EP 367 – One Source Away From Success Or Failure

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 pennies 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 notes, Scott Carson. Good morning, good afternoon, good evening, everybody. Welcome to this episode of the Note Closer Show. As always, Scott Carson. Excited to be here with you and sharing some great stuff on the show today. First of all, thank you to everybody that's reaching out and saying, hey, Scott, are you guys okay? In Austin, we hear it's like Noah's ark there. It's flooding. 40 days of rain continuously. First of all, thanks for all the, the well wishes and everybody wanting to check on us, make sure that we are infected. No, we're fine. The only thing that is affecting us with this amount of much rain is that the city of Austin has put a boil ban or a boil requirement on any water that you get. All right? So you've got to boil your water if you're going to use it to drink out of the tap. Now, what does that mean? Well, it means you can still bathe and it means you still wash clothes in it. It's just that the city is having a hard time keeping up with the filters as the water is coming through the water processing plants because that's where you just got so much water. I mean, you look at the lake, Lake Travis here, it's gone up 38 to 50ft in just a couple days. And we're expecting more rain on here. So that's been a bit of an inconvenience. But what, what it means is all the restaurants aren't serving glasses of water anymore. Your coffee spots aren't serving coffee. God forbid, Starbucks and Panera people aren't serving, they're not serving coffee here in the Austen area and the outskirts here, too. So what's funny is yesterday I, I sent Shannon, I said, hey, we're in my office here. Everything in the coffee maker is hardwired into the, the water lines. I said, okay, nobody's got any coffee. Nobody's got any tea. Let's. Let's go get something. So I sent her out. She went to Panera down this road here about a mile and a half down, which is not in Austin, Texas, and got two gallons of coffee and a gallon of iced tea and then brought it back here for everybody here. You know, if it's having the afternoon Well, I got this morning, ran down there to get the same thing. Now they have a sign on their door. They're not serving any coffee or any tea or any soft drinks. I started chuckling like you're a freaking kitchen. You mean you don't have the ability to boil water in the back to make like regular, at least regular coffee? Like, no, sir, we sure don't. I'm like, okay, fine. And I drove around a couple other places mornings the same way. And it made me start to think about how we are one ingredient away, one thing away from these businesses really suffering. Let's face it, Starbucks is not going to be Starbucks if they don't have coffee. Right. Can we agree that Panera or still have food, they were substantially down for not having coffee there. Okay. And people are like. And you know, so people are walking on a bottle of water. What does this mean? Well, many people, it means you have to go pull out your coffee maker, pour in bottled water or French press coffee, as William Casey says. Exactly something there. You got a bowl of water at the house and make your own cup of coffee and bring it with you. Because even the gas stations here aren't serving coffee because of all that. And that's, that's understandable. Good morning, everybody. Good morning, Cedric. Good morning, Christina. So it made me start thinking about us as note investors and real estate entrepreneurs. And I think it's a very, it's a very great thing to consider about in your note business. Boil a lot of coffee. I agree, would not be that difficult one case. But some people are making it out to me. Unfortunately, a lot of note investors are one ingredient away from, from either exploding their business or they're one ingredient away from having no business. And what do I mean by that? Well, I hear, and I've seen so many note investors as I go out and across the country and talk to people and they are like, oh yeah, I bought some notes from years ago from Condor and then they stopped having anything. So I stopped being in the note business. Or I used to buy from Granite Loan Solutions and then they went out of business. So I stopped buying. Or I'm upset because everybody's buying from Granite or Condor or, or other sources, increasing the price and getting upset about that. And I see this even happening today. People are upset, oh, the pricing on the stuff I'm getting. Well, it's the same tape that's been around for a while. And if it's this low hanging fruit, of course it's going to get pricier for you because you're not marketing for other assets. There's always this pendulum, okay? Or as I like to say, seesaw aspect of investing where you need to be reaching out for other sources. You need to be reaching out on a regular basis. Okay? I'll give you a great example. My good buddy Val Satir, Watermark Exchange out there would be moving assets on his platform from a variety of different sources. As one went up, he would jump on another one and find it from a wealth of different sources. Unfortunately, we as note, investors, real estate entrepreneurs often get fat and happy off of one source, one lead source, and we stop marketing. We get fat and happy off of buying assets from one seller and that's it. We get fat and happy off of just not doing anything else besides what with the bare minimum. And we complain when things change that affect our business. Okay? So that's what you have to keep in mind. More so than anything else. You have to literally keep that in mind when it comes to doing. Looking at what you're trying to do, looking at what you're trying to grow your business, you have to keep in mind that, hey, it's just not one source. You have just one source. That's great, especially if they give you a bunch of deals, if they also have stuff on a regular basis. But you have to realize what happens when that one source goes out of business or stop. Doesn't have inventory this month or doesn't have inventory this quarter. Okay, Think about that. That's important to keep in mind. You got to have multiple sources. You got to be either from hedge funds or from banks as well. You got to have a variety of sources that's going to provide your product. The question I always ask is if you think about where you're getting your assets from, is it just one source? The two sources. Is it hedge funds and banks? Is just hedge funds. Is it just banks? What happens when something changes and you aren't ready for that or you don't have an alternative source? Think about it. What does that mean to you? Scary. Downright scary, right? A lot of people aren't doing the things they need to do. Okay. And yes, Mr. Casey, William Casey, you have to market for fresh notes. And I think us as entrepreneurs, this is, I see especially in more on the traditional real estate side, especially see this on when I've gone to Masterminds and I've done other investors there and they're sending out 5,000 postcards a month or 10,000 postcards a month or 15,000 postcards a month, they send out most more postcards because the fact is they're not getting enough leads. And so what they're literally physically doing for the most part is beating a dead horse. They're literally beating that lead source to death. And it doesn't make sense. It's just not a good thing to be doing. And if you find yourself doing that, you have to evolve. You have to look for new business, you got to look for new sources. You have to look for different ways to bring in business. And as a note investor, if you're just buying straight from hedge funds, what does that mean? Well, maybe you need to find alternative sources. Maybe you need to get on the phone and start calling banks. Maybe you need to reach out and see who's buying or selling assets. Maybe you need to pull a list of assignment on mortgages in the county you're in. There's a whole variety of different ways of tracking down business. It's just a matter of doing the. That four little word, that four letter word that most people hate work. It is a four letter word. People hate doing work. You know, especially when you've seen lists that roll around that have been recycled. I don't, you know if it's been a recycled list, don't waste your time on it. It was been a recycled list. Just move on, okay? Don't try to squeeze all the blood and the water out of an old recycled list. Just go do some marketing. Go find another source. Go, go find another alternative to sending a business. That's what's so funny is I see people complaining about this one source. Oh, hey, does who's pulled comps on this one or who pulled BPOs or O's on this list? I'm like, don't. Why are you wasting your time with that list anymore? Just move on. If you don't see new addresses, just move on. If it's the same list that was a month ago. Just move on. Find another source. And that's what's so hilarious about it. Oh, good question. Catherine Branham from Chicago and seven letter word prospect. Lol. That's funny. Yes. We see this with realtors. We see this with, I mean so it was a lot of realtors prospect. That's all right. She said oops is an eight letter word. We will hold it away. Good thing you don't worry about counting or spelling in the note business. Catherine, we look forward to seeing you in a couple weeks here at the Fast track training as well. And welcome to the new the mastermind. But that's one of the Biggest things that we focus on in the fast track, training out there and our mastermind group is new sources. What's new, what's popping, where can you find new product, who's the new players on the market, who's buying stuff? How can you go further up the food chain versus just sitting there and letting some companies? What happens is there's people coming in the business. So the low hanging fruit gets more expensive and the low hanging fruit that people buy from a lot is easier to track down. And you have to move up the chain a little bit. That means a couple of things. That either means a buying in bigger bulks, raising more capital, starting a fund, or marketing out to bankers and asset managers. And that's one of the biggest things that I can tell you is you have to be doing that on a constant basis. If you haven't bought anything or you've been waiting on one source and you complain about that one source being too expensive, that's not their fault. That's your fault for not going out and finding new product, not finding new sources, not being a true investor and learning to market on a regular basis. And honestly, marketing is not difficult. It's just a matter of doing it on a regular basis. And what's funny is I see people that post. Marketing has different flavors to it. Marketing is, you know, to investors, what's going on, your database, that's one big thing. And you do that via social media. Do it be LinkedIn or all the social media aspects, which is great, all right. But one of the most fruitful ways to market for assets is simple email blast out to asset managers. And I say this again and again and again. I guess there's less I would be on, but there's less than 5% of people out there that do it on a regular basis. By regular I mean they've done it for at least six months straight. A lot of people will do it one week and the second week and they'll forget about it for three months. Why? Because I did that like that. I was like that for the first year in my business. First two years of my business is just posting whenever I thought about it. Well, with mailchimp, infusionsoft, other things like that, you can go on or write a couple, schedule it out for six months and it's done. Set it and forget it. Okay, but that's the thing. Prospecting is not a difficult business in the no space. You just have to do it. Now. Prospecting for institutional debt is actually easier than prospecting for owner finance Debt now on bigger pockets. There's been some threads on there recently, but people like, hey, I'm looking for finance. How do I find owner finance buyers or owner finance sellers out there? And that's a much tedious process because most of the owner financed owners of owner finance notes have one note, maybe two notes. They don't have a large inventory because they just don't. So to do those, you've got us in a lot of mails out a lot of letters. I've got a lot of yellow layer campaigns coming in from our properties and stuff like that, or some of the different notes. You know, you'll see this happen. People wanting to buy a note from you. And I just like, it just doesn't make sense for me because the fact is it, what can I say? It's not effective. It's one deal per letter. It's not a mass deal. And it's not like getting 50 notes every quarter new a source every month. Okay, you have to market in the 21st century to banks directly. If you're not buying to banks, go out and keep marketing. Go out and keep moving forward with things. Go out and change the way that you do business. I've got a way that we target or market to older lists to get the, the fruit that's still sitting there to reach out to us. Not going to share that. That's something we do just for the fast track. Training the mastermind. That's where we get so many people like, oh, they keep making bids on this crap. Well, why make offers on the crap anymore? Just go out and find something new or change the way that you market. Use a way to have the borrowers reach out to you. And I'm not going to tell you how we do that. It's a secret. But when we send postcards out to IRA investors, that's a highly marketable thing. But for the most part, most people just don't know how to market. It's unfortunate. They want to be served. They just want to sit there and be fed. They don't want to go out and have to hunt and kill their prey. And as note investors, that's what you have to do with marketing. Okay, yes. After a while you can get so many sources and that's one of the funny things. People come to the fast track. Our mastermind say, hey, here's a list of 20 hedge funds that have stuff or 20 stuff that have people. 20 things that a lot of 20 sources that they'll have product on a regular basis. You can get on their list. It's a great way to take a look at it. Okay, let's see here. Julian Ferraro says on finding IRA funding, if the SSR site only shows the IRA business risk, where can I trace or follow the FBO name to get their address? Oh, okay. Well, that's. That's a really good thing, Julianne. What I like to do is I will look at the deed, pull up a copy of the deed, or. Yeah, pull up the copy of the deed or the assignment of mortgage for that property, and I guess it's a deed. And oftentimes you'll find the name actually on the actual deed at the assessor's office. You just have to take a look at it. Okay. A lot of times, they'll want it labeled out. Where it's just the IRA business address. Sorry. So if you see the person's name, just do a search in that county. Oftentimes they'll have other property or real estate in that county. So if you say. Let's say if Scott Carson or Quest Trust for the benefit of Scott Carson, IRA. 1, 2, 3, 4, 5, 6 7. And it says 17171 Park Row in Houston, Texas. Well, all I would do is just on the county that's there, do a search and say, okay, what else? Asset, whether property just got car snow. And it'll often pull up a mailing address or my primary address, and there's the mailing address for it. So that's the way you check that out, Julian. Just gotta track. And now there are people own property out of state. In that case, you just do a search and see if they pop up. If they don't pop up, then just move on. Because usually there's more than enough IRA investors that own real estate that if you've got a few of them, 10% or 20% that have just the mailing address, I wouldn't worry about it. Okay? But going back to prospecting, so many people look at just one source, and that's how they build their business, around one source. Just like I was talking about. Starbucks is not serving coffee this morning. They're. They're hurting here in this county. All right? They're serving soft drinks. Are hurting. They're. Because literally, I'll tell you this. Restaurants. You wonder why you pay A$30.$30 for a good glass of iced tea. Glass iced tea costs like 10 cents. It's a huge profit center for them. With every client they're walking in, somebody's gonna order a soft drink or an iced tea. They're starting with a dollar profit right off the bat. Well, you guys, when you have just one source, that's great. You've got your profit areas, you're buying from them on a regular basis, great. But when they stop buying or they don't have anything this month, what are you doing? That is not a strong business model. You have to have multiple sources, multiple leads, multiple ways to generate in deals coming to you to make things happen. And this is what I always crack up is people like Kenny Mole, Scott, when you get lists out or when you provide lists to your asset, your mastermind members and fast track members, don't they get overbidden or do you just cherry pick the good stuff and give them the crap? I'm like, no, I don't have to do that because I find enough sources myself. I see enough assets coming in from other sources that we can take down. All right. I see sources from a variety of things. They're not maybe a thousand assets every quarter, but they're assets that feed me on a regular basis. They feed me on a quarterly basis, they feed me on an annual basis. That's why I get so excited this time of year because there's so many new sources that pop up that weren't selling the other nine months out of the year. Okay. I have to worry about not having coffee to drink because I got plenty of other hot water coming in from other places. Does that make sense? Filtered clean water, non boil type water. So it's going to be really funny to see what happens because we're getting more rain right now. It's supposed to rain all day today and how longer this, this boil ban is in effect. I guarantee it's funny as people are already like my morning cup of joe and it reminds me of investors at like a note expo or DME or not where they're going. I can't find any deals. So and so is too expensive. Scott Carson, Eddie Speed. Teaching too many people. It just is. I just like really all you're gonna do is moan about life, then you are the problem, not me, my friend. If you're not gonna go out and get creative because this is business, this is a business. Anything else. You have to constantly monitor anywhere you're getting your deals and deal flow from and going out marketing to make things happen. So good, good times out there for everybody out there. But so let's talk about some of the creative ways to find deals. I'm a big proponent of jumping on LinkedIn. Using LinkedIn to find asset managers and Secondary marketing professionals. Okay, great way, great place to go direct to find them and contact them and spend a little time at night. This is something everybody can do. Even if you're working full time or part time, you do this from 7pm to 2am this is something you do while you're watching TV or sitting at the mall or on your lunch break. While you're eating your lunch. You can literally just go on your phone, pull up on LinkedIn, type in asset managers secondary connections and just start connecting with them. Boom, boom, boom, boom. And send them an email. Hey, what do you have on your bot? What are you on your books? What do you have in your books? What are your books? It's the fourth quarter. What have in your books that you're looking to get rid of in before the end of the year? That's one of the easiest things you can do. And the beautiful thing is if they connect with you, you know what? Boom. You can export your connections on LinkedIn and now you have them in your database. So like last night before I went home, I went and downloaded my export my connections last night, 14,300 something from LinkedIn and did a quick sort, filtered it, sort it for asset managers, special asset managers, you know, secondary marketing managers, bank. And it helped me clean my list up as well. You know that very easy. Took me about 30 minutes to do and I have a pretty big list. Took longer for the list to get emailed me and downloaded from LinkedIn than it did for me to actually use my own scrubbing on it to identify and filter my list. And now I have different lists now that I can, I've customized, I can put into my CRM tool infusionsoft or if you're using mailchimp or something like that, you can upload those and now you have a targeted list that you can be re specialized to. First name, last name, institutional name, company name. Hey John, just wanted to talk to you about if you're the right person at ABC bank to handle your special assets or secondary marketing. We're looking to buy some stuff before the end of the year. Want to see if you had anything in your books you can get rid of. Love to visit. Boom. Nothing too difficult, nothing too hard to do. We're talking less than two paragraphs. Just a matter of setting up in your CRM tool and doing it and following up and following up and following up. And a lot of people too. Instead of just being sources, a lot of people will get focused on just one market or two markets. Okay. Oh, I'M only going to buy because I'm in Florida. Well, that's great, you're in Florida. But the market has changed there over the last couple of years. You have to expect when pricing changes or markets recover, the inventory is going to get tighter. So you have to move markets. Okay. I want to buy my backyard. I can't find any more nodes in my backyard. So I'm not gonna do the nobody's anymore. I mean, that's the most asinine thing to say. It's a 21st freaking century. Why don't you use meetup or a little thing called the Internet to help you with realtors and other people to drive by or servicers and things like that? Okay. It's amazing that people basically fall to the one thing and that one thing only is all they're focused on in their market or in my market or from this one source or this one specific type of note deal that I'm going to do. Well, there's a lot of ways to make money. I had a guy that was coaching one time who just wanted the perfect note deal for his first deal. Perfect note deal? Oh, I can't do that. I'm paying too much from like. What are you talking about? The assets worth 100, you're paying 50 grand for the deal. It's an appreciating market. What's not to love about this deal? It's going to close. You'll be done with it in six months. Oh, it's not perfect. It's not perfect. What's. What do you mean? Well, what if they real estate. Well, it's still going to be a good 20% yield if they re perform. What's wrong with that? Oh yeah, fine. He didn't do the deal. I made 70 grand on the deal. Your perfection, you waiting for perfection means somebody else is going to make profit. Okay? Your perfection, you're waiting for the perfect deal. Somebody else is going to run with with that deal and make some money. That's what you have to realize. Everybody. It's not just one source. It's also the same thing about having like one person just fund your deals. You got to make sure and be raising capital. You can't wait for just one specific source, one specific vendor. I will tell you, this is a funny thing happened to me when peak, peak servicing. We had a lot of our stuff with peak servicing when they stopped doing foreclosure work. Oh my gosh. It put everybody in a tizzy. Really hurt a lot of people. I mean transferring files or they laid off their whole marketing staff or the distressed notes side. It really hurt. It really hurt some things. Okay. Really hurt some things. And I just, you know, you have to be careful about that aspect. All right. Be very careful when it comes to having that one source and that one source only. Questions, comments, concerns for anybody out there? Everybody see there's any other comments here on Facebook really fast. Any other things out there? One of the things that we're doing, everybody too is I'll bring this up while I'm thinking about it. We are actually doing something here by the end of the year. Working through something to hit a goal for next year. Perfect. Important to keep in mind that way is we're actually doing a book. We're doing a book on case studies. Not just our case studies. I mean I get right a million case studies on the deals that we've closed. I'm talking about different deals that you guys are closing. And we're making this open to everybody, not just our students, but everybody. We're looking for at least 50 people to come in and want to write a chapter about deals that they have closed, a deal that they close a little bit about what's so great about the deal, what they liked about it. And then we're going to take this chapters, combine them together into a book and then we're going to market it out wherever we travel. And so it's a great way for you to get your story on a deal out in front of a lot of people. As we market this across the country at our different events. Obviously it's going to take. We're not looking to sell and make, you know, sell this on Amazon and make $20 million in book sales. We don't foresee that. This is more of a lead generation thing for everybody involved, not only myself, but but for also the people that are involved out there as well. So we're working to start this out, but we're waiting to get to. We get 50 people that are have shown interest and then we'll send some links out and get things rocking and rolling it. We're pretty excited about this especially in some of the things that we're looking for next year is opportunities to provide the book out to our database, others databases to get really the word out help build a lot of notoriety for those 50 people that are involved in the aspect of it. Not just like on Amazon. I mean we're going to be able to get pretty easy to get a bestseller on Amazon at some point. I'm trying to get it's a, it's a great marketing tool for everybody who's involved. Hey, I'm a part of a book or a part of a bestseller. Hey, here's my chapter on a case study. You think about the thousands of people that are going to be reading about those deals. It leads for a pretty good capital generating aspect or joint venture partnership lead source as people are reading about you and reaching out and contacting you and other things like that as well. So pretty, pretty excited about that and we're working on that now. So if you're interested in being a part of the book, just drop me an email@scottclosenotes.com and we'll definitely get you added the list. I think we're sitting at like 30 already, which is pretty exciting. Let me see here. Actually, Shannon just put a list together on some things that responded on just something yesterday alone. Yeah, we're up to 23, 24 actually based on a couple people responding. So it's exciting. We're halfway there. We're halfway there to have a book on note investing written on that. We're pretty excited. Well, not halfway halfway there. Getting the interested parties is a better way to say that. A part of that. But anyway, going back to what I mentioned here before, everybody take a look at your business. I know we've been talking about planning out for the next year in the last few, you know, last couple episodes. Totally think that's a great thing. You have to be doing that for your next year, for 2018. What you also have to look at is where your product is coming from. Is it coming from one source? Is it coming from two sources? Is it a mixture of bank and institution? Because when I first started in the note business, 75% of my deals came in from banks, only 25% from hedge funds. And that involved that change. Then from it went to 50, 50, then it went to 75 hedge funds, 25% banks, then went to percent, 100% hedge funds and zero from banks because it was low hanging fruit. I was just like every other investor out there. Okay, well maybe not like every other investor because we're buying more, but you get what I'm trying to say and then evolve back 25, 75, 50, 50. I think if you can be somewhere at a 50, 50 point, your business is not always going to be that way. That's the healthy aspect of things. At least you got some hedge funds and you got some institutional debt because we all know things can change pretty willy nilly when you have. You also probably Want to have a little bit of a mixture of judicial and non judicial foreclosures is when you have different states respectively in different states than just one. For sure. Because when you have things that happen in states like where you have the attorney general comes in or puts a stop on foreclosures in the state for six months as people recovering from a flood or hurricane or the foreclosure crisis like happened years ago, you had that in several states. The attorney came in and suspended all foreclosures for six months. That's a big kick in the wavos, all right. Or kicking the shins or kicking the teeth. If you're owning assets in those areas that you're trying to foreclose on, that puts a different, whole different time frame on your exit strategies. So try to be as balanced as possible on that pen. Another pendulum on the seesaw, you know, try to keep it. When you start feeling yourself going more one direction, you got to try to recorrect what you're focused on and where you're pulling your mid toy because that's a balanced business. If you're any, any type of business and you have just one client who's the majority of your business, or one person who's feeding you affiliates or feeding deals, you have to learn to develop those other sources to drive other business because that's a scary place to be. And I guarantee we know the parental rule. 80% of business comes from 20% of your activities. I get it. Again, it's very easy to turn around. I'm just gonna focus on this one guy and spend all my time on his assets or their assets they send me because that's where I'm getting the most. I'm not gonna waste my time marketing on other places. That's the wrong idea to have. It's. You have to develop other sources. Otherwise you could be hurting if they run out of water or if you guys start boiling water, you may just see your business start to boil as well. So. But that's what I have for you today, everybody. Look, don't be just stuck on one deal source. Don't be stuck on just one person providing deals. One bank, one hedge fund. Go out and develop those other relationships. Go out and develop those other lead sources because it may not pay immediately right now, but the moment you may get a little bit of inventory, but the moment maybe one faucet shuts off, you want to be able to reach over and turn another faucet on to help you feed your business. So go do that make it happen. And we'll see you all at the top, everybody. Bye, Sam.