Why Are the Riches in the Niches?

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This is the no Closer show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars worth of property for panties on the dollar. Get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same. Now, here's your host CEO of We Close nodes, Scott Carson.

Good morning, good afternoon, good evening, everybody. Welcome to this episode of the Note closure show. As always, Scott Carson here. Jacked up with you today. Today's topic is all about why the riches are in the niches. Now, you've heard that saying and it's really so relevant when it comes to being a real estate investor is finding a niche that matches your personality, your skill set, your time availability, your reserves, and then really your interest and focus. But unfortunately, in this time of year, many people are flocking to real estate investment clubs, which I think is one of the most important things that you can do as a new real estate investor is find you a good real estate investment club that you can be a part of. But unfortunately, many investment clubs, they're very, I don't want to say watered down with focus, but they do bring in people of all different niches, all different, you know, sorts and focuses, which is great. But it often becomes, as I like to say, the idea of putting another tool in your tool belt. Well, at some point, you can't actually stand up if you've got too many tools on your tool belt. And really what you got to figure out is, okay, what's the, what's the hammer, what's the Phillips and, and the flat screwdriver that you use and a pair of pliers. Those four tools are probably what you're using most of the time. Yes, it's great to understand all the different other aspects. And one of the most important things you can do as a new real estate investor is understand and learn niches because there's so much to learn. I mean, my background in mortgage has helped me tremendously over the years. My background as a previous financial advisor, a banker, you know, those things have all helped me be a better entrepreneur and a better note investor. But, you know, the fact that I screwed up and messed up as a fix and flipper or I've made mistakes in the past, that's also helped me realize I didn't want to do that. My strengths don't, don't lie in that. You also have to look at your market and what's available in your local market of, like, you're, like you're looking to do because that niche might not be available. And of course we've all seen these travel, traveling circuses, dog and pony shows where all the big name people are selling their name out to these different companies are going on, oh, learn to flip houses in your market. Learn how to find foreclosures for pennies on the dollars. That kind of stuff, you know, that comes around. Oh, why this works in Austin. And you can meet us at the airport on north side and the airport location on the south side for a couple hours to get the pitch fest, you know what I mean? You know, I've been through that. You know, we, I still speak spoken a lot at different expos and seminars and it's great to go and be a part of those things because then you get to hear from different speakers about different niches and be able to find out what works in your favor. But the biggest mistake, the number one mistake that true entrepreneurs, true real estate investors make is trying to be a jack of all trades. Now you've heard the saying, if you're a jack of all trades, you're a master of none. It is so true. And it takes time to master a niche. You know, I think what is it? Grant Cardone something in his movie, his book 10x it takes 10,000 hours of doing something to be a master of it. You think about the samurai sword makers, how they would spend hours and hours and weeks and weeks building one sword or custom craftsmanship on furniture. Things takes time and years of experience like an apprenticeship. What you have happening a lot of times you have a lot of people that come in and they take this class and they go to classes and they take another class, they take another class, they take another class and they're become, I hate to say this but an educated idiot. People that take a ton of classes are great. But if you're not implementing what you're learning or the classes you're taking are not going to fit with a your skill set, your niche, your market or what time frame you have available. It's really a waste of time and a waste of money. You know, that's why I always say that note investing is not for everybody. No, it's not. It's a niche. If you focus on note investing, you really need to focus on it as your one niche, your other outside niche possibly being subject to deals or light fix and flips if you end up taking non performing notes back or this is also why we see a lot of note investors come from the fix and flip side or the landlord Space that are tired of being landlords and want to be a lien Lord. And they no longer deal with toilets, tenants and trash outs. They like the passivity. I've not. And just look at banks. Banks don't fix and flip homes. They're not in the landlording business, they're not in the wholesale business, they're in the lending business, they're in the note business. They're a niche aspect of things. Hard money lenders aren't trying to do a million things. They're in the lending business, the note business, and potentially a little bit in the fix and flip when they have to take properties back for the most part. But they're not out wholesale and they're not. They're running 20 different plays. So that's the biggest mistake I see. It's. And you know, when I got started as a real estate investor, when I first started, when we ran the mortgage company, we were traveling week in, week out, sometimes two, three different big conferences a year, you know, talk talking about mortgage investing or offering mortgages back into, in my early years, 2004, 2000 and traveling around the country. One of the biggest names, I mean, Ronald Grand, I mean, he's got these great American real estate exposure. It still has some of these things that are virtual these days, but it's three days and it's basically about 10 speakers, 8 to 10 speakers a day of different strategy sessions of what you want to focus on, whether it's ugly houses or pretty houses or wholesaling, you know. And yes, it's a great way to learn a lot of content, but it's also can be very expensive. I would see people from one week in or one month at a time every other month. And people that signed up for this master's course of eight to 10 workshops. And I would always ask them like, hey, how was the last workshop I saw yet? And they're oh, it was great. It was awesome. I was like, great. Did you. Were you able to implement. Oh yeah, we sent letters out or postcards or flyers or whatever the lead gen activity was, whatever the marketing aspect, you know, and they were getting a ton of, you know, leads. But then I'm like, okay, how's that? Oh, we don't have time. We didn't have time to follow those leads. And that would just drive me bonkers. I'm like, you spent all this money to go learn something, then to market it, then to get leads coming in, but then you're not doing anything with those leads. And they're just either A rotting or you have motivated sellers calling you to do something and you're not following up. This is why the most important thing you learn from is talk to the speakers, talk to the people that are the educators, the, the gurus out there who are actually doing the business. You will see that they really aren't focused on 20 different activities. They're focused on really one or two niches. And that's where the riches are. They honed that craft, they've honed that strategy so that they understand how it works. This is why I stopped doing wholesaling and fix and flipping for the most part. I mean, don't get me wrong, we still take a few properties back and had we complete one in Houston recently with a partner of ours, but I don't do that. That's not what I'm looking to do. Most of the time. My legion comes from one source. Distressed debt, distressed notes. That's why we are constantly reviewing and talking with asset managers. I don't have to send out bandit signs or postcards or yellow letters or door knock because the leads come to me direct from my banks and asset managers. And that's the biggest number one thing is lead gen. How do you find deals? How do you find opportunities? This is a thing that separates the boys from the men, the women from the girls. Men and women understand the power of marketing and the power of getting multiple deals and how one lead gen becomes a multiple month over month lead source for you versus constantly having to go back and recreate. I mean I've got friends that are spending thousands and I'm not just talking like a thousand or two, I'm talking like tens of thousand dollars each month for marketing. For deal gen, they start the month off in a negative aspect each month and have to do five or six deals just to break even. That's not an attractive business model. You know, I've been a part of different big masterminds and when I was talking to other people doing things and I'm like, and one of the questions because hey, how do you reduce the cost of Legion? And I'm talking to people that it's costing, you know, 5 grand to 15 grand in lead gen costs just to get one deal in, I'm like, oh, that's ridiculous. 15 grand for us to market for note deals. You can hire a couple full time VAs to reach out to almost every bank on a regular basis and you'd have more than you can handle with at a lot far a lot less reduced cost. So this isn't to bash on any strategies, you're going to find a strategy that works best for you. And maybe note investing is on it. Maybe it is fix and flipping, maybe it is wholesaling. Maybe you don't want to market so you're scared to go and raise capital. But here's the thing that I understand. If you know how to raise capital, you know, on market and market in today's world, not like it's in the 19th century, which is how a lot of people used to market and still market this day. You market smarter, you'll find a lot of deals because there's still plenty of defaults, there's plenty of people losing their houses, plenty of divorces, plenty of people struggling to get by financially. And we see that number increase every day. You just got to find a strategy that meets your skill set. The timing of available. Like I said, you don't have to be working in the note business 40, 50 hours a week. If you got 10 to 15, that's an hour or two a day, a couple hours, the weekend, that'll ebb and flow as you get going. You may need a few more hours to get more things cooking so things don't fall through. But focus on one niche and make sure that niche is available in your market. Like if somebody came to me here in Austin, Texas and say, hey, I want to buy second liens at a discount, I just want to do them here in Austin, Texas, I would say better keep your day job. You know, if I was just focused on Austin, Texas notes and didn't invest anywhere else outside, I'd have a hard time making end meet. You know, I'd have a hard time getting by. This is why I had to expand my market beyond just Texas to Florida, North Carolina and add a state here and there and get much more comfortable at time. And when I first started off, I was doing stuff in Texas and Florida, in North Carolina, where my three favorite markets, including Georgia. And then I added Ohio and Michigan and Indiana and a few other states along the way. As I got more familiar with those states, those markets, those time frames and stuff like that. And that just comes from experience and becoming an expert, putting that time in. Unfortunately, so many people don't have the patience to develop those skills. They jump from one strategy, they think it's going to work, they put a little bit of energy into it, realize it actually is going to take a four letter word to get things done, W, O R, K to stick with it and being consistent. And they, they just don't have the patience. They don't have time to let their seeds germinate their marketing or legion to generate deal flow form that they go to something else and then they jump from something else next 90 days. The best thing you can do is I say give your strategy six months, make sure a and find out there's a variety of other people in your market doing that deal strategy that you're deal type your deal hot box is available in your market. Like somebody comes in. Like I said, second liens wouldn't work here. Looking for small apartment complexes that distress stuff's not going to happen in Austin, Texas. Okay, our vacancy factor is less than 1%, less than half a percent on most of the multi families here. Not a great market for multifamily unless you want to buy from the ground up. And that's not where most people want to do. So you see a lot of investors here in Austin investing in San Antonio or north of here in Fort Hood or Colleen or Temple or going to Houston or investing in Dallas or Corpus Christi because there's better deal flow, more opportunities in those markets that aren't quite as hot as it is here. And you know, to keep it weird. Austin state capital of the Lone star state. You got to know what's going on, know what's available and know where to find it. And that's the biggest keys. Don't just rely on somebody at the front of the room telling you where deal is. Make them prove it, make them show hey, where you at? And this is one of the greatest things I love about speaking at different investment clubs across the country is I like to pull deal flow and show that they're investors in every market, you know, and understand hey, here's deal flow in this market. Or hey, you may not want to invest in this market because of A, B and C, but there's other opportunities across the state line or in other cities and stuff like that. And that's, that's important. I mean you're not going to bash people. I'm not saying bashing anybody. I'm just simply saying know what's available. You know, know that a lot of people like oh, I want to get in apartments, I want apartments. Well, you're not going to own an apartment if you've got 50 grand in your account. You might be able to invest in a syndication, which is a great thing or maybe we partner with somebody, get the ball rolling. But you really, if you're an investor and you want to focus, you want to dominate a niche and you really want to make investing your full time activity, do yourself a favor, learn how to market for capital, learn how to market for deals and see build you a game plan. Realize if you're working at a job that's a great resource, it's a great asset and build you a roadmap. If you want to leave that job in 12 or 24 months, set some real estate goals, but don't be all across. You know the map. Focus on one niche, two niches at the most. Make sure those niches work really, really well with each other. And like 72s work really well with non performing notes because you're getting less of distressed assets or distressed borrowers and becomes a really win win aspect of things. So understand that if you're trying to do 12 things, you're going to be failing at 12 things. The real estate investment clubs are littered with them. You see people who have tried to do one thing and done going to something else and try to do another thing and go to something else. Ask what people are focused on. Ask what do they close in the last 12 or 24 months? Because that will separate. Like I said, the adults from the kids, the men from the boys, the women from the ladies are those that are actually closing deals in the last 24 to 36 months, especially in the last six months. Because everybody can make money in an up market by just buying and holding on for a period. It's when that market goes south and you have depreciating assets or depreciating values is when the the professionals really do stand out. All right, so keep that in mind. Ask questions Network. It is a great time, as we said in an earlier episode, to get out networking. Go to your local real estate clubs, network. Meet with other people. Find other people in your local area that can be partners or accountability partners or just sounding boards. But focus on the niches that work for you, your market, your energy and your profile. If you don't like talking to people, it's probably not going to be good for you to call banks. All right, if you got a lot of capital but don't like dealing with toilet centers and trash outs, maybe you want to buy performing notes. Maybe you just want to be a private lender. I don't care what it is, I just want you to take action in 2023. If it's note investing, great. We'd love to have you. Love to have you attend a class or love to have you be part of our WCN membership on a monthly basis and help you take those steps to Find, you know, success, you know, the proof was in the pudding. We're really proud of the fact that a lot of our students, our coaching students have come from other niches and they have found notes to be the niche that really it rings that tuning fork in their loins, as Tim cup would say from the movie Tin cup, is that they found an inch they really enjoy. It works well with their schedule, their life, it provides good income, great passive cash flow or active cash flow depending on what their focus is. It's also become a great strategy if you know how to use notes. If you're wanting to add assets and you're in a market that does have plenty of non performing deals that you can take back or vacant property or you want to transition from the property management side into something that's more passive with performing notes where you're not getting phone calls. When little Timmy drops his rubber ducky down the toilet at 2am because nobody calls the bank, they always call the property owner. And this is why the bank is always the biggest out there. So like I said, riches are in the niches. Get to know your niche, get to understand it. And thing that separates you more than anything else is if you're going to take action. So if you find a niche, give it time, take action, show up, give it six months before you decide to add something else. But truly be honest with yourself. Are you really giving it 100%? If you're not giving that niche 100%, it's probably not the right niche for you. If you found yourself bouncing from niche to niche to niche, the problem isn't the niche, the problem is in you. Maybe your focus is not there, maybe your attention isn't there. Maybe you're stretched a little too thin, maybe you're trying to do too much. I don't know you, only you can answer that question. I've been there. I've been trying to do too many things before and that's why I wasn't successful until I started focusing on one niche. And that's why I always say the riches are the niches. And those that are experts out there will agree with me. They focus on one niche that works best for them. Their strategy, their focus, the opportunities. And that niche may change as the market changes, ladies and gentlemen. So ask you to go out, take some action, get out networking. Feel free guys and gals. If you have some questions, want to pick my brain, feel free to go to talkwithscott carson.com that's my website to my, not my websites. We close notes.com but that link will take you directly to my calendar. Book a 30 minute call with me. I'd love to visit with you, see what your goals are for the year and see if we can help you find that niche and ultimately find the richest. So go out, take some action buddy, and we'll see at the top. Bye Sam.