EP 540 – Ten Ways To Find Notes In 2020

NCS 540 | Sources For Notes

NCS 540| Sources For Notes

 

A lot has changed in the note business over the past decade. In this episode, Scott Carson gives a bit of an overview of the how the note business thrived in the past few years. He goes on to explain what has changed in recent times. Scott also lists down ten sources for a note business in time for the upcoming year. If you are new to the note business and have no idea where to start or a long time player in the game but have stalled, this episode is for you.

Listen to the podcast here:

Ten Ways To Find Notes In 2020

I’m excited to be here. We’re in the final month of a decade. If you think back to what has happened and transpired in the last ten years, it’s been an interesting few days you could say with everything happening in the note business in this last decade. If you think back to what we were doing to find sources back a decade ago, it was the start of the Wild West out there. We’re in the middle of a major mortgage meltdown with banks closing and a lot of distressed debts at the peak. Several years ago, we had fifteen million homeowners underwater. They owed more on their house than it was worth. Foreclosures are at all-time highs. Over the last years, it’s changed. Now, we’re still seeing about two million homeowners underwater.

One in ten borrowers out there is at least a month behind on their mortgage payment. We are seeing record to default levels in auto debt, student loan, credit card, medical debt and that stuff. While the mortgage debt is low come back to a normal amount, I think it’s bracing for the impact of when others can’t pay their other bills. People are paying their mortgage debt, their mortgage payments, but they’re not paying the debt on the other stuff too. It’s a weird balance of sources of things happening in the market out there. A number of years ago, so much was not around compared to now. Years ago we had LinkedIn and Facebook. We had the LaneGuide.com and you had your phone and you’re dialing for dollars. A lot of things did not exist as they do now.

What I want to do is discuss ten different ways to find note deals in the next year, in the new decade, in 2020 because it’s different. I did this webinar also on Note Night in America. This is going to be a little shorter version. Go check out the video recording at our YouTube channel WeCloseNotes.tv or check out the replay on YouTube if you can. I’m going to go through ten sources of ways that you can find deals and give you even an opportunity to partake in something if you guys are interested and our audience out there that follow through on a regular basis. Either way, thank you as always for reading. Thank you for being active and asking questions and reaching out for more information as well.

That’s one of the beautiful things that we love about our audience members. If you guys are reading and taking action and doing things, which is what we love and why we have this whole podcast anyway. I wanted to dive into these ten new ways to find notes in 2020 is what the title of it is, and things have changed quite a bit to the last decade and there are a lot of new places to find deals and a lot of people are still trying to milk the old sources. I tell people all the time, forget about the old sources. People know the low-hanging fruit and they’re overfished and overpriced assets for the most part. It’s the bottom of the barrel.

Everybody knows about the Condor or Eddie Speed’s Colonial or Paperstac.com or Granite Loan Solutions, whatever name they’re going by. The direct source for the contract for deeds or even Notes Direct with Tracy Z Rewey. Those deals are way overpriced. There is no fancying of the sources. I think they’re overpriced because they realize that they can offer a price because most people are inherently lazy. Most people aren’t going to go do the work that they need to do to find new sources. They’re going to overbid because they know at some point, somebody is going to buy that. They’re going to leave minimal margins there for you. It only makes sense to buy from those sources these days if you’re using your own funds.

If you’re using other people’s money, you’ve got to go out and market and prospect about doing things. First and foremost, if you’re complaining about a lack of deal flow, the problem is not a lack of deal flow. The problem is you aren’t doing the things you need to be doing. You need to be out constantly marketing. If you look at mortgage brokers, real estate agents, all other people in the industry. They’re going up constantly marketing. That’s why they go to expos. That’s why you have vendors that go out looking for new deals.

They’re not doing business as normal and if you’ve been doing business as normal in the last couple of years because you had sources that were delivering stuff to you on a regular basis that made sense and some people will complain about the increase of note investors out there. Those people that are complaining are lazy and unfortunately, not going out and looking for new sources. New sources are not that hard to find. If you’re not doing any marketing, you’re not finding new deals. If you’re doing some new marketing, that will equate to new deals if you do the right things. If you’re doing things on a regular basis, not doing the same old same old, you can build a noted business with 100 sources or less. That’s the truth.

One of the things when I started years ago over a decade ago, is I’ve put a challenge in myself in the first year to be direct to 100 asset managers. Within the manager, for the first 90 days, I was direct to 100 asset managers so I had to adjust my balance. For most people, note business is a side hobby, a side hustle, you’re doing it 10 to 15 hours a week on your part-time basis and that’s okay, but you still need to market on a regular basis. Don’t rely on those names that we talked about. You have to realize that not every source is going to have deals every month out there. They’re not going to do that for the most part. It’s going to ebb and flow, especially as you go more and more direct, some may only sell once a quarter and some are going to only sell once a year.

That’s why we talk about there being magic happening when you’ve got 100 sources that are sending you stuff, some will send it to you monthly, some we’ll send it quarterly. Some will do once a year, but the more that you prospect, the sweeter the deals are going to be. By sweeter, it’s going to be more direct to the bank. You’re going to have less ugly assets because they know the relationship with the borrower is they’re not going to be sitting around vacant for a long time. They’re moving and they’re motivated to get off their books versus something that’s been sitting around for a while. Somebody bought in bulk 1,000 assets and the bottom 250they are trying to move, but they’ve already made their profits and are going from there. If you have big goals in 2020, you’ll need big sources. That’s why we say 100 sources. I talked to people all the time, students, investors and I asked. I’ll give an example. I asked an investor, “With the 75 deals that you’ve closed this year, how many sources did you have?” He’s like, “Twenty-two of the 75 came from one source. The others have all come from one-off or two offs. For me, prospecting for investors or other buyers or other sellers, and that’s fine. There’s nothing wrong with buying one deal here, one deal there. It happens.

Short Sales

We’ve done a lot of that over the last decade buying ten assets from one investor and we never bought anything else from them again. It’s not that there was a bad relationship, it’s that they didn’t have anything else to move at that time. That’s the thing to keep in mind. You’ll need big sources, but the thing is we’re getting into, if you stick with this, still follow up and do some of the things that we teach. You’ll be the only person or the only company that this seller reaches out to on a regular basis because you’ve gone and done some amazing things. Number ten on our list from 10 to 1, new sources in 2020 is an old source. From the oldest sources out there that we’ve had, but it started to make an impact, an increase across the country. We’re talking about short sales.

Short sales are on the rise again across the country. We may not see many of them here in Austin, Texas, but we do see them in Texas. We’ve seen an increase in the DFW markets, in the Houston markets, especially that number is starting to creep above 200 plus short sale listings on a regular basis. Distressed sales, you’re going to see this on a regular basis. People have gotten into houses and they owed more on their house than it’s worth when they can afford it. You’re going to start seeing those and some of the newly built areas where people are budget mindset. The beautiful thing about short sales, not that you want to see the beauty in that aspect of borrowers being in trouble. The borrowers are motivated and ready to walk with zero money. They want to get out of it. They want to get sold, they want to get moved on and that’s great.

We’re not saying you go out and make offers on twenty short sale listings. That’s not what I’m talking about. Many of the short sales may already have a cash buyer in place who’s ready to close as long as the bank is willing to take a loss. That’s where you come in as a note investor. The beautiful thing about a short sale is there’s a lot of stuff that you get with a short sale that you don’t get in a traditional distressed note sale. You make a lot of times you’re not going into your access on a spreadsheet of assets, but with a short sale, it’s got a listed agent, a listing agent on the MLS and they often will have interior views or interior access for you to take a look at it. You can see what it looks like.

What we’d like to do is we’ve reached out to short sale agents, but we like to try to purchase the notes on those listed properties with a potential cash offer to this place by buying the note at a discount below the listing price. We then turned around and then approved the short sale. If we’d say, the borrower has $200,000, the bank is willing to negotiate to $175,000, we can buy that note at $150,000, we’ll settle and make a $25,000 profit if we can. That’s where short sales are great. It’s a little faster time frame than a year to foreclose. It can be 30, 60, 90 days where you buy the note, take over the asset, approve the short sale, the buyer closes and you move on.

NCS 540| Sources For Notes

Sources For Notes: The problem is not lack of deal flow. The problem is you aren’t doing the things you need to be doing.

 

We’ve done this multiple times. We approve short sales on a regular basis. What we do when our borrowers want to sell as a short sale. The thing to keep in mind, this takes some work. You’re not going to reach out to chase Bank of America and stuff like that. You’ve got to be particular about what you do. We have one property here in Austin and the bank borrowed $220,000. It may have been more worth $100,000. It had been in the market for two years. It needed some work. We were able to buy the note at $75,000. There was a cash offer that we ended up netting. We catch over at $150,000 that was approved. We ended up netting $60,000 in a 45-day-period, which is a pretty good profit margin. When you buy it at $75,000 selling it at $69,000 and start to finish, the deal is done in less than 90 days.

What you want to do, you want to contact the local short-sale agents that are doing this on a regular basis. Call them up and tell them what you do. It’s going to be hit or miss. If you’ve got access to MLS, great. Jump on there and do a list for yourself for short sales or third-party approval required. Most of the multiple listing services in the country have a button or classification for shortsale or distressed asset or you can do keyword searches like third party approval or bank approval required out there as well. What you do is contact the bank on the title or when you go to click oftentimes on the MLS, there will be a button that links to the county records on a listing that will show you who the current bank is.

If you recognize the bank, great. If it’s a bigger bank like Bank of America, Chase, Citibank, you don’t want to waste your time. If it’s a small regional bank, that’s where the most valuable is going to come into. The thing is, you’re not using that address as your final deal. You’re trying to take that down. That’s what you have to realize. You’re using the short sale and if you do get it approved, great. That’s gravy. You’re using this address as a warm lead into the asset manager of the bank. It’s like, “I’m calling about 9016 Collegeville Drive. It is supposed to go to foreclosure in two months. It’s a list of shortsale. I want to talk about buying the note.” The whole deal is 9016 Collegeville is not the address you’re excited about. You’re excited about what else they might have on their books.

Oftentimes, especially depending on where it’s located, the bank may not take a discount, especially if you’re there all the way either getting close to the foreclosure auction or it’s been a tedious process. Sometimes they give a sale, sometimes you won’t. It’s a numbers game. That’s the beautiful thing, it uses a warm lead to the asset manager and then asks, “Are there any other notes that you’d be willing to sell?” They don’t have to be in Austin, they don’t have to be in Texas. That’s where you get the list of NPN’s looking to move. Who handles that to the bank or they move to other areas and then you have a pipeline there that you can rinse and repeat on a regular basis.

That also gives you the opportunity, if you’re seeing a list from this bank of potential short sales of reaching out to the listing agents on those properties. If they are listed in MLS and trying to find out if their cash offers in place that they are true offers that are getting ready to close on and then you can see it with yourself and turn a nice profit margin between what you bought the note for and what the final short sale number is. A shortsale has been great. It’s something that you rinse and repeat. It takes a little bit of stuff on the front end, but it’s anything else. The nice thing is having a warm lead with an address versus saying, “What else do you have on your notes that you’re looking to sell?”

Safe Harbor States

Number nine, this is something we made a lot of money with a decade ago and this was condos in the safe harbor states. Florida, Colorado, Nevada, are the safe harbor states where the condo associations, when a loan is not being paid, the borrower is not paying condo association fees. The condo often racks up big bills. If you’re buying the note on a condo and you foreclose, you’re only required to pay a certain percentage of the condo association fees. In Florida, the HOA fees are one year or 1% of the original sales price. In Colorado, it’s six months. In Nevada, it’s one year. You want to double-check state by state level. The nice thing is that’s a substantial discount compared to somebody who’s buying the asset an REO.

What I like to do is when I get a condo in Florida, they’ll say it’s a unit on a spreadsheet or something I’ve looked at in the past is I’ll go back and to the county records and A, either type in the address without the unit number and see the owners and see if the condo association pops as an owner. B, I’ll type the management company if I can or the HOA names in the county to see if they owned up other things. They may own condos at more than one location, more than one address. Especially, if the larger condo complex is what may have 2, 3, 4, 5 addresses given how big it is. That’s a nice thing.

I’m looking to once they have foreclosed subject to the first lien and taking the property back. When I do, I contact the condo association and management and say, “I see that you’re taking this condo back subject to the first lien.” You want to double-check and make sure they’re a junior lien foreclosing on the assets, which leaves the first lien in place. I’ve rather not done a quiet title action. We’ll get that in a section, but I’ve taken these condos back. They’ve put people on it, they’re getting a rent paid on it and they’re collecting the management fees out of the rent in order to stay liquid. A lot of condos went bankrupt a decade ago when all of these condos went vacant and they couldn’t pay the management, the upgrade fees and the special assessments.

When you find a condo association that’s taken 1, 2 or 3 of these units back, they’re often willing to sell the units for a percentage of either A, what is owed or a percentage below of what the actual asset is worth? They’re often rendered in good condition. You want to use that information and say, “Who was the first lien holder?” Usually, the HOA is redundant. It’s foreclosed, subject to the first lien. They’ve already gotten the borrower out. They’ve got their own people in there. This is a great thing to reach out to the bank to see who the bank is and if they’d be willing to sell the note at a substantial discount. If it’s a Bank of America, Chase, Citibank, Wells Fargo, you may not buy that note.

You want to look and see if they filed anything legal, filed to foreclose or filed anything like that. If they haven’t, then you can buy it off of the note by that position manager way of the substantial discount or percentage of what’s owed and take the condo over as a cashflowing asset and you have a renter in place. Now, you’ve got a cashflow deal going in, not paying on the first, I would file a quiet title action for ownership of the asset. This is worked out in our favor quite a bit. The worst case is, you’ve had a rental for 12, 24 months because it can take a while to do that, especially if you can drag it out respectfully. This can be a great way to find some deals and they expect to see a lot more of this in the higher priced assets in Florida as a condo market is already turning south.

Condos are first to go and they’re are first to come back because often they get sold off for a discount. You can buy, you can purchase a list of Homeowners Association and condo associations in Florida. Often, it will probably be a list of names, a list of addresses and email addresses. Sometimes we’ve bought the list and done an email blast out and had attorneys contact us. You can check the condo associations on the appraisal districts. If they own a condo, you’ve got to have the name of the condo association. It makes it difficult and, in some cases, you can’t. If you do find one, we did a search in Orange County in Orlando and we found four deals immediately that we reached out to which we’re in negotiations back and forth. That’s exciting on our end by doing this.

It’ll either be an asset acquisition, note purchase or cashflow play, which is a long-term play but that’s okay. It’s a great way to find deals that nobody else is looking for. Its substantial discounts are what we’re looking for. We’ve done this multiple times in Orlando, in Homestead, Florida and Miami. We’ve done this a couple of times in Cape Coral and Tampa Bay Area where we see the condo market boom and that’s where the places are for targeting on a regular basis. If you don’t like Florida, then check out Las Vegas. Las Vegas is a similar thing as well. You could also do something very similar to timeshares. If you’re a big timeshare cashflow fan, check that out as well.

Servicing Company’s Business Development Side

Number eight is the servicing company’s business development side of things. I’ve talked about this briefly before. Every servicing company has business development people. Sometimes it’s the onboarding. It depends on how big the servicing company is. The normal services that service smaller investors often will have the same onboarding person and maybe the same person that owns the servicing company that goes out. I would contact servicing companies and ask to speak to business development people because those are the people that are in charge of going and getting new business. They’re going to know their clients that are looking to move assets off. Maybe they’re a performing investor and they’ve got some nonperforming assets they want to move off their books. They will often reach out to the business development guys or gals to do that.

NCS 540 | Sources For Notes

Sources For Notes: You can build a note business with a hundred sources or less.

 

The thing I realized is the servicing companies representing mortgage companies and note investors like you and me. Those some big companies or some smaller companies, they may have, I’ll give you an example. There are companies that only want you to have at least 100 assets or more before they’ll deal with you again. If they’ve got investors that have fallen below 100 assets, it might be an opportunity for you to pick up a portfolio and transfer it off or added to the note. They know who is looking to sell. They do want to retain the servicing. They don’t want to give you a lead on somebody who’s going to pull business away from them because they’re getting paid a percentage monthly on the servicing cost. They want to retain services.

If you’re talking to them, it’s important to bring that up. “We’d like for you guys to retain servicing if possible.” This is especially effective if you’re calling performing or nonjudicial servicers. There are more servicers that are focused on nonjudicial states. They don’t want to deal with judicial states. They don’t want to handle the longer foreclosure processes. This is effective because there are a lot of those out there. You can jump on LinkedIn and leverage LinkedIn by typing in loan servicing companies and pulling up a list of those and reaching out to them one at a time. You are reaching out to the business development side. If you’ve taken our workshop, you can also jump on the Texas Savings and Mortgage Lending website here in the Lone Star State and download the list of companies that are licensed to do business here in Texas. Among that list, you’ll find 268 servicers. It’s not all here in Texas. Most of them are outside of Texas, but they are servicing loans are here in Texas and they want you to be licensed.

Subprime Lenders

Number seven is a big thing. It’s going to lead the way here, are the non-prime lenders. Number seven, subprime lenders are back. Non-prime lenders are lending in all 50 states. We’ve known about this before. They’re doing 100% financing or bankruptcy or foreclosures. They have that kind of stuff. You can jump on the Scotsman Guide. You can also do a search for non-prime lenders as well and see what’s available. When you reach out to the Scotsman Guide or these banks reach out and contact the secondary marketing desk and we’ve talked about this before. They will often provide a list of loans that may be scratch and dent, S&D, they call them, or people that are 30 to 90 days in defaults or 90 plus defaults.

You may also want to see if they’ve had any buybacks that they’re looking to move. These are the loans that they’ve sold off their warehouse line if you had to buy it back because of the borrower defaulting in the first 6 to 12 months. Those are some opportunities. This is a numbers game, reaching out, but a lot of times these sellers, these lenders have one person in their organization that’s responsible for this stuff at the sale desk. You may get a mixed bag of some things but follow up. If you’re looking for stuff here in Texas, it may be easier for them to foreclose and take the asset back. If they’re doing it in multiple states, and the bigger the subprime lender is and the bigger the footprint, the more opportunities that you’ll have available.

Worst case is if you see that they’re lending a specific area, especially in specific counties, jump on and see who they’re selling the loans to and then reach out to that lender as a possible source. Contact the banks and the institutions that they’re selling to if they’ve had any buyback. The non-prime lenders, especially at the first of the year, the first quarter when appraisals come out, especially if the appraisal numbers have changed, where the borrowers’ tax values are based from a lot to a lot with improvement, that can lead to nonperforming status pretty dealt relatively quickly.

New Home Builders

Number six is new home builders. Especially when you type in and start looking and you’re going to see more and more of these. We already see this popping up in Texas and other states that we travel to. They’re advertising no money down home programs, first-time buyer programs or $500 down. There was a lot of time of builders are first time home buyers that are targeting in their advertising. The thing is in a Google search, less than five minutes, I found builder communities that were doing no money down home programs in twenty plus states out there. No down payment, new home programs in twenty states and some good states. They’ll often have in-house financing companies that may have a mortgage bank behind them that they’re selling the stuff off to in a relatively quick turn and burn. When you have a default, the new community sees the biggest defaults when the markets turn. It’s a common thing. We see that here in Austin, you see it all across the country. Keep that in mind.

There is an opportunity to come in for two things, not only to maybe buy the note from the bank but if you’re targeting specific areas, you don’t see a lot of default. You may want to market those areas as potential deals you can take over subject to and do owner financing or wraparound mortgages or turn into rentals and things like that. It’s a play we did years ago and added on quite a few potential subjects to deals that work out well. Less than five minutes on Google, I found three builders, especially here in Texas and other states, LGI Homes, Starlight Homes and Kindle Homes. There were finding stuff in Houston, Dallas, all across the country that could be potential sources for me. I’m tracking those communities and seeing what’s happening with those things. By tracking, I’m setting an alert in 90 days to go back and check out where they’re building it. I already had their addresses because they will literally tell you where they’re building it and seeing the default rates in a specific area.

Old Lists

Number five seems like an old thing, but this is all about follow up with your old lists. We have all lists of old assets, NPNs we didn’t buy but that we have we reach out to the sellers. I’ve literally kept every tape I’ve ever received and labeled it when I got it and who it came from. That gives you an opportunity to follow back up. I’ve kept in every NDA a Nondisclosure Agreement I’ve ever signed with the bank. I have a file folder on my desktop on my computer for who I bought an assignment. Those make for great referrals for me to reach back out to and say, “What do you have? Do you have still have anything? Are you still in business? What’s going on?” It’s a great time to reach out to people in the early part of the year to touch base with them.

I also will check the county records on the list to see who they’ve sold to. If you could go in and if I saw an asset to say a Condor ad for sale, I could go in and see who they sold it to by checking the county records, the county clerk for the assignment of mortgages or I could go into different counties and I know they’ve had stuff off of and look and say, “Who did they sell to? I got the address from an old spreadsheet. Let’s see who that eventually sold to.” That becomes a potential source for you as well. Not only with Condor but who Condor has sold to. Now, I’ve got two sources that I can reach on a regular basis.

Conferences

Number four is one that might crack you up a little bit, but the conferences and expo list. Some of the conferences out there advertise who is attending their expos and those become great sources for deal flow. You don’t have to worry about traveling to a place. Save that $1,000 or $2,000 it’s going to cost for a ticket and airfare, hotel bill and food. Many times, they’ll advertise by saying a company and the job title is the special asset manager for One Oak Funding or special asset manager for ABC Funding. Let me Google that or use LinkedIn to jump in and find a name and phone number.

LinkedIn is a great way to leverage that. I’ll give an example. IMN, which has about twenty different events a year, Information Management Network shares the company names and titles. They don’t give you the exact name of the person, but they do special asset manager, servicing or whatever. They’ll give you the exact name and title of the people attending. For the last couple of years, we’ve used the VA, Virtual Assistant, sending an email over or exporting a list from their websites or whether they go find out who this person is on LinkedIn and we can connect with them directly. The Secondary Mortgage Bankers Association and the Western Mortgage Bankers Association share the names and company information the people attending so you can set up and make appointments. You can get all of this information without having to pay. Register that you’re interested and then the stuff can come to an email. You’re going to log on to the website and take a look at it too.

It’s easy and cheap to hire a VA at $4 an hour to scrub the list and pull the contact information but save money on event tickets and traveling. If the event is in your backyard or place that you don’t mind driving to or going to, that’s great. This is still a great way to set up meetings with people that you don’t have to be at. Say, “I’m going to be at the hotel and not attending the event, but let’s meet for coffee or drink and set up a tab and then look for the nearest borrower inside the conference or expo center.” This works well last for you to be able to leverage your time. You can still get a lot of stuff done without having to go out and be there. Don’t get me wrong. There’s nothing wrong with pressing the flesh. You’re going to need a lot of stuff there, but I still think it’s valuable to do this, especially if you’re getting started and you’re doing this on a part-time basis. You don’t have time to take off from your job or away from your family. This is a great way to leverage and kill two birds technically with one stone.

Using Whole Loan Sales

Three is another thing that we’ve not talked about before but using the name Whole Loan Sales. This is leveraging LinkedIn to contact special asset managers, but also instead of typing special assets or secondary marketing typing the Whole Loan Sales. If you do that on LinkedIn, it will pop up roughly about 32,000 individuals on LinkedIn that have that in their online LinkedIn profiles. These people will handle larger trades and note sales. These institutions will also handle one-offs of smart stuff, but they should have portfolios for you to review on a monthly or quarterly basis, at least for the most part. Contact them with the contact tab on there and make a connection. You may have to use an InMail to send a message to them. It’s worth it. It may be worth you upgrading your LinkedIn profile for a month. They increase that number and be able to do that. It’s important to include a short message and a short video to boost your responses and say exactly what you’re looking for. If you send 100, they may not look at LinkedIn on a pretty often basis.

NCS 540 | Sources For Notes

Sources For Notes: Some of the conferences out there advertise who is attending their expos. Those become great sources for deal flow.

 

Bauer Financial Lists

You may only get 10% responses. Take the time, record a short two-minute video or less of exactly what you’re looking for and make it look professional. I’ve done a video with my background at WeCloseNotes.com or the Note Closers Show and say, “This is exactly what we’re looking for. We’d love to talk with them.” It’s boosted our responses. Number two is a list that you can purchase out there. It’s called the Bauer Financial lists and our financial as a financial writing agency for banks and credit unions that tracks the default rates, the risks, the ratios. Bauer is a beautiful list that you can order and customize on how you want it. I like to order it for all the banks, not credit unions but banks that have five more branches in the country.

It’s a pretty good size list and it gives me the CEO, the bank’s phone number, their website. It will not give me email addresses, but it’s pretty easy to reach out to somebody if you’ve got a direct name and website and phone number there to do that. The Bauer list gives me a list of the ratios, it shows me their whole portfolio and where it’s broken up to residential, commercial, multifamily, default rates, reserves and things like that. It’s a valuable tool to have a list that you can look at like the number of branches. The bigger the branches, the better. It gives you the contact names and phone numbers, no email addresses. You need to spend a little bit of time going through your list.

When I ordered my list, I had 2,031 banks with five or more branches. Whether you’re interested in residential, commercial and multifamily, this works well for you as well. The list will be pulled and my list I pulled, will cost you $300 or more depending on the pull. Keep in mind, it’s $300 or more. If you pulled the condo association lists from the different lists, that will cost you a lot more than $300 because it depends. There are a lot more condo association contacts depending on the county you pull and who you want on those lists as well.

Pulling Assignments

The number one source we think here and we’re a fan. We’ve been doing this for the last two years and it’s worked out well. It’s pulling assignments, literally going into the county clerks, online offices that you can do from NETR Online and looking to see what’s been recorded as assignments. With every note deal, there’s an assignment of mortgages that gets recorded at the county clerk to transfer ownership. The beauty is there are two parties to that. If I bought a note, there’s going to be an assignment from say, I bought it from Condor. It’s going to give Condor’s name and my name. If I sell that note to somebody else, it’s going to have my name back in. I’m a big fan of jumping on the county clerk or the county recorder’s offices because each county has either/or they call it and do no search for assignments. Not every county in America will let you track by document type. This is important.

I want you to look at the APN numbers. I want to know the address or the borrower’s name. That’s a little difficult sometimes. If I can find the assignment, that’s the big thing out there. Even a lot of those that let you search for assignments, the information that I give you is not clean and that it doesn’t make sense. It won’t allow you to export that information copying and pasting, it’s not clean. It’s merge files, merge cells. It’s hard. Trust me, because I’ve done this in most of the major counties for my twelve favorite states out there.

Some counties are wanting to enlist assignments as a document that you can search for. This is effective in finding new buyers and sellers of notes. You don’t know who is assigned to or what entities are out there. You can sometimes pay title companies to pull this data for you. It can take a little bit of time. You may not know exactly what they’re looking for because they may have different access than you, but often I would jump on first and see what’s available because sometimes the county will let you download 200 names or 200 searches or 100 at a time. Sometimes, it’s 25. It can be a tedious thing when there are thousands of assignments following each county. Most of each county, those are the major ones every year. It’s often a large list and unformatted, so sometimes you guys spent some time cleared up, not easy to use or download. I’ll give you an example. I’ll need some of the numbers behind some stuff that we’ve pulled.

I pulled data for the last twelve months from November 2018 to the end of November. It’s full twelve months. I pulled Harris County. It was easier than expected. It’s 37,000 assignments although it took me several hours of editing the spreadsheet, separate it and clean it up. It’s a total of 37,191 assignments filed in Harris County in the last twelve months. Orange County, California, there are 23,551 assignments. That’s great but it was a very hard list. Once I looked at the number and tried to export, it was not feasible at all. It was very hard. Flipping coast to the other orange County in Florida, there were 20,536 assignments. This used to be a cleaner list. It was easier to export. It’s harder now. They tweaked up the website so it’s not near as easy to export.

I’ll give an example, two years ago, there were 14,000 assignments filed in Orange County or Orlando then narrowed down to 9,500 in unique names and entities. We’ve used that list to find some great sources out there. Bear County in San Antonio, Texas, it’s 12,700 assignments. It’s not the easiest thing to pull. What they show you cut off often the party’s name. It doesn’t give you the full names because they have a limited seller reach on there. It’s not the cleanest thing. You have to go back individually one at a time and read the actual documents. Franklin County in Columbus, Ohio, its 7,300 assignments.

Not the easiest thing to pull either but you’re like, “Why Harris County in Houston, Texas. Scott, isn’t Texas a fast foreclosure state and aren’t you going to have a hard time buying notes that are at a discount?” The answer to that is yes, you will. Houston, Texas, the Lone Star States, is a very attractive state for other lenders to lend in or to do lending in there, selling those notes off to a variety of investors, not just institutions but also investors like you and me. Plus, we’ve got a lot of large growth in construction in the past several years in Houston, but we’ve also had increased default rates with the hurricanes, which has been good growth. Also, there were some people getting hurt with the hurricanes hitting Houston and the flooding that goes on there in Houston. I don’t live there, I’m not a big fan of the armpit of Texas, but it’s still a desirable place for lenders.

I believe we’re poised to see a lot of large defaults with new home sales there in Houston, on the outskirts, not just in Harris County, but in the outside communities. In Brazos County and some of the other big ones, Pearland, Katy and those areas around there as well. Harris County leads Texas in short sale listings a couple of hundred and that number has been increasing every month for the last six months. We’re starting to see that take place there. Texas has fast foreclosure laws, which is nice equals the banks are desirable to lend here, which means a lot of opportunities. It’s also the largest populated county in Texas at 4.7 million population.

The next largest would be Dallas County at 2.8 million. It’s the largest populated county of Texas but the beautiful thing is it was easier to pull the data than other counties. That’s what made it desirable for me. After spending a weekend working on this, I was able to pull the full 37,000 assignments. There’s a big pot of gold in what I’ve pulled, 37,191 assignments, how did that break down? It was grantee-grantors on each side. There was a total of 74,660 grantors between those 37,000. That narrowed down once I filtered it down to under 13,500 unique entities. There are 45,000 grantees and that narrowed down to 5,365 unique names.

When you take those grantors and grantees, some people were on both sides of the transaction. It equaled 17,558 unique entities of the people who have bought or sold an assigned or assigned a mortgage in Harris County in the last twelve months. That’s a huge amount of opportunity. Let’s break it down. When I did a quick search out of 17,000, it was 205 self-directed IRA investors that had their name. There were a variety of different entities, self-directed IRA companies. Remember that 871 of these entities had banks in their name where you look for bank and it popped up. There are a lot of lending institutions, people originating loans and then selling stuff off. There was also a ton about over a fourth of the list that was made up of LLCs and investors. What I mean by investors only, its so-and-so LLC, so-and-so trust. It wasn’t a traditional bank, finance company or institution.

That’s a lot of opportunities and a lot of potential sources, maybe not for huge lists. Maybe you might find some of the big lists. I’ve done some banks somewhere. I saw a lot of banks outside of Texas on that list. It made for a lot of opportunities there for you. Also, when you look for trusts, Third Street Trust company for an individual asset and there were 1,755 trusts that were labeled on it. It’s a big list. You also had a chunk of cities, municipalities or school districts that aren’t going to be valuable on that list but overall between that amount, you had roughly 8,000 or 9,000 entities on there that can be valuable sources for your note business.

NCS 540 | Sources For Notes

Sources For Notes: If you want to do something big in 2020, you’ve got to do things differently than what you’ve done the last couple of years.

 

People ask me when I was talking about this because I talked a little bit about his on Note Night in America. Is there availability for people to get those lists? Yes, there is. We’ve put together a basic training program that we’re working through on these to help you, as note investors, note students are able to use these ten sources for 2020. We created the Ten Ways to Find Note Deals in the 2020 online training course program. Its twelve different video training on using these strategies. One at a time, it’s how to approach checklists, scripts, step by step guides on how to reach out to them and what to say. You’re going to find unlimited email and phone support if you have questions about the list or questions about what you’re focused on. We’re also going to put together a private basecamp group for those that are signed up for the training.

It’s a study at your own pace. It’s a video training. It’s a great thing that we’ve put together to help those that are serious about making 2020 a very positive and a high deal flow year for you. Some of the other bonuses that we have thrown in. We will be throwing in a complete Harris County assignment list, which is roughly about $1,999 value is what I’ve seen for these main sources. That’s the thing is the list that we pulled, we’re going to give it to you. The list that we’ve cleaned up or narrowed it down to that 17,000 names, that’s part of it. We’re going to send you the most recent Bauer Financial list of banks with five-plus branches. That’s over a $300 value if you were to order that.

We’re going to be a complete list of Florida condo association names over $900 value is what it costs. The names and then the president of the associations are there for you too, with their contact and the address and stuff like that. That’s a huge list, a huge value-add to you right there. Between those three, it’s over $3,100 value for you. The beautiful thing on that is those lists aren’t going to be available for everybody. Also, as we update the Harris County list, we will make it available. What do I mean by that? As we add contacts, as we pull contact information, we’ll be updating the list in the basecamp group for those that are part of it. I’m working on the lists myself.

As we pull with our VAs, as we scrub and find contact information because we do some mail merges to find contact information, we’re going to make that list. Why? It’s because I don’t expect everybody to sign up for that thing. I expect it will be a few people that want to do some great stuff and I have no problem sharing that with them. The normal price for something like this out in the market would be around $1,000, but we’re not going to do that for you. I want you guys to take action and do something. We have a very special price offering up as being at $599 for you to take advantage of this. It’s an awesome thing for you. We need to call it a late Black Friday or Cyber Monday sale or whatever you want to call it. It’s $599 is what we’re offering up for that and that’s the price until we get the list completed.

When we get the list completed from Harris County, it’s going to be a lot more than 599. You can go to Bit.ly/TenWays2020 or shoot me an email at Scott@WeCloseNotes.com and we’ll make sure and send you the link over for that. We believe that if you want to do something big in 2020 you’ve got to do things differently than what you’ve done in the last couple of years. That means doing different things and going out and hunting. It’s a new hunting ground. It’s fishing these new fishing holes and we want to help you find those deals, find those hunting grounds and find those sources. Let’s face it, there are more than enough deals to go around still to this day.

Some people complain about there not being deals. It’s that they’re not marketing. If you look at the huge amount of originations and new loans and refinance is taking place, it’s still having a 2.5% default rate we can tell. That still leads to hundreds of thousands of notes available for investors like you and me to take advantage of and purchase. As I say, make America great again with one default borrower at a time. I hope you enjoyed that. Once again, those are ten ways that we’re using to find new deals in the New Year and we want you to take advantage of that. If that’s something you want to do, reach out to me. I’m glad to email you the link for that and be rock and rolling before the New Year arrives or as the New Year gets rocking and rolling for you to take advantage of that.

Once again, email me at Scott@WeCloseNotes.com and I’m glad to send you a link over and get signed up for that. It’s a $599 special doing special pricing until the New Year hits for you out there. Take advantage of it. Go do something. Even if you don’t do, take one of those or two of those ten ways and apply it to your business and I guarantee you’ll find deals we work through and go from there. Take advantage and go do something. We’ll see you all at the top.

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