EP 460 – Advice For New Note Investors with Note Mastermind Members Phil and Melanie Jacob

This is the no Closers 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. Welcome to this episode of the no Closer Show. As always, Scott Carson. Excited to be here with the day. We got two special guests. I have Philanelli Jacob from Michigan, Detroit area. And these two people are doing an amazing job as note investors. How long you guys been investing in notes now?

Just about a year.

Just about a year. And getting ready to close on your 9th and 10th field, correct?

Yeah.

It's exciting. So tell them a little about yourselves. Tell them what you guys are doing now or your background. We'll go from there first. So, Bill, let me start for you.

I'm a project manager with Ford Motor Company and I spent about a year researching the notes space, watching videos that you've done, Scott. And within that year, I convinced my wife we should invest in this. And we're doing this in order to build out our 401k as well as help pay for education and stuff.

Cool. Awesome. Melanie with you were kind of like, okay, what's this? No thing that Phil has an idea, right?

For me, actually, as a registered dietitian who ran a practice counseling practice for over 15 years, when Phil told me something about, like, numbers and, like, investing in real estate, I was like, I don't know anything about this. This is not what I'm. But I was like, thinking, okay, I was able to do my business and do that, and like, I wanted to sort of do something with my husband and try to experience sort of a partnership in it. So when I finally said yes, we went to fast track back in March of last year. Everything was born every term, every acronym.

And I've never seen somebody take so many notes, like straight up shorthand, like, can I record this and then take notes on the notes that I'm getting the notes on? Yeah. You were definitely like, what's that? You were like, giving me that crazy look. What?

But when you discuss some of the marketing strategies and the concepts around marketing, I was like, wow, why didn't I use this before? Why didn't I know this before with my other business? So I think that's what I've really embraced is that piece of it. And I love it and I enjoy it so He's a numbers guy and I'm the marketing and sales.

Good stuff. Now, what's been the biggest surprise for you guys with your first 10 deals?

Biggest surprise? I'd have to say that our first note was we didn't follow your recommendations and we purchased in a more of a rural area. So it's been a surprise at how long it's taken to come to a point where we can proceed in closing out that note. Foreclosure. But on a positive side, our first note, we actually followed everything you had suggested. We got a forbearance agreement, and it is now turning into the performance in our town of Detroit.

There you go. Very good. Now, you talk about marketing. You really embrace that to the point where you really stopped doing what you were doing beforehand. Right, Melanie?

Yeah, basically, I'm still a registered dietitian, but I don't practice anymore. I don't have a counseling office anymore.

Now you've got two little ones, too. We're not so little ones, but we.

Expand in our kids. Yeah, we have two kids and one's in high school. So there's running, driving, and activities and after school. And what I like about this job is that I can work from home so I can have the home base and put a family meal on the table, have some grounding, family time. But then I could still be using my talents and making a difference for the family.

Now, you just recently got asked to speak at your local real estate investment club on a couple things, right?

Yeah, two things on two. Well, the first occasion we went to a real estate meeting, and there's like pillars of education, and one was on marketing. And we had been just following some recommendations that you gave. And I guess my most surprising thing was that people really read the stuff that you put out. So one thing we committed to is writing a small newsletter every week. And we did it consistently for over a year, and people are reading. And so with that, people saw that we were, in a way, marketing, but we were just telling our story. So then when the RIA event came up and they were like, melanie, would you talk on this marketing concept? And I was like, some basic things. I'll share what we're doing. And I'm not an expert, but I'm doing some basic things. And I think it was well received in an Ann Arbor group.

That's awesome. Exciting. They're basically taking a lot of things and you have an email goes out. What else are you doing marketing wise?

Well, we have the email that goes out once we write it. So sometimes he starts it, I finish, I start, he finishes.

Right. We also connect to people through LinkedIn and of course through the RIA's general meeting people and sharing what we're doing.

Yeah. And then Instagram and Facebook. We have business Facebook page. And now we're trying to do posting More on the LinkedIn business page, which is brand new. She recommended so well.

But that's the thing you've been asked. I want to come back a little bit because you said people are reading it.

Yeah.

So what do you mean by the reading? Like they're coming up to you at the RIA Clubs or when you're out speaking or what?

Well, we've had people actually recognize us.

Yeah.

But we can also look through our CRM mailchimp and we can see we have somewhere between a 20 and 30% open rate every week.

That's really good. Consistently for over a year now. Doing that. Okay, now what was the struggles for you? Because, hey, it's great. You're excited, Things are working out. Let's talk about some struggles. Let's get this dive into the meat that people always like to hear because you guys had a little bit of struggle. Get rock and roll, get some momentum going. Right, right.

It took us about six months to close on our first deal. And so in that six month of just trying and practicing and putting some things that we're like, something's wrong. Like what are we doing wrong? We were making the connections, but it just didn't seem like anything was happening. We were a little nervous about just bidding. Just put the deal out, Just try and it was scary, especially coming from.

No background like that. Yeah, yeah.

And then picking up calls from banks, talking to banks. It's a little bit, you know, out of my realm of expertise.

I have to say that for me, one of those big challenges is when I come across something that I'm unaware of, like what is the implication of statute of limitations and stuff. The blessing has been that we're part of this mastermind. So we've had people we can call and talk to and get advice from on how to address the different challenges that come up.

It's always good to have people you reach out to. Right now, how are your 10 assets spread over? They all in your backyard or how are those spread out?

We have one in Illinois, one in near Terre Haute, Indiana, and we've got two in Lansing, two, three in Detroit.

And three more in our self directed IRS.

Cool. But where are those three in your IRAs from what areas?

There's one Illinois, yeah.

Might be blanking on this.

There's one in Illinois, there's one in Ohio and West Virginia.

That's what I remember from we mentioned a few minutes ago. I was like, I didn't hear the West Virginia one. I was like, go back. But so you got a little bit of a diverse area. They performing, non performing. What do you kind of like now that you've been doing this for a little while? It's kind of your bread and butter.

I think non performing is really our goal, our bread and butter. But we have like the two that we're closing on right now are performing notes because we want to get the cash flow started and building in our self directed ira. So we're trying to have a kind of a balanced portfolio, maybe 70% non performing, 30% performing notes.

Okay.

And the people that really want to partner with us, they usually like a little bit of different types of assets.

What do you mean by different types of assets? Like a condo, like a three bedroom.

Single family residential, non performing notes with $60,000 value. And they just say this is exactly what I want. So they know what they want. Some people are just getting started and they want more value add for their money. So then we'll start them out with non performing.

We have one investor who really wants to have notes that go to foreclosure. So it's good to know that we have such a diverse set of investors.

So you just basically built a list from your contacts and as you have something that falls into that category, you're just reaching out to that category of investor and say, hey, we got a deal ready to fund. Yeah, that's good, that's smart. Doing what you're supposed to be doing right now. What's been the biggest surprise? Even any crazy deals with your assets, anything that's going on with your assets, it's like, ah, you know, or been like, oh, it's all been kind of normal.

Or I'll talk about Illinois.

Tell me it's not in Chicago. Tell me it's not Chicago.

It's not Chicago. But you know, you did mention we needed a buyer's license to buy in Illinois. Well, we bought in Illinois and we didn't realize how sort of complicated the application process was. So we had to figure out how to get that application filled out properly. We had to get a lawyer, we had to have him review the application. But this seemingly took months because we couldn't, we didn't know where to go or what to do.

And there was also the Ptax Form.

Oh, the PTACS form, which is when you record a deed. In this one county they have this thing called ptacs which nobody even heard about. So we had to really find the recorders that knew what to do and things like that. So the good news is that when you reach out in wcm, we call you up. Anybody pretty much will say, did you try this resource? Did you try this? Or you post on a Facebook, hey, do you know anybody that does this? And sometimes you don't get it the first time, but you have to just keep. And I think persistence is the key with most barriers.

When you hit a barrier, yeah, that's definitely the case. Not to give up or just wait, sit around. Sometimes you gotta repost it. Re ask the same question or ask the question a different way sometimes. Right?

Yes.

Yeah. Right. So what are your long. What are you guys long term goals? What are you guys looking for the note business to do long term wise? Are you still planning on keeping working at Ford or what's the goal? Or should we not say that, Kim? Should we go back and take that name out?

Phil has a good job at Ford where we're grateful for the opportunity.

Oh, yeah, yeah, yeah. Nobody said they weren't grateful. Come on now.

Actually, with me working as just privately without insurance, we have a really great opportunity to have insurance. And then me working full time in the no business right now, that's working out great. He comes home on the weekends and he works on it and maybe an hour in the evening and I have a little time during the day. The good news is that the kids, my teenager has the opportunity to do some social media postings for us.

You got some slave labor going on there. Legacy marketing. I like that. Very good stuff. But that's helped you out though there. They're getting involved, they're seeing the things you're doing. And the assets you mentioned, I don't suppose you're driving to West Virginia to go look at the asset you bought there, but have you driven by any of the others that you bought?

Yeah.

Okay.

We've driven by the ones in Detroit. Right. Just to check them out because they are in our backyard.

Right. But it's helped probably when you're looking at your due diligence, actually see the eyes on that stuff. And then you're relying on what realtors and other investors from the others.

We build those relationships with the realtors or if you have a realtor who knows another realtor, then they are more likely to help you out. And then for the Lansing assets. We had a number of opportunities to get some good CMAs, pictures, comps, things like that. So it's nice to be able to still drive. And I think I sometimes get a call from wcn, hey, could you drive by? And I've been able to do that a couple times. And one of the things I like to do is actually go to Detroit. We get a big tape or a big list of CFDs. I go right to the city, sort of know the people there. I go to the, go up to the tax office.

So the actual offices send a list.

To the lady and I said, could you look up these taxes on these assets? And it could be like, you know, 10, 20 assets. So she does it and she prints out every single one like five minutes.

Wow.

So depending on the time of year, the line could be shorter.

Careful, you're volunteering there.

Yeah, so I usually do, I say I'm going to, to the city today first. Five people limit so many assets per person. So I, because I can do it fairly fast. And then you can go to the kiosk and look up the water bill.

That's helpful.

Yeah. So I like that. I go with the friends that we make it. We make it a lunchtime, lunchtime field trip.

The field trip there. That's good things. That's a good thing. I mean you guys have some goal. What, what goals are you looking at as far as like the next 12 months with your note business? As far as. Is there a number of deals you're looking at doing or focus more on the performing side for cash flow? Because we've talked about some different things in the last five nights.

Our goal is to get up to 30 notes before the end of the year or by the end of the year. We also want to primarily have those as non performing but with a small portion forming so that we can build in the cash flow.

And you're hoping that a non performing turn into performing, right? Absolutely. Okay. That's a thing. It's not just non performing. Yeah. Rehabbing the borrower. You're buying something that's occupied. Right. You're not doing rehabs. Don't have time for rehabs. So that's occupied. That you can then modify the borrower, get them back on track and you got cash flow without having to do a lot of heavy lifting. That's good.

Yeah.

Right.

I think we also want to work with other masterminds to purchase pools of assets versus viewing it as ourselves.

Have you raised capital for anybody else or are you just doing mostly with Your own money right now?

No, we've raised capital from a few other investors as well as what we had on that.

Sure, sure, that makes sense. So 30 deals in the next 12 months. You guys are here right now in Austin, Texas. For those that don't know, we're here in Austin for the Mastermind weekend. Right, right. Is this your, what number is this your third Mastermind? Third mastermind you've been to? What's the biggest thing? It's kind of drawing to you now from the first time that you came, the big differences between this.

So for me, who doesn't have any background, I need to hear things like multiple times to really grasp it. And then I needed to actually do hands on deals to come today and go, okay, I can do this better, I can do this differently. I mean, something, some simple tools that you maybe only get like 50% of the time when you're hearing it for the first time. So I think I'm going to come back even after a year of doing this, I'm going to go back home with like 10 new things to work. And I told Phil, I said, I need this mastermind, I need a shot in the arm, I need to get going again with some new ideas.

Well, that's the nice thing. You come in, you get a little bit reinvigorated, you meet some new people that maybe haven't showed up yet or new to the group, different areas of the country, new personalities. It's kind of a great rejuvenator. Now you're expanding your network across different markets too. Right? You said something today. We did this thing, a skit called Mastermind Theater where we talked about a short sale and had all the parties. It was like the Chinese fire drill up there. But you said that was really helpful, kind of seeing me break it down piece by piece, person by person, deal by deal.

So when you actually don't come from a real estate background, understanding all the different players, all the different roles they have, who does what, when and the timing and what power they have to make decisions, sometimes you can't really process it. But today when we had the, I'll just say the visual of like 10 different people and I'll look for my social media post on this because I did take some shots.

I saw you, the camera is cracking up. I was like, okay, so we're going.

To have a little, what would they call it, Screens of different people.

There you go.

Playing different roles from the investor to.

The note to the note to the house, the realtors to the investor to the short sale department. All that good stuff.

It helped me understand it, and I still want to go back and watch it, and then I'll remember it even better.

So what's been the biggest thing that's changed for you the last three masterminds?

Well, I think the biggest one has been how we do marketing. That's definitely changed from the first mastermind. Actually, from the fast track.

You're pretty nervous.

Yeah, I was very nervous. And to the point where a lot of that basic communication is now easier to do, more natural, but keep challenging us to change with the market.

Go, Vinny.

And so putting me out there on the edge.

Well, but it's a beautiful thing because the roles are really reversed because it was be marketing Phil's company. That was the specific thing. Like, oh, my gosh, I got a LinkedIn profile. Do I need to start another one? Or I need to make it like a fake one or a pseudo name, you know, like, now let's not do that. But then you're like, oh, I can run this marketing because it works. Whether it's working for the real estate stuff or my health background, you know, all that good stuff. It's. It's marketing that works across the board. Right. Is there a nugget today from the marketing we talked about before lunch or after lunch that you really kind of enjoyed?

I really love the geo.

Geomarking marketing.

I think that is going to take so much time, energy, and the opportunity is unlimited. I just. I couldn't believe you're sharing that today. So that was a tidbit of Mastermind. Tidbit. Golden nugget.

It was a golden nugget. Yeah, totally was. If I had my. If I had my noisemaker, we think cha ching, cha ching, cha ching. Exactly like that. But the thing is, it's been great, though, is you guys are taking things that we talk about and literally putting into and very coachable. What do you got here, Phil?

This is our pitch deck, which, for.

Those that are listening, he's got. Yes, we'll post this on YouTube and Facebook. But the podcast, the radio you guys are listening to, if it's on the radio show or on the audio, we've got a blue binder here with how many pages? Like, what, 15 pages?

Yeah.

Basically, it's your pitch deck.

Okay. It talks about notes, talks about us, and different deals we've done. And at the end, we have a few examples and also our NDA.

How's that worked for you?

It's worked really well, actually. I should let Melanie Talk about it. She's the first one to actually put this into.

Into practice. Okay.

Okay. So I saw you show us how to do this. I was like, I can do this. So you did set up the template. So we work together. So he sort of knows how to do the templates. So I put this together based up of the format suggestions. And then when I was speaking at the RIA meeting, it wasn't really a topic about notes, although that's coming. He did bring that up. So he said, why don't you kick off and just tell a little bit about yourself. And I said, we're not going to talk today about notes, but if you want to hear a little bit about what we're doing at Philip Jakeman Associates with real estate note investing, I'm just going to leave this in the back and you can pass it around.

So this was only one copy.

One copy.

Okay.

But it was like maybe like 30, 40 people over an hour and a half. It went all around the room. And then people came up and said, I didn't know that this is what you do.

Oh.

So it was a very good opportunity. And the other thing is that for any investor, I think we could shorten it and make it that concise. A little more concise. And I think it would be a.

Great, great fit because you got basically the profile sheet, Philomel Jacobs. You flip over the next page.

Starting our first building partnerships for real estate success.

Good. Got a nice photo, a little bit in the background. And then you dive your sole focus on the business. Great. And then you die in what. Why we buy mortgage notes. Flip it next to what you are not. That's a very important thing. A lot of people have misconceptions about what a nut Vester is.

We did rental and we're not doing it right.

Then you got your network here with basically your network of vendors and people that you're on your team. Oh, I like it. Healthy. No, There you go. That's perfect.

Fruits and vegetables there.

Yeah, that's definitely there, there. And then what you're looking for, they ask. And then you dive into.

Let's continue the conversation.

Right. With your contact information. Then you got some sample deals. Pretty simple. And then your NDA, that's. So you had 34 people look at it. How many people out of 34 reached out to you to work with you on something?

Well, we've got one that's an active investor who wants a deal that we're looking for Now.

I think it was month 12. 12 people signed up.

Oh, really? Wow. 33% of the room.

That's good because we put in a little bit lead link so they could log in and get something for free. And then they.

What was the freebie that you gave away?

I did a very simple 30 minute video on how to use Canva. Oh, really? Because it was about marketing.

It's pretty easy to put into 30 minute gap.

Yeah.

All right, that's good.

That's good.

I like that.

So I mean, you know, we try to share some of the things that we do.

Right.

And I hope some people take it and some people are asking me to help them with their Canva or help me show me how to do it. So that's a way to build those relationships with people who you want you're going to see on a regular basis.

Right. And if you have people asking about it, you film the video so you don't have to repeat yourself 30 times. You repeat yourself once. Now it's well done once and seen infinite amount of times basically for it. What's a hurdle? It's still kind of tackling you guys. Any difficulties, any things you're struggling with.

Still for me, I did my own bookkeeping or I had someone do my own bookkeeping with my other business. So I have had to. We've hired Debbie Mullins, great resource to help us with our bookkeeping. And I'm sort of. I want it all lined up and so it's very. A little bit more complicated because you have to keep all. Everything all lined up. So I've spent a lot of time on that. So that's how I want to spend my time. So I'm trying to learn so I could train somebody else to do it. So that's been harder for me. It takes a lot of time and energy.

Sure, Phil.

I think our next step has to be bringing on board virtual assistant to help with some of more mundane type things. We've had challenges in keeping use PipeDrive as our CRM and keeping track of that, making sure it's really fully updated. We do that. We're not as effective as we could be or should be. We find that we fall back on writing stuff on an actual calendar on the wall versus just doing everything only.

At least it's getting written down though.

It's getting written down. So if I have my little. My calendar and my whiteboard and then we connect. Usually we have a Saturday morning kind of this is what we're going to do this week. And then we sort of work throughout the week on our focus so it works.

I mean it's. Everybody's got their own different things especially. How many hours a week are you putting in? 50 out. Oftentimes we'll get, hey, we're working on something. And I three way fill in as he's driving home, like, yes, that's fine, let's jump on a three way call.

Or he's got calls at night so he can't get on.

Right. What's some advice you would give to somebody who's out there thinking about getting the notes right now? What's some advice you would give somebody who's maybe brand new, has no background experience in real estate?

I think part of it is that you have tons of initially free videos that you could learn basic things to get started. The fast track I think is absolutely essential to get into like a sort of an intensive and then actually maybe working with a partner. I mean we have a partnership because we're married and we work together. We're opposites, we sort of complement each other. I think if you're a single person trying to do this without real estate background, I would highly recommend you find an accountability partner or someone you could just check in with every week or split the duties or something so you can build that momentum. And maybe you each have your own business, but you're working together. And then don't be afraid to ask advice.

This is something Scott says a lot. Just, just do something. And the reality is that is true. If you try something, you'll learn from it and keep on improving and get to where you need to be. If you don't take that first step, if you're trying to be perfect, it won't work.

That was something that you guys struggled with a little bit for trying to be perfect before you took the step. Right.

We didn't even have a website when we started and that was okay because we had a little hiccup in the beginning with it and so we hired someone different. But we just started the newsletter we started doing even though we didn't have a website. We were like, well, when we get the website we're going to put that link right here. So I think don't be afraid to get everything perfect before you start too because it'll come together as you're doing. And one thing we do is we share a little bit about us as we go and we've just changed our new newsletter format based off of some of the feedback and that we just try to share a little bit of it as we go and then value add like what is a no? Why do big sell nos and just simple concepts that just answer some questions.

Just because people don't know about it. They don't know about it. And then you're talking like a different language. And you guys actually, you lived overseas for a while too, right?

Right.

Where did you guys live? China.

Chao Ching, China.

Chaqing, China. Right. And you mentioned you. We had some conversations with it for the fast track, how different it was and some of the things lived over there for how long?

For almost 18 months. And it was like a whole different world. Well, it wasn't like a different world.

I actually loved it. I loved it because I was working so much as a counselor counseling very medically compromised patients with anorexia. I found myself drained by the end of the day and then coming home to my family and not really being able to give to my kids. And so when I went to China, I had to stop. Everything was like sort of mourning and grieving, like my identity. But then after about three to four months, I just sort of came out of this fog and I was like, wow, how did I do that? I mean, I'm still a big advocate, but China allowed me to sort of stop and sort of reframe and refocus. And not to mention the good food in Asia. Not just in China, but we like Chinese food, but Thailand and Malaysia and all these other places. India we got to travel to. But also that we really were able to spend more quality time as a family. That became a priority.

That's important when I returned. Yeah. And it's allowed you guys to have that connection as you're doing this too. Give you a little flexibility on the front end, Right?

Yeah.

Good stuff. Good stuff. What's the best way for people to reach out to email?

Email. Yeah.

What's the best email? Is it the noteworthy dealmail.com noteworthy deal, not plural deal.

Yeah.

Noteworthy dealmail.com cool.

And I have a cell phone, you know, if you want to reach me or just our online, you can look it up on the website@jacobsassociates.com jacobsassociates.com Jacob.

Yes. I thought you said S in there.

Jacob.

J, A, K, O, C. Sorry. J A, c o b.associates.com. okay.

Yes, you can look up on our Facebook page. Philip, Jacob and Associates. And more Twitter.

Well, I'll tell you this, guys, I'm very proud of you closing 10 deals in your first 12 months. Great start. Especially busy schedule. You know, hit some learning curves. But hey, would you recommend. This is a great way to do, be invested in real estate.

Absolutely.

Cool. Well, look forward to a lot of good stuff from here over the next second year as well.

Yeah. Thank you, Scott. You've been a great teacher, mentor and inspired inspiration for so many.

Well, it's good because you guys are taking action. That's always a big thing. It's not me give you the tools. Those that want to succeed will go out. You've done an amazing job. Very proud. Everybody's proud to see the growth of you guys. Keep killing it. All right. Awesome. Alright guys, that's gonna wrap it up for this episode of the no Closer show. Like I said, check them out. Not for Jacob Associates dot com. Check them out there and you'll see a lot of great things from Philip and Melanie Jacobs out of Michigan. We'll see you off the top, everybody. Bye.