Lead Sourcing - 3 Ways To Find Note Buyers & Sellers

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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.

Good morning, good afternoon, good evening everybody. Welcome to this episode of the Note Closure Show. As always, Scott Carson. Excited to be here with the day. I know it's been a little bit a while since we've released an episode as we're obviously enjoying a little bit of summertime, but also working to come up with new content, new topics for each and everybody out there. We had a lot of questions in and taking those questions and putting those into potential podcast episodes is one thing that we've been very, very excited to do in the past and we'll continue to do so here into the future. But it's hard to believe we've had 700 episodes. Once again, thank you to everybody out there who's listened to a podcast episode either on any of your podcasting platforms or checked out our YouTube channel or checked out or any of our blogs or episodes on our We Close Notes website. So once again, everybody, this episode is designed to kind of help you get over that hump. I mean, we all have that hump. Oh, I'm not finding anything. This is literally like one of my biggest pet peeves is when I attended conferences or meetup groups or I see comments in Facebook posts and Facebook groups. It just drives me bonkers. You can't find any deals. There's too many note investors. Damn that Dinah Bauer, that heady speed, that Scott Carson. They've added too much competition to the market. And here's the thing, ladies and gentlemen, competition is good. But you know what, there's a lot of deals to go around. There's still a lot of opportunities. If you look at the numbers and we had at the end of 20, 21, 81 million plus mortgages across the country and we had about a 4% default rate. That's still roughly three and a half, three three quarter million homes in default or borrowers at least 90 days behind. That's a lot of distressed debt out there. And yes, a big chunk of it is government backed loans. You're not going to be buying a big chunk of. It's bank of America, Chase, Citi, Wells Fargo. You know, those big companies aren't going to sell it to you at a one off basis. But you know what it still means thousands and thousands and thousands and thousands and thousands of of other distressed deals. Maybe not a traditional one, maybe it's a contract for deed, maybe it's an owner finance deal as well. But here's the situation. I'm always amazed at the well, not really anymore. I'm not really amazed this anymore because I see it over and over again. We all as individuals and I'm guilty of this. We all like low hanging fruit, right? We all like the path of least resistance. How can I just do one thing and end up with a ton of opportunities and we've been blessed and gotten fat and bloated like Garfield the cat over the past few years. This is I'd say prior to Covid of having companies that had list of deals. They buy big portfolio, they keep what they want to. Then they would look to sell off they didn't want to keep or couldn't get worked out in a timely fashion. And most funds, most not funds, that's their biggest goal to buy a portfolio. They work to get notes re performing. They hold on to those, the ones they can't get reporing. They're looking to sell those off at an up, you know, a percentage above what they pay. They paid 40 cents to the dollar, hey, they'll try to sell it at 50 cents a dollar because they can do that in 90 days. That's a 40% cash and cash return to the stuff that they don't like. That's a beautiful thing to have on the performing side. That's just cash flow that's generating nice income. But here's the thing that always bugs the crap out of me. If you've been a note investor for longer than two years, if you're brand new, hey, this is a strategy that you can do as well. But there's all these tapes that I've gotten over the years, right. And the tapes come from different funds, banks, stuff like that. But you know what's same on those tapes? The addresses. I can go to the county records and do a search and either deed search or if the property was sold, it's no longer the note I'm looking after anymore. But I can see who bought and sold the note if I'm doing an assignment search. If it's a contract for deed, I can go see who the investor was that bought the contract from Harper or Window Rock, one of the other bigger funds out there that was selling a portfolio of contract for deeds that leads to hundreds and hundreds, if not, well actually really thousands and thousands and thousands of note investors out there. And I'm always amazed that people, and I get it, people are lazy, inherently lazy most of the time. But here's the thing that means there are tons. There's a paper trail. You can go out there. If I got a list from somebody on, let's say one of my competitors got a list of notes and I got happened to get their list or had an address, I saw them selling on a platform, okay, hint, hint, wink, wink. All the notes that are available on different platforms out there, you can see who owns it, you can see who the last recorded assignment of mortgage was. Or if it's a contract for deed, who's the investor on it right now, see what they paid for it. A lot of times in a contract for deep, you can go to the county records, which most counties across the country, excluding like California, Baltimore, I mean Virginia, Maryland, they're a little quiet. Arizona is a little quiet. On your name searches, you can't do a name search for the address search, but you can do an address search. You can go to the county assessors, do an address search, do parcel, same thing, and literally go on to the county recorder's websites and find out who owned that note or who sold it, who owns it now, who'd they buy it from, who they bought it from before. And this leads to multiple sources for deals. Here's the thing, if somebody has bought one note, very rarely are they only gonna buy one. It's kind of like glaze. Once you buy one note, you can't eat just one. Okay? So this is one of the things that always cracks me up. Cause I see these platforms that listing webs, you know, listing assets have been on there for a year, six months. I just laugh like man, those sellers on there, their full time gig is not being a note investor. Because if they were, they wouldn't be listening to those websites, they'd be working out or they'd be marketing that to their own database on social media. But a lot of these guys, there's the name there, let me call that me, track down that person, LinkedIn or Facebook or social media, track that owner down of the note and see what they have. See if they'd be willing to take a lesser price than what they have listed. See if they've got other stuff on their books that they're looking to get rid of. And this strategy works, ladies and gentlemen. All right, I'll give you a little example. Larry Hoffman, one of our most recent coaching students, saw one note in Cincinnati On a platform. We jumped online, we tracked down that the note had been sold three times. It was originally with Granite. Well, it wasn't originally. Granite Loan Solutions held it before it was listed. Before Granite there was another company and then there's another company before that. And so what did we find? Well, one deal led to three potential sources. Now Grant Loan Solutions is no longer a business, not revolve capital. They're not really selling anything at a discount. That makes sense and that's fine. They have their business model, it's fine, whatever it is. But the other two companies that were on that assignment chain were still a business. So we reached out one of them, which turned out to be a California fund, that fund had another eight assets that this one seller had that they were looking to sell off their books. 8 notes, 7 were performing, 1 was non performing, 1 was sub performing but they sold them at a discount, basically performing. That's at 60, 65% of value. It was a great deal because they were motivated in getting these off their books. But guess what else? They had a portfolio of seconds and they didn't know the pricing point on that. Seconds aren't really a game. What they want was overpriced. But guess what, it also led to more deals. They had another one of their clients, their investors had some notes that was looking to get rid of. So it's led to well over 30 potential deals from you know what, taking that extra step, taking extra step to check the assignment chain to pick up the phone and by all means it wasn't. Hey, one phone call. Oh yeah, we'll send you everything. It took some follow up on Larry's part. Couple weeks actually I think over a month of back and forth. Second longer he's ended up closing on eight deals for 200 and some odd thousand dollars. It's going to yield them something like $3,500 a month in cash flow and in a pretty good chunk of change. But the thing I'm trying to get here ladies and gentlemen, so few people do this. Most people get busy talking or they're working on one note and they're continually working on that. And that's fine. I mean honestly, I think if you self service you're really shooting yourself in the foot and as a potential for screwing up things. But there are so many opportunities out there when it comes to finding more notes in 2022. And that's the thing. We're seeing tapes that come in. When I get a tape in I immediately go in and see who the owner of that tape is or who is the most recent assignment that's been filed to. If it's the person I'm talking to, great. If it's not, I know that this person either a has purchased it, is looking to flip it real fast, or they're a joke or broke, or what I can do is also go a little bit further back and find out, okay, who did they buy this from? And then if you look at the assignments, oftentimes what's on the assignment. What's so great about an assignment is it has to be signed and notarized. And you know what you often will get? You will often get a name and clearly typed out ink on the assignment. A name of the person who is responsible for the assignments of collateral. It may not be the exact person selling the asset, but it may be it's somebody important enough to sign off on the assignment chain. And you know what, what would you do? You can stalk that person. You can social sleuth, find that person online, contact the bank or the lender, Hey, I need to speak with John Smith and the VP and John Smith, guess what? Will often lead you to talking to somebody else. But here's the important factor. Here's where investors fail. Over 52% of the time is they never follow up. You have to follow up with these people with a phone call, an email, text message, if you got it, a phone message, you know, the LinkedIn message. If they're on LinkedIn, these people are busy just like anybody else. And when I remember when I was a banker and a financial advisor, I was very slammed. I didn't drop everything I was doing to answer your email immediately. I think we, as Americans, we're kind of have little patience. Zero to no patience. If people don't respond back, well, why? I know they got my text message. I can see it. I saw that they started typing. Why didn't they respond back to me? Right? This is the thing that you have to work at is basically, if you've made a contact and you know it's the right contact, you've got to put it in your calendar to follow back up. You got to put it on your schedule. Hey, I need to call this person this day. I need to send them an email, a phone call, you know, send them a letter, smoke signal. I need to get the puny express, whatever it might be to get to that right person. But those little steps that most people won't do, I don't have the time for it. They're not seeing deals, they're the ones that are at the conferences, they're the one that are online complaining about the facts that they're not seeing any deals. And it gets so freaking frustrating because if you spent some time, I'll give you an example, I'll literally give you an example here. If you jump on like the county records of every major city in the Rust Belt, like Indianapolis, Detroit, let's go to Columbus, Cincinnati, Akron, Dayton, Cleveland, you could go over to Chicago or Champaign, Illinois, you go over to like I said, Indianapolis. But Anderson, you could go down to like the South Bend or West Lafayette. There are any of the major cities in most of the major markets across the Rust Belt states. And you know what, if you go search for Harbor Portfolio in the deed search or the county records, Harbor Portfolio was one of the biggest sellers of contract for deeds, you know, 10 years ago, five years ago until they sold off. And if you do that search for the last couple years and I'm say pre Covid, I say 2014 to 2018 would be the heyday. You will find a list of investors that they sold to. You'll probably even find some stuff that I sold, I bought from them. Okay, but that gives you a list of LLCs. It may give you a list of some borrowers. You may necessarily want to contact the individual borrowers on some of those deals, but you would look at the LLCs on that and guess what, jump on and do a Google search, okay, for any ventures, all right, or whatever, hide funding or whatever the names are Inverse Asset Fund, whatever. And you can see, oh, guess what, they bought a note. And I'll tell you right now, most of the time when people buy one note, they're buying more or they have a portfolio they're looking to get rid of. And many people have had performing notes, maybe still hold them for cash flow, but they may also have some non performing stuff. And if you're a serious note investor, at some point you're going to have non performing and those are relationships that you want to make you want to follow up with. Get their contact email so you can drop them to a drip marketing campaign. Hey, what do you have this month? What do you have this quarter? Like literally something that I do as well. Another step that you want to take it you can jump on and use just go on LinkedIn and type in note investors and start sending messages and invites to other note investors. Hey, just wanted to see, I'm an active note investor as well. Want to see if you had anything that you were looking to sell, performing or non Performing. I'm actively buying for my own portfolio. That has led to deals coming in, literally led to a conversation today, A guy I'm calling after 5 o', clock, he's on the east coast, I will probably call him tomorrow. But he's like non performing. That's we've got some available for sale. So that's the thing that you have to realize, ladies and gentlemen, there is plenty of opportunity. There's still plenty of loans being originated right now. Think about all the crazy now, not necessarily the government loans and not necessarily the low interest rate loans are gonna be exactly, what should I say, attractive to note investors because they're at 2%, 3%, 4%, unless they're extremely non performing, there's still going to be a price gap between what people want to pay for a non performing note and what our money costs are. But here's the thing that's working in your favor too. There's a lot of people that got money dwindling away, evaporating with a crazy market. Inflation is up again for the worst in 40 years. Every $100 is being dwindled down to $92. Right now, gas prices are basically five bucks an average across the country. Gas is back, more expensive than water. All right, but people have money. If they're not putting that money to work, they are losing buying power. So Instead of getting 10% or 12%, people happily get 6, 7, 8%. Now, well, that reduces your money costs. Instead of paying 12 or half the deal, that should allow you to go out and buy some assets that turn out pretty good. So even if it's a seriously non performing note, if you can get it to perform, or you can buy that, you know, $0.50 on the dollar, which you will be able to, we're already seeing that stuff. You've got cheap money. Hey, it may very well work for you because if somebody's getting something, even if they're getting a, I hate to say this, a certificate of disappointment, that 1% is beating inflation, or if you can sit there making nothing, it's making nothing, right? I'm never going to say CD is a great investment vehicle, but at least it's getting maybe something and something's holding its buying value for a year or five years. But people out there are very nervous, they're very scared. You know, gas is up, baby formula is about to be sold in the black market. Hey, I got some, you know, shredded carrots, I got some mushy applesauce for you. I sell it to you. You know, it's cheap. It's more expensive than a hit of an eight ball, whatever, you know what I mean? I don't know. Don't do that. But anyway, what I'm trying to get is people are looking for tangible assets that will hold value. Paper is the perfect investment for folks. You don't have to do the fix and flips. You don't have to deal with tenants and evictions. You're buying notes. Yes, you have to foreclose if people aren't paying ball. But that's a huge opportunity out there. So if you're getting tapes in from a fund, do a search. Or if you've got old tapes in an inbox, because I share, I save every tape I've ever gotten right from every fun. It's one of the first things that I do. It's also a way for me to be able to tell if this, the tape is active or old. I mean, I had one tape that had the same two Texas assets sent to me, like six different from six different, seven different sources in the last 30 days. I was like, listen, you don't own this. No, you don't. Because I've seen these assets direct from the seller before. You're a joker broker. So if you're getting tapes in, go take a look at it, spend a little time. Because if the investors sold that tape off to a lot of people, guess what? Those are potential people to reach out to us. So like there's one, I'll give you a great example. There's one fund right now not going to mention any names. They had a list of 900 assets, okay, 903 to be precise, of non performing, some performing. And the seller said that he sold basically everything on that list except 18 notes like congratulations, that's phenomenal. He had a lot of investors. And ultimately there's somewhere around 50, 60 investors that ended up buying. I made some offers on it, something come back, that's fine. But the thing is I will spend time in the next, say 30 days, 60 days, I will go back and start tracking down assignments that are filed. I will track contract for deeds that have been filed, any name changes on those 900 assets. Because it will give me a list of investors, note buyers that may ask non performing or performing stuff where they bought a portfolio and they gladly recover some of their initial investment with a little bit of profit and sell the note to me on the 60 plus that I made offers on. But here's the thing, ladies and gentlemen, all this only works. It only works if you Work. It only will work if you take the time. Carve out a couple hours. And the beautiful thing is if you're working a full time job, ladies and gentlemen, that's okay. You're nine to five or you're seven to seven is booked because you got to get up, get the kids to school or the kids out of bed, you got to get dressed and go to work and then commute time. After you've punched the clock at 5 o' clock and you're not home till 7 o' clock and you're sitting there, you know what you can do? You can literally get on your laptop while you're watching the NBA finals or whatever you're watching on TV at night with your spouse and do a little research and find these information. And if you find, if you pull up the assignment, you see that it's a Texas asset or a Texas LLC or a Florida LLC or a Michigan llc. It's going to give the address, it's going to give you the name. It may very well give you two names, two entities and two people that signed off and those are gold mine for your long term investments. And you need to start building that list of potential note investors and reach out to them and just make connections. You don't have to spend fifteen hundred dollars to fly across the country to the Dana Point, California for Ironman convention. You don't have to fly to Miami beach or over that neck of the woods for IMN and connect with 200 potential not investors. No, just go to their website, they'll tell you everybody that's come and then just start connecting with those people. That's another tip for you is all these hedge funds or all these servicing conferences that share their roster, maybe they don't give first name, last name, but they give you the people's ID or their company name and their job title. That's a wealth of information. Oh, a special asset manager for Access Bank, I might want to reach out to them. Oh, a special asset manager for Uncle Bank. Let's do a search for that LinkedIn and find out the one, two or three people or more that have that job title currently and let me reach out to them because you could always, you know, reach out to them. Say I meant to connect with you at imn. Didn't get a chance to love to talk with you. You immediately it's a warm. Even if you didn't go, most people know like oh, there's a lot of people they don't meet with at an event. That is one tip One tool that works really, really handy out there. So I highly encourage you guys to take a little time, do a little marketing, do a little sleuthing. Because if you're one of these individuals and you know who you are, who's out there saying there's no deals, I can't find nothing too many, no investors overpaying. It's simply because the fact that you have not evolved, you have not pivoted was the word of 2020. You gotta pivot your marketing, you've gotta pivot what you're doing. If you're not seeing enough deals, guess what? It's from one or two things. One, you're either not contacting enough asset managers or you're not making enough phone calls, either on social media or email or phone calls and doing the whole dial in for dollars. Ladies and gentlemen, I know this is a evil thing. You know, the thousand pound telephone, a dialing for dollars is still one of the highest revenue generating activities that you will find. I mean, this is why I say you have a lot of fix and flippers and people that are getting more aggressive and making phone calls out to distressed borrowers. You just don't be a distressed mortgage to have a distressed borrower. You have people that are passing away. You've got reverse mortgages where people are dying off. That's a potential investment play. It is a note deal. But you're more of an REO play on that. We've bought some reverse mortgages recently and worked with some of our students to buy some. Those are great investment opportunities. You subject to deals. And here's the thing that you look at, I may do a separate episode on this. Look, if you're getting the paper, I know the paper is a foreign thing, but if you're getting your, you know, American Statesman or Austin American Statesman or whatever your paper is, the local paper is flip on over to the garage sale listings or the estate sales or the yard sales. I guarantee if you track this, you'll start seeing an increase in yard sales and garage sales. Especially now, the last year going into the next couple of years as we enter the bear market as we are in this recession. Because what's going to happen? Well, everybody's been living fat half, you know, happy, high in the hog as we like to say, over the last 10 years, market value is going up. People cash in the equity. What would they do with that equity? They go buy toys or use it for other things. Well, now that number is turned south. Yes, property values are going up, but people are paying More for baby food, gas, water, whatever it might be. Real estate cost of goods are increasing with inflation, so people aren't working as much. Or we all know that salaries, hourly wages aren't going up as they used to be or not going up proportionately to what everything else is costing. So what do you happen? You have people that are turning to the garage sales. They're turning to the marketplace of Facebook. They're doing yard sales because they got to pay the bills some form or fashion. And that could potentially yard sales. Garage sales could potentially be sitting out in front on the card table selling off their knickknack. Patty wax, give the dog a bone. Deals may very well be a distressed property or somebody who's struggling to pay their mortgage. And you should never go up and yell at them, hey, are you, are you selling your stuff because you can't pay your mortgage? That's not a good thing to do. It's embarrassing. You might get very well punched in your big nose and you deserve to. But there's times over the years, times over the last 15, 20 years, we've approached sellers or people aggressive. Hey, any reason you're selling all this stuff or anything like that? How's everything going? Oh, you will usually have somebody start rattling off. Oh, yeah, can't keep up with things. Husband got laid off or wife got laid off. We can't afford to stay here. We gotta sell this stuff because we're moving, we're downsizing, we can't afford to live here anymore. Well, really. Well, is there something I can do to help? I'm an investor. I'm in real estate. I help solve. I help turn problem properties into profitable solutions for all parties involved. And that's something to think about. That's potential deal flow. There are still so many deals around you, so many distressed deals, whether it's distress notes, whether it's tracking down previous buyers, sellers, new buyers, new sellers of notes from the county records. Yes, you can check the foreclosure list. That's a potential thing, but that's usually six to 12 months down the road. Look at this foreclosure list for those banks that have stuff, they're foreclosed on it as potential leads for their other stuff they have coming down the pipeline. When we did a, we were searching up the Bauer Financial list, we compare it quarter to quarter and the Bauer Financial will show you the banks what they have in default in 90 days. But they will also have a column on their spreadsheet. When you download this or purchase from BauerFinancial.com of what they have in 30 to 89 delinquencies or delays. And that's usually a number equal to or greater than what they have in default. And so that's just coming down the pipeline, ladies and gentlemen. So lots of opportunities out there for you. If you are an active note investor or somebody who gets off their ass to market instead of sitting and bitching and moaning, which you can sit there and bitch and moan all you want. If that makes you happy, that makes you happy. But you know what? It's not going to make you richer. It's not going to make you happy and sure as hell not going to help you as this market continues to evolve and get even more crazier. So take a tip from the note guy here, guys. Go out, market, take some of the tools, take some of the tactics I've just shared in this episode. Apply it. You can apply multiple of them, you can apply one of them. I don't know what your schedule is or what your focus is. Somebody asked me the other day, hey, can I do this to find seconds? Yeah, if you know who the seconds are. I think seconds are way overpriced right now. I think you're going to make more money, high returns, bigger checks, and more opportunity in the first position. Spuff and yes, it's the same thing. People that have money are looking to put their money to work right now. It's always easier to raise capital in a bear market than a bull market. Why? Because people are scared. And if you educate them and teach them what you're doing and how you're doing it, they're not going to run with it. They'd rather write you a check, struck you a check, or wire you funds to get involved. And they'll be happy making an above average return. And then above average return may be as little as 5, 6, 7%, which is cheap money out there for us as investors to go out there and make above average return. So go out, take some action. Ladies and gentlemen, I hope this episode was helpful for you once again as always, thank you so much for listening. Thank you so much for sharing this episode. Love to hear. If you have an idea topic, feel free to email me@scottclosenotes.com or take the time and schedule a call. Love to hear from our listeners by going to Talk with Scott Carson.com that's talkwithscottcarson.com that will get you directly to my calendar and love to book a phone call and I'll give anybody 30 minutes to let you pick my brain or talk about where you want to go or if note investing is the right side. As always, check out our education, our class schedule@weclose notes.com and go out. Take some action everybody and we'll see you at the top. Bye. Sam Sa.