Session 12 - Mastering Investor Outreach and Due Diligence for Note Investing

Alrighty. So let's dive into some more stuff when it comes to raising capital. I've talked a little bit about the investor questionnaire. So let me bring that up here for you guys. So you can kind of see there should be a copy inside the manual for you guys that are here on live with us on Zoom or watch the replays if you don't have one, we'll make sure and get one. But there's one in the manual and it's a very simple form. When I was a banker with JP Morgan Mortgage Chase and a financial advisor, one of the things that you always have to do when you're sitting down with somebody is they want you to take notes to make sure you're not saying something that you shouldn't be saying. Right. So it's important to have something that you're doing to take questions. You're interviewing folks now. Like I've had coaching students like Cody Cox, he's out of Portland, Oregon. And what Cody did is he sent a, you know, letter campaign out, a postcard campaign out to people in his area. And he had his pitch deck. His pitch deck on slides. Well, what he did is he invited a bunch of people to book a phone, you know, meet him for coffee one day. And I think he ended up having, he picked out a Starbucks. He got there a little bit early and he basically scheduled meetings with people from like 8 o' clock to 5 o' clock with people 8 to 6. And he did them every. He had an hour long time slot where there would be 45 minutes. Okay. And so basically people come in, visit, he talk for about 10 minutes with him, visit, just get to know him. 10 report. If he had he went through the pitch deck, he would do that. He would offer that up beforehand. And he had a couple cases working on. Well out of the. Oh, I'm trying to remember what it was. So it was basically nine people scheduled phone calls hour to hour back and back to back. I think he ended up having six people that showed and three people that no showed, which is going to happen. Right. A couple of people showed up at the same time he was wrapping up with him. So it added rapport for people. But he raised about a half million dollars in private capital from using his pet stick like that to help out. You know, that's the thing is understanding that when you look professional and it sounds like you know what the heck you're talking about, people want to work with people that look professional. All right, There'll be things that happen. Yeah, things that happen. But so many people don't do the little things. Like when I go to local real estate clubs, networking events A I'm always surprised how few people have business cards these days. Like I still believe business cards are great thing. Yes, people have that digital card where you can connect with them on LinkedIn, touch phones and stuff like that. That's okay, but it makes it harder to follow up if you don't have a phone number, an email address. I still like business cards. I'm a little old fashioned, but it gives something to somebody. Like I'm walking around with two business cards in my wallet right now. People gotta follow up. One's an attorney, was a real estate investor. It's a reminder. If I didn't have them in my card in my wallet when I pulled up a credit card, pay for lunch, it's like, oh, I got to call these people, I got to email these people. If it's on your cell phone, you may forget it relatively. These are great, but they also take away the little aspect of things. So I'll be reaching out to Derek and Linda Tresp this evening as a reminder. Like I got to reach out to. Been mean to do that. I know that they, you know, I talked to him like a week and a half ago and they were busy this last week. So if I reach out to them today or on Monday, we'll probably have a phone call this week before the holidays or after. But this investment questionnaire is pretty simple. You just fill out, you have, you know, ask their information. And this is the thing, when you pull this up, like, listen, we're gonna, if you're thinking about doing some deals, you know, pitch deck, I gotta ask you some questions, get a little better fit, make sure you're a fit for what we're doing. And I say this is not something that I require. This is something that my attorneys and my accountant, stuff like that require. All right? And if people won't fill this out, they're not going to fund with it, so move on. But you always got to require this. If everybody's going to eventually do deals with it, they need to fill this out. All right? So you have them fill out their address or you fill out their, tell them, you know, what kind of career they're in, job, number of years they've done that. And then the big question, and these are questions you ask when you're talking with people. Okay, Besides the whole form method, which form stands for where you from? O stands for occupation, R stands for recreation, and M is Your message. All right, where are you from? What do you do for a living? How long you done that? Do you enjoy that? Oh, that's got to sound interesting. What do you do like to do for fun on the holidays or the weekend? You got something coming up. Great. Awesome. Well, this is. Let me tell you a little bit about what I do here. I'm from here is what I do, my background. That's your message. Okay. But then it's getting to ask their questions. What have you invested before? You know, now I may not ask what's your adjusted gross income for the last two years? But you do have to ask to make sure they're sophisticated or accredited. All right, now you can use non accredited people. You can use those one off folks doing one off deals. There's a flat funding agreement. You're okay that way. You're going to find deals with non accredited people when you're starting off with. Because you're getting used to it. Okay, where's the investment coming? One that you're thinking of? A credit card. IRA, cash, 401k CDs, equity loan. Make them circle it. Now there's some big red flags. Credit card is a red flag, right? Equity line. If they're doing a line against their house, what's your monthly payment going to be when you pull it off there? You know, if somebody's a pull line of credit, you got to make sure that what they're making is what kind of payment you're giving them is going to cover that equity line. Okay. If you are to invest, would you come a couple times the Investment up for 12 to 36 months? Yes or no? Okay. We don't say for less than a year. And I only do 12 months if it's in Texas. All right. Anything that is going to be 24 to 36 months. If you are investing out of a self directed ira, are you investing in self directed? Yes. No. If yes, who is your custodian? You want them to write this down? Because if they say a company that's not a self directed IRA customer, if they do say like a Charles schwab or an A.G. edwards or Chase, well that's got to be moved to a custodian that allows real estate and notes. Okay. It also you want to put a star next to it because they need to open an account and that can be a warm referral to an IRA company. Okay. For interest payments, how often would you like the payments made? Quarterly, semiannual, annually or one lump sum of payment? I don't do Monthly payments. That's too much pain in the ass. I do once a quarter. What would you say your net worth is excluding real estate? What would you say your net worth is without real estate? Including real estate? I'm sorry? Without real estate? That's important. Are you currently involved in a bank, in a bankruptcy or loss of any kind? That's important. Yes and no. If it's a lawsuit, it doesn't out. Because a lot of real estate investors are involved in different lawsuits because of different things going on. Okay, if yes, just please explain. And if somebody's going on and on, says that they suit happy, suit happy, suit happy. It's also a flag for you ahead of time. Part of what you're doing here, ladies and gentlemen, is realizing that they're not only interviewing you, you are more interviewing them for the opportunity when you find out what they've invested in before. One of the things I like to ask is how did that turn out for you? When was that? What are you investing in today? Well, I haven't invested in anything in the last 12 months. Oh, okay. So is the money just sitting there waiting to go put the work? Yeah. Okay, well, great. I can give you about an 8 to 10%. There's nothing on here that talks about interest rate right off the bat. Okay. There's nothing on my pitch deck that talks about returns either. It's to get people interested in going to that. Because if they have 200 grants in the sideline that they use for fix and flips two years ago, and their fix and flip made them 12% in one year, but it's made nothing the last year. It's really made 6% and I'll use that. Say, listen. Yeah. I'm glad you put your money to work for you. I can give you an 8% return. What do you mean an 8% return? Says, well, you said you made 12 last year or the year before last, but I've done. So it's really made 6%. I'm going to give you better than it's doing right now. Passively. You don't have to do anything. Oh, okay, great. And then the last question here. What type of real estate education classes have you purchased or attended? And I want, you know, hey, you know, where else have you done? And I'll flip. Who have you taken stuff from? Ron Legrand. What have you taken? You know, fixing flip classes. You're a local member of your local ria. All those things. Okay, that comes in handy so that anybody ever sues you, says, I don't know. You can turn around and say, well, yes, you did. No. And once again, when I tell. When I meet with people or people, and I meet with a lot of people via Zoom Calls these days, because I get a lot of folks all across the country reaching out. And the thing I asked them, I said, okay, great, I'm going to send this form back to you. You've already basically answered a lot of questions. I need to finish filling out. I need to sign off on it. And then I also, if you're ready to. If you want to move forward, so that I know that you're ready, not only do I need you to send this back signed, I also need you to send me two things. One, I need to send you proof of funds, where it's coming from so that I know that you're serious about funding this deal. And two, I need a pledge letter. What do you mean by a pledge letter? Look, I'm going to ask you to send me proof of fund statement back to me. It shows that you've got the money to invest, and then I don't need the full amount. Like, if it's got your IRA, that's 500 grand in it. All I want you to do is just say, hey, yeah, I'm pledging to do 100k or 50k to put a deal to work. Let's start off this. And that's what I always say, Well, I got 250k when I put it work. Well, let me start off with 100, 150. Make sure that we're a good fit for each other. Okay? That way it's a way to get the ball rolling. And I'm not trying to buy the, you know, try to put the whole thing together. Because if you're going to do a deal, you may be with this person for 12, 24, 36 months. Okay? And go from there. Where in the manual do I find this? It's on one of the pages, Jay. You'll have to flip through it to find it. I don't know exactly what page. It's usually. It's probably in the front half of it. Okay. And Jay, if you can't find it, just email me and I'll shoot you the new copy of it here. Okay. All right, let's see. Done. Okay. But it's a simple form. I mean, you. You should do your own form. Take out the We Closed Notes logo and put your own logo on there. Or if you want to leave the We Closed Notes logo, that's fine. One guy there's a couple case studies in the manual for you guys as well. We'll, we'll go through that and I'll show you exactly where it's at later on. But there's a couple sample case studies in there. And we have our contact information at the bottom of the case studies and logo at the top. Well, this guy, whoever it was, took the case studies, printed them out. He didn't go change the logo name. He didn't even remove my contact information, which I had my cell phone, my email, my website on it. And he sent out a letter to IRA investors with my sample case studies. Do you know who they called? They didn't call him. They called me. I'm like, what? And the guy in the phone was like, well, I got this letter in the mail. It's got these three case studies. I don't like the guy that sent them, or I don't think much of the guy, but I like your stuff, so I want to invest with you. I'm like, okay, let's get this thing rocking and rolling. All right. But I found that kind of humorous and stuff like that, you know, just so look, look professional. Put it together. A one page executive summary. Pretty easy. There's a sample of that in there, you know, investment question profile. Once again, you got to require those three things them to fill this out. A pledge letter that's sent back with attached proof of funds. If they don't have those things, they're not going to fund. I can't tell you time and time again how many people said they call me up in a tizzy because they, you know, trying to fund a deal and their investor backed out on them. I'm like, well, why'd your investor back out on you? Well, I don't know. Well, did you get an investor questionnaire filled out? No. Did you get a proof of funds? No. Well, then what do you expect? Well, I've known this guy or gal for years. That's fine. But the reason you have these conversations and you move to the next phase is it's a little series of yes, yes, yes, yes. They click on your QR code off of your email, your pitch deck. That's a first. Yes. They make a call with you. Two, they send their investment question or fill that out. That's a great thing. Three, they're sending a pledge letter. Four, they're sending proof of funds. Those are all yeses along the way. If you don't get those now, you don't have to do it every time somebody funds. Does this once with you, they're good to go, right? They still may flake out the day before funding or the week before funding. I've had that happen. Okay, but you always, no matter, even if you're using your own funds, go get somebody else to fund your deals, use it, put them on a list and. Well, I thought even if you don't have something now, I said, I don't have anything available right now, but I can find. I'll probably have some in the next week or two. Can I call you then when we're ready to rock and roll? Yes. You always get people backed up. Even if you got. The reason you start doing this now is people. Oh, I want to invest them. Well, I've already got people lined up for that. I can call you for the next one I got available. Is that all right? Yeah, sure. Call me when your next one's available, people. Well, should I raise capital first or should I go find deals? Go find deals first. It's so much easier. Sometimes when you're brand new, you want to talk about theory and all this crap. Well, I'm going to do it. I got to prove theory first. No, no. Go get you a deal and then start raising capital. If you try to raise capital, have no type of deal or case studies to go through, people aren't going to invest with it. You're gonna be banging your head against the wall and feeling very frustrated that you're having all these conversations and nothing to prove of it. But you sound like you're doing a cool thing. No, go get you a deal and use that deal to raise capital. All right, Go get you, make some offers. That's why I said make multiple offers. You got multiple deals that coming in. One you fund yourself, the other one you raise, use it to raise capital and go from there. Always have a backup. You'll start building a list of potential investors and their mouse they can put together for you. And that's the way that you go shopping. Then you go and you're making more offers, more confident, because you have more deals available. Let me give you an example. I was. Steph and I were on a cruise a few years back, and then our team in the office and we got a list of notes in from one of our source, one of our hedge fund guys. It was like 400 contract for deeds. And I taught my team how to basically go through that tape in a few minutes to find the most dependent, biggest amount of opportunities because they gave us pricing and this was ridiculous pricing. Okay, this is not the same pricing day. These were non performing contract for deeds that I could buy at 33 cents of the unpaid balance, which is more likely like 25, 20 cents on the dollar, the actual asset value. Okay, now contract for deed, they're all at about 9.9% interest rate. So I know if I'm buying them at 33 cents on the dollar on average, if I get them back on track, that's like a 27, 28 cash and cash return. Ridiculous, right? And most of them are owner occupied. I said, okay, well, let's get rid of the states we don't want. Get rid of the low payment amounts, the low balances, the low values. We'll go through a due diligence checklist here for you here before we wrap up today. And they came up with a list and Jennifer, you know, called her on the phone when we had a, a stop. I said, okay, what's. How many notes came down? Well, it was 70. I'm like, okay, go ahead and send that bid in. She goes, what are you talking about? Like, go and email it into Keith. He's like, she's like, well, it's $1.6 million. I'm like, yeah, go ahead. How many is it? 70. Okay, send it in. I'm sorry, it was 100. I'll tell you the reason. I know, because we ended up funding 70 of them. She like, it's $1.6 million. I know you don't have that in account. I'm like, yeah, I don't have that account. That's fine. What do you mean it's fine? And I said, because first and foremost, we're not going to fund on all 100. We'll probably get 30, 40 of them accepted. And it'll give me, I'll have 30 to 45 days to raise capital on this portfolio, if not longer, based on whatever gets accepted. And she still wouldn't send it. So I sent it in. 1.6 million out of the 170 have gotten accepted. And so she's all like flipping, oh my God, you got 70 accepted. It's going to be like a million dollars. Like, okay, great, start the due diligence process. Let's start pulling values. Let's start sending out realtors to drive by them. Let's start. And I know it's going to take them a week or two to pull the collateral files together and get them to us, which it did. So our due diligence start then. So that gave us 30 days due diligence from the time we Received it. So that's two more weeks on the front end side of doing our own valuations and things like that. And then we got the servicing notes and we can see that, you know, the servicer was just horrible. And so I just started marketing. Like, okay, this, this is owner occupied property. We know these are owner occupied. And we started marketing. Well, we ended up funding ultimately was about 700,000. We ended up kicking a few out anyway. Maybe they accept the first 100. I can't remember, it's been a little bit. But anyway, what I'm saying is out of that 70, we funded in three different, three or four different tranches. We actually, it was $350,000 was the first funding amount that we funded. We funded that at two weeks later after our 30 days due diligence. So really we had a total of eight weeks, six weeks with their stuff and eight weeks with it. Now I could have kicked another 10, 15, 20 out during that 30 day due diligence period. If it came back. Values are bad, conditions bad, the collateral files are missing assignments and stuff like that. I could have kicked all this stuff out for the thing. But we hadn't. We basically ended up finding, like I said, there's about 7000-003500-00300,000, I remember was the first fund. And I told the sellers, like, listen, we've got IRA investors. We're gonna be wiring in money into different things. It's not all gonna, hey, can I fund this in like three different ways? Three or four ways and like, yeah, that's fine. So it was 300 to 350 the first funding. The next week later it was a hundred. And the third week later it was like 100 to 150. And we had one final trade of like 75. And we just signed four contracts and we just adjusted. And I was just disclosing, listen, sorry, money's coming in, I have the money. It's just going to fund in a couple different tranches here for you as money's rolling. And they're like, that's fine. They didn't care just as long as they got stuff. So it still bought us time to raise capital because I had that first tranche funded basically ready to rock and roll by the time we got around to it, but I didn't have the rest. So I just said, listen, I need to split up a little bit as I got money coming in and they were ready to rock and roll for it. Okay, so that's if you start buying portfolios, it's okay. To disclose, like listen, I got more money coming in. If you give me an extra week or two, I can get this done. And they would much rather give you an extra week or two versus going out and having to remarket the asset and taking another 30 to 45 days for them to close on. Okay, so the more you communicate with people like the holidays or hey, my investor wants to use their self directed IRA to fund. Can you, I need an extra week to get this stuff transferred over. Is that okay? Just communicate with the funding sources. Most of them do. They don't want to get an earnest money check of a thousand bucks or two thousand bucks. Although I have in the past we had like one big trade. It was, was 365 non performing notes and we had to fund by, oh, we had to fund by Friday. Now what, what happened is the guy that was wiring the funding the whole trade, his wire wasn't going to hit by Friday at 5 o' clock for me to turn around and send. So I contacted him, said listen, the trade's not going to close by Friday. It will by Monday. You know, the money's probably not going to clear my account in time for me more and the sellers are getting all upset and I let them know this Thursday, right? Oh man, you're supposed to do that. I was like, what's the issue here? Well we the and since it was a bigger trade, There was a third party due diligence company was owed 40 grand for their due diligence stuff. I said okay, well how about I do this if that 40 grand is getting coming out of the million. Well I just, I have the 40 grand. Why don't just wire the 40 grand right now and then we credit it from the million on Monday when it hits. But that way you can pay your vendors and they're good to go. He's like, oh that's, that's perfect. Easy done. So just communicate with people. Now here's the thing. There are some selling companies out there that I don't like. There's funds I don't like because they have jerked people around. And I'll tell you if they've jerked you around or they tricked other people around. If you start reaching out to me, but I won't say it here like I've had one company that has probably pulled 20 bids from students where a they call them on a Thursday, Friday, hey, your bids accepted. You're good to go at this price. My students order BPO, O&E. They put money out for these due diligence documents and guess what happens come Monday, they call the seller, oh, we sold it to somebody else. What? So you should not order due diligence until you have a loan sale agreement, especially from this one company. I just won't do it because they do that. They pull that trip others. Okay, hey, you're a winning bid. You know, you're starting to due diligence process. We're going to send you collateral files when that stuff. Okay, I don't order due diligence until I get the collateral file sent to me, the due diligence doc sent to me. Then I'll order a BP Only too many other times people would have dealt with this company. The guy that runs this company just talks out both sides of my. Says one thing and it does another thing and he's just unethical that way. And I'll tell him that straight to his face. I don't like that way he does business. But anyway, but that's the thing. Until you get the due diligence file or the collateral file sent to you where you know you're the only one that's working through that. Don't order any paid due. Now you could you call a realtor to drive by the property for you? Yes. Could you jump on Zillow? Yes. But don't order a BPO which is going to cost you 125, 150 bucks depending on where it's located. Don't order a title report, owner O and E report to check what's on title. You don't need a full title report, you just need a two owner report. And that's going to run you anywhere from 100 to 200 depending on where it's located and how old that property is in a lot of cases. Or that note is for you and how far they got to go back and how rural that community is for you. But really your due diligence aspect is going to be about 250 to 500. On a note, one of our coaches students just ordered a BPO and E for us and there was basically like 310 for both those together for him. But he has it under contract and he's got oh, another two, another week or two to close. So he's already already gotten the. It took about a week for that stuff to come and he ordered last Friday and it came through Thursday or Wednesday afternoon. Thursday morning is when I sent that over to him, stuff like that. Okay. So don't stress so much about that. I know raising capital is still stressful. Until you've done it. Let's use some of smart smarter resource than me to help you with raising capital too. All right. So I've always liked using if you're not using right now AI. Oh my God, I said a bad word AI. So there's a whole variety of different AI resources. You could go to Google and use Google Gemini to create something. So let's try this to see what kind of responses we can you look at this? Can you help me write a three letter campaign to Sefti IRA investors. About using their retirement funds to fund. My deals to find my investment opportunities in performing and non performing notes. The letters will be going to existing IRA investors who have already used their IRA to buy investment property or who have lent their money on other real estate deals. Let's see what it says. This is Gemini. It's different than what I usually I usually like chat GPT okay here you go. Can highlight the opportunity and they're just pulling it from other things. Okay so like see it's pulling from your guide to investing in promissory notes with self directed Iraq. That's a news article that's Invents Horizon Trust Co. April 14 More financial using a subject IRA from this area. It's IRA financial. Okay. Oh I was actually at an event that IRA financial I know those guys. So it's pulling from that is showing all the different resources now. So here you go. The subject is an alternative way to build wealth in your self directed IRA Dear investor name as an experienced self directed IRA investor in real estate you're you've seen firsthand the benefits using your retirement funds for tangible assets. What if you could diversify your real estate portfolio even further generating passive income without the complexities of property management. My name is blank and I specialize in real in a real estate strategy focused on performing and non performing notes offer a unique alternative to direct property ownership or lending with the potential for the most for more predictable returns and a different risk profile. For investors with real estate with a real estate background, adding notes to your SDI can be a powerful move. It's all about leveraging a different aspect of the real estate market the underlying debt to generate wealth for your time. In the coming weeks I will share more about how this strategy works and the potential it holds for your sdr. I look forward to speaking with you about this unique operator. Now you go in there say listen we're already buying assets. You know you might include a little bit more about you in there. You know hey I saw that you've used your IRA already. Include the address, it's a hot button. And then here's the investment types. Hey. Dear investor, my last letter I introduced the concept of investing in real estate notes with your self directed Iraq. This approach is compelling because it offers two distinct strategies for consider performing notes and non performing notes. Performing notes, these are loans where the borrower is making all payments on time. Investing notes provides a reliable passive income stream over a set period similar to traditional loan. But often the higher yield is strongly focused strategy focused on consistency and predictable returns. You could also put the third one passive investing. You find the deals, you manage them and they get a flat return. Non performing loans, these loans where the borrower has fallen behind on payments. As investors, you can purchase these notes at a significant discount. This higher risk can potentially do higher rewards as you have several options for resolution including working with the borrower taking the property. There you go. The call to action in our previous conversations have addressed how performing and non performing notes can be powerful additions to your self directed IRA real estate portfolio. This approach offers a way to generate. So yeah. That a bad letter campaign? No. You're going to make some changes to it. Okay. I would add a couple sample case studies, You know, so that it gets a little bit more. It's a little too blas. But that's what AI is doing based off of our prompts. Okay, let's see here. And you can donate in here. Let's see what they say in Chatbot. Copy. We'll go over to Chatbot. Okay, so we're gonna go check open AI and chat GPT 5.0. What's up with chat. But I think there must be doing some maintenance to it. It's. It's been acting a little funky the last day or two. There we go. Please complete. I don't know what's going on with it. Please complete. Yeah, so there's a different one. They're going through some maintenance on here. I know I have a AI newsletter I get basically on Fridays. I know they're updating some things so maybe we go back to it. But I've used this before previous classes and it does a pretty, pretty good job. Let's try different. Try new chat. Just do open AI and see what happens here. Right, that's perfect. Letter one, letter two. There you go. See, it's a little bit shorter, you know, but it's a good touch base approach to it. You can send one letter and then a postcard a following week with a deal. Case study that what is what Seems to work really well. A hello letter. You send out a postcard, hey, we just funded this deal. Or if you're buying in specific area. Okay, so like if you're buying in Florida, you're buying in Miami Dade, buying a note down there. Then I would take that picture of that asset and go over to Vistaprint, create you a quick postcard and say, hey, just funded. You know what I mean? That you could create. Let me see here. I think, let me look back here because Phil, bro, do you see here? Case studies documents. Here we go. Union temp. So here we go, Here we go. So you could do a case study like this. Okay, perfect. Let me share this with you. I think you can see this already. Boom. All right, so you could create short case study bits. So this is what Phil Brodura, another one of my coaching students, he's actually out of Canada and he went bought Talk with Phil. Today, his phone number. Great guy. And when he came down for his one on one for two days he spent with me one on one, we kind of, he had three notes that were accepted. So we actually put together case studies for him that he could film like short two to three minute videos. And what he did is. So this is the actual copy of the postcard. We created this postcard on this Uniontown, Pennsylvania asset. And then he, what he did is on the backside. He talked about the case studies, he talked about your IRA could earn, you know, could have earned above average returns to it, you know, opportunity. And that went out to IRA investors around Uniontown, Pennsylvania. Okay. And basically it's a vacant single family home, failure market value of 234. Original UPB of 70k. So they're way upside down. No payment since 2011. Legal balance of 190k is what's owed. Foreclosure in 90 days. He's buying the note for 140k. So either he's gonna get paid 50k at the foreclosure auction or he's gonna take it back and have an asset now worth $94,000 more than what he's got. Okay, not a bad deal. Strategy one is foreclosed sell auction, gross profit about 49. Strategy two, sell it on the MLS make it roughly gross profit of 62,000 on it. And this is actually a current photo of it. So it was surprised that it was vacant, but it was actually vacant. Okay. And he's looking funding partners want a 12 month time frame. It's great for a self directed IRA investor. For information, call and talk to me on that. And so those three slides was a short video. It's like a minute, two minute video. And he put the QR code on the actual back side of the postcard so people see they could scan it and they learn about the actual case study that was going on. All right, and here's another one he did. This one was in Lower Borough PA. This was a vacant property, value of 155 UPB originally of 126. No payments for 10 years. Legal balance of 239. Based on the attorney who was already handling the foreclosure, he could be foreclosed out in 90, 120 days. He's buying the notes for 100k. Okay. And once again, foreclosure make about 45k at the auction. Or strategy two, take it back, sell it and still make 34, five, because it was in pretty good condition. He's just. This is an older photo of the property, but still that's a copy of the postcard and same thing. Looking for a funding partner. Just pretty simple. And so Phil is used in this PowerPoint slide. Every time he gets a deal to go through and help him put together a two minute pitch deck or case study deal and send it out to people, this is what he posts. He's post a few of these on LinkedIn and his YouTube channies. Raised over a million dollars in private capital from just doing that alone and then sending these case studies out to potential investors. Now people inquire about these like, oh, I mean, sure about that, that one's already been funded. But hey, we do have some other ones. Let's talk. It's just. You ever like walked into an Italian restaurant, ladies and gentlemen, and you get that whiff of like the food and the peppers and. Or like anybody has fajitas and that smell of the peppers and the meat and then the. They put the ice cubes down. So it's got the smoke and the sizzle going. You get excited about fees. Which fajitas were actually invented in Kyle, Texas, just south of here years ago, was actually the leftovers that somebody made fajitas out of. And now it's a big nationwide thing. Okay, I like the breakfast taco, but these are all simple things. So he created another slide off of that. Okay, here's another investment opportunity. This is a property in Glenford, Ohio. This mobile ham on an acre, 2.3 acres, been vacant for a little while, value 230, no payments. In 2017, he's picking up for 95k and he's either gonna sell at the auction for 38k or take it back and sell it and make 100k plus on the REO sale. If you're interested in same thing. Funny partner wanted easy enough for you to do. Like that. Okay, now, Judy, I know that you're, you'd be one of our coaching students. I'll send this, these slides over to you so you can plug and play your individual case studies into them. And you don't have to go rinse and repeat. All you got to change is the slide and the images on it. You know, change your front slide, change your name out in the logo, and you're rocking and rolling. Okay, because this stuff works. If you will just post it and post it and post it and go from there. It'll help you get a question here. You're welcome. Is my chat roll not working? Let's see. It probably isn't. Oh, nope, sorry, I forgot I had to redo that. Okay, All right, question here. So if he sends this out, what is he offering the investor? Once again, you're thinking you're putting the cart before the horse. He's just looking for people to get interested, to reach out to them. And then it's all about, okay, what's your money been doing? What kind of return? What have you invested in the last 12 months? What invested the last two years to find out what they're making or what they're not making. Now somebody comes back, oh, I'm doing fix and flips and making, you know, I'm, I'm doing stuff and making 15 return. Okay, then I probably got to be at 12% to you. That's the highest I would go. Or somebody's like, oh, I'm a private, you know, I've lent some money on at 10%. Great. I can offer you 10% concept that you don't have to go find. So that's the whole thing. It's the interview process. What you know, you don't give away the recipe without finding. Like you don't send somebody chicken fried steak if they don't want chicken fried steak. You get what I'm saying? It's all about answering the question or asking questions to find out what they're looking for. What are you looking for? Okay, where's this money coming from? Where's it been just a conversation to find out if they're fit. Like, I'll give you an example. I had one guy send me a hat. He wanted to send me a half a million dollars. He reached out to me. Hey, Scott, I got a half million dollars I want to put to work with you. I'm like, okay, great. What's it been doing? Oh, it's been sitting there for about two years. I'm like, okay, great. What have you done before? Well, I've been kind of passive. I'm in some syndications. I'm like, all right, you're an active investor. Yeah. Yeah. So what are you kind of return? I want to get 20%. And I'm like, well, then I'm not the guy for you. He goes, what do you mean? I was like, look man, I got cheaper money than 20%. I'm not going to take 20%. The best I could give you would be 12. What? I don't want 12. I'm like, well, listen man, I've got expenses too. I know you're making like 25% or 30%. Yeah. So you want me to basically get nothing, right? No, I have to go find these deals. I got due diligence and this. You're a passive investor. I'm going to get the best. I would give you with 12 on deals. No, I want. Well, then I'm not your fit. Then you need. If you want 20% or you want greater than 12, then go do it yourself. They're not going to go do it. And then you just follow. Hey, you still got to put that money to work. Nope. Oh, making zero. I, I could give you 10% now. 11%. Okay, that's the thing. Don't get what of the. You know, and, and let me, let me rephrase this a little bit. Judy asked a question. Because Judy's looking for 12, 15, 16%. Right. And we oftentimes think that what we want is what they want. Right. When I was a banker at JP Morgan Chase, one of my best clients, John was his name, he had over a million dollars in the bank. Million dollars in the bank in ten different hundred thousand dollar CDs making 4%. Okay. When I was going out, I reached out to John, said, hey, John, I have an opportunity for you here. Maybe you're interested. I could give you 12%. Oh, 12 is too risky. Okay. What do you mean it's risky? We're going to be making. I'm making more. It's not going to be a risk. I can give you a. Oh, no, it's just too risky. Because here's what you got to realize. I realize coming from the banking side. Banks, credit unions, financial advisors, Dave Ramsey, all these big Susie Orman, they preach this brainwashing okay. 0 to 4% is safe, 5 to 8% is mid risk. 8% to 12 or greater is too risky. Okay. If I can buy a note that somebody's going to sell me and a guy's paid for year, one year straight, two years straight, he put 10% down, he's got good credit and I can get it at a 12 or 15 yield, then that's a good, that's a good, that's not risky at all. This is a good deal. Right. Why do I need to focus on that? So this is a good question. Pedro asked a question about what about raising capital for the foreclosure cost. So he's a question question is, hey, if a property looks like it's going to have to be foreclosed on and you're going to have to go through that process, then are you going to borrow the estimated holding amount needed for the foreclosure process to happen since there are no payments from the owner being made? Just. Yeah, so that's a great example. If you're buying a note, say this house is worth 200, they owe 220 and you have it under contract for 100 grand. Yeah, I would go ahead and borrow 120, borrow that extra 20 grand. It's not going to take 20 grand to foreclose most time. But you know, if it's in a normal borrower, upside down, under, you know, as long as it's not a million dollar asset where bar could drag you out for months, paying attorneys, delay things. Yeah, borrow the extra 10 grand or 15 grand for that foreclosure cost, it's still going to be a good, good deal to your investor. We'll go through a couple case studies like that later on or we'll do that. Actually we'll probably do that tomorrow to go through that aspect going on where we're at with time and stuff like that. But yeah, borrow that little bit extra as long as you're not going above 70, 75 cents of the dollar. Okay. If you're going above 75 and you're getting 80, 90 cents of your potential profit margin, you got to be careful there. Okay. So yeah, it would make sense in that case if it's. Yeah, you know, don't worry about it. Pedro, Pedro, I said that makes a lot more sense. Sounds like common sense to me. But I wanted to ask. Yeah, I mean if you're buying a note and you're gonna get it at a great discount and by all means. And you can borrow a little bit extra, great Go ahead and borrow it. Pay a little bit of interest on that money at the back end. If you don't use it, guess what, that's a tax free loan. You just got by paying that loan on money borrowed. You don't pay taxes on that 20 grand if you don't use it. Okay. That also works as kind of your cash for key starting point. What are foreclosure costs, foreclosures gonna cost you if you're in Florida, probably around five grand. Okay. And if somebody comes up, well, I want to do cash or keys. Okay. As long as they don't have like 100 grand in equity. Because remember, just because you're buying the note 100 grand doesn't mean that their debt's getting discount to 100 grand. If they owe 200 on a $175,000 house, they owe 200. You buy it at a hundred, they still owe that 200. So. And something like that, would I give them up to three grand, five grand cash or. Yes, because that's what it's going to cost me to foreclose. Now would I give them maybe a little bit more? I might give them a little bit more if it's going to speed up the process. Now if we're like in the next 90 days going to foreclose, I'm going to stick to that legal side because that's really what it's going to cost me. But if we're at the beginning of it and we've got a year long process ahead of us, yeah, I would probably go, I'll give you 10 grand or 20 grand to walk from the property to speed this thing up. And we've done that before. We've done anywhere like say from 500 bucks cash for keys or helping them move to 75 grand cash for keys when they had a ton of equity, get the deal done and to avoid the foreclosure auction so that we could tap into the full value of the house because they had just so much equity. It's like 200 grand in equity. 75 grand doesn't seem like a slam dunk to us. And they left plenty of meat on the bone for us to take the property back and rehab it and sell it. Okay. All right. But going back here, let's what's great about some of the things we're going. Right, let me pull this back up here. All right, so what I love is these different AI tools to help you write stuff. Now when it comes to, besides targeting IRA investors, as we talked about beforehand, you're going to be building contacts, your local rea club, your other conferences you go to, people in meetup groups, Facebook connections, stuff like that. You want people to start connecting and you're going to see people like going to Facebook or LinkedIn and answering questions. Or since I got these deals available and people like, oh, here's my email. Well, you know what I do? I go grab that email. I'm not going to lie to you. I grab that email address, that name and I put them in my database because I know that they're not investor. And we send out an email once a week to our database. All right, that's one other thing aspect of marketing. We talk about consistency. Everybody, everybody is a buyer, a seller or a funding source. These are three things you got to keep in mind. Everybody you know, a buyer, a seller or a funding source. We talked about email still being the number one deal when you send out. And you just can, you don't have to send out, hey, fund my deal, fund my deal. That's not effective at all. Okay? To your database. But you should get in the habit of sending out emails once a week to your database at a time that works well. Okay? And then we talked about yesterday how the best time open rates are like Tuesday, Wednesday, Thursday to asset managers and other people during the week. Sunday night is also a great time to send an email address or email to your warm database, not your asset managers for your warm contacts. And you'll raise more capital from just touching basis in. Remember, 80% sales comes after the fifth contact. So. So Gary Vaynerchuk wrote a book a few years back. I GUESS it's been 10 years since he wrote a book called Jab, jab, jab, right hook. Okay? And basically what it is, is you give content, content, content. Then they ask content, content, content. Then the ask. Okay? Now if you've got a box, a shoebox of business cards or a stack of business cards sitting on your credenza or your dresser, let me, let me see you raise your hands because I guarantee everybody's got a stack of business cards just about anywhere, right? Oh, I had a stock, a box, a shoe box, a Nike shoebox full of business cards. Luckily I had done something with them and they were actually all in a spreadsheet. Okay? But if you got a stack of business cards that aren't in a spreadsheet of some sort in your CRM, then guess what, you probably just need to go ahead and throw those away. Okay? I don't mean that in a rude aspect of things. It's just that if you haven't put them in and they've been sitting there for two, three, four years, they're probably not gonna be accurate. You're probably have a huge, huge bad list, which is. Okay, that's. Sometimes it happens, you know, any better. But here's the thing. When I go out and I coach with somebody for the first time, or they come into Austin, spend a couple of days with us one on one here, one of the things I want to make sure that they've done, hopefully prior to coming, is write an email to their database. It's kind of that, hello, email. Hello world. All right, so I'm going to use Judy as an example. Okay. Judy just retired from her job. All right. It was about six months ago, I guess you retired, Judy. Roughly about that, give or take a little bit. And so no matter what, you can still be working full time. All right, so like we had a guy, Scott Myers, he was a dentist I worked with down in Florida a few months ago. Scott's been a dentist for 20 years. He hates looking at people's mouth, but he likes real estate investment. But he still keeps a dental job because all of his, you know, dental dentitions or whatever you call them, can't think of what the word is today, do most of the work for him. So what he did, he's got this huge database of people that are his clients and people he's known in the community down in, in the, you know, I can't even think Orlando area where he calls home. Orlando, Lake Mary, Florida area. So. So, well, let's do this. I said, have you ever sent an email out to your database, let know what you're doing? He's like, no. What do you mean, so? Well, you know, these people, you're in their mouths. Some of them have been coming to you for years, right? You say, yeah, yeah. I don't never know a stranger that comes my office, like, well, then let's do this. Let's take your database and let's send an email to your database, plus all the network connections you have from your meetup groups and stuff like that. So we sent a hello letter. And then what we did is we sent hello from Dr. You know, Scott. And when we said, hey, first name, whatever the first name was, he had a mail merge. I just wanted to reach out to you and say, I want to say thank you for being part of my extended family, you know, here for. Many of you know me as the local dentist who's been looking into your mouth for years, if not decades. Some of you, and I really enjoy being this. I've enjoyed being here and love the connections that makes with me for my audience, for my network and my extended family. But what most of you don't know is that over the last 20 years, especially the last 10 years, I've also been an active real estate investor, and I am focused on buying and investing in distressed real estate. Distressed notes. Here we are helping to keep people in their houses. And did we use. No, we didn't use the Making America Great Again when distress borrowed a time. We use something else. Oh, we're helping to turn people's financial cavities into crowns or fillings or something like that. We're. We're doing it. We're doing a deep cleaning on people's distress deals. That was kind of the logist of it. But we come across all sorts of deals. You know, 25 that start off at 25, 50K, that can be great passive returns that you can use an IRA with or to make above average return if you're looking. And if you're looking to put your lazy assets to work and you want. You're tired of inflation eating away or creating a cavity in your retirement account. I said, you play into what people know you for and let's talk. I just wanted to let you guys know because, you know, I want to reach out, like, if you didn't know, you don't know. But we have different opportunities available besides just giving you a deep cleaning once a quarter. And it worked well. He literally got started getting people that called him and emailed him. Right off the bat, he's like, oh, my God, this is great. I said, well, it's great because it's your first email and you've got a warm relationship. Not everybody has that right. Not everybody's had their fingers inside my mouth, right. So they keep in mind, is this just a. Hey, here's what I'm doing. And this time around the holidays, as we're recording this December, January, how many of you already get letters or emails or postcards or Christmas correspondence from your extended family? You know, you know, like, you see that picture on the front where three out of the, you know, two out of the three kids are looking at the camera, the other one's crying or upset, and you got husband and wife that are trying to smile, and the letter's like, yay. You know, Merry Christmas, Happy New Year. A little update of our family. You know, Jim is still holding out for a management position in the worm farm. Worm farming business, you know, Year six continues to grow without a prospect. Little Sally's eyes are straight after getting kicked by a mule. Who knew that a mule kicking her head would cause her to have clear vision? Little Johnny has finally gotten potty trained at 8 years old, thank God. Just kind of that. And I'm, I'm, you know, I'm day drinking starting at 9am every morning. You know, something fun like that. You get what I'm saying? Well, you can send a hello letter, hello email out to your database. Just hey, guys, you know, you've known me as a fix and flipper. You know me in the pharmaceutical and in the medical industry. You've maybe known me as a realtor here in South Florida before. Maybe you didn't know that. Also invest my own investments. Love to talk with you. If you got some lazy assets, you want to put the work. Because we're coming out, coming across also all towards all types of deals, right? And then putting a picture or two of a deal or case study that you're working on just so it gives a little bit of social proof. Now that's the first email. That's hello letter. Okay? Going forward, you need to send something out once a week to your database. And I know that freaks a lot of people out. All right, well, you have to realize you basically already have half of your weekly emails written for you because every month has a holiday, right? Or some big thing going like going back to school. I mean, look at we're right now. We got Thanksgiving next week. We got Christmas, we got New Year's or Quanzai or Hanukkah, whatever it might be. Then you've got New Year's, Valentine's Day, April Fools or easter, you know, St. Patrick's Day, March. I got the two mixed up there. I jumped a month there. March, April, May, Memorial Day into school. All right, June is Father's Day. July, July 4th, August is what? Patriots Day falls in there. September 11th, same thing, Labor Day. Back to school. Start a football season, right? Then you go into October with Halloween and then you start the whole process all over again. So guess what? That's one email. Hey, just wanted to call from our family to yours or from our investments to yours. You know, Happy Halloween, Happy Thanksgiving. Right? So that's one email a month right down there. Okay? Now most of you are going to have, if you've done the right thing, you're probably going to have more business cards, local or more connections, local with your friends, family, colleagues and stuff like that around where you live, right? So you're probably going to split your database up into two, you know, local contacts. Like I say local, like your state and others going to be outside of Texas or whatever it might be, wherever you're at. Now, for me, I have a Texas data, but then most of my data, Most of my 64,000 email contacts are all over this the country. So I always say, hey, here's the deal. Like we have a new podcast episode we are coming out with or we have a new event or something, a newsletter, a new story coming out. You could use a variety of contact content to send out to your database on a weekly basis. One, obviously one week is always going to be about the holiday of that month. Two, it's going to be a we're I'm going to my local rea club tonight. Something edutainment. And by edutainment could be something about real estate. Everyone wants to know the values of their home, the foreclosure statistics, what's going on in their state, Right? So you're educating those folks with, hey, here's a did you know that here's an update on the foreclosure. Like on Monday, I'm recording an episode breaking down the number of foreclosures going to foreclosure the first Tuesday, December here in Texas. It'll be one I do and I'll post it all around. It gets good value because a big chunk of my audience is here in Texas and a lot of people like to invest in Texas, right? So that's not asking anything, just letting you guys know, hey, here's some distressed stuff if you've seen. I might post an article or two about stats across the country, things like that. Third thing could be about a case study or something else that you're doing. Maybe it's a Christmas party. Maybe it's something fun you did that month. Hey, we're hosting a Christmas party or we're going to the local RIA Club this month. You're more than welcome to come by, right? We had Jill Ferris from the dealmaker Syntex Group on my podcast last week that comes out this week. We'll talk about, hey, you want to join me at the local area club meeting for happy holidays? I would send it to everybody. Hey, if you're interested in finding more, come on out. Okay. And then the fourth email is going to be your right hook, your ask. But you don't do that in the beginning. You've got to get your three emails first, your hello and then really Your three emails to get to your ask, okay? Because if you do, most people make the mistake if they do their ask first, they get no response, no correspondence and they don't do anything. And you can't think that that's the wrong way to understand the tool of email marketing. So you do your hello, your you know, happy holidays, you know, here's an event that we invite you to some sort of edutainment about what's going on your market. Realtors are really good about sitting out like a flyer once a month, which is but once a week. You got to stay abreast of the situation, stay on top of what people are doing now. The great thing is you can often use these emails you send out to your database as a article on LinkedIn, as a newsletter on LinkedIn. Okay, in the next week or two, I'm bringing one of the foremost AI experts on who's helping real estate investors and business entrepreneurs utilize AI to be more content. Because the whole idea of search these days, what people are searching for information is changed 180 degrees, okay? And people that are using pay per click or Facebook ads or you know, Google AdWords, things like that, their, their cost per lead has skyrocketed because the way that these search engines, Bing, Yelp, Google, you know, has changed completely in house. You don't remember, go in and type, you type a question and then you have, you notice that Google asks a question here or they answer your question before they give you these dots. So if you're not mentioning these three, you know, where to do and stuff like that, you're what, you're already gone. If you're on page two, you're no longer there. All right, now you're even further down the pipeline. But you can start posting these things about entertainment, things going on in your market and what you've got going on, that's ads credibility not only to your long term but, but it adds a great way to start building rapport and trust with your warm market. Okay? And once again you can pre write a lot of this if you go out and pre write, look at your calendar and pre write all your holiday emails. I've done that several years like hey, Merry Christmas, Happy New Year's. You know, you create your images that you recycle every year in Canva. Okay, I had my va. Judy, you're looking for something for your VA to do. Go create a flyer with your logo for all the holidays that are upcoming. The major holidays, you know, 12 major holidays or more. That's what your email blast is that week, okay, but have it go out on a Sunday night or a Tuesday or Wednesday. I like Sunday night at 7pm because it's the highest open rate. People are sitting there looking at their email worried about what's going on next you're trying to repair and they see your email pop up. It gets a high open rate and very high open rate. All right? And same thing with like Wednesday evenings gets a high open or Wednesday afternoons as well too for you. Don't send an email out on Friday to your database. It's not going to get, it's not going to open. Don't send an email out Saturday to your database. You're going to be too busy living life. Send it at Sunday night, 6pm or if your CRM will allow it the best time on Sunday or if that person's time zone at 7pm, their time zone and just that weekly. Hey, how's it going? It's just a touch base. Touching base with people. But you'll start raising capital, especially when you start pointing, hey, we've got a deal we're working on. You could even put down at the bottom of your hey, here's a deal that we're working on. Coming to market soon. Or here's our next flip that we're working on just to start slowly touching base. Not a full jab. I'm not, not a full hook, but a little like hey, coming soon. We're working on a new deal. We've got a new opportunity. A new opportunity. Boom. Funded. This deal just got funded this week. Judy used your IRA to fund our purchase of this property. You know, take a picture where you're staying with Judy. All right? It gets people thinking, well, I want to be that position. I want to make money. You know, I want to do this. All right, go. Or if you have a book that comes out in investing, hey, if you like real estate investing, check out this book I just read. It's phenomenal. There's all sorts of little things that you can do to add value. All right? Like last night we were watching H. People were watching Bill Maher watch Bill Moore. People would think that's kind of funny, kind of, kind of a Republican. But I like, I like his non biased aspect. But he had Mel Robbins on and I heard a chance to hear see Mel Robins speak at Podcast Moving in an event that I went to. It was great. I love Mel. I started listening to her podcast. She's got a great book out and those are things you can do. Hey, I met, I met Russell Crow this weekend at Stubbs Barbecue. You know, I got a picture where I gave Russell Crowe a pair of boots. It was pretty cool. And you could use it. Like I said, use that same newsletter on your LinkedIn, on your Facebook to share what's going on because people want to work with positive people that stand out. Many of you, you're non existent across social and that's okay. Maybe you don't want to be on the dumpster fire that Facebook is. You don't have to, but you need to be on LinkedIn because that same credibility works a little bit for you. It doesn't all have to be, you know, it doesn't have to be all. That's just business, business, business. Share some of that personality and people will love you for it as well. Does this make sense, everybody? All right, One of my favorite guys to follow on LinkedIn is. Let me pull them up here so you guys can do the same thing. He's always pretty funny. Oh my God. Now I'm going to, Now I'm. Hang on here. There's, there's a couple people that I follow on LinkedIn. So like I follow like. So if you're looking for good resources on like markets and stuff, like Darren Bump Blumquist, he works over@auction.com. he's phenomenal. Darren Blumquist, okay. He's always got great stuff on foreclosures and stuff like that. You see like my buddy Aaron Dominguez talking about his son. Why is it asking on here? Let's see here. I like stuff to be simple and stuff like that. I mean you use AI to create photos if you don't want to. There is, where is this? And I'm sure I'll pull it up and, and pull it from you in a second. But let's do this. Let's take a, let's take another 10 minute break actually. Yeah, let's do 10 minute break, come back 10 minutes past the hour and we'll go from there. Now some more stuff to share with you.