This past weekend, I taught a full day course through my local REIA, Central Florida Real Estate Association on how and why to Invest in Non-Performing Notes (specifically focused on Non-Performing 1st lien Bank Originated Notes). I received a ton of a great feedback from the attendees on how informative, easy to understand, and well formatted the course was. The audience really felt they got a lot out of the course and could actually continue to pursue Note Investing as a form of building wealth (which was my goal). Even with all of the great feedback, I still consistently heard “what do I do next?” and “How did you know when you had enough knowledge to be ready to buy a note?”
Since that was not my first time hearing those questions, and very likely will be the last, I thought it’d be great to address those questions here. It can be super intimidating and feel like an enormous challenge to finally pull the trigger when starting a new business or buying your first asset in a new investing strategy. It may never feel “right” or you may never feel like you know enough to actually get started, so here is my advice: If you follow the guidelines below, and take deliberate actions toward your goal, you will see success! Hopefully I’ll be able to help a few of you realize you’re probably a lot closer to being ready than you even know!
Get the Knowledge
Note Investing is an intricate business, and can feel overwhelming during the learning process. I truly believe the brunt of the “work” is in the initial stage of learning what in the heck it takes to invest in notes. There is a LOT to digest and is a detail oriented business. With that being said – once you learn what you’re doing and what to look out for you’ve done most of the heavy lifting. If you want the knowledge or have attended courses and feel pretty confident you have learned what it takes, you might be ready for the next step. For those just starting out, here are my best suggestions on gaining the knowledge necessary to learn.
Attend a Seminar or Educational Course with an Experienced or Reputable Teacher
There are lots of online courses that are offered, like Scott Carson’s Note Camp, or Virtual Buying for Dummies, which does a great job of teaching you about note investing all from the comfort of your own home and computer.
There may be local courses, meet ups, or other groups as well (similar to the course I taught here in Orlando). Check out your local REIA’s and on Meetup.com to see if there is anything happening on the topic of notes.
You can also attend the longer 3 day events that are often held by the “guru’s” which typically cost more, but do provide great education. Here’s a spoiler alert for those 3 day events…They will up-sell you (and up-sell a lot), on joining their mentorship program. There is nothing wrong with joining or the fact that they are pitching this to you. They’re not going to give away their decades of experience and knowledge for a few hundred dollars and in a 3 day course. They have a ton of experience and a WEALTH of knowledge packaged and ready to go for you to learn from, so this may be a good choice for you if you want to really ensure you have the necessary educational foundation. Just know it’s going to happen and be open to all of the education they do provide to you while you’re there.
Explore the internet!
There is SO much great, free information, online. BiggerPockets.com has great blog posts on NoteInvesting. Dave Van Horn at PPR also has a lower cost educational course he offers with a ton of free content upfront to help you learn more about investing in notes (both 1st and 2nds). A great resource for seconds is at the Key Hole Academy. There are also great blogs written by real note investors like myself. If you haven’t read our other posts, I highly recommend taking a lot at some of the posts that walk you through the basics of investing in notes.
If you have you have a solid foundation of Note Education, the next steps is to build your pipeline to be able to get inventory and close some notes! I would make your next efforts be…
1. Creating Your Brand, and Building Presence as a Note Buyer – (remember professional and reputable). Create your website, LLC/Note Business, Logo, Email, Business Cards, LinkedIn account, Facebook, and Blog (if you’re doing one).
2. Raise Capital – Attend local REIA’s and let yourself be professionally known as a note buyer, talk with your friends and family. Post about what you’re doing on faceboook. Talking with people opens doors. You never know who has money sitting idle that they are willing to invest!
3. Contact and Reach Out to Potential Sellers – In order to buy notes, you must have inventory. Start reaching out to sellers from banks, hedge funds, or credit unions. Make as many connections, follow up, and fill out those NDA’s. If you do this actively you’ll start to receive inventory!
Ready, Fire, Aim!
You’re probably familiar with the saying, “Ready, Aim, Fire” which focuses on readiness and preparation before taking action. Instead, we like to say and live by “Ready, Fire, Aim” which focuses on readiness, then action, followed by adjustments to get you back to your ultimate target. If you’re waiting until you’re fully ready every time – guess what, it’s extremely likely you’ll never FIRE. I was probably asked 10 times in my class “When did you know you knew enough to buy your first deal?” My honest answer; I didn’t! I got my education, we bought our first deal and learned a lot as we worked the deal, then bought more. Every deal I do, I learn something new. I’ve now done 30+ note deals, and have been reaping the rewards of “Ready, Fire, Aim” instead of still sitting on the sidelines waiting to “Aim then Fire”.
I’m not saying attend a 2 hour course on notes and go buy your first note deal. As I mentioned before, education is the brunt of the work and one of, if not, the most crucial part of investing in notes. Just don’t spend years “learning”, then learning more, then waiting until the perfect deal comes along. Get the knowledge, pull the trigger, adjust from your mistakes, and do it again.
We really started to see success in our business when we stopped learning about ALL of the ways we can make money and focused on one strategy, notes. We knew notes allowed us to live the lifestyle we desired, provided both passive income, and cash to have on hand, grow our retirement, or save. When we stopped attending other real estate seminars and dabbling in other areas of real estate investments we saw our note business take off! Whether you invest in notes or not, one of my biggest pieces of advice to you is to choose one strategy, get good at it, rinse and repeat.
Work on You: When You Grow Personally, The Rest of Your Life Will Too
The last thing I think is crucial to success not only in notes, but in any business, is self development. I truly feel around 90% of our success has been solely from self development. Over the past 3 years, we have attended several courses, read and listened to a variety of books, and openly talked about and explored the growth process that came from these events with each other and our family/colleagues.
I’m not sure why self development courses and gurus have such a bad rap. Maybe because a lot of the courses do have some corny activities, and downright out of the box, in your face activities. But guess what – if it works, WHO CARES? At one event we attend very early on in our self development journey, the speaker asked us to high five a neighbor and repeat some cheesy phrases (that of course were positive and self-affirming but feel lame and weird to say aloud let alone in front of people). My husband and I were a bit hesitant and definitely weren’t fully committed, but we did it nonetheless. When we sat back down in our seats, the speaker called out the numerous people in the audience who were clearly doing the activity half-heartdedly. The speaker then said, “would you rather be rich and look stupid, or look cool and be poor?” My husband and I thought about it for a second, and no more than a minute later realized, if what we’re doing in ANY way will improve our life, our income, our happiness, who cares if we look stupid.
There is fear, weakness, doubt, and hesitation in all of us, even the most successful of people. If we expect to change our lives, to grow our income, or to create a lifestyle we haven’t been able to live yet, we have to expect to change ourselves. To get big, new, and incredible results you must be willing to be vulnerable, dig deep into your inner beliefs, explore and face your fears, motivations, and confront and change your thoughts. While it’s uncomfortable, scary, and at times down right weird, it’s worth it, and it’s necessary to see the results you desire.
I hope this post is beneficial for you if you’re starting out in notes or any other business. We want to see your success!