20 Questions for Prospective Investors

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This is the no Closer show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars worth of property For Panties on the dollar. Get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same. Now here's your host CEO of We Close Nodes, Scott Carson.

Hey Real estate.

Investors, this is Scott Carson. I'm known across the country as the Note Guy and I've been an active note investor focused primarily on the niche of non performing notes, distressed mortgage notes on residential commercial properties for almost 20 years now. My company is we close notes.com and I know there's a lot of different things when it comes to the note world. Are you buying performing notes? Are you buying owner finance notes? Are you buying institutional debt? Like I would focus on Are you buying first seconds contract for each There's a lot of questions and it can be very confusing about what you can or cannot do. So one of the great things that we've hosted for the last couple of years that we do on just about a regular monthly basis is we host our one day class called Note Weekend. If you go to noteweekend.com you can register for our free three and a half hour class. We'll talk to you and share with you how you find fun and flip non performing notes. And yes, you can buy non performing notes from banks, hedge funds and a variety of different hard money lenders out.

There for your own portfolio.

No, you don't have to have millions of dollars to dive into the non performing note game. We've got students that have bought plenty of deals with 2530 grand getting their ball rolling using their self directed IRA who are tired of dealing with toilets, tennis trash desks, tired of battling contractors and GCs to get properties rehabbed. We all know the market is changing and while it may not be like 2008, 9 and 10 again, it we do see a lot of distressed debt out there on both the residential and the commercial side. So if you're thinking about diving into the note game, becoming a note investor, a lean lord as you'd like to say, versus the landlord. Or you just want to figure out what it is about the sexy side of real estate in the note space. Well, check it out. Noteweekend.com doesn't cost you anything. We host it live usually the first or second Saturday of each month. You can go today. Register at the website noteweeking.com Register for the next live class we host. You'll get sent A replay to the previous class so you can start learning about the note business today. No questions asked, no credit card needed. This is a great way for you to dip your toes in the water and see if it's warm because I guarantee going through Art three one day class. You want to dive into the deep end and become a note investor. So check it out noteweekend.com you can also go to our website. We close notes.com check out our podcast. Check out our YouTube number one YouTube channel. We are here to help support you. Whether you're experienced investor or you're brand new investing Note weekend is a great place for you to get the ball rolling. People often say we cover more in our three hour class than most people cover in their three day class. So check it out. Love to have you be part of our note family but get signed up today@noteweekend.com thanks and have a great day.

Good morning, good afternoon and good evening everybody. Hey. Welcome to this special dual edition of the Note Closure show and Note night in America. 20 questions for investors. This special episode is dedicated to all you newbies out there who have having a hard time raising private capital recently. And then about a month ago, I attended an event in Houston, Texas with the legendary Brad Blazer from Capital School and he had a really good insight into raising capital. I mean, from somebody who's raised a couple billion dollars in the oil and gas and real estate industry. I enjoyed his event. It was really good. And he shared the 20 questions that he likes to ask and I was really kind of blown away. There's a lot of similarities in what we teach when it comes to talking with your investors, prospecting, making phone calls, reaching out to IRA investors. There's a lot of great stuff. And so I thought it valuable enough that we should do this special episode on the 20 questions that you should be asking your potential investors to help build rapport and really take your capital raising to a whole new level. Now you're not going to do ask all these questions on the front end. These questions are primarily designed to ask investors or prospective investors in the first and second phone calls or meetings that you're actually talking with them. You know, you're not going to ask all 20 of these questions right off the bat, hey, do you want to invest? You know, that kind of stuff. But these are designed to help build rapport and I thought I would go through them here one at a time, kind of touch base on each one. And if you want to take notes, feel free. We've, we're going to put all 20 questions in the message the YouTube video. Also we're gonna put it in the podcast episode as well for you so so you can watch, learn, take it with you and have fun with it. So feel free to comment as well. Ask Questions we always like to monitor those with questions. We'd glad to answer those any way we can. And if you'd like to get more information about raising capital or note investing, please feel free to reach out to me@talkwithscott carson.com or reach out to us at the website@weclose notes.com but anyway guys, glad to have you here and join us on this live webinar. But anyway, our live podcast recordings would be another way to put it as well too. But we these questions are designed to build trust rapport and help you build your relationships and come from a place of intelligence, not ignorance. And I know for you that are brand new out there that have never raised capital, it can be very intimidating when you get to those questions. What do I ask? What do I say? What don't I say? So the whole thing here is just take it easy, role play a little bit. That's why we're giving you 20 questions. Some of these questions you're going to ask me, you may not depend on what you're perspective investor says to you. The most important thing is when you ask a question, listen, listen, ladies and gentlemen. It's so important because if you ask good questions, your investors will give you good answers, which they'll tell you exactly what their hot buttons are, what their fears are, what their concerns are, how experienced they are, or how inexperienced are they. And that helps you tailor your presentation, tailor your pitch deck, or tailor what you say when you're talking about case studies or investment opportunities on the third and fourth conversation for you. But anyway, let's without further ado, let's get rock and roll on. The first question that we want to go through here with you guys is pretty simple. It makes a lot of sense if I can get my PowerPoint slide rocking here. Okay, first question is what have you invested in? Or have you invested in whatever you're proposing? Have you boasted in renotes? Have you boasted in real estate, oil, gas, etc. Before? If they say yes, great, how did that turn out for you? Or no, okay, no problems. But have you invested in notes before? And if you have, how did that turn out for you? That's a really important question just to kind of see because that's going to tell you if you're dealing with an educated individual right off the bat. Or you might have to do a little more of a deeper dive into educating that individual on more of the nuts and bolts. But also you can tell you if they've got a favorable opinion of that asset class and if they've had good experience or bad experience in the past. Good, it should be easy for you. Bad, you may need to wait a little bit more with what you've got going on. And that would lead to if they had a bad experience, leading to the question, well, what happened with that Number two question. When you invest, what are you looking for? Are you looking for appreciation? Are you looking for income? Or are you looking for tax benefits? Because people will invest for a variety of things, especially in today's world. Many of them are looking to beat inflation. Depending on how old they are, they might need that money for income to survive on. Or they may also be looking for something they invest in that will help them eliminate what they have to pay Uncle Sam on a regular basis, you know, or they're looking for tax benefits as far as investing in something using their qualified investment plan like their the Roth ira so their investment can grow tax free or tax deferred if it's a traditional ira. So just ask these questions, practice them, and you'll feel a lot better when it comes around to actually having those conversations. Number three, what's your time horizon? Are you comfortable with an investment of three to five years? Some people don't want to have their investment tied up for three to five years. They're looking more for like 90 days. Quick flips, mezzanine loans. If somebody's been in a cd, a certificate of disappointment or annuity, they're going to have their money tied up for at least 12 months, if not five years or seven years. So I always say, are you comfortable with an investment of a short term three to five years? When somebody thinks about note investing and they're not new to it or don't understand, they may think 30 years. So that's why I always say come with a investment of three to five years. We all know a year can fly by pretty fast. In three to five years is actually a pretty short paced time frame considering a lot of the other options out there for you. Okay, Number four is also an important question to ask. What has made the diff the biggest difference among your most successful investments? Now what does that mean? Does it mean that they've taken an active approach? Are they passive? Is it good management? Do they trust the individuals? Was it just the right time at the right place. Those are. But that's the question. Think what has made the biggest difference among your most successful investments? And then the opposite side of that may be what's, what's been the biggest difference in your failed investments? Did you invest something to understand? Was the market crash? What was going on? Okay, I think that's pretty explanatory. But ask and listen. Don't ask and then wait to ask again. Ask and listen. Number five, tell me about some of your most successful investments. Very similar to previous questions. This is a different way to phrase it. Tell me about some of your most successful investments. Is it, was it because it was short term, was a quick flip, was it you hit a stock market price? Were you one of those gamers in GameStop? You know what, what was it that was successful about it? Tell me about it. People love to talk about successes, not necessarily their failures. All right, number six is also very important here for you guys and gals out there. And like I said, these questions are going to be in the description. We'll list them individually so you can take a look at that. And if you want to copy paste them and add them to your deal flow, your capital raising procedures, feel free to. Number six, was your top concern when it comes to investing? Is the market's going to crash? Is it capital appreciation? Is it less risk? Is it making sure that the principal can be returned? What is your number one or top concern when it comes to investing? Number seven, if you could own this in your IRA or qualified plan, that means like a 401k or 3B solo 401k, would you invest? Yes or no? Number eight. Oh, and this is also. Let me come back here. Number seven. Number seven, if you own this in your IRA qualified plan, who would you invest? And I would also ask the question, who do you have your qualified plan or your IRA with? Like I was just talking on the phone with a guy who was talking about, oh, I got my IRA when buy a note and it's with Fidelity. I'm like that's great, I'm glad you got it with Fidelity. But you can't use that to buy a note or piece of property. You're going to need to roll that over into a qualified self directed IRA custodian or trustee like Pensco Trust, Mid Atlantic Equity Trust, Rocket$. Depending on what you know, depending on kind of where they're at, located in the country, stuff like that. Okay, so good to know that 7A and 7B, I guess you'd say on this one, number eight, who are you connected to that we should be. Now this is more of a referral question after they invest. But I wanted to bring this up sooner than later because many people forget to ask for referrals. So if you're talking to somebody and somebody's excited about what you're doing and they're ready to start investing, it's great. Hey, who else should I who else are you connected to that I should talk to that you think would be find value in this? Okay, where we should meet? You know, it's pretty easy for doing this at like a networking club like BNI or if you talk with somebody. How do you, you know anybody at your job that is interested in this, if they've got a career or something like that? Or who are you network connected with or networked with that I need to talk to that we should meet or get together for lunch or should I get an introduction to. It's Lilly asking referrals because so few people ask referrals. Number nine, this is an important question. This is a true question. See if they're going to be have enough to invest with you. What is the typical size or amount of the investments you make? Size might be number of shares or the dollar amount, you know, of the investments you make. We invest in 50, $50,000 bunches or $100,000 bunches or I like to buy a thousand shares of stock, something like that. This is important. If somebody's got less than, you know, 20k, they shouldn't be investing with you. They probably need to raise a bit more money to do it. But this is an important question. You got to ask this really on the second, you know, first or second phone call. You can't wait till you're pitching on assets and you realize that you're pitching a $50,000 asset and they only got 10 grand. Okay, it's also important to, to clarify. Like I talked to the guy and he said, oh, I got 100 bucks in my checking account. Or he was, I got 100 in my checking account. I'm like 100 in your checking account is that $100 is no 100 grand. I'm like, okay, big difference. Let's get that moved over into something, into a chunk of that into self directed IRA or something. All right, so ask what's the typical size monthly investments you make? They're brand new. They may not invest in anything. That's why you would maybe sold. You know, what do you have that you think you're looking to put to work. Okay, number 10, as we get halfway to the halfway point, how diversified do you think your investment portfolio is? Is it all in real estate? Is it all in the stock market? Is it all mutual funds? Is it a certificate of disappointment? Is it in your. Just in your 401k from work or your previous 401k? Do you own any real estate? Do you own any gas? How diversified are you? Do you think your investment portfolio? Is it all real estate? Is it all cash? It's good to ask that question, to let them sit there and think about it. Okay, number 11, are you looking for less volatility in your investments? Would you want something that has more predictability to it? This is a great question when it comes to talking about performing notes or non performing notes. Non performing has a little bit more volatility as we can agree to it. Right? There's not going to be a steady cash flow to it initially. It could be, but you may have to foreclose and go that route. But if they're looking for more predictable income, that's going to be something that you want to put people directly into a performing asset. Either they're lending you money at a flat rate or you're putting them into a performing note that's paying them on a monthly or quarterly basis. That's a really good question. I ask, are you looking for performing or non performing? It makes you look a little smart, of course. Feel free to tweak these for your cadence, for your wording. Sometimes we go, are you looking for more volatility? You may sound like an idiot. That was one thing that happened when I was a a banker. I had all these new financial advisors coming and asking these big high dollar questions to blue collar, no collar people. And my clients would look at me like, what the hell is this guy saying? He's speaking Latin. And I'd have to explain it. And they're like, oh yeah, well, I would like that. So always make sure you're speaking to your clients, not down to your clients. Okay? It's very important. You don't want to come off as being arrogant. You want to be knowledgeable, but also be able to speak the person. Some worst thing you can do is speak to somebody and they not understand what the words they're looking at. You can tell by their eyes glazing over them, starting to look away during the conversation. Okay, number 12, very important one here for you. And you're going to laugh a little bit about this. Can we do anything to improve our presentation or Pitch deck. And this would be something you would do after, after they've invested, just getting feedback. And I always like to get feedback. You know, if you've been around for a while, we send an email out once a year, hey, how are we doing? What can we improve? Same thing is there. Can we do same thing from our presentation? You'll be surprised. Sometimes it's maybe, hey, I couldn't see the presentation so well, or this didn't make sense. And if somebody will tell you what's confusing about your presentation, listen to them, because many people won't. If you can get somebody to be honest about it was confused in your presentation or that you went too long and rattled on about something, it's important that that feedback is golden to make it much easier for you to present. And like I said, you don't really want your pitch decks to be longer more than really 10, 15, 20 minutes at the longest. Okay, number 13, how does this fit within your other investments? Are you already an active real estate investor? You're also an active note investor or whatever. How does this fit within your other investments? Okay, important to know. What do they experience that? Is it fall in line with everything else or is it going to be kind of outside the box? Okay, number 14, I hope this is like I said, if you have questions, please type them in the chat role. We make sure to answer those questions as we can. This falls in line with number 13. What other investments do you have? Do you have, you know, CDs, you have a 401k, you have IRA, you have stock, mutual funds, rental property. Have you done some private lending? Just ask them some questions and then be quiet. They'll tell you based on what their responses are, what type of returns they're looking for. They've got money sitting in a checking or Savings accounts making zero. They'd be happy making 6 to 8%. All right, or even 4% in a lot of cases. All right, if they're an active investor and they're getting, you know, private lending at 10 to 12, then you know, you got to come at 10 to 12 to be desirable for them. All right, but what other investments do you have? And then be quiet and listen to what they say. Okay, number 15, how important is liquidity to you? This is important question. This goes back to the whole three to five years. If somebody needs their investment to be liquid where they can accident given time, you probably don't want to put them in something that's going to tie it up for three to five years. If you do make sure you put some penalties if they go withdrawal. But if somebody needs liquid access to their, their funds, probably not going to be an important thing for you to do, you know, like, oh no, I've got 100 grand and I'm just putting 50k with you. I'll be fine. I don't need this stuff to be very liquid as long as it, you know that three year period. All right. No, I've got a big expense. I'm sending my kids to school in a month. I'm gonna need access to those funds pretty fast. Probably not a great person to have invest in your fund or your deal if they need to pull the money out or they need it might save liquid for you. Now you don't want to be doing like El Chapo or something like that in gangs. I need my money to be liquid. It reminds me of the scene from Casino Royale, you know, the James Bond movie where the guy pulls up the African crime lord with the trucks full of cash and he gives it to the, the criminal who's taking the money and loses it all he needs to be liquid and access it anywhere in the world. And you know, we know how that movie turned out. Number 16, what value might you add to my business other than an investment? Can they contribute expertise in any way? And this is something I think we forget about. I know that I, when I saw this question like ah, that's a golden nugget there. Because I think we get so used to especially as, as entrepreneurs doing things ourselves and we don't necessarily often realize that there are our investors or the people that we're working with may be potential great team members in one way or another. Maybe great at being on the deal with you. Maybe they're great at bookkeeping, maybe they're great at raising capital as well and being added value to your team or you know, they understand the business and want to get into it and it can help you manage a property or two. So this is a, I really, I put a star next to this number 16 here. Can they contribute expertise anyway? And you see this happening. A lot of multifamily guys who want to get into multi family, they've got some money, they can raise some capital, but they need to add something there to be a part of the, the team. So how can we, how can you contribute? Can you be on the board of advisors for me? Can you be on my board as you get growing? Those are some things that are very important to you. Okay, can I bounce ideas off you? You know that's that's a different value. Do they own, what are their other investments? Are they a realtor, are they a mortgage broker, you know, these kind of things. They have access to other clients or could be access to your team or you know, rehab crew, stuff like that. Very important to think about. Okay, number 17, as we're getting into the final couple here for you ladies and gentlemen, I hope this has been valuable for you. How important are the tax benefits of an investment? Would you be interested in an investment that can reduce your taxes? And this is important thing to think about that. How important the tax benefits. Do they want to pay more taxes now, unless later in life or they don't want to pay any taxes on the money? You know, this goes into is it going to be a self directed Roth IRA or a Roth 401k versus a traditional IRA or a traditional 401k? So knowing what, how important the tax benefits are of what they're doing, do they need to have something in a 1031 or put some investment into 1031 exchange to flip it? That means being real estate couldn't be aspect of things or do they need to have some access to some other things? So this is important to keep in mind how important the tax benefit of the investment because that can actually add an unknown number, an unknown, unknown return that you just don't see in dollars and cents initially. Number 18, very important to know if they're the decision maker on this one. Do you rely on anyone else in analyzing or reviewing your investments? Now, you know, are we talking a cpa, financial advisor, attorney, spouse? All right. And feel free to volunteer to send the materials to the other person as well. I'm glad to send this to your attorney, your cpa, your whoever it might be to review. Now financial planners aren't going to review anything outside of their book of business. They can't do that, can't give any advice. So. But it's good to ask this to make sure that they're the decision maker, that they can make the decision, oh, I need to talk to my attorney or I need to talk to my accountant to see what's available and go from there. So it's important to know and ask this question because you don't want getting ready to expect somebody to close and they say, well, I need to run this by my CPA. Well ask this on call number one or number two, so you know, number 19 kind of goes back. Are you looking for income at this stage in life? It's important to know this if Your proposed investment will generate income for someone. Like if it's going to be monthly or quarterly payments or they're going to be getting rents or something like that. Are you looking for income at this stage in life? It's important to know because if, like I'll give you an example of if somebody's investing in non performing, we may not have payments coming in for a little while and we may need to structure that deal where we don't start making quarterly payments until the borrower starts paying or we foreclose and then sell the asset off. If they're looking for income, they need to be probably more on the passive investment side. So it's a regular stream of income to them. So ask this question, looking for income at this stage in your life, where you at? I mean of course if they're using a self directed IRA, they're below 55 or 59 and a half. They can't touch that money. So keep that in mind when you're talking with your investors, but kind of what age they are, how you know, don't ask them, hey, ma', am, how old are you? That's never a good thing. You can often tell by getting a feel for people if they're at that age in life where they're looking to bring some income in or live off of it. Okay, number 20, what is your tolerance to risk in the investments you make? You know, do you want any risk or you want it pretty vanilla? Non performance might be a little bit riskier, higher returns, but we know that you're going to buy it at a cheaper price. So there is a little bit of risk involved. But just going through that every. And that's one thing, ladies and gentlemen, if you're investing in real estate, it's an investment. It is not a called a guarantee. All right, it's an investment. Something can go wrong. I had a call today with a student of mine who she lent money to a guy, her dad was a second lien holder to a guy in a fix and flip and the guy walked away from. So she's having to foreclose on the deal. And I asked you, I said, well, have you had some issues? I've had some good deals. This is the first deal that's gone south and I'm okay with it. We are in a good number and that's one thing to look at if you're. That doesn't mean you avoid the risk in it. You address it and share with your potential investors how you're going to overcome that risk. Or what safety measures have put in place with being able to foreclose. You have attorneys, you have insurance in case of an act of God, some of the things like that. But Anyway, that's the 20 questions. You know, let's do a quick little recap here. Number 20 what is your talents to risk in the investments you make? Number 19 are you looking for income at this stage in life? 18. To rely on anybody else? Analyzing, reviewing Your investments? Number 17 how important are the tax benefits of investment? Number 16 what value might you add to my business other than investment? Number 15. Oh, come on. Let's see here. My PowerPoint got a little stuck here. Not a roll there. Come on now. Oh, goodness gracious. Don't you love that when that happens? All right, there we go. Looks like we're moving now. We were moving. Well, we'll put the whole list in the chat roll below there for you or in the comments section of this stuff here. But those 20 questions, very powerful for to use. Look at them. Role play, get with your friend. I, I had a great call again with a buddy of mine, previous mortgage broker. My buddy boy was we were talking the other day, he was literally talking. He goes, I can remember you role playing playing on the phone or role playing in the office in front of me or asking questions of people and investors. And I kind of had to chuckle because it's a lot of these were the same questions are very similar nature of it. So those 20 questions, I hope those are valuable. Like I said, if you have any questions, any concerns, it's always good to reach out to us. Ladies and gentlemen, we're here to help you any way that we can, one way or another. So make sure if you're listening to this, make sure you subscribe to the podcast, subscribe to our YouTube channel if you're watching on there. And then of course you can always book a call on my schedule by going to talkwithscottcarson.com that's talkwithscott carson.com thank you for listening. Thank you for being active here on the special dual episode of Note Night in America and the Note Closer show podcast. Go out text match everybody and we'll see at the top.