EP NNA 61 – Domino Investing: The Chain Of Events In The Note Market And Where Opportunities Lie

NNA 61 | Note Market Opportunities

NNA 61 | Note Market Opportunities

 

A lot of changes are taking place across the country. Sparked by the fall of one domino, the COVID-19 pandemic, we see the moving parts in our society slowly toppling one over the other. Where are we now in the chain of events? Where is it going? What will it look like ahead? In this episode, Scott Carson answers these questions, particularly in the note investing space. He discusses where the dominos are falling in the note market and where the opportunities lie. Gearing you up for a more hopeful future, he also shares what you should be doing over the next 30 days to make the most of the second half of 2020. Now is not the time to be a casualty in this chain reaction; create lemonade out of the lemons thrown at you. Scott guides you how in this discussion.

Listen to the podcast here:

Domino Investing: The Chain Of Events In The Note Market And Where Opportunities Lie

A lot of changes are taking place across the country. There are a lot of moving parts in every society between those that are sick and those aren’t sick and the small business and big business and banking. I thought it would be a good idea to come in and share our topic about where I see the dominos falling based on not only where we’re at now and where we’re going to be in the following months. We also can learn a lot by looking back at what I was doing several years ago in 2008, ‘09 and ‘10. Some of the things that you can be putting into place now. Some of the things that you can be doing immediately here in the next 30, 60, 90 days to make sure that your second half of 2020 is probably going to be one of the most productive six months that you will ever see in your real estate career.

There are a lot of great things going on and a lot of bad things going on. We can create a lot of lemonade on a lot of lemons and help a lot of people. We can create a lot of win-wins for everybody. It’s great to have you all here. I encourage you to go to WeCloseNotes.com. It’s our main website for everything out there along with our different podcasts and different trainings we have available. I’ve been bombarding a lot of people who are curious like, “What’s the market doing? We need to learn note investing. What do you have available?”

We had a one-day Note Weekend. It was great. We’ve got two events. The first one is our Note Buying for Dummies. It’s a three-day nuts and bolts training. You can go to NoteBuyingForDummies.com. It will take you straight to our website to check out. If that gives you any issues, please let me know. Our normal price is $699 but we dropped it down to $599. We have our major convention back. It’s Note CAMP 2020 as we call it. This is our mid-year convention with 30 to 40 speakers. We will rock you at that event. You can go to NoteCAMP2020.com. The price is $99 but that goes up to $125. You’ll save yourself $30 or if you sign up for the Virtual Note Buying Workshop, I’ll throw in a free ticket into the Note CAMP. If you signed up for the virtual workshop, you get a ticket to Note CAMP. It’s an extra added bonus for you. I’m excited about it. We do have new things going on. We’ve got some new training that we’ve been working on. It’s a lot of phone calls taking place and a lot of things that we’re working through in assets. Check those out.

Markets That Are Hit The Hardest

Let’s talk about domino investing. This is one thing that I track on a regular basis. Many of you that have been around for a while know that we spend a lot of time tracking data. What assignments and mortgages have been falling? I’m glad I pulled that list, but if you look at the top 5, 6 states that have been hit the hardest or that are going to be hit the hardest, California is at the top 5 or 6. They don’t exactly know where it ranks, but tourism and service industry jobs are going to be hit the hardest. They have been hit the hardest in the number of layoffs and unemployment.

Texas is going to be on sale for a little bit. Service industry, restaurants, transportation, healthcare, money, manufacturing, oil and construction markets have all been hit hard. When you look at Halliburton furloughing 6,500 people, that’s a big thing. They’re laying off, not that much but it’s for a while. A lot of people are hoping the market comes back but when you talk and look at all the economic advisors, when they talk about the fact that we get through this, there may be 3, 4, 5, 6 oil companies remaining. That’s a lot to be worried about because there are a lot of smaller businesses that aren’t going to be around when it comes to that.

In Massachusetts, tourism is a big thing. Although, they didn’t release numbers on what specific sectors have been hit the hardest. They are ranked number three when it comes to the number of layoffs and unemployment that has been filed for. Ohio manufacturing and industrial, automakers there are laying off. GM is laying off a lot of people. Big universities in these areas are laying people off. I don’t know if there could be a rebound. Pennsylvania was a surprise number one in our article on Business Insider. Transportation, hotel, restaurant, administrative and healthcare industry is being hit hard there in Pennsylvania. I was surprised not to see Florida because I’ve seen this listed.

When you think that the number one company out there that’s laid off and furloughed the most number of employees are located in Florida or California, you’ve got to add Florida to that list as well too. With tourism, hotels, restaurant service industry, that’s six states. We have seen a lot of stuff in Texas over the last decade, not really. In California, that means it’s not really. Ohio, Pennsylvania and Florida, yeah. Other states, cities and industries would be hit harder, don’t get me wrong. Airfare, I saw someone at Boeing was laying off or furloughing 3,500 employees as well too in Colorado. This is high-level. This is not meant to be the be-all list of the states that are hit the hardest. We all know every state is taking it right now in the shorts and getting kicked in the knees and the teeth.

Pay attention to what’s going on in your market. Pay attention to what’s being stated out there and who’s laying who off. Is it a great thing that some of the states are opening up? Yes. Will I be excited to go to a movie theater? Yes, I will be excited to go on to the movie theaters. What I’m trying to get at is to start looking at how the dominos are stacking up where and who is laying off. What I did is I also jumped online and found the top twenty largest companies that have laid off across the country. Disney being number one with over 100,000 layoffs.

Next are TJ Maxx companies, Macy’s, Marriott, Kohl’s, Gap and Tesla laid off half their staff. L Brands, which owns Victoria’s Secret and Bed, Bath & Beyond. I understand why those stores are always next to each other in the malls. They’re owned by the same parent company. Caesars Entertainment out of Vegas is laying a huge number of its employees. Best Buy, JCPenney, Cheesecake Factory, Landry’s, DICK’s Sporting Goods, Ascena, which is the company that owns Lane Bryant and Ann Taylor. CarMax laid off over half of the staff and Tenet Healthcare, which is out of Texas here. Under Armour out of Maryland laid off 6,500 employees. General Motors laid off a big chunk of employees. Quest Diagnostics laid off a big chunk of their employees.

What you have to realize is if you look at these, what calls out to you? Old-fashioned, big-box retail and your larger restaurant chains and some of those. You throw in Caesars in there as being tourism. With the Marriott in there and stuff like that too. Also, healthcare. CarMax doesn’t surprise me, especially with all the bigger companies offering up 0% financing for 84 months. Although, I’m surprised to see GM on there. It’s a variety of things. These are the top twenty companies based on an article that I pulled that shared the stuff. Disney’s California and Florida. Florida is more than California. A lot of these are companies that are all across the country in a variety of things. Are we talking huge amounts in any one specific area? Probably not.

Caesars is in Las Vegas and a couple of other places but for the most part, it’s going to be the retail stuff. Some of this is the stuff that we already knew that were issues. The thing that pops out to me, CarMax is a surprise. We’ve talked about how a lot of selling used cars and auto debt financing being in trouble for the last couple of years. That’s the biggest true kind of used car salesman company across the country besides your bigger chains for local companies. CarMax being the biggest one has done that. Can you pick up some debt probably on some auto loans pretty cheap? I know you can. It’s been in the crapper for a while now.

Opportunities In The Dominos Falling

The things you have to look at is if you’re in a market that has these, this is what you’re seeing. I’m less than a mile probably from 70% of these except for Under Armour, General Motors, Landry’s, Cheesecake, JCPenney, Best Buy, Caesars. I’m less than a mile from the majority of these companies except Disney. There are people being laid off. Most of us are. The thing is, what can you do? How can you help? What are the opportunities here as the domino is continuing to fall? These people are being laid off. They’re trying to file for unemployment. They’re looking for jobs but what happens when you’ve got a flooded job market? You still have a huge number of people looking for work that can’t afford things.

Let’s talk about what it means for us. It means for us is when you look at these, think about the majority of people working at these corporations and these companies. A large percentage of them are minimum wage positions, making less than $20 an hour. If you look at some of the biggest cities or the states and compare that with what it means to try to live in those areas, Orlando, you’ve got to make at least $20 an hour combined to survive there, to be right above the poverty line. We all know that’s different for areas like California. You’ve got to make a whole lot more to be above that poverty line. There are a lot of unskilled workers that are going to be struggling.

That means they’re renters. What are they doing? They’re not owning. They’re renting. They are struggling. They’re renting apartment complexes or houses with friends has been a big trend. For those that were working beforehand, they are a first-time home buyer trying to buy something there if they had good credit. I have seen email after email from some of the companies that we follow and are opted into their loan pricing matrix. They’re telling me, “We went from zero reserves required to requiring 6, 12 and 18 months of payments in reserve for our new home buyers.” It’s craziness.

The thing is to start looking at your markets that you’re investing in, where you’re living and look at what’s that price point? The median home price here in Austin is $300,000 roughly. That doesn’t make a good sense. You’ve got to look back and drop it down to there. Where is it below $200,000? Where is it below $150,000? In some markets in Ohio, $150,000 is still a big-sized house. In other areas, that’s the dog house in San Diego. Looking at those places where people are renting or first-time homebuyers especially around the colleges and duplex row. Does anybody have those in your areas? I know we’ve got several spots here in Austin where it’s the whole street on both sides of the duplex.

When I went to school in San Marcos, Texas, which is in Hays County, which was supposed to be one of the top 25 counties growing across the country, now with kids out of school and college towns being ghost towns for the most part with other industries, those are going to be your ground zero for the default game for those dominoes that are starting to fall. It would be an opportunity for you. It’s going to take a little while to get through it, especially depending on the foreclosure timeframes and what the states end up doing and opening that up for evictions or foreclosures. We’re still 60 days out before we have a true picture on that, but we’re to start seeing trends happening.

 NNA 61 | Note Market Opportunities

Note Market Opportunities: Talk about what you’re looking for. Put it out there, and the law of attraction will bring it to you.

 

Talking about rentals, apartment owners that have stuff, they’re going to be struggling. Out of state property owners that are renting or own houses in an area, whether it’s a long-term rental or a short-term rental, they’re going to be ones that are hurting, especially if they’re out of state. They may not be able to go over there. They may try and require on property management to take place of that and that’s a difficult thing. The thing to also keep in mind though, this is swaying that pendulum back, “Scott, quit being so negative. What are the opportunities for us?”

There are more property, but with all these people being laid off in other industries as well, it does mean that people, if they’ve been putting money away into a 401(k), a retirement account, they’ll have something they need to do with that money. They can roll it to a self-directed IRA, start educating people what they can do with that money. Some of them will probably need to cash out or dive into it. Some people need to stay there, but there are opportunities for people to pull money out of their 401(k) to invest if they’re not leaving the job if they’re furloughed for a period of time. Keep that in mind.

Where are we going to see a lot of big deals? We’re going to see a lot of the property in your retail, big box stores, hotels, motels, smaller strip malls, office space and self-storage facilities. Why do I say self-storage facilities? In a case where people can’t make their rent payment, think about this, people moved into apartments years back because they couldn’t afford traditional housing. We’ve seen it. When people are laid off and can’t afford their rent, they’re not going to pay their car payment and they’re not going to pay their self-storage payment.

What does that mean? Self-storage facilities are going to start to see a dip in occupancies. They’ll see an increase in foreclosures. You’ll see a lot of mom-and-pop companies that probably aren’t set up properly to take care of that. They don’t have enough reserves. They may not have the business savvy. They may be ready to walk away from a problem and cash out. It could lead to some great opportunities for investors like you and me. Opportunities that come in and take over some notes where the banks may be willing to carry it or be willing to recast the loan, especially self-storage, some smaller office space. Maybe it’s smaller strip malls. I was talking to an investor in Dallas and he was talking about how over 50% of the malls in Dallas will close.

When you look at Neiman Marcus filing bankruptcy and some of these other retailers, the days of the malls are gone unless they can do something with either reaching out to smaller mom-and-pops. They may not have that or converting that space to executive office suites, other types of retail and bank. Turning some of these into self-storage facilities would be a great place to do climate control. Who wouldn’t want that? There’s some opportunity there to recast that stuff to make some good stuff work.

Hard money lenders are already starting to call, already starting to email me, looking to move stuff off their notes, stuff that was supposed to be refinanced or cashed out 6 months ago, 3 months ago or 1 year ago. I’ve gotten several large lists that have been working through. I worked on it a little bit. I looked at it. I’ll be working on a lot of it. People are already trying to move that paper, their assets, especially in the hard money side because they realized there’s this whole wave coming of values dropping. If they’re not on the market and sold or fixed up, they’re not going to get what they’re into it for.

Subprime lenders, your first-time home buyers, people who have gotten into a house with $500,000 down. I don’t know if I mentioned this, Bank of America was doing 100% financing on Fannie Mae. What do I mean by 100% financing? They’re donating the down payment and putting $7,500 towards closing costs. I guarantee you that the program is gone. When you look at the numbers that they’re talking up, and then also from the other side, from Chase and Citibank talking about what they’re seeing and predicting, “We’ve got another big recession and tidal wave hitting us and you’ve got to be prepared to create scenarios.”

That doesn’t mean you come in and evict everybody. Maybe you come in and you work with the borrowers, maybe you work with the tenants and you’re taking over the note. Let’s modify it. Let’s keep everybody to play a little bit. What programs are working out there? You’re getting your $1,200, get out of jail card or maybe not. I hadn’t cracked it, but I was watching TV and I started seeing foreclosure bailout commercials. I haven’t seen those in Austin forever. They’re already starting to crank them up. You are seeing those in other places. Is the bank trying to kick you out of your house?

Investors Doing Marketing

They started popping up local channels here in Austin. It’s history repeating itself. Let’s talk about what you should be doing and what should we be doing as investors? What should we be doing? It’s marketing. I know you probably hate it when I say that, but marketing means yes, it’s exactly that. You’ve got to be building the foundation, laying out the things, building the connections now, especially for the next 30 and 60 days. In the last 30 days, you could have gotten away with binge-watching every series on HBO. From the Sopranos to Game of Thrones to Big Love, whatever you want to watch on there.

You could spend a whole month of April sitting on your butt live streaming and it totally would have been fine. Now, you’ve got to get off your keister, go back to work and start marketing to take advantage of some of the things so that you don’t sit here in six months, “I should have done this. I should’ve listened to Scott back months ago.” People are calling me up, “Scott, you called this.” I’m like, “I didn’t call anything. You can look at the writing on the wall and see things going on.” If you’re struggling to figure out what you should be doing, here are the basic things. Marketing your present or previous deal case studies. What do I mean by that?

That means pulling up and doing a short video, creating a short infographic image and deals you’ve done. You need to be putting those assets in place. In a town, drive out in front of the house and stand in front of it and do a short video. Take your camera, go out and drive. “This is Scott Carson. I’m standing in front of 1718 Palo Pinto Parkway here in Round Rock, Texas. This was a note deal we bought several years ago. The borrower owed this much, $125,000, we got the note for less than $100,000. We were able to do Cash for Keys with the borrower and then turn around and sell it for roughly $120,000. We didn’t make a ton of money, but we did make roughly about $10,000 to $15,000 on the deal. It took us roughly 90 days to do. “Those are some things you could be doing. It’s not difficult and I’m not talking about just note deals.

Get in front of your fix and flips. Get in front of your wholesale deals. Get out there and rejuvenate those assets. I was looking at some of my oldest videos and I’m like, “I’ve got better camera equipment now. I should drive up there and spend the day driving around something assets around here,” and that’s exactly what I’m planning to do. Here’s another thing. Take a look at your database and start identifying the investors in different states and their top three states. You will see an email coming out from me to my database. If you’re in my database, what are your top three states that you’re buying here?

What are your top three states so that when we start seeing stuff, I can start sending you stuff? Talk about not just the assets that you’re doing, but maybe the assets you’re looking for and the assets that you’re investing in. Who wouldn’t want to post, “I’m looking for self-storage. I’m looking for distressed retail. I’m looking for distressed office space?” There’s a whole thing that you should be doing. Talk about what you’re looking for. Put it out there. In karma, quantum physics, the Law of Attraction, put it out there what you’re trying to attract. You’ll never know who will call you or maybe it’s some New York hedge fund calling you because you’re the only person that’s posted about a deal in this particular area or ZIP Code or a particular type of asset class because you popped up.

The stuff that we’re talking about is free. We’re not talking about going out and dropping 50,000 postcards, which would be a waste of time. We’re talking about marketing like it’s the 21st century. It is the 21st century, everybody. Scotty is here to beam you up. He’s giving all he’s got to help you. If you know your investor’s database, the top three states that they’re investing in, that is worth millions to you when you start getting these lists from the market. You get a list in, “I like this state. I like that state. There are 50 deals on here in different states that will buy-in. Who’s on my list? Who can I call to see if they’re interested in it?”

As I said before, start reaching out to banks. You’re going to see something from me that you will enjoy. People are going back to work. We’re going to start doing some things, dialing for dollars, but posting deals of what you have done, previous deals, start doing that. We are already starting to do that as we get lists in, I’m starting to pull up, “Here’s a good-looking asset.” It’s an asset that I made an offer on in Sugarland, Texas. Is it a performing note? I was told no. They’d like my bid at $0.80 on the dollar of UPB for their market and I’m like, “That’s fine. I’ll follow back up with them next month.”

By posting this, I had twenty people reach out, “I want to know more about this Sugarland, Texas deal.” You have to wait. The simple things, start building your list. States are starting to reopen. It’s maybe a good thing, maybe a bad thing. I don’t have the answer to that. You have to be prepared. Now’s the time to be doing this and we’re not talking to spend 40 hours a day doing this. We’re talking, you can do most of the stuff in 3 to 5 hours a day. If you’re sitting at home, you can do this. If you have kids or family and stuff like that, I get that, but you can start doing little short videos.

NNA 61 | Note Market Opportunities

Note Market Opportunities: Be a deal maker or a deal engineer, where you’re bringing buyers to the deals, and you’re controlling that facet.

 

I don’t care if you’re sitting on your patio or in your front yard or in your truck somewhere where it’s quiet, where you’ve got to take a fifteen-minute time out away from your family. Make it useful. Also, start marketing IRA investors now. Start pulling the list of people that have bought the property with their IRA, who have lent money with their IRA and start sending out letters to them. Start reaching out to them in some fashion. Googling them, seeing if they’re on Facebook or on LinkedIn. If you’re buying an IRA list, now is a great time to buy it.

Start buying in lists and company. People at companies that have been laid off or companies that are doing layoffs. It’s the best way to start marketing them, not IRA investors, but the people that are pulling the trigger with investors or doing stuff. Add them to your list too. Sharing your deals like that photo is on Facebook, LinkedIn and sending an email blast out. Sharing on a regular basis, getting people paying attention to what you’re doing so that when deals start flowing in, you’ve built these assets. I was looking at some of my mastermind students’ profiles and I was amazed because they’re supposedly working on deals and I see zero deal flow from them. I don’t see anything about the twelve deals they are trying to buy or 100 assets they just closed on.

I’m like, “What are they thinking?” Start marketing. I know they’re at home. I know they’re not doing anything and others have been furloughed or they still at least got a few hours a night. Marketing will save your butt in a variety of ways. Please start marketing now. You will feel a whole lot better doing this and starting to see traction. You’ll start seeing immediate traction from this stuff as long as you stick with it. I think back to what I did from 2008 to 2010. What did I do? I did exactly what I told you. Start reaching out to banks. They started getting a list sent to me. I looked at the list and identified assets on this list that I liked, but I want to take down myself. I started marketing the other people that I knew in other parts of the country.

My big thing back several years ago is we focused on two deals per day. One in the morning and one in the afternoon, one before lunch, one before 4:00. I shared those on my social channels. I would find the largest Meetup groups. Most Meetup groups didn’t exist then, but there were different networking clubs and REIA groups at that point that I would reach out to. I would also jump on LinkedIn. LinkedIn was relatively new. The biggest thing that I had was Facebook and my email. I had a spreadsheet of people where they were buying and I would market to them. Why did I only do two? It’s because three days a week, Tuesday, Wednesday, Thursdays, I would dial for dollars, at least 50 individual phone calls.

If you call from 10:00 to 12:00 and 2:00 to 5:00, that’s 50 phone calls. That’s roughly ten an hour, one in every six minutes. Sometimes you can crank out 50 phone calls and leave 50 messages in 2 to 3 hours, that’s honking it. That’s a boom. Are they getting transferred? Maybe, so keep that in mind. If I didn’t do that, I would have never found that property there in San Diego that you’re looking at. It’s at 7825 Mansfield Drive. I bought that from Capital One. I marketed it out to my deal list because what did I get when I got into Capital One? They sent me the commercial deals, the commercial note, the commercial paper along with the hard money mezzanine stuff is what’s going to be flooded in the market first because that’s what they need to get moved. It’s not going to be bailed out for the most part by the government, especially smaller commercial properties that’s sub $5 million in value or $5 million in UPB.

What does that mean? Those are great opportunities for most of us to tap into that. There is a lot of times assumable financing on some of these things that you can step in and take over or step in and get it to recast, step in and may have value. What I did back then is I wholesale with double closings. That means I get under contract. I had a signed contract with a bank for 30 to 45 days to close, which is very normal. I went out and market it and found somebody in the close in that 45-day period. I gave them a contract. I duplicated the contract, changed some names and dates around and I ended up closing. They funded with me in my escrow account. I wired to the bank and then I had the bank say, “This is the entity we’re going to be using,” or “Can we change the assignment?” If they wouldn’t change the assignment mortgages, it’s totally fine. We did a thing.

Double closings are what we do to protect ourselves. Nathan asks a question here, “In the past, you’ve mentioned using virtual assistants for a variety of tasks. In your opinion, do you see using VA’s as a viable option? Train property, do you think this is simply too high level needs to be done only by the note investor?” I think your VA’s can do a variety of things especially database, marketing to your social media, creating photos and list. They can do a lot of that. The one thing they’re going to need the most amount of help with, and you could do this is starting dialing for dollars and calling banks. They may be able to do that. In times in the past, that’s more of a phone call you need to be making.

It’s a relationship. It’s knowing what to say, what not to say a lot of times. Unless your VAs are watching and learning from you, you don’t know. When I was getting assets in, my posts included three things when I was getting this list and obviously the numbers of the deal, the estimated values, where did I see the opportunity there? Roughly cap rates. I had the financials from the bank on the commercial deals. That was great if I didn’t. A photo of the property and a video, “Here’s this eight-plex in San Diego.” I would never give the address, but I say, “I’ve got an eight-plex available for sale.” The bank has it. We got our contract for $375,000. I’m willing to flip it for $425,000. It’s worth right now, we have a value of $699,000 on it.

You can find it in 30 days. You’d have it for $50,000 above what the bank has said. We’re going to negotiate that down because, in this market, it’s all about the velocity of capital. Movers and shakers, buyers and sellers. You’ve got to be a deal maker or as somebody says a deal engineer where you’re bringing buyers to the deals and you’re controlling that facet. A lot of the platforms are probably not going to do well because they’re set up. That’s too fast and talking long for people to list it and enlist it. If you don’t have buyers for your assets that don’t have a list, you may be struggling a little bit. You’re still going to have one-off. Investors are buying and selling, stuff like that. That’s fine, but the new stuff that’s coming in, especially the commercial stuff, it’s going to take you marketing and going out and doing some things.

One of the things that I did back in 2010, that’s not around is Postlets. It’s a free website. It listed the address there. It would pull up all the information from the county records. It’s ended up being purchased by Zillow if I remember correctly, or Trello. It’s gone. With the inception of Leadpages or ClickFunnels or even Wix in some cases, I hate to say that name, you can create a relatively easy website to list the properties that you’ve got to cross or the notes that you have under an option agreement or what’s available. The idea is setting things up so when you get stuff in that you can roll it out, who’s buying in this state? Who’s buying in that state? Getting an opportunity to know it.

The social media market is pretty easy to run some marketing across different places. When you can post a picture to Facebook and simply say, “Anybody in this market and anybody in Texas looking for these types of deals?” trust me and you’ll be seeing some of that. There’s a thing I put together. I’ve had a lot of people reach out and wonder if I’m going to do this. I said, “Yeah, let’s do this.” We’re going to do something a little bit different. I’m going to call asset managers. We’re not opening this up just to anybody. If you sign up for Note CAMP or our Virtual Note Buying Workshop for one of those, you’ll get a pass to this.

If you haven’t signed up for that, no problem. If you’re part of the WCM membership, that’s a different thing. You get part of that. If you haven’t, you can sign up for one of those. It’s a $49 ticket to join me for four hours. Why am I charging for this? This is valuable information. You’re going to hear me talking to banks. You’re going to see my email back and forth. You’ll be able to see the conversations with who I’m dialing and when we’re going to make it a charge. We’ve had a lot of people attend these in the past. I did for free and that’s great. They asked a lot of questions, but they never pulled the trigger on doing anything.

I can think of 90% of those that have been on phone calls watch, but they’ve never bought a note and that aggravates the hell out of me. I’m going to do it. I doubt anybody else is going to be calling bank asset managers as I do. I’m going to show you how we do what we do. If you want to join us live, great. You can sign it forward at CallingBanks.com or you can have this as a bonus to Note CAMP or the Virtual Note Buying tickets. For those that don’t know me, for those that are like, “I think I know enough.” That’s fine. You can still join. Am I going to record it? Yes. Am I going to release it immediately? No.

If you go to CallingBanks.com, that’ll get you signed up at $49. We’re going to go through the full four hours of me pulling my list. I’ll share with you what we sent out, how we pulled the list. Some of the things that we’ll be doing prior to are I’ll be sending an email out obviously and following up with another email. Those two lists and those that have opened those emails, those were our biggest open places that we dial. Those big who we dial for dollars first and foremost as I tell you to do this all the time. You can take advantage of that. If you want you to say $49, great, it’s four hours at a time, $12 an hour, trust me. It will be entertaining. You’ll learn.

If you’re on there, you’ll be able to ask questions via the chat roll or come on and ask questions live in between phone calls, but you’ll be able to hear the conversations and who I’m talking and hear me, who I’m asking for, me getting transferred or hung up on or cussed out. Who knows what’s going to happen on these calls? Most of the time it’s usually pretty good and other times it’s pretty bad. If it turns out to be a complete flop, I’ll refund your money back on it. We’re pretty excited about this. I haven’t done this in a while and we’re going to make it worthwhile every time that shows up. Questions, comments, concerns, if you’re signed up for Note CAMP or sign up for the Virtual Note Buying Workshop already, you’ll get a ticket to this.

You want to take advantage of this, sign up for those to get this extra bonus thrown in. Remember if you sign up for the Virtual Workshop in NoteBuyingForDummies.com, you get a ticket to Note CAMP. Why not get an extra bonus thrown in there too as well? What questions do you have? Let’s see if anybody’s asking any questions online. Here’s a question from somebody, am I going to be calling residential departments or commercial? I have contacts for both. I’ll be calling a variety of both over that four hours.

NNA 61 | Note Market Opportunities

Note Market Opportunities: Dialing for dollars is still one of the most valuable things that you can do as a note investor.

 

Have you ever seen me call banks? It’s funny. I’ve done this and shared it. It’s always been a great learning curve. A lot of people have learned a lot from me making the dialing for dollars. We have a question, “Scott when speaking with banks and investors, do you use only can sales, talks, or scripts when making calls like this or is it based on your own experience and evolution as a note investor?” I’ve put scripts in place before. When I started off, I did script it out. It’s part of the thing that we include in the virtual workshop is we include our scripts. “Here’s what you should say, what you shouldn’t say. Here are the emails.” Over time, you do enough scripts, it’s going to roll off your tongue. It comes from an experience like anything else. I do start off the scripts. Depending on who you’re talking to, it can go to a variety of things.

We usually have the FAQs outline pretty easy so that people can identify when somebody asks you a question back, you’re ready to ask them and go forth. If you’re doing this on a part-time basis of calling banks or want to do that, we’d like to say follow up with emails and keep the conversations back and forth that way because then you have the opportunity to do the old crap, what do I do next? What do I say to this before hitting send? We leave that available. I have the scripts in the virtual workshop manual for you to go through. If you’ve watched some of my videos beforehand, you’ll see me making phone calls and you see it’s the same basic script, which works out well if you know who you’re talking to.

Dialing for dollars, not everybody likes doing it. This is one of the things that built our business strong over a decade ago. Stephanie is one of the best people to call banks. In one of the first masterminds I did with 60 people together in San Diego, we were doing masterminds for five days. The first two days we divide everybody up into teams and they had to call banks. They got a point for every asset manager contact they got, name, phone number and email address. Steph totally blew people away with her contact list. Pay attention to what’s going on in your market. Pay attention to employers. Pay attention to what you’re seeing. Start making some lists, checking it twice and find out who’s naughty and nice. You can be Santa Claus and not only get deals sent to you but also delivering some amazing value and creating opportunities out there for you.

It can be a little intimidating and nobody likes to pick up the 1,000-pound phone, but I was very blessed early on in my professional career. I worked for Enterprise Rent-A-Car for 90 days. I worked for Verizon Wireless. It was probably one of the best companies, the best sales trainers I got. You’re on the phone. If you’re not in the office there and they incentivize you bonkers. I made some big commission. I worked so much in Verizon. A year went by after I left and I got a recalibrated over time and I got another $8,000 check that showed up from overtime. I also did sales records with them back in the day.

Dialing for dollars is still one of the most valuable things that you can do and still a very valuable thing to be doing as a note investor, calling them banks and asset managers. Let’s face it, they may not have the answers by next week, but what will they do? “When can I follow up with you next?” or “I’m wanting to get on their radar now and go from there.” Pay attention to what’s going on. Look at what’s going on and there are opportunities all around us. The best thing you can be doing is marketing. Thanks, everybody.

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EP NNA 61 – Domino Investing: The Chain Of Events In The Note Market And Where Opportunities Lie

NNA 61 | Note Market Opportunities

NNA 61 | Note Market Opportunities

 

A lot of changes are taking place across the country. Sparked by the fall of one domino, the COVID-19 pandemic, we see the moving parts in our society slowly toppling one over the other. Where are we now in the chain of events? Where is it going? What will it look like ahead? In this episode, Scott Carson answers these questions, particularly in the note investing space. He discusses where the dominos are falling in the note market and where the opportunities lie. Gearing you up for a more hopeful future, he also shares what you should be doing over the next 30 days to make the most of the second half of 2020. Now is not the time to be a casualty in this chain reaction; create lemonade out of the lemons thrown at you. Scott guides you how in this discussion.

Listen to the podcast here:

Domino Investing: The Chain Of Events In The Note Market And Where Opportunities Lie

A lot of changes are taking place across the country. There are a lot of moving parts in every society between those that are sick and those aren’t sick and the small business and big business and banking. I thought it would be a good idea to come in and share our topic about where I see the dominos falling based on not only where we’re at now and where we’re going to be in the following months. We also can learn a lot by looking back at what I was doing several years ago in 2008, ‘09 and ‘10. Some of the things that you can be putting into place now. Some of the things that you can be doing immediately here in the next 30, 60, 90 days to make sure that your second half of 2020 is probably going to be one of the most productive six months that you will ever see in your real estate career.

There are a lot of great things going on and a lot of bad things going on. We can create a lot of lemonade on a lot of lemons and help a lot of people. We can create a lot of win-wins for everybody. It’s great to have you all here. I encourage you to go to WeCloseNotes.com. It’s our main website for everything out there along with our different podcasts and different trainings we have available. I’ve been bombarding a lot of people who are curious like, “What’s the market doing? We need to learn note investing. What do you have available?”

We had a one-day Note Weekend. It was great. We’ve got two events. The first one is our Note Buying for Dummies. It’s a three-day nuts and bolts training. You can go to NoteBuyingForDummies.com. It will take you straight to our website to check out. If that gives you any issues, please let me know. Our normal price is $699 but we dropped it down to $599. We have our major convention back. It’s Note CAMP 2020 as we call it. This is our mid-year convention with 30 to 40 speakers. We will rock you at that event. You can go to NoteCAMP2020.com. The price is $99 but that goes up to $125. You’ll save yourself $30 or if you sign up for the Virtual Note Buying Workshop, I’ll throw in a free ticket into the Note CAMP. If you signed up for the virtual workshop, you get a ticket to Note CAMP. It’s an extra added bonus for you. I’m excited about it. We do have new things going on. We’ve got some new training that we’ve been working on. It’s a lot of phone calls taking place and a lot of things that we’re working through in assets. Check those out.

Markets That Are Hit The Hardest

Let’s talk about domino investing. This is one thing that I track on a regular basis. Many of you that have been around for a while know that we spend a lot of time tracking data. What assignments and mortgages have been falling? I’m glad I pulled that list, but if you look at the top 5, 6 states that have been hit the hardest or that are going to be hit the hardest, California is at the top 5 or 6. They don’t exactly know where it ranks, but tourism and service industry jobs are going to be hit the hardest. They have been hit the hardest in the number of layoffs and unemployment.

Texas is going to be on sale for a little bit. Service industry, restaurants, transportation, healthcare, money, manufacturing, oil and construction markets have all been hit hard. When you look at Halliburton furloughing 6,500 people, that’s a big thing. They’re laying off, not that much but it’s for a while. A lot of people are hoping the market comes back but when you talk and look at all the economic advisors, when they talk about the fact that we get through this, there may be 3, 4, 5, 6 oil companies remaining. That’s a lot to be worried about because there are a lot of smaller businesses that aren’t going to be around when it comes to that.

In Massachusetts, tourism is a big thing. Although, they didn’t release numbers on what specific sectors have been hit the hardest. They are ranked number three when it comes to the number of layoffs and unemployment that has been filed for. Ohio manufacturing and industrial, automakers there are laying off. GM is laying off a lot of people. Big universities in these areas are laying people off. I don’t know if there could be a rebound. Pennsylvania was a surprise number one in our article on Business Insider. Transportation, hotel, restaurant, administrative and healthcare industry is being hit hard there in Pennsylvania. I was surprised not to see Florida because I’ve seen this listed.

When you think that the number one company out there that’s laid off and furloughed the most number of employees are located in Florida or California, you’ve got to add Florida to that list as well too. With tourism, hotels, restaurant service industry, that’s six states. We have seen a lot of stuff in Texas over the last decade, not really. In California, that means it’s not really. Ohio, Pennsylvania and Florida, yeah. Other states, cities and industries would be hit harder, don’t get me wrong. Airfare, I saw someone at Boeing was laying off or furloughing 3,500 employees as well too in Colorado. This is high-level. This is not meant to be the be-all list of the states that are hit the hardest. We all know every state is taking it right now in the shorts and getting kicked in the knees and the teeth.

Pay attention to what’s going on in your market. Pay attention to what’s being stated out there and who’s laying who off. Is it a great thing that some of the states are opening up? Yes. Will I be excited to go to a movie theater? Yes, I will be excited to go on to the movie theaters. What I’m trying to get at is to start looking at how the dominos are stacking up where and who is laying off. What I did is I also jumped online and found the top twenty largest companies that have laid off across the country. Disney being number one with over 100,000 layoffs.

Next are TJ Maxx companies, Macy’s, Marriott, Kohl’s, Gap and Tesla laid off half their staff. L Brands, which owns Victoria’s Secret and Bed, Bath & Beyond. I understand why those stores are always next to each other in the malls. They’re owned by the same parent company. Caesars Entertainment out of Vegas is laying a huge number of its employees. Best Buy, JCPenney, Cheesecake Factory, Landry’s, DICK’s Sporting Goods, Ascena, which is the company that owns Lane Bryant and Ann Taylor. CarMax laid off over half of the staff and Tenet Healthcare, which is out of Texas here. Under Armour out of Maryland laid off 6,500 employees. General Motors laid off a big chunk of employees. Quest Diagnostics laid off a big chunk of their employees.

What you have to realize is if you look at these, what calls out to you? Old-fashioned, big-box retail and your larger restaurant chains and some of those. You throw in Caesars in there as being tourism. With the Marriott in there and stuff like that too. Also, healthcare. CarMax doesn’t surprise me, especially with all the bigger companies offering up 0% financing for 84 months. Although, I’m surprised to see GM on there. It’s a variety of things. These are the top twenty companies based on an article that I pulled that shared the stuff. Disney’s California and Florida. Florida is more than California. A lot of these are companies that are all across the country in a variety of things. Are we talking huge amounts in any one specific area? Probably not.

Caesars is in Las Vegas and a couple of other places but for the most part, it’s going to be the retail stuff. Some of this is the stuff that we already knew that were issues. The thing that pops out to me, CarMax is a surprise. We’ve talked about how a lot of selling used cars and auto debt financing being in trouble for the last couple of years. That’s the biggest true kind of used car salesman company across the country besides your bigger chains for local companies. CarMax being the biggest one has done that. Can you pick up some debt probably on some auto loans pretty cheap? I know you can. It’s been in the crapper for a while now.

Opportunities In The Dominos Falling

The things you have to look at is if you’re in a market that has these, this is what you’re seeing. I’m less than a mile probably from 70% of these except for Under Armour, General Motors, Landry’s, Cheesecake, JCPenney, Best Buy, Caesars. I’m less than a mile from the majority of these companies except Disney. There are people being laid off. Most of us are. The thing is, what can you do? How can you help? What are the opportunities here as the domino is continuing to fall? These people are being laid off. They’re trying to file for unemployment. They’re looking for jobs but what happens when you’ve got a flooded job market? You still have a huge number of people looking for work that can’t afford things.

Let’s talk about what it means for us. It means for us is when you look at these, think about the majority of people working at these corporations and these companies. A large percentage of them are minimum wage positions, making less than $20 an hour. If you look at some of the biggest cities or the states and compare that with what it means to try to live in those areas, Orlando, you’ve got to make at least $20 an hour combined to survive there, to be right above the poverty line. We all know that’s different for areas like California. You’ve got to make a whole lot more to be above that poverty line. There are a lot of unskilled workers that are going to be struggling.

That means they’re renters. What are they doing? They’re not owning. They’re renting. They are struggling. They’re renting apartment complexes or houses with friends has been a big trend. For those that were working beforehand, they are a first-time home buyer trying to buy something there if they had good credit. I have seen email after email from some of the companies that we follow and are opted into their loan pricing matrix. They’re telling me, “We went from zero reserves required to requiring 6, 12 and 18 months of payments in reserve for our new home buyers.” It’s craziness.

The thing is to start looking at your markets that you’re investing in, where you’re living and look at what’s that price point? The median home price here in Austin is $300,000 roughly. That doesn’t make a good sense. You’ve got to look back and drop it down to there. Where is it below $200,000? Where is it below $150,000? In some markets in Ohio, $150,000 is still a big-sized house. In other areas, that’s the dog house in San Diego. Looking at those places where people are renting or first-time homebuyers especially around the colleges and duplex row. Does anybody have those in your areas? I know we’ve got several spots here in Austin where it’s the whole street on both sides of the duplex.

When I went to school in San Marcos, Texas, which is in Hays County, which was supposed to be one of the top 25 counties growing across the country, now with kids out of school and college towns being ghost towns for the most part with other industries, those are going to be your ground zero for the default game for those dominoes that are starting to fall. It would be an opportunity for you. It’s going to take a little while to get through it, especially depending on the foreclosure timeframes and what the states end up doing and opening that up for evictions or foreclosures. We’re still 60 days out before we have a true picture on that, but we’re to start seeing trends happening.

 NNA 61 | Note Market Opportunities

Note Market Opportunities: Talk about what you’re looking for. Put it out there, and the law of attraction will bring it to you.

 

Talking about rentals, apartment owners that have stuff, they’re going to be struggling. Out of state property owners that are renting or own houses in an area, whether it’s a long-term rental or a short-term rental, they’re going to be ones that are hurting, especially if they’re out of state. They may not be able to go over there. They may try and require on property management to take place of that and that’s a difficult thing. The thing to also keep in mind though, this is swaying that pendulum back, “Scott, quit being so negative. What are the opportunities for us?”

There are more property, but with all these people being laid off in other industries as well, it does mean that people, if they’ve been putting money away into a 401(k), a retirement account, they’ll have something they need to do with that money. They can roll it to a self-directed IRA, start educating people what they can do with that money. Some of them will probably need to cash out or dive into it. Some people need to stay there, but there are opportunities for people to pull money out of their 401(k) to invest if they’re not leaving the job if they’re furloughed for a period of time. Keep that in mind.

Where are we going to see a lot of big deals? We’re going to see a lot of the property in your retail, big box stores, hotels, motels, smaller strip malls, office space and self-storage facilities. Why do I say self-storage facilities? In a case where people can’t make their rent payment, think about this, people moved into apartments years back because they couldn’t afford traditional housing. We’ve seen it. When people are laid off and can’t afford their rent, they’re not going to pay their car payment and they’re not going to pay their self-storage payment.

What does that mean? Self-storage facilities are going to start to see a dip in occupancies. They’ll see an increase in foreclosures. You’ll see a lot of mom-and-pop companies that probably aren’t set up properly to take care of that. They don’t have enough reserves. They may not have the business savvy. They may be ready to walk away from a problem and cash out. It could lead to some great opportunities for investors like you and me. Opportunities that come in and take over some notes where the banks may be willing to carry it or be willing to recast the loan, especially self-storage, some smaller office space. Maybe it’s smaller strip malls. I was talking to an investor in Dallas and he was talking about how over 50% of the malls in Dallas will close.

When you look at Neiman Marcus filing bankruptcy and some of these other retailers, the days of the malls are gone unless they can do something with either reaching out to smaller mom-and-pops. They may not have that or converting that space to executive office suites, other types of retail and bank. Turning some of these into self-storage facilities would be a great place to do climate control. Who wouldn’t want that? There’s some opportunity there to recast that stuff to make some good stuff work.

Hard money lenders are already starting to call, already starting to email me, looking to move stuff off their notes, stuff that was supposed to be refinanced or cashed out 6 months ago, 3 months ago or 1 year ago. I’ve gotten several large lists that have been working through. I worked on it a little bit. I looked at it. I’ll be working on a lot of it. People are already trying to move that paper, their assets, especially in the hard money side because they realized there’s this whole wave coming of values dropping. If they’re not on the market and sold or fixed up, they’re not going to get what they’re into it for.

Subprime lenders, your first-time home buyers, people who have gotten into a house with $500,000 down. I don’t know if I mentioned this, Bank of America was doing 100% financing on Fannie Mae. What do I mean by 100% financing? They’re donating the down payment and putting $7,500 towards closing costs. I guarantee you that the program is gone. When you look at the numbers that they’re talking up, and then also from the other side, from Chase and Citibank talking about what they’re seeing and predicting, “We’ve got another big recession and tidal wave hitting us and you’ve got to be prepared to create scenarios.”

That doesn’t mean you come in and evict everybody. Maybe you come in and you work with the borrowers, maybe you work with the tenants and you’re taking over the note. Let’s modify it. Let’s keep everybody to play a little bit. What programs are working out there? You’re getting your $1,200, get out of jail card or maybe not. I hadn’t cracked it, but I was watching TV and I started seeing foreclosure bailout commercials. I haven’t seen those in Austin forever. They’re already starting to crank them up. You are seeing those in other places. Is the bank trying to kick you out of your house?

Investors Doing Marketing

They started popping up local channels here in Austin. It’s history repeating itself. Let’s talk about what you should be doing and what should we be doing as investors? What should we be doing? It’s marketing. I know you probably hate it when I say that, but marketing means yes, it’s exactly that. You’ve got to be building the foundation, laying out the things, building the connections now, especially for the next 30 and 60 days. In the last 30 days, you could have gotten away with binge-watching every series on HBO. From the Sopranos to Game of Thrones to Big Love, whatever you want to watch on there.

You could spend a whole month of April sitting on your butt live streaming and it totally would have been fine. Now, you’ve got to get off your keister, go back to work and start marketing to take advantage of some of the things so that you don’t sit here in six months, “I should have done this. I should’ve listened to Scott back months ago.” People are calling me up, “Scott, you called this.” I’m like, “I didn’t call anything. You can look at the writing on the wall and see things going on.” If you’re struggling to figure out what you should be doing, here are the basic things. Marketing your present or previous deal case studies. What do I mean by that?

That means pulling up and doing a short video, creating a short infographic image and deals you’ve done. You need to be putting those assets in place. In a town, drive out in front of the house and stand in front of it and do a short video. Take your camera, go out and drive. “This is Scott Carson. I’m standing in front of 1718 Palo Pinto Parkway here in Round Rock, Texas. This was a note deal we bought several years ago. The borrower owed this much, $125,000, we got the note for less than $100,000. We were able to do Cash for Keys with the borrower and then turn around and sell it for roughly $120,000. We didn’t make a ton of money, but we did make roughly about $10,000 to $15,000 on the deal. It took us roughly 90 days to do. “Those are some things you could be doing. It’s not difficult and I’m not talking about just note deals.

Get in front of your fix and flips. Get in front of your wholesale deals. Get out there and rejuvenate those assets. I was looking at some of my oldest videos and I’m like, “I’ve got better camera equipment now. I should drive up there and spend the day driving around something assets around here,” and that’s exactly what I’m planning to do. Here’s another thing. Take a look at your database and start identifying the investors in different states and their top three states. You will see an email coming out from me to my database. If you’re in my database, what are your top three states that you’re buying here?

What are your top three states so that when we start seeing stuff, I can start sending you stuff? Talk about not just the assets that you’re doing, but maybe the assets you’re looking for and the assets that you’re investing in. Who wouldn’t want to post, “I’m looking for self-storage. I’m looking for distressed retail. I’m looking for distressed office space?” There’s a whole thing that you should be doing. Talk about what you’re looking for. Put it out there. In karma, quantum physics, the Law of Attraction, put it out there what you’re trying to attract. You’ll never know who will call you or maybe it’s some New York hedge fund calling you because you’re the only person that’s posted about a deal in this particular area or ZIP Code or a particular type of asset class because you popped up.

The stuff that we’re talking about is free. We’re not talking about going out and dropping 50,000 postcards, which would be a waste of time. We’re talking about marketing like it’s the 21st century. It is the 21st century, everybody. Scotty is here to beam you up. He’s giving all he’s got to help you. If you know your investor’s database, the top three states that they’re investing in, that is worth millions to you when you start getting these lists from the market. You get a list in, “I like this state. I like that state. There are 50 deals on here in different states that will buy-in. Who’s on my list? Who can I call to see if they’re interested in it?”

As I said before, start reaching out to banks. You’re going to see something from me that you will enjoy. People are going back to work. We’re going to start doing some things, dialing for dollars, but posting deals of what you have done, previous deals, start doing that. We are already starting to do that as we get lists in, I’m starting to pull up, “Here’s a good-looking asset.” It’s an asset that I made an offer on in Sugarland, Texas. Is it a performing note? I was told no. They’d like my bid at $0.80 on the dollar of UPB for their market and I’m like, “That’s fine. I’ll follow back up with them next month.”

By posting this, I had twenty people reach out, “I want to know more about this Sugarland, Texas deal.” You have to wait. The simple things, start building your list. States are starting to reopen. It’s maybe a good thing, maybe a bad thing. I don’t have the answer to that. You have to be prepared. Now’s the time to be doing this and we’re not talking to spend 40 hours a day doing this. We’re talking, you can do most of the stuff in 3 to 5 hours a day. If you’re sitting at home, you can do this. If you have kids or family and stuff like that, I get that, but you can start doing little short videos.

NNA 61 | Note Market Opportunities

Note Market Opportunities: Be a deal maker or a deal engineer, where you’re bringing buyers to the deals, and you’re controlling that facet.

 

I don’t care if you’re sitting on your patio or in your front yard or in your truck somewhere where it’s quiet, where you’ve got to take a fifteen-minute time out away from your family. Make it useful. Also, start marketing IRA investors now. Start pulling the list of people that have bought the property with their IRA, who have lent money with their IRA and start sending out letters to them. Start reaching out to them in some fashion. Googling them, seeing if they’re on Facebook or on LinkedIn. If you’re buying an IRA list, now is a great time to buy it.

Start buying in lists and company. People at companies that have been laid off or companies that are doing layoffs. It’s the best way to start marketing them, not IRA investors, but the people that are pulling the trigger with investors or doing stuff. Add them to your list too. Sharing your deals like that photo is on Facebook, LinkedIn and sending an email blast out. Sharing on a regular basis, getting people paying attention to what you’re doing so that when deals start flowing in, you’ve built these assets. I was looking at some of my mastermind students’ profiles and I was amazed because they’re supposedly working on deals and I see zero deal flow from them. I don’t see anything about the twelve deals they are trying to buy or 100 assets they just closed on.

I’m like, “What are they thinking?” Start marketing. I know they’re at home. I know they’re not doing anything and others have been furloughed or they still at least got a few hours a night. Marketing will save your butt in a variety of ways. Please start marketing now. You will feel a whole lot better doing this and starting to see traction. You’ll start seeing immediate traction from this stuff as long as you stick with it. I think back to what I did from 2008 to 2010. What did I do? I did exactly what I told you. Start reaching out to banks. They started getting a list sent to me. I looked at the list and identified assets on this list that I liked, but I want to take down myself. I started marketing the other people that I knew in other parts of the country.

My big thing back several years ago is we focused on two deals per day. One in the morning and one in the afternoon, one before lunch, one before 4:00. I shared those on my social channels. I would find the largest Meetup groups. Most Meetup groups didn’t exist then, but there were different networking clubs and REIA groups at that point that I would reach out to. I would also jump on LinkedIn. LinkedIn was relatively new. The biggest thing that I had was Facebook and my email. I had a spreadsheet of people where they were buying and I would market to them. Why did I only do two? It’s because three days a week, Tuesday, Wednesday, Thursdays, I would dial for dollars, at least 50 individual phone calls.

If you call from 10:00 to 12:00 and 2:00 to 5:00, that’s 50 phone calls. That’s roughly ten an hour, one in every six minutes. Sometimes you can crank out 50 phone calls and leave 50 messages in 2 to 3 hours, that’s honking it. That’s a boom. Are they getting transferred? Maybe, so keep that in mind. If I didn’t do that, I would have never found that property there in San Diego that you’re looking at. It’s at 7825 Mansfield Drive. I bought that from Capital One. I marketed it out to my deal list because what did I get when I got into Capital One? They sent me the commercial deals, the commercial note, the commercial paper along with the hard money mezzanine stuff is what’s going to be flooded in the market first because that’s what they need to get moved. It’s not going to be bailed out for the most part by the government, especially smaller commercial properties that’s sub $5 million in value or $5 million in UPB.

What does that mean? Those are great opportunities for most of us to tap into that. There is a lot of times assumable financing on some of these things that you can step in and take over or step in and get it to recast, step in and may have value. What I did back then is I wholesale with double closings. That means I get under contract. I had a signed contract with a bank for 30 to 45 days to close, which is very normal. I went out and market it and found somebody in the close in that 45-day period. I gave them a contract. I duplicated the contract, changed some names and dates around and I ended up closing. They funded with me in my escrow account. I wired to the bank and then I had the bank say, “This is the entity we’re going to be using,” or “Can we change the assignment?” If they wouldn’t change the assignment mortgages, it’s totally fine. We did a thing.

Double closings are what we do to protect ourselves. Nathan asks a question here, “In the past, you’ve mentioned using virtual assistants for a variety of tasks. In your opinion, do you see using VA’s as a viable option? Train property, do you think this is simply too high level needs to be done only by the note investor?” I think your VA’s can do a variety of things especially database, marketing to your social media, creating photos and list. They can do a lot of that. The one thing they’re going to need the most amount of help with, and you could do this is starting dialing for dollars and calling banks. They may be able to do that. In times in the past, that’s more of a phone call you need to be making.

It’s a relationship. It’s knowing what to say, what not to say a lot of times. Unless your VAs are watching and learning from you, you don’t know. When I was getting assets in, my posts included three things when I was getting this list and obviously the numbers of the deal, the estimated values, where did I see the opportunity there? Roughly cap rates. I had the financials from the bank on the commercial deals. That was great if I didn’t. A photo of the property and a video, “Here’s this eight-plex in San Diego.” I would never give the address, but I say, “I’ve got an eight-plex available for sale.” The bank has it. We got our contract for $375,000. I’m willing to flip it for $425,000. It’s worth right now, we have a value of $699,000 on it.

You can find it in 30 days. You’d have it for $50,000 above what the bank has said. We’re going to negotiate that down because, in this market, it’s all about the velocity of capital. Movers and shakers, buyers and sellers. You’ve got to be a deal maker or as somebody says a deal engineer where you’re bringing buyers to the deals and you’re controlling that facet. A lot of the platforms are probably not going to do well because they’re set up. That’s too fast and talking long for people to list it and enlist it. If you don’t have buyers for your assets that don’t have a list, you may be struggling a little bit. You’re still going to have one-off. Investors are buying and selling, stuff like that. That’s fine, but the new stuff that’s coming in, especially the commercial stuff, it’s going to take you marketing and going out and doing some things.

One of the things that I did back in 2010, that’s not around is Postlets. It’s a free website. It listed the address there. It would pull up all the information from the county records. It’s ended up being purchased by Zillow if I remember correctly, or Trello. It’s gone. With the inception of Leadpages or ClickFunnels or even Wix in some cases, I hate to say that name, you can create a relatively easy website to list the properties that you’ve got to cross or the notes that you have under an option agreement or what’s available. The idea is setting things up so when you get stuff in that you can roll it out, who’s buying in this state? Who’s buying in that state? Getting an opportunity to know it.

The social media market is pretty easy to run some marketing across different places. When you can post a picture to Facebook and simply say, “Anybody in this market and anybody in Texas looking for these types of deals?” trust me and you’ll be seeing some of that. There’s a thing I put together. I’ve had a lot of people reach out and wonder if I’m going to do this. I said, “Yeah, let’s do this.” We’re going to do something a little bit different. I’m going to call asset managers. We’re not opening this up just to anybody. If you sign up for Note CAMP or our Virtual Note Buying Workshop for one of those, you’ll get a pass to this.

If you haven’t signed up for that, no problem. If you’re part of the WCM membership, that’s a different thing. You get part of that. If you haven’t, you can sign up for one of those. It’s a $49 ticket to join me for four hours. Why am I charging for this? This is valuable information. You’re going to hear me talking to banks. You’re going to see my email back and forth. You’ll be able to see the conversations with who I’m dialing and when we’re going to make it a charge. We’ve had a lot of people attend these in the past. I did for free and that’s great. They asked a lot of questions, but they never pulled the trigger on doing anything.

I can think of 90% of those that have been on phone calls watch, but they’ve never bought a note and that aggravates the hell out of me. I’m going to do it. I doubt anybody else is going to be calling bank asset managers as I do. I’m going to show you how we do what we do. If you want to join us live, great. You can sign it forward at CallingBanks.com or you can have this as a bonus to Note CAMP or the Virtual Note Buying tickets. For those that don’t know me, for those that are like, “I think I know enough.” That’s fine. You can still join. Am I going to record it? Yes. Am I going to release it immediately? No.

If you go to CallingBanks.com, that’ll get you signed up at $49. We’re going to go through the full four hours of me pulling my list. I’ll share with you what we sent out, how we pulled the list. Some of the things that we’ll be doing prior to are I’ll be sending an email out obviously and following up with another email. Those two lists and those that have opened those emails, those were our biggest open places that we dial. Those big who we dial for dollars first and foremost as I tell you to do this all the time. You can take advantage of that. If you want you to say $49, great, it’s four hours at a time, $12 an hour, trust me. It will be entertaining. You’ll learn.

If you’re on there, you’ll be able to ask questions via the chat roll or come on and ask questions live in between phone calls, but you’ll be able to hear the conversations and who I’m talking and hear me, who I’m asking for, me getting transferred or hung up on or cussed out. Who knows what’s going to happen on these calls? Most of the time it’s usually pretty good and other times it’s pretty bad. If it turns out to be a complete flop, I’ll refund your money back on it. We’re pretty excited about this. I haven’t done this in a while and we’re going to make it worthwhile every time that shows up. Questions, comments, concerns, if you’re signed up for Note CAMP or sign up for the Virtual Note Buying Workshop already, you’ll get a ticket to this.

You want to take advantage of this, sign up for those to get this extra bonus thrown in. Remember if you sign up for the Virtual Workshop in NoteBuyingForDummies.com, you get a ticket to Note CAMP. Why not get an extra bonus thrown in there too as well? What questions do you have? Let’s see if anybody’s asking any questions online. Here’s a question from somebody, am I going to be calling residential departments or commercial? I have contacts for both. I’ll be calling a variety of both over that four hours.

NNA 61 | Note Market Opportunities

Note Market Opportunities: Dialing for dollars is still one of the most valuable things that you can do as a note investor.

 

Have you ever seen me call banks? It’s funny. I’ve done this and shared it. It’s always been a great learning curve. A lot of people have learned a lot from me making the dialing for dollars. We have a question, “Scott when speaking with banks and investors, do you use only can sales, talks, or scripts when making calls like this or is it based on your own experience and evolution as a note investor?” I’ve put scripts in place before. When I started off, I did script it out. It’s part of the thing that we include in the virtual workshop is we include our scripts. “Here’s what you should say, what you shouldn’t say. Here are the emails.” Over time, you do enough scripts, it’s going to roll off your tongue. It comes from an experience like anything else. I do start off the scripts. Depending on who you’re talking to, it can go to a variety of things.

We usually have the FAQs outline pretty easy so that people can identify when somebody asks you a question back, you’re ready to ask them and go forth. If you’re doing this on a part-time basis of calling banks or want to do that, we’d like to say follow up with emails and keep the conversations back and forth that way because then you have the opportunity to do the old crap, what do I do next? What do I say to this before hitting send? We leave that available. I have the scripts in the virtual workshop manual for you to go through. If you’ve watched some of my videos beforehand, you’ll see me making phone calls and you see it’s the same basic script, which works out well if you know who you’re talking to.

Dialing for dollars, not everybody likes doing it. This is one of the things that built our business strong over a decade ago. Stephanie is one of the best people to call banks. In one of the first masterminds I did with 60 people together in San Diego, we were doing masterminds for five days. The first two days we divide everybody up into teams and they had to call banks. They got a point for every asset manager contact they got, name, phone number and email address. Steph totally blew people away with her contact list. Pay attention to what’s going on in your market. Pay attention to employers. Pay attention to what you’re seeing. Start making some lists, checking it twice and find out who’s naughty and nice. You can be Santa Claus and not only get deals sent to you but also delivering some amazing value and creating opportunities out there for you.

It can be a little intimidating and nobody likes to pick up the 1,000-pound phone, but I was very blessed early on in my professional career. I worked for Enterprise Rent-A-Car for 90 days. I worked for Verizon Wireless. It was probably one of the best companies, the best sales trainers I got. You’re on the phone. If you’re not in the office there and they incentivize you bonkers. I made some big commission. I worked so much in Verizon. A year went by after I left and I got a recalibrated over time and I got another $8,000 check that showed up from overtime. I also did sales records with them back in the day.

Dialing for dollars is still one of the most valuable things that you can do and still a very valuable thing to be doing as a note investor, calling them banks and asset managers. Let’s face it, they may not have the answers by next week, but what will they do? “When can I follow up with you next?” or “I’m wanting to get on their radar now and go from there.” Pay attention to what’s going on. Look at what’s going on and there are opportunities all around us. The best thing you can be doing is marketing. Thanks, everybody.

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