Session 20 - The Due Diligence Checklist for Maximum Profit

All righty. So we are back after a short little break there for you guys. Got some great questions that you guys asked during the break, which I love, absolutely love seeing that. So, all right, let's go through these questions. All right, go back here. All right, so. All right, we already answered the email question. I already answered that. How do you. Okay, so Jay asked the question here. How do you wholesale these deals without getting blackballed by the bank? Great question. Well, first and foremost, the bank's not going to care as long as they see receive money as long as you're not going out like blasting. I'll give you a great example. We had a lady who got a list in off of Excel. LinkedIn, LinkedIn lead got a list in and then she used the same exact photo that the bank was using to market that note for sale. Which is stupid. He saw like what are you doing? And that's the stupid thing, right? You also got to make double sure that your buyers can perform. All right, this takes in knowing what's going on. Most of the banks are going to give you 30 to 45 days. Some private sellers will do smaller. And it all comes to how your marketing aspect of it, okay, you gotta leave plenty of meat in the bone. The bank doesn't care. They're not looking for an earnest money. Now if you sign a contract with them or if it's approved, I mean, like I'll give you an example. Like these seven notes I have, they're my offers are approved. Once they sent me the due diligence file, then I know I'm locked in. And to take these now, do I have a loan sale agreement with them? Not yet. Because I'll probably kick a couple of these things off. So in this situation, I would probably do a double close, double close, double contracts. My contract for whatever I'm buying. If I'm wholesaling them, then I'm going to increase the contract and make sure a that the seller, I mean, I mean the buyer who was buying them from me is going to fund two days prior to when I need to fund on them. So if I was going to wholesale, that's the first thing. You have a separate contract. Banks don't. If you make a bunch of offers and you don't close on things or you're marking the same aspect of things, like I wouldn't send an email blast out marketing the wholesale deal to my asset manager list. That's, that's smart to do. You have it separated. Okay. Does that make sense, Jay, you know, hey, this is why it builds you to market ahead of time and have a database of people that are buying or, you know, if you're marketing a Facebook group, that's fine, but you don't share the address with anybody. Okay? That's one of the big things. Hey, I got this eight unit apartment complex in San Diego. You know, if you're interested in, let's, let's talk. And so I kind of keep it up. And then I also make the, the potential buyer sign a non competing, non disclosure agreement. That makes sense for you. But the bank, as long as they get wire funds, right, they may not change the contract. So you may have to go and create a second assignment on that stuff because a lot of times the attorneys from the bank are not going to change the loan sale agreement or change the assignments to reflect somebody that wasn't on a loan sale agreement. Okay, but that's, that's the thing is it's, it just comes from time. You know, you get plenty of stuff in from asset managers. You know, you get blackballed by people on Facebook because it's Facebook's, it's a dumpster fire. All right? A lot of know it all educated idiots on Facebook and some of these Facebook groups or in bigger pockets, when you see somebody's got like 20,000 comments, things like that guy's not doing stuff, he's just busy commenting and being a troll. All right? So keep that in mind. You, you market these things smartly, you don't share the address. Yes. You can take a different photo, street view, stuff like that. It's all about how you market stuff. Hey, you know, eight unit apartment complex in San Diego is different than 4728 Mansfield Drive. Okay. Shanti says in the short sale, if the real estate agents lowers the sale to 85, is that means the lender lose money? No, you're forgetting this. Shantae or Shanti, I'm sorry if I'm pronouncing it wrong. Yeah, you, 85% of fair market value, you bought the note well below that, you're the lender. Okay, so if the lender is owed 110, the house is worth 100 and you listed at 85. It sells at 85, you hopefully bought it at 50, $60,000. Does that make sense? Now you, yes, technically you're writing off some money. The original lender lost money selling the note at 50. But since you're the bank, you bought it at 50k and you're agreeing to sell it at 85k. You're not losing money. The only way you would lose money being the note buyer. Unless if you sold it for less than you offered to sell it for like 60k or 65k. And after closing costs then you're below 50. Okay, that make sense for you Shanti? Okay, good. All right, moving on. When do the wholesale example? Can we go through the math numbers on a deal? Okay, yeah, we'll talk about that in a second. I've got a simple thing based off like that 12 unit 12 note portfolio yesterday. Just to give you a bit of an idea. Okay. Jay says so how do you know if the property is going to be a short sale? Are you just assuming that because the property was listed below 4 marks fair market value. What other details are you reviewing to make that decision? Okay, yes. If it's been listed on the MLS in the near in the last year, you can usually see somebody's trying to sell it. Okay. A they owe more than the properties worth, they're living in it. You look at the servicing notes, they maybe talk about doing a short sale. Previous listing. Previous listing. Those are all things that are telltale signs. Okay. Now if they never listed, they're living in it still. That's an opportunity. Not short sale is okay, but it may not be a short sale. That's why we try to do the reinstatement assumption. It's an opportunity we offer up to them. Okay. But yes, if it's listed previously in the last year and you see a canceled contract, canceled listing or they owe just under what the full payoff is, they can't afford to technically pay the realtors commissions themselves. That's an opportunity. Especially if it's in a moving market and you see a lot of people where values have corrected. They're a little upside down on their note right now. Okay. And just looking at, just looking at common sense. No, you know when you're doing your due diligence, you Google can see it was listed in the last year canceled contract. What's the value of the property? Okay, the value of the property is 300. They owe 330. Okay. We can buy this at 210. All right. There might makes a little sense there for us to do a quick little short sale. Forgive 30, 40 grand. We're not losing the money because we bought the note at 200. So we let them sell it at 270. Great. We still make some money on the deal. Go from there. All right. You know what's the days on market? That's why you talk to your agent you know, if it's a, if it's a fast 90 day, you know, or 30, 60 day pricing point and you can move it. If we don't get any activity in the first 30 days, there's no foot activity based on 85%, then we. Or cancel the short sale and move into a deed loan, cash receipt, cash for keys, or consent to judgment to take that asset back and let them move out of the property. I'm not going to let them sit there for nine months on a listing. No, no, let's get this thing sold. If it's not going to sell, not any activity, then let's move to a judgment and we'll take the asset back and sell it off at that point. Okay. And I'm not going to let the realtor or the borrower dictate showings. It's got to be available for showings anytime. Not, oh, between two and four every other day. No, no, no. It's got to be ready to sell. Okay. If the bar is not being, not playing ball and being nice and going by that, then it's, it's no longer short. So then we'll look to, you know, foreclose or cash or keys. If they're not gonna play ball, we are going to keep pushing. Okay. You know, this is the big thing. Some people want to. Let's go get the full financials of the bar. Let's send out a financial. No, no, let's give them a phone. Let's figure this out. What can you afford? What can't you afford? If you can afford it, that's great. If you can't afford it. And then let's move to option B, C or D. All right. And it comes from experience. Just comes from experience and stuff like that. And yes, that's part of what we're here to help you do that. It's a different mindset being the bank than being the property owner. Okay. But the thing is on that you're kind of going back and forth. Okay, what did I pay for the note? What's the value of the property? Was the days of the market. So we bought the note here. We foreclose or get the seller pays this off. Great, we're good to go. Just looking at the maths and the number. Okay. All right. So Jay wanted me to talk about like a wholesale deal. So what I thought I'd do is bring up this. So like this will give me raised in. So with Collins deal. And I think you guys, okay, you can see it. Okay, so this is that 12 small balance note portfolio. Right, and we told you that it's 138. Let's say Colin gets it at 70 grand. He gets it approved at 70 grand. Okay, now what kind of yield are people looking for? What kind of ROI would you want if you had 100, 150 grand, what kind of yield would you want to see? Okay, and this is where the interactive part of it is, is for you guys to answer questions for me. So I can actually dictate to you what it is. Do we want 8% return? Do we want 10% return? What are you looking for? 15, 20. All right, so let's see here. Judy's, Jay's wanting 12% amendment. Okay, great. So if this is thrown off after servicing costs, it's thrown off. 1994, remember, that's how we got. We add these all up, they came to 22.94 in cash flow. We took away the. Since these are performing for the most part, 300 servicing costs. Okay, so it's netting 1994amonth, which is 23,930 a year. Right. So if you want 12%, you just basically take this and divide it by 0.12. That means this cash flow is throwing off. Basically. If we wanted 12% cash flow based on that, you'd pay 2, almost 200 grand for a 12% return. Well, you're not going to pay 200 grand for a balance of only 138,000. Right, because remember, some of these are in that second half of the cash flow basis. That's just a straight cash flow analysis. Now, you got to look at time, value of money and figure that all out there for you. But what I would do is look at this way. Okay? So if, if Colin buys us at 70 grand, he's going to get a 34%, he's going to get his investment basically paid back in three years. Can we agree to that? Yes or no. But let's say instead of 70, he didn't want to deal with it. Let's say he wants to sell this thing at 90, okay. Where he can make a 20 grand wholesale fee. All right, well, let's figure what the cash flow on that is still pretty good. It's still a 27% cash and cash return to them to somebody to take it down. All right, 90 grand, still a pretty good deal because it's going to pay it off in over four years. And that's where you start seeing the, you know, obviously returns up. Is things going to start getting paid off five Six, seven, eight year old, you know, got to run a cash flow analysis, put the refinancial calculator, all that good stuff for looking at your amortization tables, stuff. But there you go. He gets it under contract for 70 grand from the seller. He gets a loan sale agreement for. He gets all the due diligence docs. Okay. He markets this deal, says, hey, I got 12 performing notes, low balance stuff. They're bringing, it's bringing in $1994 a month. I'm willing to sell it at 90 grand. You know, it's $138,000 payoff. Technically he's paying, he's selling this at under what, 70, something like that, 65 cents on the dollar. That's still going to allow someone to make some money on this. Right? Now if you tried to sell it at. Nobody's gonna pay 199. If you try to sell it at 130, that's not going to leave a lot of cash flow in a good positive way for, for people. Yeah, it would be a decent cash flow for a couple years, but you want to leave plenty of meat in the bone. So he could wholesale this for 20 grand. So he puts it under contract, he gets a loan sale agreement. If the seller is not going to give a loan sale agreement until before he funds, that's okay. He could still go out and market it. He's got control of the asset, right. Nobody else is bidding. He's looking at his due diligence aspect of things when the seller sends all the due diligence files. Okay. You know, probably it's an all or nothing bid. So it's not going to be kicking anything out. So he's probably going to loan sale agreement with like a closing date in 21 days. Right. So he's got that 21 day closing. So if that's 21 days from tomorrow, that's the 24th, is tomorrow seven days. So basically, let's just say the 14th of December. So he's gonna, he would market this immediately to other note sellers or note buyer, say, hey, I got a performing portfolio, small balance stuff, Michigan 2 in Wisconsin. It's generating roughly 2 grand a month in cash flow after servicing costs. Payoffs are anyway from five years to 15 years. I'm willing to let it go at a $90,000 purchase price and go from there. You can offer at 90. Somebody comes back at 85. Okay, 85. He makes 15 and two weeks. And what he would do is set this up, be funded at least two or three days. Before the 14th. So, hey, by the 10th of December. All right, so if you look at this stuff, let's figure out, to be more specific, so the 14th is on a Friday. Well, that's November. Sorry. So the 14th is on the Sunday. So he would want either a, to delay the contract to, say, the 19th funding by the 19th, where then the seller, whoever the seller is going to get wired on the 19th, whereas he would. I would require the buyer for me to either fund by the 12th or the 15th. The money comes in. When 90 comes in, he turns, rounds and wires out the 70. He's going to have to probably create duplicate contract, a similar contract to what the seller sent him. Just change the buyer, all right, him being the buyer, change him to the seller. And then the new buyer is the new buyer from him where he's the seller on the second contract and the price is 90. Now, here's the thing. If I know the investor, like, if Judy comes to me and says, Judy, hey, I'd like to buy this, okay, here's what we're going to do. I know Judy. I like and trust Judy. Judy wouldn't hurt a fly. I've worked with her before. What I would do with Judy, say, okay, Judy, here's who it's going to be. I'm going to have you sign a wholesaling agreement. You're going to pay me 20 grand. I'm going to have a contract for 70. I'll sell it to you at 90. And then I would call the seller because I know, say, hey, I've got a buyer for this. So and so Judy, I want to transfer the contract to her. Now, she's already signed a wholesale agreement, right? Now, the seller, let's say this is David Polio, who wants a point and a half. Okay? Well, his point and a half, I'm going to have to pay that out of my 90, right? I would do that or, you know, make sure that if Judy's going to fund this at fund the 70 from him, she's paying the point and a half. I'm getting the difference between a point and a half and my 20 grand. All love and in love and war, right? I mean, now, of course, if Judy goes behind my. Doesn't want to fund me, I'm going to slap a lean on all these properties, okay? You know, I can go slap a lean on them all because she didn't follow through on stuff like that. All right? I could still have the money wired to my escrow account. Here's the official wire instructions Making sure we're getting taken care of. I could have it, actually. I would make the wire instructions where she's wiring money in on the contract to my escrow account. You know, if I didn't know Judy, I'd have. That's what I would do. I'd set up an escrow account with Alan Chesker. You know, wire's gonna come into attorney a neutral third party there for you. I'm gonna direct the attorney to send it out. He's going to ask, is it okay to send this out and be good to go? Okay. Okay. So can I become. I don't get. Can I become the lender and the real estate agent too? You could, but why you're actually putting. You would be putting yourself at harm's length because you don't need a real estate license to buy notes. Okay. If you're going to buy the note, go buy the note. All right? If you go by the. The you try and get the listing and go buy the note, then I would just simply say, yeah, you could represent it. But the double dipping is. It's going to go to you either one way or another. It doesn't make any sense. Okay, so that's the thing. If you're going to buy the note, buy the note. All right? You don't need to. I'm gonna go get the listing. You're. You're. By being the bank and rocking it and letting it be one agent. I mean, that's the thing about short sales. I'm going to say, okay, if I'm going to bleed, everybody's going to bleed. So instead of being 6% commission, I'm going to reduce it to 4% commission. Okay. If you're an agent in that area, great. Okay. Yeah. Put yourself on as a listing agent for a flat fee or something like that. But I think you open yourself up for somebody getting pissed off that you're actually the note. You wouldn't want to disclose that you're also the note buyer. You'd want to do it through a separate llc. And yeah, you could technically do that, be the listing agent and the seller's agent. It might be a little bit awkward when you have to sign on behalf of the bank on the payoff stuff and stuff, but completely happen. We've got people that are not investors, that are realtors that do it too. But I think you're just over complicated the situation there. Okay, but did Jay, did that answer your question about wholesaling an actual deal? You want to leave plenty of meat in the bone for somebody there, you know, Let me give you a different example. So we go to some of these other deals here. Hang on here, that we went through a little bit yesterday. Is it. No, let me get a different list here. Okay, so yeah, let me me do this. Okay, so share. All right, so we worked through this one on the Georgetown, Texas one. So if we go over here, let me pull up a different one. So we're going to do Houston. So we had one of our students who wants to buy one of these Houston notes, right? And it was you look here, it's moss hang. Moss hang court. All right, so the really the legal balance is 160. It's kind of skinny and some same thing, relatively fast foreclosure. So 140 is what the sales price is. Right. I didn't look at back taxes owed. You know, it's 84% of the legal balance. Stuff like that at one, you know, is what their UPB, stuff like that is. So I told John, I said, okay, John, if you're going to take this down, that's fine. You're going to pay me a point and a half on it. So if he's, if he's going to buy, if he's going to get it under contract at 140 and it sells at the foreclosure option, he doesn't make any money back, that's fine. I mean, he'll make some money back, but I want to make sure he get paid. So if you take 140,000 times 1.5. So I'm sorry, 015. Means I'll make $2,100 for the introduction. Okay. And he'll wire that funds to me the day he wires funds to the seller. Now if he doesn't doesn't close on the deal, then it's no biggie. I don't make anything. But if he does, which I think he will, then he's going to wire that, that money directly to my account. We'll send him a statement forward, a wholesaling agreement, stuff like that, a fee agreement for the deal and we'll go from there. And he's already in the due diligence process on it. If he's going to go, I'll like, I'll be one of the things I send over on Monday or Tuesday. So. So here we go. Here's our why instructions for this is doable on when you pay the underlying Oak harbor fund. You know what I mean? I'm not worried about him. We've had good Conversations. I know him. He's looking for deals. He's not going to, you know, ruin the relationship for 20, $100 if he does. He'd be stupid to do that because then I get to very easily reach out to my seller and say, hey, so and so went around me, didn't pay me my fee, and they'll blacklist. Most of my sellers are going to support me and do that. If, like, we had one guy that made offers, it was about a year ago, he used my name. He used my company name and made bids under my company name. Well, he's not a part of my company. Right. And so what happened? The company called me. He goes, hey, is this guy Jerry part of your team? I'm like, no, he's not part of my team. He goes, well, he made offers under your name. Like, oh, really? He did? So I called up Jerry and I was like, hey, Jerry, what's going on? He's like, hey, Scott. I said, what is this? On these notes in Detroit, Michigan, email. Oh, well, I used your LLC name because I don't have the experience. I'm like, well, that's fraud. You don't work for me. You just committed fraud. All right, so there's two choices here. A, since you made this on behalf of my company, they're approved. I'm going to go ahead and close on these deals, and I'm not going to give you anything. Or B, you got 24 hours to call and correct it to get it put under your llc. If you can't proof up with them, guess what? You're going to get blacklisted by the fund. All right? I don't mind vouching for somebody who's taking a class from and say, yeah, they're a legitimate buyer. Or I, a, I, they take one set to my workshop. They're a paid client. If you're just watching on YouTube and you're not done, I'm not going to vouch for you because I don't know you from Adam. Okay? But those of you guys that are live on here. Yeah. Hey, you get somebody. Somebody calls me. Can you vouch for Judy, Shanti, Jay, Edward, all the folks that are on there? Yeah. Okay. Yeah, they said to my class, you know, they were on Zoom all the time. I've had a conversation or two with them. I'll vouch for them. That's value. Because you know what's going to happen if something pops up? They're going to deal with me. Because we send buyers to people. We send our coaching Students to them, right? If something pops up, an issue, they're going to call me and hey, this guy's doing this or this gal's doing this. Well, let's fix this. What's happening? You know, let's. Let's solve an issue, okay? And we want you to close deals. That's why we're company is called we close note, not we talk notes. All right? We close notes. And that's a powerful image in our 17 years, has it? We closed on every deal. Now we've had, we've had some deals that have gone south just like anybody else. Have we been sued? You're going to get sued in real estate at some point. Yeah, we've taken care of folks, okay? Work to solve win win solutions for people, all right? And that's the thing. You got to realize you're buying debt. You're. You're stepping into the big boy game here, all right? You got to have your together more so than just going your local real estate club and being a jack of all trades wholesaler. A jack of all trades is a master of none. If you're trying to do 20 different activities as a real estate investor, guess what? You're not going to be good at any one of them, okay? I always say you're going to be good at maybe 1, 2 niches that work well with each other. Now if you can't find fix and flip deals and you can't find profitable rentals, you got to do something different. You got to pivot. And that's what I liked about notes was gave me the cash flow and the ability to control real estate without all the headaches of property ownership. Now, do I not get all the write offs? Yeah, I don't get the ability to do a 1031 exchange into a note. I don't get all the write offs of cost segregation or depreciation, but I do, because when I take an asset back as an REO and I keep it for a bit or do that, I can then write it off. That way I can do cross segregation or keep that property for a while if I want to. All right? Or I write off the debt, we forgive off our profits. Okay, Jay, I don't get what your question is. If you could do that, it would be awesome for you to walk me through some of these deals. That's what we do with our coaching, Jay. All right? It's pretty simple aspect of things. When you're get something under contract and paper it up, we hold your hand through the process. That's what's so awesome about our one on one coaching? Okay, so like I said, if you're interested, guy, book a phone call. I'm always glad to Talk with you. TalkwithScottCarson.com I think I got spots Monday, Tuesday, and then I'm off Wednesday through the rest of the week because we're headed down to Corpus for the Halloween, not Halloween, for Thanksgiving with the family. I'll be back on Monday. But yeah, let's talk on Monday. Let's talk Tuesday. Glad to visit with you while this is fresh for you and go and get rock and rolling from there. Okay, so, but that's, that's the thing. This is not complicated. It's like anything else. You're going to learn more by doing and have somebody hold your hand through that process than trying to go out and figure it yourself out. Don't be wrong. Nothing wrong with YouTube University or podcast University. I get it, I get it. All right. That's a great place to learn. But if you really want to learn, you got to sit down, get some education, get a coach that's going to hold your hand through the process. Too many times people have tried to go buy a note and they overpaid or they didn't think about something. They didn't know the foreclosure process and they end up stuck, Chuck. Losing money. And we don't want that. All right? We do not want that. Right. I want you to be in profitable deals. But if we go back here to this, if this sells at auction, you know, and John's using his own money and it sells at 160 at the auction and he's got to pay me 2100. He's out, let's say a grand or two for foreclosure costs. So he's at 145. He made 15 grand in 90 days. It's a pretty good deal for him, you know, am I going to jack it up by ten grand? No, that doesn't make any sense to do that. Now if it doesn't sell and it goes back and he takes it back as an REO and the value there is, what was it? What do you say the value of this was. Is? 190. Yeah, he's gonna make a little bit more money because of that profit, but I'm not gonna hold him accountable for that profit. I'm gonna make my two grand because it makes more sense for me to do that than move on and move on, go do something else. I've created a relationship with John. And he's like, oh, I can make 40, 50 grand on that. I can make probably 35 grand on the deal. Okay, let's do that. I don't mind paying 2100 for a $35,000 profit. How many would you want to do that? Right. That's what we're trying to work here, people, is help you take the action. That's why this is why we spend so much time going through how to find these deals. You know, a lot of other folks think, they talk about the theory of it or why you should go out and owner and talk to a tired landlord and try to turn it into an owner finance situation. Okay, That's a tough. I don't want to go uphill. All right? To get one deal, I would rather have make a relationship with a lender, a bank who's going to send me notes on a weekly, daily, monthly, quarterly basis that I have a relationship with it, since I ain't going to buy it all. But I got somebody who's a motivated seller who's got 60, 40, 100, 200, 900 notes. They're motivated to sell. Okay, I just got to go spend the time to find the right deals by going through the due diligence and the, you know, on the upfront side to get rock and roll. I don't have to spend hours reviewing everything about an asset before making an offer. That's the one thing that people have a tendency to freak out. I got to know everything about that asset before I make a bid. Listen, by the time you do that, four days later, I've already made an offer three days earlier than you. That's going to win me the bid. Okay, Another thing that freaks people out. Oh, my God, you're making 10 offers. I can only make one offer. I'm not worried about the money in my bank account. If I'm making a half a million dollar offers, I'm not worried if there's not a half million in my bank account. Because I guess what, my bids become more valuable to that seller because I'm making 10, 20, 30 offers on a variety of assets, not just the one best asset out there. Knowing that a, if I get 10 accepted, that's much more likely to get something to happen. And I can always. Here's the thing. I can fade my bid if I find the value where they say it's 319, and it's not 319, it's 219. Guess what? I'm fading my bid, which means reducing my bid or canceling it because the value is not there. No penalty, no harm. I don't have to put up any earnest money, okay? And that's hard for people. When I. When my coaching says let's make more offers, nobody's going to get bent out of shape. I'm not going to pay for 10 BPOs. Am I going to pay for 10 O&ES before I know I have an available item in the winning bid under contract? Right. I don't have to do that. I can check some online values, I can check taxes. I can get all the information they give me a spreadsheet and make an offering off of that. Knowing what my money costs are, that's always the big thing. Knowing what your money costs are, what it's going to cost you to fund that deal from a private investor. If you don't have anybody right now at 8% or 7% or 10%, then figure 12, okay? A lot of you guys want to do 12. That's great. That's fine. It makes sense. Okay? It makes sense in, in about. Not this week, but in two weeks. A friend of hers, Lisa J. Harris, is a book coming out about raising private capital. She's a local Georgetown realtor investor doing a lot of fix and flips, but she's been raising money at 10 to 12% for all her deals for a while. It's a great book. We just had her on, interviewed her. The podcast is going to come out December 5th when our book comes out. And it's all about the networking side of things. And it's the networking sign on the note business as well. Okay. Talking with investors, talking with note sellers, reaching out on LinkedIn when most people aren't going to do that. And I mentioned beforehand, I don't think I finished. My thought, now that I think about it, is that when you think when I talked back earlier this morning about how we all thought it was like a five year old, you know, four to five year market, it's been now 15, 20 years later. People note investors got lazy. When I first started off back in 2008, you know, I was dialing for dollars, all right? There wasn't all the Facebook groups and all the other bigger pockets and things like that out there. I had to dial for dollars. I was making 50 to 100 phone calls once a week and then I went to four days a week. Okay? My whole goal when I first started doing this was to have a hundred connections at banks at year one. Well, I did that in 90 days where I had 100 signed NDAs from banks, making phone calls. So then I upped it to a thousand connections. I hit that in my first year. Okay, guess what? You don't have to do that. You don't have to dial for dollars. Make 50 phone calls a day and follow up if you don't want to. LinkedIn, Octopus, CRM, Rocket Reach. Those are things you can do, right? You can also go to the different like Texas savings and mortgage lending websites and stuff like that. Download a list or your state licensing website or going to IMN and searching to see who's going to be connecting there. Looking for special asset managers or all these other things that didn't exist when I started doing this. Okay, Pretty easy to find deals if you will just market. But over the period from like 2014 and on for about five years, you had a bunch of funds that would buy 5 million, 10 million, $20 million in notes. And that's their whole goal, was to turn around and flip them, sell them to other investors. Because if they bought them, let's just run some normal math. They bought them at 50 cents on the dollar and they reached out to the homeowners, the borrowers in the first 90 days, if they got those borrowers back on track, okay, that turned into roughly about a 12% cash and cash return to them. All right, that's pretty good. If you buy them at 50 and you get them to reinstate, that's like double whatever the interest rates. Interest rates weren't below 6% for the most part. Okay, that's a pretty good yield coming in. Right. Well, if they didn't modify or reinstate to some sort in 90 days, then they went to start the foreclosure process. But they would turn around and market those lists to investors like you and me. Okay, so buying at 50, we're going to sell them to you at 60 or 65 or 64, 63, whatever it might be. Right. They bought it at 50 and they sold it at 60 cents on the dollar. They got a 10% markup in 90 days. That's a 40% annualized cash on cash return. Ain't gotta be stupid to figure out that that's pretty good. But investors got lazy. They stopped marketing, they stopped doing an email or they never sent an email blast out in their life. I'm just gonna buy from Granite Loan Solution. I'm just gonna buy from Lutetian or Reed MC or Watermark Exchange. Okay. Oh, I'm just gonna go to Paper Stack. Well, you know what? Eh, they closed, change names, stop buying and guess what paper still got created, non performing else still got creative or still out there for you to buy, you just revolve back where you had to learn how to market. So most real estate investors couldn't market themselves out of a wet paper bag. Or they're still doing business like it's been. They still think they're going to do business the same way, sending out a ton of direct mail, killing all these Amazon rainforests, or paying a ton of money through their nose for pay per click. I've got a really good buddy of mine, Jason Bible out of Houston, and he's being known as Mr. Texas Real Estate, okay? And I talked to Jason, I said, Jason, you're sending out distress leads, foreclosure bleeds, stuff like that. I go, what is your acquisition cost per deal? He goes, it's about 15,000 in marketing costs per deal. I'm like, shit, that's a lot. That's a lot of overhead going out the door every month to get a deal. And numbers made sense. He was closing two, three deals a month that he could rehab sell. Stuff like that. Okay, if you're, if you're making 30 grand a deal and you're paying, it's cost you 15 grand in marketing to find it, it makes sense, right? But if you don't have the 15 grand or the 30 grand to be marketing every month, that doesn't make any sense. That's what I always liked about note investing. I thought it was an equilibrium. If you could market and you used LinkedIn and dollar for dollars and that stuff, you didn't have to do the big overhead of postcards and letter campaigns or pay per click because you don't have an asset manager going there. How do I sell my notes? They just don't do that. Okay, but they'll sell it to you if you know what you're saying and you know what to say, how to say it, and you're actually buying it. Whether you're buying it for your own portfolio or you're buying it for your own portfolio for 10 minutes and you're looking to wholesale it, flip it to somebody else. You just got to know what to say. And that's what we specialize, that's what we've always done, is showing you guys the in and out how to evaluate deals. There's nobody else out there that's sharing, showing you how to break down tapes on a Monday night or going through a tape on a Tuesday afternoon. We do, and that's what we specialize because it is easier than you think it would be. It may seem like you're talking, you know, Spanish or Portuguese, there's a lot of crossover, but you got to separate between buying the note versus buying the property. And that's the thing, I think that makes note investors so powerful is that we're the bank and the bank always wins. All right? Now I don't waste my time chasing seconds. I don't chase my time wasting my time going after owner finances. They come to me because we'll post outline, hey, we buy notes, we'll buy notes. We're buying perform, we buy non performing, okay? These are the areas that we buy, we post it. That's what we do so much of the marketing that we automate the stuff. So we're always top of mind with people. You guys can do the same thing. It's not as difficult as it used to be. You have the same resources that a lot of these huge billion dollar companies have at the same cost. That puts you on the same level with them. All right? And that's the thing, is there's opportunities out there are just race rates are going up, okay? Default rates are going up across the board. It may not be like it was back in 2010, but guess what? If you know where to look and know how to evaluate things, guess what? You'll find stuff. Nobody else is going to show you how to go to the county records, the finalists, they don't want you. They think you're too small. All right? Oh, you're too small. Bank won't sell to you unless you got $10 million, which is a bunch of horseshit, pardon my French on a Sunday afternoon, but that's a bunch of crap. Banks are motivated to move stuff off. Now you're not going to buy from bank of America, Chase, Citi, Wells Fargo. Those guys are too big to deal about with one little individual residential note, okay? And that's why I say, well, how do you know a bank will sell a note? Well, I know if they're really big like that, they're not, but that's okay. If it's a smaller regional bank, there's a lot of that being originated. Still some opportunities out there for you, okay? And that's the beautiful thing I'm hoping that you guys open up and see, oh, the opportunity here is actually easier than expected. You know, giving you the key to that front door in to get into the house is the most, most difficult situation out there. Most people are sitting on the sidelines. Oh, you can't do that. They won't Sell to you. You're too small. There's no note deals available. Yeah, there's no note deals available to. If you've never sent an email blast out to your database over, picked up the phone, dollar for dollars, or reached out to asset managers, period. End of statement. If you're not doing the marketing, of course you're not going to find the deal. You're just relying on paper stack or Facebook groups to help you find deals. That's a dumpster fire. That's a waste of time. I see it all the time. We'll buy notes. We buy anything. No, you don't. You don't buy anything. It means you're a joker broker, okay? Don't sit here and try to flip my deal if I'm actually selling a note. I'm not looking for you to wholesale my deal, okay? You got to understand what the heck you're talking about. Now, here's one thing I want to share with you guys, okay? It's a little bit of way to determine if somebody is full of shit, okay? Because you'll get people that see that you have notes and they say, oh, we buy anything. And I'm like, okay, how do you, you know, what are you buying? Well, my. What are you looking for? Well, we got 20 million a month. It's always this 20, 10, $50 million a month crap, okay? I represent somebody in New York. Represent California. Okay, great. Then tell me, can you send me your QIB form? If they've never heard a QIB form, what a QIB form is? Guess what, they're a joker broker. Now you're all thinking, what is a QIB form stand for? What does that stand for? Anyone want to take a guess? A QIB form stands. You're a Qualified Institutional Buyer. Institutional means you're buying if you can. If you're going to fund 20 million, you're not going to be buying from me. They're not be buying from you. They're going to be buying directly from some banks on that big stuff, all right? If somebody tells you what the qib, that means Qualified Institutional Buyer. They don't know that. If they say, I got that, we can provide that. Great. You're dealing with a whale. Then 99.9% of the time, if they. I don't know what it is. It's a joker broker. Don't waste your time. Well, QIB stands for Qualified Institutional Buyer. And if you were a legitimate buyer with 20 million a month, you would know that. But what you told me, since you don't know what that means. Means you're a joker broker. I'm not. And a QIB is not going to be reaching off to some guy on Facebook to help them go find deals. Right. Just not going to happen. I'm sorry. Another thing that's a big. Oh, I hate this. It literally just makes me crawl. Is when somebody says, can you jump on a zoom call? Can we jump on a conference call with my business partner? Why? Why do I got to jump on a call? Don't you have a list? Don't you know what you're buying? And oftentimes when someone says a phone call talk with their partner, I'm like, okay, have you bought notes before? No, we haven't. We want to. So then I'll ask them, okay, who's your servicing company? Well, I don't know what that is. So it means you've never bought a note. Don't lie to me. Just tell me. Hey, I'd rather you tell me. I'm brand new. We want to get into this. Tell me that. Don't tell me we got 20 million, $10 million. I don't care about that. You haven't closed anything with me. And I just want to ask you, what have you closed before? What's your background been? You know, I've got a guy in New York and Citi that, you know, a couple guys called me Monday, I think was Monday or Tuesday, and say, hey, we would. We've bought notes before. We would like it if you came across anything in our neck of the woods to send for you, and we'll be glad to pay a commission. Like, okay, here's what it is. If it's a performing note, I charge a point. If it's three, it's a non performing note. You'll pay me three points off the funding amount. If they balk at that, then I'm like, never mind. See you later. Okay, I don't have. That's a normal fee. If they start blocking it, paying that, then it's. There's no reason to even do it. I'm not going to introduce them. Well, can you introduce me to people like, no. Screw you, dude. Not giving away my sources, all right? And that's the thing that's the most valuable. Your sources are the most valuable thing. And if you have no sources, you got to go find some stuff. That's why we like to make it an easy thing for our folks. Like, hey, here you go. Let's see how serious you are about doing this. And get rocking and rolling, okay? This is not a hard business and I don't want you making it harder than it is supposed to be. It's not. But you do have to evaluate where's it at. Okay. When you get into pricing of notes, okay, there's really, you know, there's a stair step model. If it's a non performing, they're underwater like we talked about a little bit yesterday on the due diligence checklist. If it's, you know, if it's below, you know, below $60,000, you're going to do it off a percentage of the value provide that they're underwater, they owe more. So if it's a house is worth 55,000, it's between 50 and 60, you would make an offer at 55% of that 55,000. You have to do that. That's a guide. It's not hard. In fact, they might come back and say he wants 70 cents on the dollar. Okay. So he says off of that note is a. Have you started the foreclosure process? No, you haven't. Okay. Is there back taxes? Their back taxes owed? Okay. No. You got to realize, ladies and gentlemen, part of what we talk about, that stair step price, because people will complain, oh, you can't use doorstep pricing. You have to use it as a guide. It's a guide. It's not hard. In fact, if something's about to go to foreclosure, then you bump it up to 70, 80 cents on the dollar to take it down. Because making 20 cents at the foreclosure auction is a pretty good day. Now I'll be the first to admit that these, on some of these reverse mortgages, it's kind of skinny. I don't, I don't like paying as much. But I'm only offering on the Texas stuff because it's the fastest foreclosure side of it. If it was on the other states, no way. It's too long to foreclose. It's too skinny a deal. And you know, one of the most magical things that I do, and this is something that you can do as well, we've said this a couple times, but 80% of sales are made after the fifth contact. Right, the fifth contact. So if you get a bid that's accepted and you then cancel a bit because of values or something, you find in due diligence and you find out that your bid was too high, guess what? Okay, I'm canceling my bid. Moving on. Or you can first adjust, you know, offer to fade the bid. I'm Going to reduce the bid to make it worth my. They say no to that. That's fine. Mark yourself on the calendar. Look 30 days later, okay, 30 days later. And come back to him said, hey, have you sold that asset? If you haven't sold it, my adjusted number is still available. I had one deal that took 150 days to negotiate the right price. Okay, and this goes back, I got a phone call. Oh God, it would have been in like early June. I get a phone call in from an asset manager out of Miami who's got a six unit apartment complex in West Palm Beach. No, I'm sorry, it was an eight unit. Sorry, not six. Eight unit. Small, little complex. And they said, I got your name and information from one of my colleagues. Says that you buy distressed debt. I'm like, I sure do, I do. Who referred you? Oh, I'm not going to tell you that. Okay, fine, you got my number at the on board. And I was like, okay, so tell me the situation. He goes, well, it's an eight unit apartment complex. There's a first that we. Hold on, there's a second, a private second. The bar filed bankruptcy on this thing. They haven't paid in a year and they owe like $450,000. I'm like, okay, all right, 60k a door technically is not so bad. So $450,000 was on the 1st and $60,000 was on the private second. I'm like, okay, borrow filed bankruptcy. Like, okay, not a big deal, that's fine. What do you want for it? Well, heed himself. What do you want for it? He goes, Well, I want 240 for it. I'm like, okay, so based on the cash flow basis and stuff like that, it's really worth now since it's upside down, it's worth about 3, 310 to 350. I was like, nah, I'm not gonna offer now 240. No, first he wanted. I'm sorry, let me rephrase it. He wanted 300 for it. I'm like, no, I'm not paying 300. That's basically really where it's at. Full value. It needs them up. Need some work. New maintenance now. No cash flows on it. No. So 30 days, goodbye. I follow back up with the guy. Hey, do you still have that eight unit apartment complex in West Palm Beach? He's like, yeah. I go, what do you want for? Well, I'll take 2 7. I was like, Nah, I'll give you 175. No, no, no can do that. No problem. Another Month goes by, I call him back up, hey, do you still love it? Yeah, yep, still got it. I said, what do you want for 210? Like no, my offer at 175 still stand. I'm not paying 210 for that. So then I, then he calls me, calls me the first of December and says, okay, we still have this. I'll accept your 175. Can you close before December 27th? I think I said, I think I can. So made a couple phone calls around. I got the funding for it. Kathy Tompkins is a realtor down in San Antonio and a note investor. She had money in her ira. She's like, yeah, I would fund that. I said, okay, let's, let's jump on it together. So we paid 175 for the note, we fund it, we funded it. I will flew out to West Palm beach for something else. I drove by the property, we hired a part time property manager there, but we didn't own the property yet. Let me rephrase that. So what we did is in 60 days since the borrower had filed bankruptcy, we got substituted plaintiff in the bankruptcy case. We petitioned the court to take over receivership because in commercial notes, there's a clause written in commercial notes that if the borrower stops paying, the lender can start collecting, has the right to collect rents. So we were able to do that. We got a, the receivership of the manager of the property turned over to us. Then we started increasing the value of the property. Normally we were going to foreclose, we were going to finish the foreclosure process, got it discharged, we're taking it auction. So in that eight months process between from the time that we bought the note, 30, 60 days to get it back on track. It was actually eight months after we got it in receivership. We got it fully leased up. We were collecting rents, we owned the note. We paid 175 for the note at the foreclosure auction. We sold it eight months after we took it over and receivership for 310. So we made 135 plus eight months of rents on this. It only took me about 30 days first to get it fully leased up with new tenants. And it just needed to be clean. We had to get rid of one bad tenant that was bad about it, wouldn't pay it. So we said, listen, we can either evict you and it goes on your credit or you can leave peacefully and boom, it was fully leased up. Somebody got a good deal on it. 310 is what we listed it for, is what Kathy was happy with. And so that was a $200,000 in profit in less than a year on that aspect. Not a bad day for a small asset. Right. But we never would have gotten if I hadn't followed up every month for four months. And then they called me in the fifth month before the end of the year. So that's why it's so important for you guys to take action now. And then also through January, February, March, Q, that's Q1 or Q4 for a lot of banks. There'll be a lot of banks and lenders that have stuff on their books that they didn't get rid of, that they can get rid of come January or vice versa. They want to get rid of it because it's now their Q4 and they got to move it now since we're now in the new year, they can't play around with it. They can't pretend and extend in a lot of variety fashion. So it gives you guys a huge opportunity to take advantage of what's going on in the market right now because we're going to see more and more. Everybody's talking about 2026. I've been talking about 2025. We've been seeing more stuff for six to 12 months. We're gonna see a whole lot more stuff here in the new year. And if you know how to market, you know how to follow up and you know how to follow up, follow up, follow up in multiple touch. You're gonna come out smelling sweeter than roses and your portfolio's gonna look at. Even if you don't have your own money, there's a lot of money sitting on the sidelines waiting to get into it. You just gotta get out and talk to people, IRA investors and go from there. All right? Now there is a company. There's a couple things I want to go through too with you that I forgot to mention yesterday. And these are some data companies, okay? Now if you go to Melissa Data, okay, You can also. This is a great thing for skip tracing, and Melissa Data will do skip tracing for you, but they also sell you data. Okay. They can sell you a variety of different lists, okay. Mailing and integrations and stuff like their data. There you go. Global addresses. You can do a whole lots of same thing. Exact data. We like exact data a little bit better because with either one of these, you could buy a list of IRA investors. Oh, let me share my screen. I don't think I shared my screen. Sorry. Now it's going to be a generic list. It's not going to be a list of people that have a self directed ira. Equity Trust or Quest, you know, Quest Trust previously or in spirit Financial or Pensco. It's going to be somebody who just has an IRA. Okay. And yes, all IRAs are technically self directed. Those with AG, Edwards, Schwab, they're only self directing to the funds that they offer. Not notes, not real estate. Okay, but sometimes it's worth it to buy a full list. Now, exact data you can do by a whole list of people that have an ira. Pick any county or any area of the country. They even can separate it into those that just have an IRA or those that have 150k or more in an IRA, which is what we like to target. They're going to want you to purchase a subset list of about 1,000 bucks. Okay, so 1,000 bucks. What that's going to compass, it's going to come as about 15,000 names, addresses and emails and some phone numbers. Okay. Phone numbers are usually landlines, not cell phones. If it was cell phones, it'd be easy to do text blast in a lot of cases. All right, but, but that's a lot. All right. One of the things that we offer up to for our coaching students is, hey, we can put together a customized list with a few folks. So maybe you're only paying 250 for a list or $500 for a list versus the full big thing. So we, it allows us to get a little bigger discount for you guys. All right. But with that list of emails, now you have to put them up into your CRM tool. Well, that's going to take you off. You've got 5,000 names, phone numbers and emails. You can't just upload it to your mailchimp or your infusion software. You already blackbook. Get up a little bit of time, like 100, 200 a time to get the market down to it and help separate that. There's some other ways that we help you do that as well as far as like look alike audience and things you can do. But these are a couple sources for you if you guys need to prime the pump with a potential list. Here you go. Do I want to buy a list of real estate investors in, you know, Bear County, Texas? Okay, they'll pull a list for you. Go from there. So it's one of the, I like to say it's like one of our smoking, smoking referral sources that we use for a lot of research. We've, you know, spent a Lot of money. Like, I was putting on an event in Houston a few years back. So I bought the whole list of anybody who has an Iraq in Harris county. It was like 60,000 people, was a $4,000 list. But guess what? It came in handy and it worked really well. And so we have a variety of those lists that we've purchased over time as well, too. But if you're going to go with exact data act to talk to Patrick or reach out to us, we're glad to put you in touch with our account rep over there and get you taken care of. But I wanted to go through that because that's a, you know, you have no email list, no stuff. Guess what? Go buy a list and start drip marketing. Those and go from there is one great way to kind of proverbial prime the pump in either raising capital or building your network. Okay. Because build, you know, it's not, you know, nothing against buying list. We've bought plenty of lists. We sponsored events like the REI Expo or the Think Realty Expo where we would pay five grand to be one of the main sponsors. And part of it was that we were gonna get the full attendee list of 3,000 registrants. And that was pretty good. I'd pay $2 a lead that I can put into my marketing, because remember, I believe everybody's a buyer, a seller, or a funding source. That funding sort doesn't necessarily mean they're funding the deal themselves, but they have a relationship. And so one of the things that you have to look at too, with your marketing, and this is something that always comes to my mind, okay? And I call this the private money formula. Okay? Now if you take a look at your private money formula. What do I mean by that? Let's take a look at your database. Okay. Okay. Let's just do something real fast here. All right? File new. All right, Your private money formula. Okay? So do this. If you take a look at your. Your list. So you look at your. So they say your email contacts. You put your Facebook connections. You put your LinkedIn connections. Okay? What else would be good? Email, Facebook connections, LinkedIn. Good question from somebody. Oops, sorry. Thank you. All right, so you make a list. Okay? Now the magical number of this is that if you look at those three lists, for the most part, those are going to be your biggest. Now you. Could you throw in your Tik Tok followers? Yeah, you can throw your TikTok followers in it. Could you put your Twitter followers in? Yeah. Could you put your threads? Yeah. Could you put your Instagram. Yeah, you could throw those folks in there. So let's just do this real fast. So let's say you've got 5000 people in your email contacts and you've got say 1500 Facebook connections. You've got 5000 LinkedIn connections. Your TikTok, let's say you do really well. You got 12,000 tick tock followers because you were tick tock famous Twitter, let's say you got 5, 000 on there threads. You've got 200 people in Instagram, you got another 5, 000 people, whatever. Okay? So here's the thing to take a look at. Your email contacts are always going to have a higher hit ratio, okay? So all in all you might have a little crossover. But if you add these all up here, summation, all right, let me sum them up. Technically you got about a 30,000 network, you know, network, okay? Like in social media, marketing, advertising, they all want to know how many people in your network, right? How many profiles are across the board. Okay. Now you might have more in Instagram and TikTok, but you're actually the most valuable thing is going to be your LinkedIn connections and your email contacts, okay? Because here when you send an email blast out to you, your ratio most of the time is about to be about a 20% open ratio. Okay? Facebook, that's going to be like 1% the rest of the way down. Actually take it back. LinkedIn is going to be about 5 to 10%. So let's say 10% on there, right? But the rest is really going to be unless you are doing something different, it's about be about 1%. Okay, thank you Steffi, appreciate it. Fresh cup of coffee. So now when you look at this. Oops, hang on. That means if you send an email blast out to your database, really 1,000 people are going to see that right? Now if you do the same format all the way down, you're not going to have many people that see your stuff for the most part. But if you sum it all up those up, that means you've really got about 1737 people, not 33,000 people in your network. And this is not meant to diminish it, what you've done. Look, I get it. When you start posting to TikTok, you can have like I went from zero to like 7,500 people posting one small video per day and I've raised capital off of it. I've closed business, I've sold assets, I've sold coaches, sold classes off. It's great, okay? But it's not nearly as effective as your email or people that are actually going to see your stuff. So the thing to keep in mind is what I call the private mortgage formula. When you know these open rates or engagement rates and stuff like that, what are that number is? Take that number and multiply that number times a thousand. A thousand bucks at least. Okay. Now if you're a little older, your average individual is going to have more than a thousand bucks on average. But that's. So if you might have one person with ten grand and put something working the others with nothing, okay, that's okay. But if you figure this out, That's still $1.7 million in potential private capital right there waiting for you. Now, the whole goal is it's going to take five or more contacts for him. Okay, so if you figure the first email, first post you get there is going to probably be about a 2% response rate you probably have. That means that somebody has something, they're going to respond about 2% of the time. Okay. So if you figure out what I say, okay, just take 2% response rate. So you send one post, one email about a deal that you're doing. So this is going to be equal to that times your 2%. That means you'll probably have somebody responds to you that's got 35 grand to do something with. Guess what? 35 grand that can fund a note deal, right? 3%. The second time you send a post is what a pretty normal market response rate. Guess what, that's going to be pretty good too. That's going to go up there. Times another somebody who sells was 52. Okay. Third time it's going to be about a 5% response rate because you've hit them multiple times. Okay, I'm ready to do something now. Oh, hey, I've built some rapport with you, right? Okay. 1, 2, 3. Fourth time might be 10%. Right. And then the number five is the remaining 80%. Five plus is going to be the rest. Okay, fifth time, probably 20%. This is not me making up numbers. This is American Marketing association talking about sales statistics and follow up. And when they look at the percentage of responses, that's a 2, 3, 5, 10, 20. Okay, but most people give up when they're here, not when they're here. Okay. Now the same thing to keep. Oh, what did I do that shouldn't be. Yeah, 10%. 20%. Yeah. So summation. Means those five marketing pieces that you do over time can help you raise about 700 grand. But you have to get in the process of realizing I gotta rinse and repeat, I gotta repost, I gotta share once a week, I get to remember we talked about this yesterday, that weekly email blast out. This is what you need to get to. If you did a subtle little jab, hey, we've got a deal that working coming down the pipeline. Let's talk about it. This is what you have to look at. This is how we kind of calculate what we're doing. Okay, what are we looking to do? This is why we're raised. We're constantly marking. We've got a big email database. So like we have our 65, 000 person email database. Okay, that's everybody in our books, right? And well, there's a bunch more that's not in there that we keep as well on the side. But we have a very warm email database of 25, 000 within that 65. And you know what that open rate is? I'll share with you. It's a lot. Okay. And I just do this so that you guys understand, you guys can do the same thing. Is it going to happen over time, overnight? No, it's not going to happen overnight. Okay. Oh, pull us up here real fast. All right, so like when I send an email broadcast out, oops, let me share my screen. So if I go to my email broadcast here. Okay, so we do different marketing. Forget grab your ticket. All right, so like look at this. This one grabber ticket, this was for how many we sent it to. So it was a smaller list. Within the list. 6,000 people clicked on. We had an 80%, 82% open rate. That's ridiculous. Right? Okay, off that smaller list, within the list. Now if we go back here to the bigger list, I go down Here, this was 22, 22,000. Off this list was still a 27 and a half percent open rate. Ridiculous. That's because we send something out on a regular basis. Okay, this only went to one person. They didn't open the email. I came up with new episode fix and flip funding. All right, let's look at this 29 open rate. It went to 22,000 people. Okay. Now I follow up with an email to the folks that didn't open for another 5 to 10% opener. This is unheard of. I'm telling you this right now. Most people see a 17%, 10% open rate. We see double because of the consistency. Once a week. At least once a week. Once a week. Once a week to find deals. Once a week to help you raise capital. Okay, Do you see this Screen Shanti. Now. Yes. Does it take a little while to build a database of 22,000 people that like and trust you love it? Sure does. And here's the thing that most people forget about, too. Here's one thing that stops people from marketing. And I only bring this up because you are all going to run into this, okay? Everybody is going to run into this at some point, okay? Even if you were Jesus Christ or Mohammed, you're going to run into this, okay? Even you're the most beloved person in America, okay? Guess what? You're gonna run into the haters. You're gonna run into the trolls, the people that. Oh, aren't you good. This is a mental side of the business right here that can trip you up, okay? Anybody ever had trolls, somebody like that say something bad about you or get jealous or upset, just say something ugly on your post because they didn't agree with what you're saying. God knows that's what Facebook and bigger pockets are all about these days, right? Okay. You have to realize that when we look at. If we go back here to this list here, we go back to your database, Honestly, your database, your network is to be made up of three pots of gold, okay? Three pots of gold, okay? And when you look at three pots of gold or three buckets of people, here's where the three buckets lie. You have your first bucket. These are your friends, your families, your loved ones, your biggest cheerleaders, okay? Those are the ones that support you. Those are great. Those are easy. Those are taken care of. They're gonna say they're gonna love you no matter what. The other two pots of gold are the ones that can trip you up or be the most amount of opportunity. Now, the other pot, second pot of gold, is people that have a dark hole for a soul, okay? These are people that might say they're your friends, but they're jealous of you or they're just ugly. You're going to have haters that aren't going to like you for a matter of reasons, because of who you are, your color, your skin, whether you're male, female, whatever you identify yourself with, who you sleep with or your weight or age or whatever. They can just. They'll just hate you because you're taking action and they're not. I think we all have friends and maybe even family that are like that, okay? They don't. They're not going to like you no matter what you do. But guess what? Unfortunately, when we send out a marketing piece or post something on socials, the first pot might say all the great comments in the world to be supported, but guess what? We ignore that in our mind. And we think about those idiot, the trolls that say something negative. Oh, what do you think you are? You're wrong or you're Satan. You know what I mean? Oh, it sounds. You sound like that's illegal, right? Bunch of educated idiots. All right, A proctologist, wet dream, wall to wall, right? If somebody on that group says that Benson is out of shape, oh, my God, somebody say something bad. Oh, my God, what do they think we're doing? And that what happens. You'll have most comments in the first, like email you send out. Second email. Third, you'll get somebody that says something ugly like, oh, I don't want to deal with that. Guess what? It's life. Unfortunately, you've got too many keyboard warriors who won't look at you face to face, but they'll say something because they use a different name. We see this happening all the time. Social media is full of it. Right? Okay. Nobody's perfect, all right? You expect to be perfect. It's not going to happen. You're going to be disappointed. But that's what happens. We quit worrying about what the first people say because we know they love us. We worry about those idiots in a second pool, a bucket of people. And what you have to realize is who's in that third bucket. Well, that middle bucket is people that are on the fence, that don't know you, that are in your second and third degree connections. Your second degree from Kevin Bacon, right? Those are the people that you're going to wow with consistency. Okay? They come across you and they follow up. They see that you got some stuff online. They join your LinkedIn newsletter. They follow you on LinkedIn. They follow you on Facebook. They see out at a real estate club, a networking event. I listen to you on a podcast, all right? Or they see you do a video about a case study, something like that. We've never been closer to people out there, but a lot of times I think we're so far away, I don't know what's going on. I mean, we. We know that society likes us to be negative and fighting. I mean, the political parties love it. All right? But what you have to realize, and this was one of the hardest things for me to understand, because I did. I was like many people. I love the first people, but when somebody say something ugly or negative about me, it really hurt, right? It felt like a stab. And one of my mentors, Greg Reed, who is the Author of Think and Grow Rich, three feet from Gold. He does, he's done, he's on a multiple bestsellers. Does a lot with the Think and Grow Rich Napoleon Hill Foundation. He sat me down one day because, Scott, he goes, well, your problem is. I go, what? He goes, you're not too, you're not enough, big enough jerk. What do you mean? You worry about what everybody else thinks. You will never find happiness or success. He goes, and he told me these three buckets analogy. I was like, okay, okay, it makes sense. He goes, what you have to worry about, Scott, is you have to say goodbye to that third bucket, that bucket of the ugly people and focus on the people that you love, that love you. They're your biggest cheerleaders. And then that middle on the fence bucket where people don't know you. You're not going to be everybody's cup of tea. Not everybody. You're not going to be loved by everybody. Nobody is. And the most unhappiest people out there, those that want to be loved by everybody, okay, you're not everybody's cup of tea. And that's a. Okay, guess what? There's nothing against you going and doing something else or hitting unsubscribe. When people unsubscribe from my newsletter, remain a blessed. That's fine. See you later. Say something ugly. That's fine. I don't need you. Sayonara. And what you will find over time as you continue to market, you can continue to post things and email things and make offers and put yourself out there. Because let's face it, secret agents don't work as real estate entrepreneurs. You can't be a double O7 and be successful whether you're James Bond or Jane Bond. You can't be a secret agent no matter what you do. You've got to get the word out and market what you do. But you're not going to be every cup of tea. So what you have to do is just keep putting content up those haters. You're going to have them from time to time, just block them, delete them, move on. Because what will happen is over time and you keep following up weekly thing, those people that are haters are going to disappear. They're going to go find somebody else to hate on, somebody else to bash. They'll make them feel gold that will try to fill that hole in their soul we talked about, which is not going to happen. They will eventually fade away. Okay. But you will also have someone, that group that realize that will respect the hustle they will respect what you're doing. Many of them may share the same name, the same household, or the same blood with us that they'll come over after a period of time, say, hey, I've grown to respect your hustle. Unfortunately, when you're starting out doing something new, our. Our friends, families may not like what we're doing because they want to protect. It's like, oh, they want to see us fail. Guess what? Failure happens all the time. How many people do you know that worked 40 hours a year, 40, 40 weeks a year, 40 hours a week for 40 years and fail at life? A lot of people, they never achieve success. They. They never do the things that we all wish we could do. They all have nothing but regrets at the end of their life, right? Great rewards comes with great risks, okay? And buying notes really is riskier than it buying a fix and flip. It's not buying. If you have a servicing company and you got an attorney to help you out with that stuff and you buy at the right price, guess what? Most of the time, you're going to come out doing well, okay? Get a little bit of coaching, Got somebody in your corner, you're gonna come out, we're doing really, really well, okay? And like I said, over time, those people that may have been your biggest detractors are going to become your biggest fans and realize, like, hey, remember when you started off that first email? That was so horrible. I'm proud of you, you know? I know you're proud of me. I keep receipts. I remember when you bashed me. You know what I mean? So that's one of the biggest things I love. And that's the thing I want you guys to know on here. You're not competing with me. I don't look at you as competition. I look at you as potential allies. I look at you potential, no buyers from me, that when I get a portfolio and we can close more stuff and make more money than it, we close notes together, okay? And the things that I am teaching, the things that I go through, I'm not going to give you something to do that I've never done before, all right? If you ask me something, I've never done it before, I'll tell you, I don't do that. But let me put you in touch with somebody that can help you with that or somebody that knowledgeable. But I've got a great network of people that I love and call family, all right? And when you're at the top, you're going to have more detractors, more people Throwing money at you because it is what it is. One of my, my good friends, Chris Prefontaine went through a real bad situation back years ago during the township. Basically out of a $300,000 house into a one bedroom apartment. And he licked wounds for a while. He had some deals that went south and he had to lick his wounds for a while and he had to build back up and get better. But he's a better man. He's a better real estate investor because of the issues he went through. He's learned from his mistakes and done better. Same thing with my buddy Aaron Young from Lawful Associates. He had some mistakes. He's learned better from it. Coming. I'm a better man, a better investor from the mistakes that I've made along the way. I'm not perfect. I don't act like I'm perfect. And I know I'm not everybody's cup of tea. And that's a okay, all right? But I know what's going to happen is that the one person who's a troll out there, I have a hundred to a thousand people who need to hear, need to see and are looking for what I or we are offering. People are hurting out there. People's retirement accounts may be doing good if they're in a few stocks, but a lot of folks, they're sitting there, they don't know what to do. They need an opportunity. They need somebody to show them away. They've got money in an ira. They don't think they can invest anything because it's only 50 grand or 100 grand. Guess what? You have an opportunity to help them. You're not begging for money. You're offering them opportunity in a deal. That makes sense. And the six things we talk about, we only buy first liens. We buy it 70% of value or less. All right? Buying it below value. We're using professionals like servicing companies and attorneys to help us with it. We put insurance on the property case and that guy. We make sure our taxes are done. And we're not the guys doing the work ourselves. We're going to use professionals. Approve the collateral file, make sure everything's dotted and crossed for us to buy something. When all those things match up, then we'll find. When it doesn't match up, we're not going to do a deal. Okay, what can wipe you out if you don't check the taxes, pay the taxes. What can wipe you up? Act of God Insurance. Somebody burn their house down? You don't put insurance on stuff like that. All right, Occasionally you run into something like that happens to Covid, where foreclosure will get delayed 12 months. Funny, funny thing is when back in 2010, we were buying notes, I was buying stuff in South Carolina, right? South Carolina is about a one year foreclosure process. Well, everything was so extreme with the Great Recession. The attorney general for the state of Carolina came in and canceled all foreclosures for a year. Oof. That's a tough hit, right? That's a gut punch, right? Ooh, foreclosure stopped for a year in South Carolina. That's going to hurt. Okay, we got to figure stuff out, go do some more deals other places, right? And I called it when Covid was kicking in, I said, watch it. I guarantee, I guarantee the government's gonna stop all foreclosures for a period of time. And sure enough, I was right. Like 30 days later, they canceled all foreclosures for at least a year. Right? And we had some that got delayed because of foreclosure. It is what it is. We just, okay, this is gonna suck for the year. Doesn't mean they don't owe money. That that money pay off. Legal balances can still keep ticking. And roughly about 85% of folks still paid on time. 15% didn't. They decided they could pay for a reason or they decided to take up opportunities to drag some stuff out. And we worked some things. We had some people wait to foreclose on, other people we had to drag out, wait a year till we could get back or 18 months to foreclose on. That doesn't stop you from doing deals. And that's the beautiful thing, guys, I want you to get today. Don't be limited by what your past experience or your lack of experience. Don't be limited by what's in your checking account or what's not in your checking savings or retirement account. There's plenty of money out there. There's plenty of opportunities for you guys to take advantage of in this market as it sits. It's only going to get better. The more distressed the market gets, the better it is for us as note buyers. Whether you're looking for performing or non performing, the more distressed it is, you're going to have people that need to sell their performing notes off at a bigger discount to you that you can buy at a 12% or greater return. The more distressed stuff we have, you're going to have more banks, lenders selling stuff off at bigger discounts that they need to boom off their books. Okay? This whole fund that we bought these reverse mortgages from the ones that we didn't make offers on. Guess what? We're going to follow up in 30 days. Hey, did you sell that one? Nope. Guess what? We might be interested now in it, but here's my offer. And we can adjust and go from there. Sometimes just asking for a discount get you a discount. All right. Like, I went back and forth three or four times on the seller with my bids. They counted. Every time they came down a little bit more because I asked for it. Okay. Now it's Sunday night, or Sunday, as we sit here on the third day, right? When we used to teach workshops all over the country, one of the things I would always say to folks like, listen, when you go out tonight, it's like a Friday night. We always say the first night, Friday night. Like when you go out, you'll get a dinner somewhere. You have a bottle of wine or something like that. And that waitress comes up and asks, what's on? What would you like for dessert? What I want you to ask is that. Yeah, well, we'd love to see what's on your free dessert menu. Free dessert menu? We don't have a free dessert menu. Oh, okay. Well, if we spent good waiters, if you spent, you know, a steak dinner, bottle of wine, something like that, many of them would come back with like a scoop of ice cream or maybe a piece of cake. They would say, it's a birthday. Discount desserts are one of the most given away things at a restaurant. Being in the service industry for years. Okay. And what's kind of funny, I was teaching a workshop here in Austin, downtown off of 6, off of First Street. There used to be a Radisson down there that we taught. And inside the resin was a TGI Fridays, right? And you know, go. You'd be surprised what you get for a free dessert. Well, somehow a bunch of the students from the thing went down and asked for free dessert that night. Okay. And one waiter was like, oh. And they're like, oh, you're here for an event and a thing. So one waiter went and found out that I had account there, my room number, and he went and got 20 pieces of cheesecake and charged it to my room. So all the people got free dessert, but did they get free dessert? I didn't find out till I was checking out the hotel. I'm like, what's these 20 orders of strawberry swirl cheesecake? And realized that these people say, oh, yeah, we all got free dessert. We asked for it. They get free dessert. And they did but the thing I want to get you in the point of realizing it's okay to ask. Okay, I saw a post the other day, some lady was talking about how she's selling a mobile home park and she knew somebody wasn't serious. When they asked if they had any owner financing aspect to it, I'm like, well, yeah, they're serious. They're going to ask it because anybody's going to ask, hey, is there any aspect of owner financing to it? Just curious. When I go calculate my numbers that'll give me, offer me, give me an opportunity to offer more, offer less or negotiate some things. And she got all been out of shape for it. Like somebody's just asking if they get a little free dessert. That's what we teach. That's what every, you know, like Ron Legrand, is that the best you can do? You know, is that the best that you can do? Okay, well that best you can do is not the best that I can do. That's not what I want to see. So keep that in mind when you're making offers. Expect to follow up. When you're talking with investors, they're not going to just follow over with their credit cards or their IRA wiring instructions in the air. They need you to follow up. And that's what is going to separate 95% of people out there is in that follow up campaign. When we talk in person workshops or if you ever come to like if you come to one in Austin here in late February, one thing that we give everybody that shows up is the registration list with your contact, your first name, last name, email, phone number and location. The reason I have no problem giving away the registration list to an event if you're in person is I want you to follow up with everybody. I want to help prime that pump. I've got your registration information. It's not going to hurt me if I give away the 50 people their email addresses to everybody that shows up. But I do it as an opportunity to see who's going to really take action because I can always tell who are going to be the most successful people by one thing at live events or after an event. And it was, something was hammered into my head from Bob Leonetti, you know, Bob Diamond, I can tell you all these amazing investors, educators I learned from is in that follow up. And what we would always see is that within the first 24 hours we finished on a Sunday night, if we saw an email come from somebody on Tuesday to everybody say, hey, it was great meeting you there at the event, we knew that person was going to be successful. And 75% of the time that person was successful as long as they stuck with it. But those that didn't send an email didn't follow up. They're the ones struggling. And we've had students like the go to event, they spend so much money going to an event and connecting with people. Why you wouldn't follow up with people to stay top of mind. And we all talk to a ton of people. Your face is great. People remember a face to necessarily remember a company name or logo, but they remember your face. And that's why we say when you market, you market personally, you talk. You put your personal photo or a family photo on your pitch deck. You send an email out with your name in the title, maybe a small photo of yourself in the bottom corner so people get begin to identify because you are all your brands. You're all your brands when it comes to talking with people, to raising capital, funding deals. And I can't tell you how many rooms I've walked into, posts I've seen or even been picked, talked to people at the airport or the place. Aren't you that note guy? Yeah, I'm that note guy. You all could be that note guy or that note girl in Race K. Aren't you that investing guy or aren't you that investing girl? I recognize your face. You are all capable of doing that. You don't. You're not competing with me. You only compete with yourself. Now if you're sitting there and suddenly, well, I'm not very technologically savvy, that's great. VAs are technologically savvy can help you out with that. Once you create something, guess what? Rinse and repent, rinse and repeat and use it and stuff like that. Share your case studies, share what you're working through. Hell, if you can't do PowerPoint, just pull up your smartphone, hit record and give yourself a little deal. Hey guys, this is Scott Carson and I'm working on this, a non performing note deal in Houston, Texas. The house is worth about, you know, $220,000. They owe 165. I'm able to buy the note for 140. It's a little skinnier than most like, but I can either foreclose and make about 20 grand in 90 days and pay an investor 12% money for that period of time or if it doesn't, we'll take the property back, do a light fix up and sell it at a higher closer to 60 to $70,000 profit in six months. If you're interested in putting some money to work, let's talk Reach out to me. Glad to communicate. Something simple like that. A two minute, less than two minute video. You can throw that up on all your socials. It'll do well for you. It'll help you raise capital. Asset manager will see you posting those deals. They want to reach out to you for deals as well. All right, I'm on my. My soapbox here. Let's do this. Ladies and gentlemen, let's take a quick five minute break. We'll come back and we'll be in the final hour of the class there for you. All right? Got some good stuff for you to go through.