Where Do You Find Notes?

I was looking back at our catalog of content and realized that I haven’t shared the top ways that we find note deals in some time. So I pulled out my presentation from the 20-Day Note Challenge we hosted two years ago and updated it for 2023!

That’s right! I’m going to share the Top 20 Ways To Find Notes on Monday night! Some sources will sound familiar and some will definitely be new for a lot of people (especially if you don’t market on a regular basis). We’ll share a few platforms, some outside-the-box ways, and our tried and true proven ways we’ve harvested note deals for over 16 years, come rain or shine!

There are other ways to find notes, but I wanted to make sure and share the best ways that we and our students have been harvesting performing, reperforming, and nonperforming notes since I started back in 2007 (and no, we don’t spend time on costly and low-converting direct mail leads). Tune in now to discover the multiple paths toward these note deals!

Want to talk to Scott? Book a call with him HERE.

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The Top 20 Ways To Find Note Deals, Come Rain Or Shine!

On this episode, we’re going to spend some time probably answering one of the most asked questions that people ask me about. When people hear the concept of note investing, they get all excited about it. Who doesn’t? It sounds sexy. It’s the sexy side of real estate. I could control real estate without dealing with toilets, chains, and trash outs. You have to go do the fix and flip side. What the heck? This is awesome.

The next question is, where the heck do you find no deals? I’ve always found that if you ask that question, especially if you’re taking a class and they hee and haw and won’t share with you resources about how they find it. I’m not telling you that they’re going to tell you they’re top twelve hedge funds, but if they he and haw about it, they’re probably not doing it full-time. I’m going to tell you that right now because there are so many ways to find notes.

That’s why this episode is the 20 Ways to Find Notes. I’m going to share with you the top 20 ways that we find note deals. I’ll go into each category a little bit, but to give you a bit of a brief idea overview, on this episode, we’ll discuss how we use LinkedIn search, Lane Guide, state licensing websites, Dialing for Dollars, Scotsman Guide, LinkedIn groups, Facebook groups, note conferences. Also, other note buyers, different note platforms, how we leverage power financial, county recorder offices, servicing companies, different MBA conferences, that’s Mortgage Banking Association conferences for you, foreclosure list, condo associations, short sale listings, following up on bids, and then of course, wholesalers and brokers.

We’ve got a lot to cover in this episode. If you guys are joining for the first time, welcome to this episode. I’ve been an active note investor for over 16 years and a real estate investor for over 20 years. I love helping note investors find deals. The reason I’m not afraid to talk about these top 20 things is because it takes you to market.

Most people aren’t going to share with you ways to market for notes. They’re going to say, “Only buy from our platform. Only buy from this. Only buy directly from that.” That’s a bunch of BS. There are so many ways to find deals. You don’t have to rely on one source. If you do rely on one source and that source goes away, you’re out of luck. You’re up a creek without a note-investing paddle.

This episode is designed to show you the different ways that we find note deals that strong note investors leverage. At least I’ve been around and doing this for sixteen years, it’s because I leverage these at different times. I use different sources to find lists of notes, not the onesie-twosie. You don’t see any way on here direct mail. I’m not going to waste my time sending out direct mail campaigns to a one-off note or somebody who owner finds next to their house.

I know that’s what most people will talk about that are in the note investing space, and that is the old, antiquated way, 18th-century Pony Express way of being a note investor. Screw that. I want you to be able to tap into deals and multiple deals, not dealing with one cranky, crotchety old seller of a house who’s got one note for sale. You got to mail out thousands of postcards to get a 1% response rate. I hate that. I’m here to help beam you into the 21st century as a note investor, so let’s get started.

Jump On LinkedIn

My number one way of finding is by jumping on LinkedIn. LinkedIn is free. You don’t need to have an advanced membership for it. Go to LinkedIn and start looking for note sellers. Look for special asset managers. Look for secondary marketing managers. Look for chief credit risk offers. Look for a whole loan trading desk. Those four titles right there are the internal departments at a variety of different lending institutions across the country that handle the disposition of distressed notes and non-performing notes. Using LinkedIn is free to do.

You can reach out to them, “What do you have on your books? Would love to talk with you. I’m a note buyer.” You can use short messages and tell them what you’re looking for. I like to include a link to an asset manager video that I recorded. It’s like two minutes or longer little pitch of what I’m looking for about my company. It works well to make connections. I can then go back and look at profile views, who’s been looking at my profile from different banks and asset managers, and often that leads to great resources.

I use a service called OctopusCRM.io. I’m not paid by them. I have an affiliate, but if you use that link, I don’t get an affiliate. I’m not worried about it, but this helps automate daily connections to those different departments on LinkedIn. I can also search for other things like real estate investors and note investors. You can even narrow it down by city or state. If you live in Georgia and you want to connect with other note investors in Georgia, search for “Note investors in Georgia,” change the location.

This is an easy way. We’ve been doing this since LinkedIn’s been around and it is one of the most effective ways to build direct connections with asset measures banks. The thing is 99.9% of note investors will not do this. That’s why they struggle. I don’t want to live off of scraps or crumbs. I want to get stuff direct. This right here can make you $1 million if you put this thing into place a little bit each day.

A hundred connections per day on LinkedIn, reaching out and following up with them and posting on a drip marketing campaign, not mail, drip market posting, connecting with these asset managers. You will find deals. It is proven. Do as I say and do as I do. You will understand the voo-doo that we do to find notes. It’s not some Chinese arithmetic or double calculus quantitations or rocket science. It’s not that at all. It’s pretty simple. Use LinkedIn and start reaching out.

 

Lane Guide

2) It’s pretty easy. Some people like Lane Guide, other people dislike it. It’s been around for a long time. It’s back. Lane Guide for over 40 years has tracked banks who’ve been bought and sold. They also provide a lot of internal numbers. Last time I checked, there’s $165 per year. The big thing with Lane Guide is if you log in, you can pull a list of REO and note asset managers. Search in seconds. That’s going to give you a list of about 500 to 600 asset managers. It’s going to give you specific contact information by bank.

You can also do a lending type search if you’re looking for multi-family loans or RV loans. You can classify it up to specifically subprime. You can search by states. Retail, wholesaler, or both, and then look for both residential and commercial numbers. I’ve used this for years. It is one of the great things that I tell people to use it. It’ll build you a good list, initially 500 to 700 asset managers with their contact information.

All you’ve got to do is email them, call them, and connect with them on LinkedIn. It’s well worth it. You’ll find that most of the things we talk about, this is going to be the most expensive thing for you, $165 a year. Who would’ve thought? You aren’t going to pay somebody a big thing. If you want to sign up for coaching, I’ll help you implement this stuff, but there are plenty of sources out there for you.

State Licensing Websites

3) This is a thing that I’ve used for years. It’s a little bit different. Some of the states have changed up some of the things, but state licensing websites have a different registration process for mortgage bankers or mortgage companies or banks registered at the state level. Some of them will register on the national level, but some states will still require them to register locally. Texas requires mortgage bankers, mortgage companies, or even servicing companies to register at the state level.

You can go to the Texas Savings and Mortgage lending website and literally request a download list of all the mortgage bankers, servicing companies, loan processors, and mortgage companies. You can go to the National Mortgage Lending servicing website, but it’s not going to allow you to do a lot of searches. You can search for servicing companies there and it’ll pull about 190 servicing companies. The great thing with Texas Savings, Florida does this and allows it, as well as Illinois and a few other states out there.

If you contact the state licensing website, whether it’s the Texas Savings and Loan Department, in California, it’s the Department of Real Estate or Insurance, in Florida, it’s the Department of Insurance. Don’t quote me on that one, but I’ll give you an idea. I can download roughly 270 servicing companies, 890 mortgage bankers, and then 2,000 loan officers. Texas is the fastest foreclosed. It’s banker-friendly. The great thing is not just people in Texas that it shows. It literally gives anybody that’s an outside entity who’s registered in Texas. They’ve got to register here to do loans.

You literally used to be able to download in minutes and start drip marketing, too. It’s still pretty easy, but you’ve got to pick up the phone and call the license department and then they’ll email it to you usually pretty fast. Mortgage bankers, servicing companies, mortgage companies, even loan processors, you’re looking for somebody there locally to help you out with stuff. We’ve been drip marketing to the contactless that they provide for years.

Dialing For Dollars

4) The 6,000-pound phone. Dialing for Dollar still works. It’s cheaper than direct mail and more effective. On these couple lists, we talk about calling the Lane Guide and Texas Savings Mortgage Lending list. Besides dropping an email out to them, we pick up the phone and call them. We email first, we give it 48 hours for the email to go through, and then we start calling those who have opened the email. If you make 50 phone calls, you’ll probably have 20 conversations.

Dialing for Dollars still works. It's cheaper than direct mail and more effective. Click To Tweet

Law of averages, probably sign around four non-disclosure agreements. You want to track this through a CRM or the basic thing is an Excel spreadsheet in a lot of cases. Always leave a message. Follow up on LinkedIn with those folks. Send an email at the end of the day once you talk to them, if they give you a different email address of somebody there.

If there’s a gatekeeper, ask for the email and say, “I know you’re probably the gatekeeper. I want to respect their time. What’s the best email for me to reach them at?” You’re going to get in the habit of doing this. This is not difficult to do. It’s a matter of finding the time to do it. Don’t call ten and give up. If you do that, I’m going to smack you across the phone.

“This doesn’t work.” This works as effectively as LinkedIn does. That whole another level. I get it. If note investing or real estate investing is your side hustle and you don’t have time during the day, I get it. You’re probably not going to do this, but you probably do want to set some time to follow up on LinkedIn connections and email blasts. You probably will be dialing for dollars a little bit when you see people responding or emailing.

The best times to call or email is Tuesday through Thursday. Don’t send anything on Monday. Don’t send anything on Friday. The best time to call is between 10:00 and 12:00 and 2:00 and 5:00. It’s also about the same time. The email is pretty good that way, too. Avoid the last week of the month of the quarter because they’re busy doing other things to get ready for their end-of-quarter numbers. They’re not going to answer your phone calls. Carve yourself out for two hours and get on a roll. Most won’t call you back. You just get in the habit of dialing for dollars. Every no is worth $500. I’m going to tell you that right now.

How do I know that? I like to gamify when I’m dialing for dollars. If I call 70 people, I get a list of notes and I make $35,000 off those calls. If you take 35 divided by 70, that’s worth $500 for every no you get along the way. Email on Tuesdays and Thursdays. I don’t like to email later in the day. I would like to email before 2:00 after 10:00 AM, on Tuesdays, Wednesdays, and Thursdays, proven by the American Market Association as the best days to email. Anything else is going to be too difficult. Monday, they’re going to meetings. Friday, they’re going to be working on stuff.

When you send an email blast out, call those who open it up. It’s so easy to do. Even those who didn’t open the first time around, resend it 48 hours later. Sometimes, you’ll get as high as a 10% open rate the second time around. To make it simple for folks, you might even want to include a Calendly link in there. “I’d love to talk with you. Let’s schedule a time to talk about your portfolio and how we can create a win-win solution for you.”

Scotsman Guide

5) Scotsman Guide. There is a free online version of the Scotsman Guide. You don’t have to pay to get the periodical anymore. It helps you find lenders in the commercial and residential space. I use it in conjunction with Lane Guide and I use it primarily to find commercial note deals. Scotsman Guide gives you a scenario to type in, run some numbers, and then it’ll spit out what lenders will do that type of business. That works well. I’ve used this to find subprime lenders or we call them ALT A or non-prime lenders. I’m also searching for portfolio lenders who are originating and holding notes on their portfolios.

Besides those originating and keeping, there’s also warehouse line, lenders who give warehouse lines to mortgage bankers. Those have been pretty good to target, too, to get deals that are non-performing on specific mortgage companies. Warehouse lines that they’ll sell at a discount. Like I said, non-prime, it’s pretty easy to use to find a list. It’s been around for years and I like it.

It’s one of those things that people forget about. You got to play around with it a little bit, but it can be very effective when you’ve got a specific need you’re looking for. The best thing for this is using the commercial search to find lenders that are lending on specific assets. If you’re an apartment investor, RV park, hospitality, or hotel, this would probably be the best way to find out who’s still lending and who’s got portfolio programs.

LinkedIn Groups

6) Another thing of LinkedIn is the LinkedIn groups. Highly non-targeted stuff. Don’t get me wrong, there are a lot of groups out there that have a lot of crap in it, but there are some large LinkedIn groups in the special assets, the secondary marketing space. You can find real estate, special assets, and distressed debt groups out there and start connecting with those members without having to be connected to them. There are some groups of over 500,000-plus members out there. You’re not going to connect with them all, but a good starting point is to start looking for individuals and see if you’re in groups with them, and then find you a couple of groups. Post once or twice a week something valuable.

One of the things that you can easily do is, “We buy notes. We’re looking for notes, non-performing notes or whatever.” Posting in those groups will get you people to spend time looking at your case studies. You could post once on residential and once in commercial, market or asset classes. Talk about what you’re looking for. Anything that you’ve closed on or bought, that’s going to probably be a better way to prime the pump to get people to start paying attention to what you’re doing and see that you’re serious in doing it.

You’ve got to have a good LinkedIn profile. Don’t have a LinkedIn profile that doesn’t have any information at all. No photo and no background image. You want your LinkedIn to be a professional resume because the first place people in the groups are going to look at, they’re going to click on your profile and look at what you’re doing on your profile.

You want your LinkedIn to be a professional resume because the first place people in the groups are going to look at is your profile and what you're doing on your profile. Click To Tweet

Facebook Groups

7) It can be a bit of a dumpster fire, but there’s still some opportunity with different Facebook groups. There are some large Facebook groups with different investors in real estate. There are some smaller groups on the note-investing side. That’s okay. Look again, real estate, special asset, and distressed debt groups out there. There are some large local plus large national and small groups that you can take a look at, like National REAs. It’s a great way to build lists, especially if you’re looking at a regional area. You finally say, “I’ve got some notes available.” Seeing people that literally jump in and start sharing, “Here’s my email address and my phone number.” I’m like, “Thank you.” I have my VA scrub that information and put it in our database.

Same thing. If you find a group like that, post what you’re looking for once at a time, “We buy notes.” Keep it clean. I see people that post in there, you can’t read it because they have so much crammed on the image. Just because an image looks good big on your entire screen doesn’t mean it look good small when it’s crunched down to a 3-inch by 3-inch image. Keep it simple and keep it clean so that people can rely on you.

Same thing. We talked about the LinkedIn groups post, once on residential, once a commercial, and the types of asset classes. I’ll give you an example. One post in a week alone resulted in 15 investors sending me deals and I had 5 deals sent to me. Added 15 investors to my database, and 5 potential deals sent to me. Just got to do it on a regular basis. This is not rocket science. It’s rinse and repeat to find success. Guess what? 99.9% of people aren’t doing that. That’s why they’re not finding diddly out there.

Attend Conferences

8) Conferences. Conferences are a little bit different. There are industry conferences that you can’t attend. There are Mortgage Banking Association conferences that you can go to. I don’t necessarily want to pay the $800 to $1,500, but I will hang out in the lobby or the bar. The state MBA often meets on the first. You can go to MortgageBankingAssociation.org for the different schedules of the big ones that they have. There’s a big one that meets in August that we met about a month ago. The secondary marketing conference or the Western secondary conference, that’s a great one to virtually go to. Hang out there if you can, locally. There are a bunch of different debt servicing conferences you can go to.

Also, IMN.com has a variety of different events that take place across the country. Usually, around March, they have done some stuff online, but they’ve done stuff in person too, where it’s like the debt servicing or distressed assets classes. You can go there. What’s great about that is that they will literally give you the list of attendees. A lot of times, there’s usually a list of attendees somewhere around 324 in 2019, there were 586 in 2021.

The virtual events are still good to go to and look at online because you can see the speakers. I like contacting the speakers on LinkedIn because they’ll know who handles those note sales in their division. IMN List is a company and job title of people who have attended their distressed debt stuff. There were 524 past names in the past. Not names but listings of job titles and companies. You can look down that list of registrations they only give you on the website for hold-on trading, special assets, and portfolio managers.

I then give that list to my VA and she goes over and pulls all information, finds those exact people, and we contact them directly. It’s like shooting fish in a barrel, but there are plenty of asset managers who have stuff by doing this one thing alone. You don’t have to pay the $800 or $1,000 or $2,000 you’re going to pay by traveling to the event and then attending for three days to listen to crappy panels. Be smart. Work smarter, not harder.

Ask Other Note Buyers

9) This sounds pretty simple and common sense, but you’d be surprised how few people ask other note buyers. I love tracking note buyer case studies. When people start posting about the address they bought this property or they bought this note at such and such address, guess what I do? I will jump on the county records or the county clerk and look for that address. Look who the previous owner was, who the lender was, then I’ll look for the assignment of mortgage to see who that note was bought from. I’ll then contact the seller directly on the assignment of mortgage. Not the new investor, but I’ll buy who they bought it from. It often leads to some great deals of stuff.

Review the assignment chain. If it gives you a name, it’s like the grantee and grantor, the mortgagee and mortgagor, whoever the bank is, google that lender. A lot of times, it’s going to be LLCs. Find out that contact. There’s a phone number. Often, you can find an email, and then I’ll contact them directly and say, “I saw that you sold this note a few months ago or a year ago. Do you have anything else available for sale?”

I also look for contract-for-deed sellers too on the appraisal districts. It’s in a deed transfer, not in AOM. You go to some of the major counties in the Midwest and search for Harbor portfolio, window rock, or rock-top partners. Those were the three biggest buyers and sellers of contract-for-deeds across the country a few years ago and see who they sold to. It’ll give you a whole list.

Also, the buyers, the people they bought from Harbor Winter Rock and Rock top, there are also note investors like you and me. They may have smaller portfolios, but they may also have stuff that they’re looking to move off their books as well. They’re probably more likely to have re-performing or non-performing notes and contract-for-deeds for sale. It’s a great way to find note sellers and note buyers out there going up the chain or following the paper trail. It’s completely free. You just need some time.

Note Platforms

10) It’s probably my least favorite out of the top 10. I had to throw this in here because so many people are like, “What about this? What about the note platforms you buy from?” There’s a variety of them out there. Here’s the thing. They don’t all have a lot on there. They’re going to have small lists. The first one there, I think they had 136, maybe only 10 non-performing notes. They had some owner finance notes but not a big list. You have to be careful about number two on there because basically, it’s all focused on what they’re selling.

Number three on the list here, just small. They don’t update their list on a regular basis and it’s a lot of crap. Number four on there, you’re going to see some stuff on a regular basis, but they’re going to make you jump some hoops to get it signed up for it. If you’re looking to broker-owner finance notes, you could go to FinacUSA.com and they’ve got a good owner finance brokering program to get you bids, which is pretty good. You can also go to SellPrivate.Mortgage, that’s for owner finance notes. I’ve never sold anything through them, but that’s a resource for you.

There’s another platform like Debexpert.com. Never bought anything from them. It’s very similar to what number one and number two will have. preREO is a source. You can take a look at it, but there is a lot of junk on there and there’s not anything on there. You’re probably going to get back re-performing. From what we found, it’s all foreclosure and not very clean collateral files. Those are some of the topper platforms for you to take a look at.

Commercial notes is a little different ballgame. 10x.com or Auction.com’s commercial arm, you’ll see some notes available for sale there. Our buddies at Exchange.Loans do commercial and resident notes for sale. Pretty clean stuff. You just have to register with them. Debtx.com. That’s going to be larger banks that are selling portfolios. They’re going to charge you a $500 registration fee. Mission Capital Advisors is a large bank portfolio as well. You’re probably not going to buy from them or DebtX because they’re going to make you jump through hoops.

LoopNet. I only put LoopNet on here because I’ll search for notes and I’ll often find distressed commercials up. I’ve been on LoopNet. I’ll do the same thing like I talked about the previous thing is contact the account to find who the bank is and contact the bank directly because often they’ll have more than that one asset. If you like commercial notes, then check out CRED iQ, that’s CRED-iQ.com. These guys do a tremendous job with defaulted commercial notes and tapping into the secondary servicers. It’s phenomenal. Check out CRED iQ. If commercial notes is what you’re looking for, they’re your bag.

BauerFinancial

11) Source. BauerFinancial is a great source to find specific banks and what they have exactly on their books. BauerFinancial is a third-party rating system for banks and credit unions. I don’t target the credit union side, I just target the banks. They will basically evaluate the quarterly reports that banks file with the FDIC, and then you can actually purchase quarterly reports. I’ll purchase a spreadsheet from them once a quarter of the banks that have at least five branches or greater.

 

It tells me literally on my customized report what percentage of those banks’ portfolios are in default and what kind of ranking they were last quarter. Did they lose stars? Did they go from a 5-star to a 4-star this quarter? What percentage of their portfolio is in default? What’s 30 to 89 days late? What part of their residential commercial? What part of their commercial portfolio is in default? Even multi-family into it. With the banks that have five branches, it’s literally about 1,100 institutions. It’s a lot of valuable information to help you target, “I need to contact that bank and see what they have.” That’s a numbers game as well.

BauerFinancial.com, if you google it, it’ll take you there. The quarterly report is $330 to $400 a quarter. It’s not expensive and well worth it. The newest report usually comes out by the middle of the month. If you’re waiting for the end of the third quarter, it will be out by the 17^th of the following month. It will give you the bank CEO’s name. If you want to jump on LinkedIn, you can do that. Probably not going to connect with you anyway. It gives you a general phone number, which is their customer service number.

Don’t waste your time there. I would literally use BauerFinancial and Lane Guide in unison to find the internal numbers in the back office numbers. We identify the banks with a bad debt off there. We’ll send direct messages to asset managers on LinkedIn or start to pick up the phone and dial for dollars. We’ll get the list that they send out to us and go from there.

County Recorder’s Office

12) It’s something I talk about that a lot of people don’t mention it briefly, but using the county recorder’s office or the county clerk. You can do it as an assignment search. You go through NETR online, which will give you access to every county website out there, provided that the county website doesn’t charge. A few counties will charge free you to have access to. It’s not that big of a deal. It’s usually not expensive. You can search for free, but we’ll do an assignment search.

I won’t do it immediately, but when you look at an assignment on mortgage, this is what transfers ownership of a note. It’ll have an assigner and assignees, two sources, who the note seller and buyer were, and two potential deal flow for you. I like to search the largest counties of the states I’m buying in and the major cities.

If I’m looking like Indianapolis, I would go to Marion County Indiana and search there for an assignment search and I’m going to make a list. Some of these you can download pretty easy. Copy and paste them. We’ll Google the entity or the LLC or the investor’s names who’s signed off on the assignments by looking at this. It’ll give us a nice name to connect, and then we’ll jump over on LinkedIn and do a search on there.

We track the list from the sellers to see who they purchase from. Same thing, we’ll look for an assignment. Who do they buy from? It leads us direct-to-source. We’re not dealing with brokers or daisy chains or stuff like that. It’s always better for you to go to directing. Banks will sell you notes, just not the big 5 or 10, but plenty of lending institutions out there will do that.

Servicing Companies

13) Servicing companies. A lot of servicing companies have an investor data or sale portal. They’ve also got a trader who’s there to help them move. Sometimes, it’s the person who’s handling the servicing company if it’s a smaller servicing company. Sometimes big servicing companies have individuals that handles the portfolios aspect of things, but they all have notes. You might as well reach out to them and say, “Do you have somebody in business development or somebody who handles note sales?”

Tell the business development, “I’m looking to buy performing or non-performing notes. Oftentimes, do you have any of your clients that are looking to sell?” Some servicing companies only want to deal with performing notes. They don’t want to deal with non-performing or they only want to deal with non-judicial states and they’ve got some judicial notes they don’t want to necessarily service. Some servicers like Halo or others require you to have at least 100 notes. If you don’t have 100 notes, they don’t want you in the platform, so they keep that in mind.

Here’s the thing. You don’t necessarily want to talk about buying it and moving it to somebody else. The business developments are making money on the servicing costs every month. You say you’re going to move it to a different platform, they’re going to lose out some money. It may make sense for you to move some of your notes over to that servicer so you hit that minimum amount or pay them a bird dock fee. We want you to retain servicing. That’s the one thing that you’ve got to remember to tell them. We’d like for you to retain servicing if it’s possible and if it’s not too expensive. We don’t want you to miss out on some money.

How do I find servicing companies? You can go to Lane Guide, look for primary classification, search by state, and then servicing companies. You can go to Texas Savings and Mortgage Lending List. Like I said, they download a list. There were 200 servicing companies that were licensed to do business in Texas. You can Google loan servicing companies in a blank state. It’s a pretty easy Google thing. Also, the mortgage banking licensee list will often give you servicers only.

If you look at that IDFPR report, it’ll give you 350 names and contact information if you go to the mortgage banking list. It’s pretty awesome. Look at servicing conferences and MBA events. They’ll often list servicers that are there as well. Besides going to the national mortgage loan MLS.com and searching for servicing companies that’ll give you a list of 189 there.

Mortgage Banking Association Conferences

14) We’ve talked about this briefly, but in Mortgage Banking Association conferences, each state or each area often will have a mortgage banking association like the Indiana Bank Mortgage Banking Association or the Florida Banking Association. Many are different. This will be different from pulling a Texas savings and mortgage banking lending list that I’ve talked about pulling. We like to target membership lists because oftentimes they’ll say, “Here’s a list of members. You can search our list of members.”

If I go through that list, I’ll look for bankers, servicers, or you’ll even find vendors that work with servicing companies. If you go to their website for that, they’ll often list contact information people to talk to business development or other things like that, too. Who’s the Chief Credit Risk officer? Who’s a whole loan trader? Looking at the mortgage banking conferences to find attendees and websites to back, I call it the backdoor aspect of finding people.

Texas MBA, the National MBA, and the Mortgage Bankers Association have over 500 members as we speak. Using the vendor marketplace on the Mortgage Banking Association and looking for note servicers, sellers, and workouts is a great way to do that. You can contact them people directly on LinkedIn. You must remember to follow up with LinkedIn, Lane Guide, Bauer Financial, or whatever you’re using. Eighty percent of sales are made after the fifth contact. You’re not going to send them once, and then suddenly get a list sent to you. You just have to usually follow up with these people.

Eighty percent of sales are made after the fifth contact. You're not going to send them once, and then suddenly get a list sent to you. You just have to follow up with these people. Click To Tweet

Foreclosure Lists

15) It’s something that many people are already used to using to find distressed deals, and that’s foreclosure lists. They’re a great way to find non-performing notes because it’s a non-performing note that’s getting foreclosed on. When we get these lists in a specific county, I’ll pull a list every once in a while for Harris County which is Houston, Bexar County. We’ll narrow down that list. We’ll first organize it by bank or lender. We’ll get rid of the Chases, the cities, the Wells Fargos, and focus on the smaller-size banks, and then we will reach out to them.

We’ll try to contact their special assets department and we’ll use Lane Guide to see if we can’t find an internal number or LinkedIn to find a person at that bank like IBC Bank special assets for IBC Bank of Commerce or Falcon Bank, Special Asset Manager. If we can’t find anything like that, the great thing is these foreclosure lists will list the foreclosing attorney, whoever’s going to be doing the foreclosure. Sometimes, we’ve had success contact to the foreclosure attorney and say, “Who do you deal with over at ABC Bank or Falcon Bank that we could talk to? We’d like to talk about buying their notes and still having you handle the foreclosure process.”

Sometimes, that works, but the goal is not to get the property they’re foreclosing on. We’re using the property that they’re foreclosing on as the warm lead into the bank for contacting them. You can use that address as a warm lead. When you send an email, send it with an urgent. The borrower’s name is on the foreclosure list, the address, and then, if they list it, the loan number, and then show the pending foreclosure date. If it’s going to go to foreclosure in the next 30 days, you probably need to come in around 60% to 70% of either fair market value if they owe more than the property’s worth or somewhere around 70% of the UPP or legal, depending on the value.

The great thing is the bank has done most of the heavy lifting. The downfall, the bank has done most of the heavy lifting. They may not be willing to sell the note off because they’re at the cusp of foreclosure, but what’s great to see is these foreclosure lists will often have a previous listing, yes or no? If it has a previous listing and says yes, it’s probably been on the foreclosure list for a month or a quarter. You might be able to buy because it may be a listed short sale or it’s been delayed because of bankruptcy or something like that.

These can be great leads for short sales for buying the notes. Once a listing is short, you’re going to be able to see the interior. Go buy and take a look at that property if you need to. There may be even a realtor involved you can reach out to. Also, there are potential cash buyers ready to roll because if they sell it on short sale, somebody may have to make an offer on it. You may be able to buy that note at a big enough discount and then close on the traditional sale to the end buyer who’s looking for it.

Condo Associations

16) It’s one that’s probably a little bit more so, like Vegas, Florida, or Colorado. We target condo associations. If you get a list in of notes, you see where it’s got a unit number, and it’s a condo, guess what? You may find more. Go to the county appraisal district for that condo. When you search, look for that unit number. It’s great. Some of these are foreclosed and there’s a bar on that, but take the unit number off and see if there’s something that the association owns other units. That may be owned by the condo association. They have it foreclosed and taken back because the condo association can foreclose subject to the first.

The great thing is you can often buy those at a big discount. When the condo association foreclosed, it’s subject to the first lien, you may be able to contact the bank on the first lien and buy the discount or potentially buy that second lien, that condemnation fee at a big discount and then take over the property subject too. You’re going to have to review the underlying lender to see how far they are along in foreclosure.

Sometimes, there’s a major bank like Chase, Citi, or Wells Fargo. You can buy that second lien, you may be able to cashflow for 3 or 4 years or before they ever get around foreclosing and go from there. They’re usually pretty clean assets and they may even already have potential tents in place because the condo association has turned around and rented them out, trying to recoup their fees.

When I see this, I’ll contact the condo association. They’ll usually put me in touch with the attorney, handle the foreclosure, and we go from there. This has worked very well. We’ve used this in Texas and Florida. Vegas has got a little bit different now since their safe harbor laws have changed than many of the banks are tracking condo association fees and paying taxes to avoid tax foreclosure. As I said, Florida’s great. Safe harbor actually will eliminate a lot of the big condo owner association fees on there like that. When you buy a note, if you’re buying the first lien and foreclosed, it’s going to wipe out the big lien.

You can go to SunshineList.com. This will allow you to buy a list of condo association management by the county level. One of the things we’ve done in the past is actually when we buy that list in a specific county, it gives the board members their contact information. We’ll do a drip marketing campaign out to the president or the vice president in specific counties. Do you have any condos or members that aren’t paying their HOAs, getting ready to foreclose on, or any condos you’ve got to take back?

We’ve found dozens of deals over the year by seeing one note on a list, reaching out, looking, and finding that the condo association had taken back 3, 4, or 5 other notes. We’ve been taking condos back by paying the liens and then running the condo for cashflow for a few years. You could do a quiet title action and potentially wipe out that first lien from a bigger bank. People aren’t paying their mortgages, they sure as hell aren’t paying their HOA or COA or even taxes to double-check that.

Short Sale Listings

17) Short sale listings. Short sales are making a comeback with everything being like it is. This is great. They can be great money-making deals at the bank that will sell you the note. It’s all dependent on who the lender is. You have to keep in mind that if it’s a short sale listing, you’ve got to borrow, ready to walk away without making anything into your access and views. You’re hopefully online through their listings. Oftentimes, there’s already a cash buyer waiting in the wings for the bank to accept a negotiation or go through the negotiation. The bank’s already taking it short already.

Here’s the great thing. The loss mitigation department doesn’t communicate with the special assets department most of the time. There have been many times that there was a short sale in place. They were going through the process that we were able to buy the note cheaper than what the bank had negotiated on a short sale because we were able to close faster than how this thing was dragging out. It’s going to work well when you have long average days on market and we’ve seen that increase with interest rates going up. It’s not going to work so well when they’re short, like less than 30 days on the market. It’s not going to play well.

If something’s been listed for six months or dragging out because of foreclosure, that’s a better state to look at. That’s why when things drag out, it’s motivation for the bank to sell the note versus going through the foreclosure process. Literally, you can put yourself between the bank and an end buyer for money. You technically buy the note and become the bank. A realtor’s what you got a buyer for, and we’ve made some great deals happen. How do I find them? If you’ve got a realtor’s pretty easy to do this, have them create a custom notice searches for short sales or third-party approval required listings on the MLS, sort it by the longest days on the MLS, and then look by the lender and bank.

 

You could jump on the county clerk or their realist report that many of these MLSs have a check for who the most recent lender is. Most of the MLSs will let you search. If they won’t let you search directly to MLSs, go to the county clerk to see who the current lender is, and then leverage what we’ve talked to you about before. Going to LinkedIn, finding the special asset manager at the bank to gauge their interest in selling that specific note or with others. What else do you have in your books? We’ve been lucky to contact banks to say, “What do you have that you’re looking to get rid of this quarter?” It’s got some stuff that’s been listed that we reach out to and potentially buy.

When we’re looking at the bank from the notes, we see a listing and then our realtor reaches out to the listing agent to see if they have a solid cash offering. We’ll ask if they need a backup offering just to find out the range that they have that short sale approval in. If they don’t need a backup offer, that means they’ve got a very strong cash offer and that’s good for us. As I said, it’s best to have your agent contact the listing agent because they’re not going to tell you anything, but they will often spill the beans to other agents about where they sit and what kind of offering they have.

Dialing For Dollars 2

18) Dialing for Dollars number two. What I mean by this is if you follow a plan of action we’ve talked about pick a different list. When dialing, smile while you dial. Call on Tuesday through Thursdays, 10:00 AM to 3:00 PM. Keep track and leave messages. Follow up with emails or social media connections. We found asset managers on social and reached out to them that way. They may not necessarily like that, but they’re like, “Okay, yes, I’ll check my LinkedIn.”

When it comes to dialing, prepare to dial 50, 14 to 24. You make 50 phone calls. You probably talk 14 to 24 NDAs. That will lead to a list or two, but make a game out of it. The reason we threw this in here twice is because it’s as important. You have to get comfortable on the phone and this is honestly going to make you the most amount of money.

You have to get comfortable on the phone, and this is honestly going to make you the most amount of money. Click To Tweet

What lists can you use? We’ve talked about these before. Lane Guide, Texas State Mortgage Lending, the county clerk, AOMs, and all sorts of lists. Follow up. You never know when someone will have something. This is why you need to follow up and get people’s emails so that you can drip market to them on a monthly basis.

Two hours, two days, two weeks, two months. Stay on top of mind with them. Do it two hours a day. Do it twice a week. Do it every two weeks and follow up maybe every two months. It’s one of the great things to follow because most of these asset managers don’t have a list. The person who follows up the squeaky wheel is often the ones who gets the grease.

When you’re going to do this, set aside time to call and remove distractions. Turn the TV off and put your phone on mute. Don’t be looking at email and social media. Focus on dollar for dollar for two hours. Make it a part of your marketing. If you’ve got a full-time course or if you have a full-time career and job and can’t do it, I understand that. You might check out one of the things that we’ve done in the past, CallingBanks.com or our four-hour video on us calling asset managers is a bit of an inspiration to help you out with that.

Following Up On Bids

19) This is one thing that most people don’t do and it leads to us probably closing on 50% of our offers that we made initially that we didn’t get approved on. It’s following up on bids. Keep track of every tape or list you ever get. If you submitted bids and they weren’t counter back, follow up with a seller or the fund and say, “Did you sell this asset?” If I make 50 offers and I don’t get 20 back. What happens to those 30? They were higher bids.

A week later, did those close? Did you get a higher offer? Are they on track to close? That kind of same thing after a month. If you didn’t close, I’d be interested. In 90 days, do you still have those assets? Did you still have a chunk of those assets off that tape you haven’t sold? They’re now 90 days older. The bank and the seller’s more motivated to move that stuff at a bigger discount because they didn’t get a list or a bid on the first round.

Deals fall through all the time. Funders flake. People don’t know how to market. They don’t know how to raise capital. Some of our best deals have come from following up. Funds get more ready to move deals at the end of the month, the end of the quarter, the end of the year, or in some cases, if you own a note fund when they’ve got to cash out that fund at 3 to 5 years. You got to stay diligent and follow up.

Note Wholesalers

20) I throw them in the same bucket here. Note wholesalers are note brokers. There are some good note wholesalers. There’s also a lot of joker brokers out there. There are some good brokers as well. Some banks will use commercial brokers, especially to sell commercial non-performing notes. They’ll need to sign an NDA and a fee agreement saying that, “Yes, you’ll make sure they pay them a fee agreement.” You’ll often find some of these on LoopNet or industry events out there, too. Beware of people who call and say that they’re seller reps or sellers’ mandates. That doesn’t mean crap. It’s a big joke that they’re a joker broker.

Watch out for the LinkedIn note trader. There are a lot of people that are joker brokers. Most people can’t pass a smell test if you’ve been around for a little while. What’s the smell test? Do they have a website? Do they have a professional email? Do they have a LinkedIn profile? It’s the same thing anybody would use to looking at you. Some wholesalers will have exclusive pools that they have under consignment, and that’s fine. Consignment means they’ve got the right to sell this stuff at a price. Whenever they make above that price, it’s good.

You will usually end up paying 1% to 3% on the funding amount to consignment. If it’s a performing note, you’re probably going to pay a 1% fee of whatever you fund on. If it’s non-performing, 3%. Be aware of daisy changes. Daisy changes, the price go up by three points every time somebody else is involved, which is a waste of time.

I always say when you get a tape in, I want you to do some stuff, sign a fee agreement with them and be directed. You’re probably going to have to pay that note trader 1 to 3 points for 2 years off of anything you buy. If you’re already direct to them, just tell them, “I’m already direct-to-seller. I’ve been direct with them for months.” They’re not going to hold you that fee agreement.

More about wholesalers and buyers. There are some Wall Street traders who are buyers and wholesalers. We will wholesale notes from time to time. We get a list in or we’ll have asset managers reach out to us, “We’ve got some stuff that we need to move by the end of the year.” We’ll buy ourselves and we’ll sell off other assets on a tape that we aren’t necessarily buying for ourselves. The great thing about this is it gives bulk pricing on one-offs. It’s like the Sam’s Club versus the Walmart aspect. I love to buy that 48-pack of toilet paper, but I only need six. Scott’s buying 42. I need to buy six to wipe my ass.

Here’s the thing. Note sellers would rather deal with one investor who’s buying 60 versus 60 individual investors buying one note. That’s something to keep in mind. We’ve negotiated whole tapes to wholesale one-offs left and right. One of the things that we do for our coaching students is that if they’re looking at assets, we can help them negotiate a lot better price because we know the sellers often or know what’s going on in a sweet talk and making things.

 

Even things when you’re buying in bulk, you may have rolling closes. We’ve done several times where we bought 60 or 100 notes at a time. We didn’t have to fund them all at the same time. We would fund on 20 this week, we would fund on 20 the next week, and then the final 20 in two weeks after that. It gave us time to raise capital, but also, we didn’t have to wait a month. The seller was happy and starting to get money in for this first 20 and go from there.

We’ve also used non-exclusive option agreements to tie up a portfolio for a period of time to market it and then make money off whatever we sold. Whatever we haven’t sold, we gave back to the seller. You got to avoid the joker brokers. If you suddenly get people asking for LOIs or Letter of Intents and Proof of Funds before they’re ever going to send you a list of notes, that’s a joker broker. One of the questions I ask is who have they sold before. References? Who have you sold to before?

Good wholesalers and brokers will ask you for what you are looking for. What are you looking for? I may have something. I’m looking for Georgia or Florida. First liens. This value to that. Avoid the mass email joker brokers. This happened. You’ll start to recognize them. They’ll have similar-looking tapes or the format that you’ve seen from other people. When you get a spreadsheet in from a seller, when you go to save it, most Excels will allow you to look at the info. If you look at the info of that spreadsheet, it’ll tell you who the creator is and the last update is.

 

If the creator is not the person to getting the note from or the date is more than 90 days old, you’re dealing with a joker broker. It’s definitely a joker broker. Here’s the thing, too. I’ve never had a bank send me a sanitized list where they don’t give me the address. If you get a spreadsheet in and it has all this information except the address of the property. That’s a sanitized list and you’re dealing with a Joker broker.

Lots of great stuff there for you guys. I hope that was valuable on the 20 ways that we find stuff. We’ve been doing this for a long time and we’ve taught a lot of folks how to find notes, not the traditional way of relying on one seller or one source. That’s the problem. When you look back to 2010, 2014, 2015, 2016, there are quite a few big note funds that bought big portfolios from Wall Street and others and were selling them. You didn’t have to be good at marketing. You could go to a few note conferences and find a seller, too, and they would provide stuff. We were even like that, too.

When I started off, 90% of the notes that we got came from Bank Direct. It came from us buying directly from banks, hedge funds ourselves, and they would send us stuff. Ten percent came from platforms. That changed. It became 50/50, and then it even became 75 from platforms and 25 from direct. What happened? A lot of those platforms dried up or those companies went out of business because they couldn’t buy anything and we had to go back to our marketing technique.

That’s why I share this with you. There are folks out there who are teaching note investing that are not going to share with you those ways. They’re going to share it with one way where you can buy direct from them and that’s it. If you go outside of their path or out their sources, they’re not going to deal with you or they’re not going to help you. That’s not the way I work and that’s not what I believe. I encourage you guys to check that out. If you enjoyed this, make sure you check out the Note Closers Show or Note Night in America episodes on our different way to podcast.

Of course, always we do have an upcoming class. If you go to NoteBuyingForDummies.com, I believe it’s December 13th, 14th, and 15th. It’s usually $997, but we’re running a special sale to the end of the year at $495. If you’re reading this after that class, go back to Note Buying for Dummies. It should list when the next class is, which will probably be in February of 2024. That should actually be in person here in Austin, Texas.

Anyway, I encourage you. If you have questions or you enjoyed this, I’d love to hear from you. Feel free to reach out to me and book a call with me and go to TalkWithScottCarson.com. I’m here to help assist you. There’s plenty of deal opportunities and plenty of deal flow. You don’t have to use and do all 20, but it’s going to be knowledgeable in all 20 ways. There are more ways that I didn’t cover on this, but these are the top 20 ways that we find note deals in 2023.

 

Important Links

• Lane Guide
• Scotsman Guide
• OctopusCRM.io
• MortgageBankingAssociation.org
• IMN.com
• FinacUSA.com
• SellPrivate.Mortgage
• Debexpert.com
• preREO
• 10x.com
• Auction.com
• Exchange.Loans
• Debtx.com
• LoopNet
• CRED-iQ.com
• BauerFinancial
• MLS.com
• SunshineList.com
• CallingBanks.com
• NoteBuyingForDummies.com
• TalkWithScottCarson.com

 

Want to talk to Scott? Book a call with him HERE

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