share immediately. It’s the same thing in the type of real estate stuff. If you’re waiting around to be perfect, your deals are going to go the way of the dodo bird and it goes to somebody else.

People who suffer from over-analysis paralysis are not good in the note space or real estate investing space. These are the people that have a spreadsheet that’s twelve pages deep. They over-analyze. They worry about every major single issue that doesn’t end up happening. I wish our best-case examples happen every time. It’s not as though we are in the middle. It rarely is in the worst-case example. Sometimes it is, but most of the time it’s somewhere in the middle. If you over-analyze, if you rely on your spreadsheet for everything and you’d have all your exit strategies, we’ve all got to line up before they pull the trigger, you are killing the deal before it ever gets a chance before you made a bid on it. This was one of the hardest things that we found out for note investors a lot of times and I still do to this day. If you get a tape and make a big offer, don’t make one or two offers. Make a big offer and worry about the due diligence after you get pricing and stuff.

NCS 532 | Good Note Investor

Good Note Investor: Lazy people don’t do good as real estate investors. They are looking for the least amount of work to do.

 

You can make some general bids based on what they give you, but you’re going to pull value. You’re going to check taxes. You’re going to check the title. All that stuff is all built in the due diligence period. If you’ve got to have your exact number on the frontend time, I guarantee you’re going to over add expenses often twice. If it’s an occupied asset, it would probably be going to be a reperforming loan or foreclosure. It will go 1 and 12 different ways, but it’s not going to go all twelve ways and you have to weigh what you’re looking at and see what the most likelihood. If it’s a vacant property, it’s not going to be reperforming. I see a lot of people struggle to get into the note space because they get overwhelmed by a couple of things. One, they’re not focused enough on markets. Don’t try to do twelve markets. Focus on only one or two markets and those deals in states or cities where they try to evaluate everything. This happens a lot of times when people come into note investing space, especially if they’re a realtor or a mortgage broker for the most part. They come into the real estate space basing especially their knowledge of real estate with tangible assets. They will offer over-value regular assets.

I’ll give you a great example. We had a realtor working with us a couple of years back. He was a nice guy, but he was not coachable. He was going to work with us and I said, “You need to watch this training.” We can tell that he never watched all the training because when he got to the point of making bids, he was overbidding assets. He pulled values on some of these assets that were at $200,000 value, but they only had $75,000 payment. He was bidding at $150,000. I was like, “Why are you buying this at $150,000 when they only owe $75,000?” He said, “Because it’s worth $200,000. We should not make an offer at $70,000, $75,000, or $60,000.” I was like, “That would make sense, but the debt’s only for $75,000. It’s like $0.30 on the dollar. You should be way below that. You didn’t read or you didn’t listen to the workshops. You don’t do that.”

Understand Versus Overanalyze

We see that happen. People come and look at it. They have to understand the numbers are different on the note space versus the fix and flip space. That’s the thing. People overanalyze things without understanding. It’s going to sway you. You cut a lot of this crap out and these expenses out because it doesn’t fall into that thing. People will overanalyze because they come from a scarcity mentality, scarcity and scared and you can’t do that. You’ve got to take a deep breath, quit overanalyzing, maybe you need to write it on a dry erase board. This is why I say fix and flip and note space is one of the most valuable things in my first two years in the note space. I spent late evenings in my office. I had a dry erase boards on 3 1/2 of the walls and I would work through the deals, “What happens with this?”

It’s still one of my favorite activities to do when we have our coaching students in as I go through, “What happens with this?” That’s the thing that you have to look at or anything else is that, how many deals are you working through? That’s a big facet of people that are over analysts is, “How many deals are you working through or are you just relying on a spreadsheet?” That’s the thing that most people struggle with. As we talked about their ROI calculator, they double bill the expenses. They’re looking at a formula versus using common sense. They may build in rehab costs. The house doesn’t need to be rehabbed. Somebody is living in it right now. What if I have to, “They make payments of eight months straight here and they’re paying an extra?” I doubt they’re going to default. That’s not going to happen. That’s the thing you have to look at. You have to look at some common sense underwriting when you’re looking at deals versus the perfectionist stuff where they’re over analysts fall in the same category, over analysts more than so than anything else.

Do Extra

Lazy people don’t do good as real estate or note investors. Lazy people are looking for the least amount of work to do. These are people who would rather watch TV and do things. People who would rather not do marketing. They rather do other things such as hanging out and drinking. You see people call me all the time and they’re like, “I’m having trouble finding deals.” The first thing I do when I’m talking on the phone is I’ll jump on their social media and take a look at what they did, “It looks like you celebrated a weekend in the golf course. You’re up in a boat for the last four weeks straight. What are you doing for your note business?” “None.” “It shows.”

I get people to call me all the time like, “There are no deals.” “Yes, I know. I should send more emails. I haven’t sent an email out in two months.” If you already know this, then go ahead and do it. “I don’t want to do that.” I was like, “Are you’re telling me you don’t want to do more of what needs to be done?” We talked about an episode earlier about doing the OR a little bit more. Lazy people need to stick to being in a job. If you want to get ahead in life, you’ve got to do extra. You’ve got to go out and attend those workshops initially. You’ve got to show up to class on time on your major. You’ve got to do the things. You’ve got to market. You’ve got to build these digital assets. You got to have a website. You got to have a social media presence and make some videos. Those are the things you got to do.

NCS 532 | Good Note Investor

Good Note Investor: If you want to get ahead in life, you’ve got to do extra.

 

Evolve And Embrace Technology

That takes me to the next phase. That’s becoming more reality in this world of high tech is those that struggle with technology or social media or fighting marketing don’t need to be in real estate note investing. Whether you believe it or not, we’re all in the media space these days. We’re all in marketing and you’ve got to endorse those things. Otherwise, you’re going to be working for somebody else. I see this, especially with a little more seasoned people. People that are against social media. They don’t want to do it. They fought it for years. They’re not going to find the same deals that you or I are going to do. They need to be doing something that makes sense for them. Maybe they need to be a landlord and have their rentals or stick to the fix and flip stuff. If you’re doing something, if you want to do something different, you’ve got to evolve and embrace the technology aspects going on now so that you can get in front of asset managers. You can do some marketing pieces that work on it. If you’re not marketing and you’re not using video these days, you are definitely behind.

Those note investors that are using video and other marketing are doing a kickass job of finding deals and taking their businesses to that whole next level and evolving. They are going from a landlord to be a lender or they’re getting more deals sent to them. They’re building a bigger online profile. As we talked about building those digital assets, that’s a big thing. If you’re not interested in doing that and you don’t want to do that, you hate Facebook, you hate YouTube, you’re going to hate real estate because you’re not going to have as much success. It’s not the same thing as dropping $10,000 postcards and $10,000 yellow letters. That’s what used to work. Posting a hundred bandit signs out. I’m not saying those things don’t work great, but you got to do a lot of work to get fewer results. Everybody I talked to, we’ve got Jason Bible on here from Mr. Texas Real Estate talking about when he was running Houston House Buyers, their budget monthly was $35,000 for marketing.

That’s a lot that most people don’t have. Most people have extra to drop 50 letters or 100 letters with stamps. That’s an extra $5,000. Most people are bootstrapping their real estate. They don’t have the time or the ability to compete with the big boys that are dropping thousands of marketing pieces. They might get a deal here or there, but it’s going to be frustrating. If you want to evolve and do some big things, you’ve got to do stuff on a regular basis. How do you do that? One of the best ways to do it is via the media these days as we talk about. Whether it’s a podcast or a YouTube series or video Facebook, TikTok, Twitter or Instagram stories, pick the niche that works well for you and share it out there. LinkedIn is obviously blown up right now. That’s a huge aspect. Learn to leverage your resources and your digital footprint and you’ll see things a lot clearer when it comes down to it.

Overanalytic people aren’t good. Perfectionists aren’t good. Lazy people aren’t cut out to do this. A Jack-of-all-trades person, running around trying to do everything isn’t good. I’m going to throw something out there. Engineers struggle with this. They fall into that over perfectionist, over-analysis paralysis thing. Engineers struggle with the note business. They may be good and fix the flips or rentals because they have very specific extra strategies once they take the asset back, but they often struggle with the note business because there are many different exit strategies. Not all engineers, but some engineers do well because they have that common sense. We see a lot of people that struggle with it, especially engineers because they are like, “I don’t know which way to go.” It’s like they have a brain aneurysm. I can’t understand how everything can’t make sense on the frontend before they pull the trigger. There are a lot of moving parts. There are different time frames, due diligence and stuff like that.

Engineers don’t do it well. They struggle. When I talk to an engineer, I chuckle a little bit because in ten minutes, I can pick out whether they’re going to be good or not and things like that. Who else is not cut out to be a real estate investor or note an investor? Young people out there suffer or they’re not focused on where they want to go in life yet. They’re going to struggle with their careers. They will struggle with a variety of things. They’re going to bounce around until they figure out what they want to do. We’ve seen that most people over 35 to 65 is where 80% to 85% of our audiences roughly at, but those are more of the serious part where they’re looking to put some money away, they’re looking to start making some money and they’re looking to make some more money and they want it. They’ve been sold on the rat race, which they know is a lie. They want to go a different route and that’s what it comes down to. They’re focused. They’re smart. They’re educated. They understand social media. They understand digital assets. They understand it’s a business process and they get rock and rolling and go their merry way and are often going and gradually growing.

Coachable

I’ve talked to people. I’ve been out and spoken to people. I have offered things to people. I’ve talked to wholesalers and I’m like, “You should talk to the people that are buying your deals. Have them fund your deals and split the deals with you versus being a wholesaler, so they make a whole lot more money.” They never get around to taking the next step so they’re always a wholesaler for the next 5 to 6 years and they leave so much money on the table. One thing is you got to be coachable. Who do we find that do really well? We talked about realtors. We talked about mortgage brokers. Mortgage brokers do well. Realtors do well. They understand the fix and flip side of things. They’ve got that real estate background, not a traditional agent because most agents can’t understand that. They’re pretty cheap when it comes to marketing. Most of them are living from commission to commission.

NCS 532 | Good Note Investor

Good Note Investor: Free information is just free. It doesn’t give you the experience.

 

What I’m trying to get at is that people who are coachable, usually what we have found have come from a team philosophy. What do I mean by team philosophy? They’re an ex-athlete. They were in the band. They understand the team concept of things and that they can’t do it all themselves. They understand that there’s a camaraderie and they’re able to delegate. They do their job, they put other people into doing their job. They set clearly-defined goals that they work through. They work through KPIs or Key Performance Indicators. They set goals for themselves and they work a plan. Those people do well. Patient people do well as note and real estate investors because oftentimes people want a quick hit. I need success in the first 30 days, otherwise I’m going to move on to something else. That’s not always the case.

Other things that I see struggle people struggle with, people that are looking when they’re broke. I hate to say this in a derogatory fashion. They’re looking for money to pay the bills. If you’re looking for money to pay the bills, you need to get something solid underneath you. Real estate investing can make a lot of money. Notes can make you a lot of money, but it’s not a get rich quick aspect of things. Sometimes people need to have a job to make sure that their bills are paid, to make sure the ship isn’t sinking and then spend time as a side hustle, learning real estate investing and learning in the note business, especially if you’ve got a spouse and kids. People were like, “I quit my job.” I was like, “What are you doing?” “I hate my job. I don’t know if I can do this.” “Did you have to quit?” “No. I could have quit at the end of the year, in three months or six months.” Then build yourself a bit of a runway with savings and systems. Build that first because you’re going to fall flat on your face. You’re going to hurt. I only say it because I’ve been there. I fell flat on my face hard. Not all due to my own fault being laid off, but I was like, “I don’t need to get a job. I’ll do this.” Nine months later, I was a Debbie borrower.

Have A Job

If you’re trying to make a lot of money quickly in real estate and you’re brand new to it, get a job. Take some time and learn on the side. Go do a runway with 6 to 12 months of savings. Get some experience and understand where you’re going and be coachable. Get yourself a mentor. People that think they know everything struggle. People that don’t reach out for help aren’t cut out to be a real estate or note investor. Those are the people that will end up failing because they think they know everything. They won’t ask for permission or ask for guidance or counsel. They ask opinions of idiots out there that have no experience in it. That’s one of the big keys of people that I see. They’re coachable. They’re not afraid to ask questions. Those are the characters of people that are going to make it, not only in the short-term but also in the long-term, which is longer than two weeks.

One of the key things on talking to people before they come into our coaching program, I say, “What have you done? What are you focused on? What your goals? What do you want to accomplish?” If they’re all over the place, I’ll be like, “It’s not good.” I had a guy call me, Eugene, and he’s like, “I want to be in your coaching.” I was like, “When you’re brand new to stuff, you opted into something, you need to get educated first. You need to watch the videos and listen to the podcasts. You need to understand what you’re on. If you don’t know what AOM or ARV is, then you’re going to struggle. That’s not a good place to be in because you’re not going to know what the hell to do. You don’t need to spend $15,000 to $20,000 on a coaching program. You need to take some time and maybe spend $500 on a class or watch some videos to get your feet wet and then take a class for two or three-day workshop and go from there.” That’s the biggest thing.

Have Mentors

I think mentors are a good thing. Some people say, “There’s free information out there,” but free information is just free. It doesn’t give you the experience. People that bash on mentors, bashing people that they’re charging for their time and their experience needs to take a look at themselves. People have been burned. There are people selling the crap out there that’s not workable. It doesn’t work in this industry. It doesn’t work this year from three years ago. I agree with that. If people are closing deals, my ten plus years experience in that space is worth something. You want to come in, sit down, get my list, my leads and learn how I do things, it’s worth something. That’s the thing that you’ve got to keep in mind. My experience, my knee scrapes and my mistakes are worth something to help save you making a big mistake. Free has no value anyway. Be careful with people up there spouting off, “I’m not going to pay for a mentor.” That’s great. You can deal with taking six years what you could be doing in six months. That’s the big thing that you don’t want to do.

That’s what I mean when it comes down to, “Are you cut out to do this?” There have been plenty of investors who’ve screwed up in the past. A decade ago, many real estate investors with the downfall and mortgage and banking debacle in the RTC days at the end of 2009 to 2010 went through the crap. I know investors that have lost millions of dollars. I lost it. We waited. They licked their wounds. They put down their goal for a little while, get their feet back up underneath of them doing something, then went out and started building something up again. It’s going to happen. Success is not an overnight experience and not an overnight thing. It takes years of experience. It takes years of going through things.

If people say, “I want to close on 50 to 100 deals in the first year,” and you haven’t even closed your first one. Let’s get your closing your first one. This is a realistic expectation. We talked about it before earlier, know your numbers and live by those numbers. People want to argue with me all the time, like, “I’m going to close at 100 deals this year.” I was like, “How many hours a week are you working on your job?” “80.” I’m like, “It’s not going to happen this year.” “What do you mean?” I’m like, “You don’t have ten hours a week to do it. You’re married with kids, so you don’t have ten hours. You have to do the 2 to 5 activities. Let’s say your goal is to get maybe 5 to 10 deals done, you can get one a month done. That’s a great start to your first year.

Hire People

That’s all I’m trying to get at everybody. There are exceptions to every rule, so I’m not bashing on people and things like that. People can learn. People can evolve. Everybody does. What I’m trying to get at is if you find yourself falling in one of those niches we talked about before, uncoachable, perfectionist and over-analytical. Especially in those things, “I’m going to send this out. I’m going to get this done. I’m going to get better.” That all leads to the ultimate thing. If you want to do something big, you can’t do it all by yourself. I see people out there and I’ve made this mistake in the past. I tried to do a lot more than I could do with myself. I hired assistants. I hired an asset manager. I hired VAs. It’s suddenly helped me get better at what I was doing. It helped me evolve. It helped me do more and be more effective and efficient at what I was doing anyway. You’re going to have people come and go about your business. You have to hire and you’re going to fire people. Good people are hard to come by.

The thing is if you want to do big, you’ve got to hire people. It can’t all be you and your spouse. I see speakers and educators out there and I got to the point where I started blocking them because they talk about things and I’m like, “I know you. It’s only you and your wife. There’s no way you could be doing that. There is no physical way you’d be doing what you’re doing because I know you’re not. You are not an expert at all this even though you say you are and you’re not.” That’s the big thing, you don’t want to deal with talking heads. I’m going to be the first one to tell you that we have had the issues that we have worked at overcoming and getting to overcome and move on. You’re not in this business for many years with everything going hunky-dory.

You also have to learn that people that had only been around are flashing their pans. They’ve been around a year or two years, they haven’t done a ton of deals. They can’t guide you through those tough times because they’ve not been there. You also realize that an employee, someone who is an employee, with a salary, cannot teach an entrepreneur how to be successful if they don’t have the same stresses or the same thing. They say, “All my bills are paid every month because I have a salary.” That’s great, but you can’t teach an entrepreneur who’s 100% real estate investor and 100% entrepreneur how to be successful because you’re not doing it yourself.

If you’re involved in a coaching program where you get a call 1-800 number and talk to somebody who’s making $18 to $20 an hour in a call line and flipping through the handbook to answer your questions, that’s not good. A lot of training and coaching programs are that way. That is not a good thing to do. I encourage you all, especially as we’re coming to the end of a decade and start of a new year in 2020. Look at where you’re at. If you want to dive and you’re new to real estate investing, great. If you’re struggling real estate investing and I’ve touched a few nerves on this episode when you’re reading, don’t be pissy, grow a thick skin, grow a pear and realize that I’m here to try to help you.

If you have issues and are looking for help, feel free to drop me an email at Scott@WeCloseNotes.com. Shoot me a text message, share a message on Facebook or YouTube. I’m glad to schedule a phone call to try to help you overcome those obstacles. I’ll give you some options. I’ll give you some counsel to what helped me overcome it or put your appointment in the right direction of somebody you need to talk to. It doesn’t have to be about notes. “Scott, I want to do this. I want to go this route. Who’s a great person to reach out for this?” I’ll be the first one to tell you, “That’s not me. Maybe this guy. If you want apartments, you can call Corey Peterson. If you want to do wholesale, Sean Terry is probably a good one.”

There’s a whole variety of different people out there that are experts in their specific niches. They have majored or they’ve got a PhD in their major section of real estate. They’re focused and they’re often happier because they’re focused on that one specific niche. I wish you all the best of luck. Go out and make something happen. Take a look at and see if you could cut out to be another real estate investor. You need to do it as a passive thing on the side. Maybe syndications, being a private lender at 12% or investing in crowdfunding or something like that. Let’s do a much better return than you’re doing nothing and your money sitting in a 0% or your IRA account is not doing anything. That’s losing money. Go out and take some action. Reach out to me if you can. Have a great day and we’ll see you all at the top.

Important Links:


Love the show? Subscribe, rate, review, and share!
Join the Note Closers Show community today:

Leave a Reply

Your email address will not be published. Required fields are marked *