EP NNA 85 – Understanding The 3-Step Strategy When Investing In Wholesale Notes With Scott Carson

NNA 85 | Wholesale Notes

NNA 85 | Wholesale Notes

 

What do you need to know about note investing for 2021? Scott Carson shares his insights and some very important things everyone needs to know about wholesaling notes in the current market. He highlights the importance of following his three-step approach which he believes is the key to a successful investment. Scott says that while having a network and a list of deals should be prioritized, protecting your relationships with sellers and buyers is the main factor one needs to take note of. Learn the trick of the trade when it comes to wholesaling notes and be well on your way to a happy investment!

To schedule a time to talk with Scott about his coaching, you can schedule a time on his schedule at http://talkwithscottcarson.com

Listen to the podcast here:

Understanding The 3-Step Strategy When Investing In Wholesale Notes With Scott Carson

I’m glad to have you all join us here. We’re talking about a topic and a strategy for making money. That’s one of the easiest strategies to do to get started, but there are some moving parts. If you’re brand new in note investing and you don’t have capital and things, wholesaling notes is one of the easiest things that you can do to start creating income, especially when you start getting some lists in. If you’re getting tapes in or looking at deals in other places, you can make some good money being the matchmaker between the real investor and the seller and put yourself in the middle if you know what you’re doing. What is wholesale? Wholesale is selling a vested interest. I like having it under contract in a property or a note to another investor for a flat fee percentage.

A lot of wholesalers don’t put things in their contract. They flip the paper and they take a wholesaling fee or they take a bird dog fee. That’s okay. You could do that too. I just think the less you have committed to it, the less money you’re going to make. I like taking the time to have a property under contract. At least having something where you’re making some offers on a bunch of assets and working to get that price down but at the same time, working to market the assets for sale. Not knowing the value of that asset is one of the most important things that you can do to make sure that you’re rocking and rolling. It’s one of the most important things you can do.

Knowing the value of that asset, doing the due diligence, doing some number work on it, values, what it’s worth and what’s the expected ROI. Knowing the value of that asset like you were going to buy that note yourself will make you a much more valuable wholesaler. Wholesalers get a bad rap a lot of times because they throw stuff against the wall like, “Every property needs $5,000 to work.” I got a text message where somebody is trying to wholesale a piece of property. I’m like, “I’m not interested in that area.” He didn’t even have my name right. Knowing the value of that asset is important. Knowing the profit potential is even more important.

Through doing some due diligence on the deal, knowing that there’s enough meat on the bone and leaving enough meat on the bone for your end buyers. That’s the most important thing. You got to leave enough meat that makes sense for your end buyer. If you’re trying to take the lion’s share as a wholesaler, then you’re giving them a hard time wholesaling. Here’s the philosophy of wholesale. Getting 100% of something or any part of something is a whole lot better than getting 100% of nothing.

Let’s talk about a couple of sample wholesale deals that we’ve put together. We’ll walk through a couple of things. Here’s one. I liked South Florida. This goes back. This is one of the first wholesale. I did this deal live from a class a few years back. It was worth $70,000. We get under contract for $35,000. I found it off of a bandit sign. I flew in to Orlando Airport. I was on my way to the hotel for a couple of days before an event. I saw a bandit sign. I picked up the phone and called it. We put this 1 plus 2 under contract. The actual owner was an out-of-state owner dealing with a probate deal. The person who owned the house didn’t want to do it because their parents had passed.

We marketed the deal to Meetup groups in the local area. It was totally off-market. It wasn’t listed with a realtor yet. We listed it for $45,000, which is not too bad. We’re finalizing it for $40,000 to an investor who came in who wants to keep his real property. He was willing to pay a little bit more than others would. He figures that most of the time that $0.70 on the dollar at $70,000 value comes in about $49,000. With $40,000, that’s pretty good too for him. He’s got $30,000 of profit. That’s below there. It gives him a little bit of room to clean up on it. It’s $5,000 in four days. I think I was the biggest winner because my return on investment was infinite. He funded at 24 hours from the time that he saw it. It was a pretty slam dunk deal. Who doesn’t want to do at least one $5,000 deal a week? That would be awesome.

A $5,000 profit in five days from start to close. It started on a Monday and closed on a Friday. We closed the deal in front of two students there. I would love that. The important thing here is we saw numbers. The numbers seemed like they made sense. I didn’t have a big list for Orlando. I jumped on the different Meetup groups of real estate clubs there and marketed to their groups Meetup and Facebook groups. We found somebody who’s willing to do it and hungry. It all starts with having a deal. It also starts with having a list. There are plenty of lists out there. What I mean by lists are groups that you can network with.

Every one of you could do something like this. If you find a deal, you can jump on about every website, every group and do it remotely. You don’t have to be in that backyard to do it. I just have happened to be there. It’s another wholesale case study. This came from a friend of mine who knew I like Florida. This was in Lehigh Acres, Florida. It had a $90,000 fair market value. This was a nonperforming note. They owed $120,000. The seller had it at $45,000 from RSI Finance. The seller is my buddy. He had it under contract for $45,000 from RSI. He knew I liked Lehigh Acres. My buddy was Robby Woods immediately called me up. He’s like, “Scott, I saw this deal. I put it under contract from RSI. I know you like it. I want $5,000 for it.” I’m like, “Sure. It makes sense.”

He offered me $50,000, $5,000 is for him. It was a good deal for me still at $50,000. It took about another three months to foreclose but I still made a chunk of money on this one. I wired $5,000 to Robby. At the same time, I wired $45,000 to RSI. We had a one-page fee agreement. He had it under contract. We transferred the contract to me. Once he got the $5,000, he said to RSI, “I’m transferring the contract to Scott Carson,” and we were good to go. It was a pretty easy transaction. I came out ahead on this deal because it was a pretty slam dunk deal. It was in great condition. We sold it roughly in 30 days. We sold it at a foreclosure auction.

I ended up making $30,000, $35,000 on a deal and Robby made $5,000 for putting a deal. Once again, it was about a one-week deal for him. We sold it in 120 days for $85,000. I’m in about $35,000 on the deal. It’s not a bad day and a couple of months there going through the foreclosure and getting the contract. Robby found a deal. He knew somebody was interested and that the numbers made sense. He reached out to me. I was glad that he made $5,000. He was glad that I made money. Bill Bymel didn’t care because he already sold it at $45,000. I was glad to let it go at $45,000 at the time.

Here’s my three-step approach to doing things. It’s not difficult. It’s pretty freaking simple. You have to put this together on a regular basis. One is you’ve got to build your list of buyers. If you got a deal, it’s great. If you have no buyers for it, that’s also difficult. In this world with social media, Facebook, Twitter, Meetup groups, LinkedIn groups and all of the different things out there, it’s pretty easy to build a list of buyers. It’s either existing people you have in your database that you can reach out to or create new ones. It’s not hard to do. The second thing and this is the most important thing. It starts with this. It’s getting a list of deals. Getting a list of deals on their websites that you can take a look at, know the assets, get it under contract and then move it. Protect your relationship with the sellers. That’s one of the most important things.

A lot of people screw up because they give information. They don’t secure the property under contract or an option agreement of some sort. The buyer can end up going around you. We secure with either a wholesale fee agreement or do a double closing. It’s not hard. Step one. Let’s talk about building your buyers list. You use a CRM like MailChimp or AWeber, some sort of CRM, Customer Relationship Management software or email service provider. If you’re emailing out to your database, ask them what they’re looking for. What do you want? Are you looking for notes, REOs, performing or nonperforming? What type of returns or profit amount are you looking for? If you’re using your own money, are you looking for an 8% return, 10% or I want 15%?

NNA 85 | Wholesale Notes

Wholesale Notes: Wholesaling notes is one of the easiest things to do to start creating income, especially when you start getting some lists in.

 

Are they okay? Do they buy in one or in bulk? Are they okay with a double-close? What are they looking for? The nice thing is you can do this building list. It is pretty easy to survey your audience or the customer list. You can do this in MailChimp where you can set it up like a list opt-ins or using SurveyMonkey. It’s not hard to create a list and identify what you’re doing it for, target groups, events, Meetup and REIs in the area of your deal flow. If you’ve seen a lot of stuff in Columbus, Ohio and you’re in Austin, Texas, you would go spend time looking at Columbus, Ohio at their Meetup groups and REIA clubs, even other wholesalers.

Look at the social media groups out of Columbus or Toledo, Ohio. I signed a contract on a note in Toledo that I posted to Toledo and Dayton Group in Ohio. They sent an email blast out. I simply found a buyer for this deal. It’s not going to be a bad day. It’s $10,000 on a deal. I don’t want to take it down. I don’t want to do rehabs. This guy’s a local rehabber in the area and part of a couple of REIA clubs. It’s a win-win. Step two is to get the list of deals. There are many ways. If you’re going through our 20-Day Note Investing Challenge and you went through the first five days. There are a lot of ways to find deals.

You can jump on one of the many different websites that’s been sitting out there. Those are probably the easiest ways to get started. Find something that makes sense. Make an offer and see if you can negotiate and put it under contract. Talk to other wholesalers. If you see people marketing deals, what do you have in this area? What do you have for this? I’ve used wholesalers not only to move my own stuff but I have also use wholesaler deals to make some money and cut myself in the middle. That’s the thing. Part one, if you send it out to your database and they tell you what you’re looking for, you could go shopping. Wholesalers end up making the least amount of a deal. You’re not buying anything. You’re pushing paper and there’s nothing wrong with that.

We do this stuff all the time but don’t let it be the only way that you’re making money. Starting off with it helps you get your feet wet until you build some capital up. It totally makes sense. If you’ve got a list of people and they tell you, “I’m looking for stuff in Ohio, Michigan or Florida,” start looking in those areas for those deals. Start by asking, “Do you have any deals in Florida?” If you’re talking to mortgage bankers in the area, servicing companies or if you have anything in Ohio, South Carolina. I don’t even say California because everybody overpays in California. If you see something that makes sense, it can make sense.

The most important is when you do get a list, then do some due diligence on it. What’s it worth? I’m not talking about go out and pay for a BPO and O&E but spend some time. Look at the value of it. Where’s the legal side of it? Is it the foreclosing? What are the rental rates? What’s the neighborhood look like? What are the profit options? Is it going to make sense for me to get this reperforming? Is it going to foreclosure? What’s the yin and yang? What are the possible exit strategies for somebody to make money, especially with what I want to make? If somebody wants this at $45,000 and I want to make $5,000, is $50,000 still a good deal to somebody or is it better to be at $47,500? Get it under contract. Don’t be afraid to put a note or a property in a contract or an option agreement in some cases. The more you have a below 60% of fair market value, the better.

Somebody might say, “60%, I’ll do it myself.” It’s great. Go do that but we’re talking about notes. It may be contracts for deeds, lease options or REOs. Somebody sent me a list of REOs that were all $0.90 on the dollar. You can’t make any money at $0.90 or $0.85 on the dollar. It doesn’t make any sense. If you’re an end buyer buying for your own property, that might make sense but as an investor, that doesn’t make a lot of sense. Don’t get greedy. Leave plenty of profit for your buyer, 65%, 70% cap at the peak if it’s a good-looking asset. You might go to 75% or 80% in California. For the most part, you want it to be down. Otherwise, it’s too expensive.

There was a student I was working with. He was trying to wholesale a note. He wanted $8,000. He took it from $0.60 to $0.66, $0.67 on the dollar. People come in and were like, “$0.65.” He wouldn’t budge from it. I’m like, “Why are you not budging from this?” “It’s because this is what I want.” It doesn’t matter what you want. It’s what the market will pay. If you had three people that told you that they would pay $0.65 for it and still put some money in your pocket, now you’re not going to sell it all because everybody thinks it’s overpriced. If you have to go back to these people, they’re going to cut you down on the price a little bit more. Don’t be too greedy.

Also, have a next mentality. If somebody keeps jerking me around, they won’t close or they won’t follow up with the proof of funds, then go onto the next one. Don’t wait around for people. This is a hard thing for most new investors, “So-and-so, one person is going to buy it.” Are they? Make them get a little bit nervous. It’s okay to ask people to put deposits. I ask people all the time, “You need to put some money down. Put $500. Put your money where your mouth is. Let’s see if you’re serious.” The most important thing is if they’re not going to do $100, an option fee or something like that, they won’t prove up a proof of funds or stuff like that, move on to the next person. You have somebody who is jerking you around.

Here is one of those powerful things that you can say, “He who has the gold makes the rules.” The gold in this world is not money. It’s the deal flow. One of the most valuable things you can tell potential wholesalers is, “This deal is good enough to do myself if the price is not met.” Just like Rob said, “At $50,000 I could do the deal myself if you’re not willing to come up to it.” I’m like, “I’m cool with that. If it’s win-win, let’s move on.” I would rather keep that relationship to send another deal to somebody versus trying to squeeze it all out. If there’s only one winner, you’re not going to do business with that person again.

Protecting your relationship is a very important thing. Your relationships are going to be your buyers. Your relationships are going to be also the people that you’re getting deals from the sellers. If you’re going to mark a deal you’re marketing, have them send an NDA, Non-Disclosure Agreement or an NCNDA, Non-Compete Non-Disclosure Agreement. It’s a two-page agreement. It’s simple. If they won’t sign it and send it back, then don’t do business. You’re basically saying, “You’re not going to go around me. You may have a fee agreement is there a minimum of this, whatever it might be. If you get a list, then don’t send me an NDA. Even if you’re not a bank, I’m not going to sign your NDA. I am not going to go around you.” I will tell you right off the bat, “I see this list of stuff. I don’t know where it’s from.”

This is another thing that you got to do to protect yourself in this industry with your buyers. Avoid daisy chains. If you get a list from somebody who does not have a professional email and their email is Tigerlily05 or somebody says, “I’m a buyer rep. I’m a buyer mandate,” I want to talk to the buyer. Avoid the daisy chain aspect. If you don’t know what a daisy chain is, here’s what a daisy chain is. Let’s say David has a list for sale. Eric is an investor. David gets Eric’s email looking for deals. He says, “I got some deals.” David sends it to Eric. Eric is trying to make some money. He sends it out to Henry, Ivan, Jeff and Jerry. He sends it to four people.

Let’s say Jerry sends it to John. Let’s say John wants it. John makes an offer back to Jerry. Jerry has to send it back to Henry. Henry is going to send it to Eric. Eric’s got to try to get it from David if it’s still available. If you have four people between you and the seller, that’s a daisy chain. Sometimes between you and the true seller can be a daisy chain. If everybody’s trying to add on 5% or trying to add on 3%, be careful. It’ll end up being a big cluster. I always say, “We’ll do a flat fee agreement here. If you ended up buying from the seller, you’re going to pay me. If it’s a nonperforming note, it’s 3% of the funding amount. If it’s performing notes, 1% of the funding amount.” I’ll do a flat fee group with some people if they’re going to be regular buyers.

NNA 85 | Wholesale Notes

Wholesale Notes: Knowing the value of an asset like you’re going to buy the note yourself will make you a much more valuable wholesaler.

 

We have a question, “How do you avoid daisy chains?” You avoid daisy chains by marketing, being direct to the seller, require and then deal with your own buyers if those are serious buyers. When I say serious buyer, when someone’s going to make an offer, it’s great. Let me see your proof of funds. Let me talk to your title company. Put an earnest money check with your title company or your attorney. You can do some due diligence and see what they’re doing. What’s their profile look like? If they’re not serious about it, if they have an AOL or 1ColdKiller69@Gmail.com. I have 1ScottCarson@Gmail.com. I’ve used that email for years because that’s my professional one. If they don’t pass the smell test, then start hanging out in other places. Make them put a $100 option fee if you’re in a local area.

Be respectful of it. If you ended up dealing with the people that ended up burning you, you say, “I’m going to blacklist you.” Don’t waste your time with jokers. I hate to say this but a lot of us have to expand our friend network. We get people that are joker brokers, who aren’t serious about it. I will make more money on an individual asset. It will be so much faster to make $5,000 or $10,000 versus trying to make $100,000 on a big tape and selling it for $20 million. That’s not going to happen. If you’re brand new, you’re not going to go hit it out of the park with some whale and make $5 million. It’s not going to happen. You’re more valuable to make $5,000 or even $1,000 on a wholesale fee.

Require proof of funds before disclosing the full address or details. Make sure that they’ve signed your NCNDA or fee agreements before you give the full address if you’re buying it and you got it under contract. Let’s say I’m going to buy something from RSI and I’m set to close in a few days. I want to make sure that whoever is going to buy it for me is going to close at least 2 days or 3 days sooner. If I get a contract, I could send that same contract tweaking some things, tweaking the buyers, the amount and the closing date. You will always want your closing date to be before your close date. I would use some hard earnest money. If you’re giving people 30 days to close and you’ve got over 30 days to close, give them two weeks of due diligence period. They got to put earnest money up.

After that two-week period, that earnest money goes hard. By hard means, it’s non-refundable at that point. Unless it’s an act of God or something weird but if they’re jerking around, they’re trying to wholesale a wholesale and this is the thing too. Have them deposit their earnest money check at your title company if you’re using a title company or an attorney’s office. I have somebody who’s trying to buy a deal from me. I find out that he didn’t deposit the earnest money at the title company. I’m like, “You need to deposit either a check, certified funds or wire it in. Wire the money to me and we’ll hold that $1,000. We’ll wire back.”

There are two easy ways to close. One is doing a double closing, where you have an escrow account. You’re closing with an attorney. You’ve got your contract. You’ve tweaked the contract and the same terms for your buyer. You could do a wholesale fee agreement. It’s a one-page wholesaling fee agreement where you have what you’re making and then you have a copy of the contract that they see. If you know the person and you closed deals with them before, it’s easy. Number two is it’s easy. If you don’t know the person and you want to protect your relationship, you may want to do a double closing. That’s going to cost you probably $500 to open an escrow account with an attorney.

I will do earnest money on a note. Somebody put up $1,000 if I’m wholesaling. Put your money where your mouth is. Wire in $500. Here’s the thing. If we’re selling assets, I’ll do that sometimes, especially if it’s local that I don’t know. I’m like, “I need you to send in $500 to this account, to our earnest money. If you don’t end up closing, we’ll refund it back.” I’ve wired $40,000 on a trade before earnest money that went hard. My funder who was supposed to come in and fund the deal and it was late getting in by the day.

I called the seller or the person we were buying the deals from soliciting my funds not going to hit until Monday and wanted to close on Friday. He got mad. I was like, “How can I help you?” He goes, “I got to pay my vendors this for $40,000.” I said, “How about I wire $40,000 in? It’s non-refundable because I know this guy is going to close. I can see it pending but it’s going to come in after hours.” He’s like “That’d be fine.” I wired $40,000 in. The money came in. I took my $40,000 out of it. When somebody says they want to buy notes from me, the question I asked them is, “Who’s your servicer and who have you bought from before? Do you have proof of funds? Can you prove up whether it’s your IRA account or your 401(k)?” If they can’t prove up that, don’t waste your time with them. It’s not worth it. You’ll be running around in circles.

Some other important details here is you need a good real estate attorney or title company if you’re going to be doing this a lot and it can be your local real estate attorney handling the closing or a real estate attorney if you’re doing a lot of stuff in one city if you’re not there. It’s important to do that. It makes them feel comfortable. Here’s another thing. You don’t want to tell a seller you’re wholesaling if that’s your biggest thing. If you end up not being able to close, you’re not burning a bridge. You’ve got to be okay. I’ve used putting things in our contract and say, “I’m getting a new entity. Can we change the entity at closing?” Sometimes we do that.

What’s important to keep in mind is if the seller finds out you’re wholesale and they’re not okay with it, then you can lose risk. I’ll give an example. I had a student of mine who came across a strip mall. It was a commercial note. She connected with a seller online. The seller sent her a couple of deals. She mainly went on LinkedIn and posted a picture of the asset the same day at $10,000 over what she had in her contract. The seller got pissed. She called me and she’s like, “He is mad.” I’m like, “Why are you posting?’” If you connect with him and you reached out through his posting, he’s seeing your stuff. Why did you put the exact same photo minus the address?”

This is why I’ll post photos of properties without the address but I always try to find a different photo. It’s not the exact same photo that they sent me. Most of the time sellers aren’t going to send you a picture of the property. They might send another BPO. If you do a screenshot view, don’t be putting pricing on there and say, “I’ve got a great deal. Why don’t you give me a phone call?” Make it generic for them to give you a phone call. If they’re okay with you wholesaling, you can do a wholesaling agreement. If they’re not okay, then you’ll need to do a double close. Always have constant communication with your buyers and sellers. The people that are buying need to talk to you, “I need to hear from you every 48 hours on how it’s coming. How’s it coming? If I don’t hear from you in 48 to 72 hours, I’m going to start thinking, especially prior to closing that you’re going to fly.”

It happens. If your buyer walks, have a backup buyer ready to roll. This is why marketing is so important. We market deals that we hopefully can get 2, 3, 4 buyers on the deal. As the first one walks, we’ve got a backup buyer ready to rock and roll. The important thing about having a backup buyer is if your first buyer walks, you go to your backup buyer. Let’s say Eric has a deal. He’s going to be my buyer but he flakes out because he’s working too hard. Schmitty is my backup buyer. If I go to Schmitty and say, “Schmitty, the first buyer ended up having to walk. You’re ready to roll.” If Schmitty goes, “I want $500 less,” I’m like, “Thank you for playing. I’m going to go to the next person.”

It’s a powerful thing there to have multiple buyers. It’s also very powerful to educate your buyers like, “When we’re ready to rock and roll, I need you ready to roll.” Everyone that you know is a buyer or a funding source. If you’ve got a wholesale buyer if people are buying wholesale notes for a long time. If you market it and start talking about the relationship, what you’re trying to do, a lot of them could end up funding your deal instead of you wholesaling and making $1,000. You’re still offering them a pretty good deal to fund your deal. If it’s REOs guys, one of the nice things that we have done in marketing some more REO deals is getting a local hard money lender to evaluate that REO. We mark it as a package.

NNA 85 | Wholesale Notes

Wholesale Notes: A lot of people screw up because they give information and they don’t secure the property under contract or an option agreement of some sort.

 

If we take an REO back and let’s say it needs some work, it’s fine. We’ll market it at roughly up to about 70% of financing if that’s what we can do with rolling in the purchase of property plus the rehab. Hard money lenders like Longhorn Investments here in Texas send it out to their list, “Here’s a pre-approved property. You can take it down at 70%. We’ve got pre-approved financing.” Properties finance. Hard money lenders don’t care about the borrower. You could step into a deal. That’s a great way to do it because a lot of times hard money lenders have a great list of buyers and people that are looking for deals.

If you’re going to have higher dollar fees, you can get more wholesaling nonperforming notes than performing notes. Performing notes are going to be a lot thinner on the profit margin. With a nonperforming note, the least I’ll do 3% of the funding amount. That’s usually on a bulk deal. Sometimes I’ve done $5,000 up to $100,000. Performing notes are maybe 1% of the UPB or 1% of the funding amount. Every once in a while I have a good idea. If you take REOs back, get a hard money lender to underwrite it. They’ll tell you what they’ll fund and you can see if it makes sense to go that route. In some cases, we’ve offered seller carrybacks for 6 months or 12 months on rehab deals once it’s pre-approved refinancing.

I want to come back to setting up your list. Know your buyers and seriously, spend the time. What are they looking for? I’ve made a $100,000 wholesale fee on a nonperforming. It was for an apartment complex in LA. Know what the spread is. You’re below 60% and it makes sense up to 65%, what’s that 5%. Is it $5,000, $20,000, $50,000? It all varies on the asset class. What are they looking for? What are you seeing? If you see in a lot of hotels, you might want to look to apartment investors or affordable housing in different parts of the country. If you’re looking at office buildings that can be converted, there are hedge funds that are managing that or investors that are looking for stuff in the areas that you may see out there.

I found a ten-unit apartment complex in San Diego. I marketed to San Diego investors. People jumped on it. I found a twenty-unit apartment complex in Houston. We marketed at the Houston Apartment Owners Association. Knowing what your buyers are looking for, are they looking for first liens? Are they looking for second liens? Are they looking for performing? If they are, what kind of yield are they looking for? I need to make a 10% return on my money. What states? What states do you dislike? If it’s nonperforming, it’s the same thing. What are you looking to make? What kind of percentage are you looking for? What kind of value? Do you want low value, high value? What states do you like or don’t?

Are you looking for self-storage? Are you looking for apartments? Knowing the asset class and then connecting yourself with people in those asset classes. If you’re seeing stuff in a specific class, reach out to the educator. Reach out to the investors that are pulling the trigger in your area. The big question is how are they funding the deal? What type of return? If they’re funding a deal with a line of credit or their own funds, is there enough room for them between what they got to pay for their capital whether it’s their own capital or somebody else they’re borrowing? Is it going to make sense?

If Wayne wants a 12% return on his deal but the seller on this deal I’m looking at is only going to budge for where it would be about an 8% return, it might still be worth reaching out to Wayne but Wayne might be too greedy. I’m like, “Wayne, at 12%, you need to be doing your own work. This is a deal that’s going to make you 8%. You don’t have to do anything.” It’s also important to know what’s your expected profit. It’s okay looking at your expected profit, knowing what your expected profit is. Here’s a bit of a run-up. On performing notes, there are 1 to 2 points on the funding amount. One point is pretty normal. Two points, if the seller is motivated and buying in bulk.

With nonperforming, it can be a percentage of the deal. It’s usually three points if we’re just trying to move stuff out there or a flat fee for doing one-off stuff or you might be able to carve out a bigger chunk if you get a sweet deal. If you’re selling a pool, it’s going to be 1 to 3 points depending on the makeup of the portfolio, how much of it is performing? How much is nonperforming and going that route? If it’s a high-end portfolio performing stuff in California, you might be lucky to make it 0.5 point. A 0.5 point might be a great deal for you in the long run. You have to know what the makeup is.

Wholesaling agreements is not hard. If you’ve been through our virtual workshop, we talked about wholesale quite a bit. We have our three-day virtual workshop upcoming. A big chunk of it is all about making money. We talk about wholesaling as an exit strategy. We’ll talk with our forms for wholesale notes and contracts, stuff like that in the manual there for it. If you are serious about this, you can go to NoteBuyingForDummies.com and get signed up. Here’s a special bonus that some of you might like. What do you do if you don’t find a buyer, even though you’ve committed to buying the property? Here’s the thing. There’s going to be a contract period for due diligence. If you put it under contract and you can’t find a buyer of the property, then you need to cancel the contract before your counter goes hard or market more.

That’s the one thing that drives me bonkers. I see students that get a deal under contract and they only do a little bit to market. I’m like, “If you don’t have a buyer unless you need to be marketing everywhere. I should not be able to turn around and not see you on everything out there.” That’s the point. We’ve all talked about marketing and getting the word out about what you’re doing. If you don’t have a deal, you may have to eat some earnest money. If they walk, then you need to go and say, “I need three more days to get this thing closed. My investor just walked.” You can say that. This is why it’s important to know your due diligence and know what’s going on with that asset. Have constant communication. Is this deal good enough to do? The worst case is you market it to fund it yourself.

Here’s the thing. You’re going to have people walk. The only way that you’re going to get good at anything is by taking action, getting out, practicing it and doing it. We’re doing a thing. We’re in the midst of the 20-Day Note Investing Challenge. Some of you have signed up for that. That’s awesome. I’m glad to have you here. It’s at 5DayNotes.com. If you sign up for a VIP pass for $299, not only will you get all the videos and stuff going on with our 20-Day Note Investing Challenge, we also teach a lesson each day on finding deals but also on funding deals. It’s 40 lessons, half and half. One of the big bonuses for our VIP members is a free ticket to our three-day workshop.

If you want to sign up for the twenty-day, get the lessons and watch the replay videos, that’s fine. That’s $99. It’s gold. It’s a great knowledgeable thing. If you want to get an advantage with some of the deals and some of the bonuses, I would sign up for the VIP pass at $299. You can opt-in to it and then sign up for a VIP or a Gold Pass. If you sign up for the gold pass, it does not include a ticket to the workshop. It just includes a replay to the twenty days. We’re excited about this. We got a lot of momentum going for a lot of people. I look forward to what we’re going to cover.

You got to realize that the first five days are already available for Gold members. We’ve got those up on YouTube. We’ve sent those out in a couple of emails. They’re available day by day as we get them available. We’re emailing them out. Check your inbox. You probably already got an email with me with the first five days. I sent an email out to everybody with that stuff. Check your junk folder. As a WCM member, if you’ve already got a VIP, that’s great. There had been emails going out with the replays. We’ll make sure to get the replays out to everybody as well for that going forward.

It’s one lesson a day. I’m not doing all twenty days at once. I’m drip-feeding all of you. We’re excited. It runs through March 12th, 2021 in all twenty days. Get signed up. It is well worth it. We’re killing it with content. I’m giving you the best of my best. If there are any other questions or comments, please let me know. I’m here to answer questions for you. The first five days have been awesome. It was pretty good to day six. We’re looking forward to the whole lineup of things. I’ve spent a big chunk of time outlining and putting it in places that works both for the finding side and the funding side. In some cases, you can use both to find and fund but we split it up. It’s a different mentality.

The first part is about finding. The second half of the lesson is about funding. We’re splitting those videos up separately so that you’ll have a finding playlist and then also a funding playlist that’s separate from everybody. Thank you so much. You can always go to WeCloseNotes.tv or going on over to YouTube, subscribing to our YouTube Channel and being able to download all of our webinars and shows. There are all sorts of goodies out there for you as well. Thanks, everybody. Be safe and we’ll see you all at the top. Bye.

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