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PTP 12 | Building Rapport

How Building Rapport With Sellers And Asset Managers Can Change Your Investing Game

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PTP 12 | Building Rapport

 

More than excellent deals and fast transactions, nothing could ever beat having the right sellers and asset managers in the world of investment. That’s why the first step to long-lasting relationship with the most trustworthy people is by building rapport from day one. Join Dan Zitofsky and Logan Hassinger in their discussion on what it takes for your investing career to forge the most rewarding relationships with the leading individuals and have deals pouring into you almost daily. They dive deep into the various responsibilities of every buyer, from keeping an authentic self and being clear with what you want even from the start. Moreover, the two of them underline the importance of taking it easy with your transactions and avoiding the false investment stories that usually circulate on social media.

Listen to the podcast here:

How Building Rapport With Sellers And Asset Managers Can Change Your Investing Game

I’m welcoming you for being on here for another great episode. We’re looking forward to this. Once again, like every other time, me and Logan get caught up before the show, probably doing a whole other show. We’re going to bring you some action-packed stuff. We don’t have any advertisers and sponsors on here. We decided at the beginning of the show not to do that. We’ve been offered the opportunity, but it’s not about making money for us. It’s bringing great content to you and trying to drop the golden nuggets to help you on your journey to create passive income, passive wealth, and living a prosperous lifestyle. We’ve both done. If you liked this show, the only thing we ask you is our cost for doing this is to share this with at least five friends that you think this will help. Five people that you help live in that mindset of non-scarcity, help all the people get to their journey like we’re doing for you. We’d love your review. If you love what we have to say, give us that five-star review and share this out. Thanks so much for being on, Logan. It’s great seeing you again.

We started off with a little pre-show talk of some different things going on down here in Dallas. It’s always an interesting time given where we are in the market.

Remember years ago, we used to have those bloopers and all that stuff on TV. Usually, our pre-show is the stuff that people say, “If I could be a fly on the wall for Logan and Dan and hear what they talk about.” We talk about some heavy stuff a lot of times and a lot of times it’s private what we talk about like the under links of a business, how it works and uncovering numbers that people really want to see. We try to summarize it and bring it to you in the show. We’ve been talking about this a while, but people ask us all the time because Logan has his own Facebook group and I have my own Facebook group. People ask us all the time, “I’m able to get the money maybe now. I have the mindset and I want to get started. How do you build a relationship with those?”

PTP 12 | Building Rapport

Building Rapport: You might have the demand, but without the supply, you’re going to run dry.

 

Logan and I both buy a lot of deals from asset managers. At different times of our investing career, we buy a lot from asset managers, non-performing notes, REOs and a number of things it could be. They are going to be vacation rental space now and working with some hedge funds. How do you get those relationships with asset managers and sellers? We talk about this all the time because people ask us those questions and we give them advice on what we do. I either don’t see him doing it upfront. I’m putting the work in or don’t or they go out front and they ask what the asset manager could do for them.

They don’t understand. It’s not about what the asset manager can do for you, it’s what you could do for the asset manager and how do you help that asset manager. What do you see on your side? I’ll get into what I see a little bit more on my side. Hopefully, this helps people to get in the mindset of how to build a relationship with asset managers and direct sellers in the market, wholesalers, or whatever it might be, because that’s so important. You might have the demand, but if you don’t have that supply, you’re going to run dry.

That’s where we are on the supply and demand side. I wouldn’t say we’re waiting first stop to hit us but it’s a little dry right now. I’m big on setting up either semi-monthly or quarterly calls with some of my asset managers. They are not looking to nag you or anything. They just want to stay on your radar. They want to keep you up-to-date with what we’ve got going on. If anything changes on your end, hopefully, I’m the first person that they’re thinking about. That’s great for where you and I are now. We’ve got the relationships, we’ve got the context, but how do you get started. I remember back in early, probably January, February of 2019, we were getting started with a lot of the notes stuff on a bigger scale than what I was doing on the side. I was reaching out through LinkedIn trying to find different asset managers for banks and different conduits of sellers that were trying to move notes.

My approach was, I don’t like saying, “Fake it until you make it,” but there’s a small piece of that. You’ve got to look the part. I wanted to make sure that if someone were to look me up, they had a general idea, “You got a good profile picture. He would pay for headshots.” There’s a star versus somebody surrounded by his friends and he’s got beers in front of him. It’s probably not the best image for the first shot from an asset manager who’s doing some due diligence on you because I promise you, they are. From there, learning different terms. If you’re getting into purchasing and doing fix and flips, know the lingo. I made sure to do a lot of different research, reading, and networking with other note investors to be involved, learn the words and the lingo. As I’m communicating with these guys or ladies, it comes across as if I’ve done this before, again, you are going to fake it until you make it, but it worked.

It's not about what the asset manager can do for you. It's what you can do for the asset manager. Click To Tweet

PennyMac, one of the large government entities that were helped servicing for Fannie and Freddie loans. I was able to purchase from one of them early in my note investing career. We still touch base. I haven’t bought anything from him in years, but he thinks it’s cool that for investors in notes and he’s like, “How does this process work?” I talk to this guy about family now. It’s interesting how they would the relationship and in this one instance, it has evolved. In the beginning, it’s projecting an image that you look like you know what you’re doing and you talk like you know what you’re doing.

At that time, I had capital behind me so that was a piece that was needed to be there as well. From there, the relationship grew as I started closing on one office over here and one office over here. I could talk about different states that were involved in. Those relationships helped me in other networking opportunities. Whether that was a broker out of Utah who’s connected me with a seller in California, it starts shifting around. Once you’re labeled as, “He’ll close. Don’t worry about it,” then doors start opening up. We made sure we were going after good deals and stuff that made sense for our investors and slowly grew it. It’s not a get rich quick scheme or anything. You and I have talked about that for a long time, that this is not an overnight success. It’s been several years for me to be where I am now, and I’m still growing.

I know when I talk about hitting the asset manager up and talking to them, I don’t say, “I’m a note buyer.” I’m specific and intentional when I tell them. What do you tell the asset managers? I tell them is exactly what I’m looking for. What do you generally start off telling asset managers when you get them on the phone?

When I get them on the phone, generally, I’m targeted with particular states and even counties depending on how large of an operation that I know that they’re working with. Usually, I jump into states and counties and cities and then balance ranges. I put a limit to, like, “I’m not here to take down $20 million of UPB. I’m probably going to be looking at it at a tape or wherever you have and I’m probably going to be more one-offs. We’ve got the ability to take down a pool of assets.” Being transparent with them too, let them know, “If there are assets that make sense for me and I’ve got a network behind me as well, there may be an opportunity for us to take down 15 to 20 of these, but it would be across 3 or 4 of us.”

It’s being transparent and honest with them, but I am targeted with what we’re going after, but also started off with, “We’re discount buyers. I don’t want to get too far into the conversation.” They’re expecting par pricing or $0.90 on the dollar. I’m like, “We’re probably closer to $60 million, depending on the quality of the assets. You helped me with this understanding, but we’re not going after loans that at the end of the day, we’re not comfortable in the home. That’s a big sticking point for us.” Generally, they know the house that’s backing the loan, like, “You’re probably not going to like any of these.” Fair. I’d rather be targeted with the conversation versus up in the air, “We buy loans and buy them everywhere.” To me, that comes off because I’ve had guys call me now that I’m several years in and guys are calling, “We’re buying loans everywhere.” They’re feeling it out and I get it. I was there. Have a concise sales pitch, an elevator pitch for yourself, and what it is with that you are going after because let’s face it, you’re not going after a loan in every state and every country.

PTP 12 | Building Rapport

Building Rapport: If the loan is underwritten the right way, that’s going for par over par right now, depending on the yield.

 

It’s not as much anymore. I don’t see the gurus coming out and teaching note stuff that much anymore or whatever. It’s maybe because the courts are closed and maybe because the pricing got so damn high. It’s not so advantageous for everybody unless you know and you don’t have relationships. I can tell every time a note class happens with some of these gurus out there.

I befriended a bunch of random people, “I buy notes too.”

They would hit you up. In the beginning, I would try to help them out and then they were so off-based. They would waste your time. They would come in with these low offers or they try to broker your deals to somebody else. There’s a place for brokering, but if you want to be in this business and you truly want to build passive wealth for yourself, you want to come in and say, “Where do I need to be? What numbers do I need to be at to make it work for me and my investors?” My investors, I mean people we raised money from. Our investors always get taken care of. I want to make sure that they’re always being paid back no matter what.

Thank God, we’ve never had an issue where we have not been able to pay an investor back. We’ve always paid them back and they’ve always been happy. That’s why they want to reinvest with us, but we want to be specific. I get people to hit me up and they’re like, “I want to know if I could buy them.” What I generally will do is send them 1 or 2. I want to see how they act. Two things will happen. One is I will get a yes or no from them. If I don’t get a response, a yes or no, when they hit me personally and I send the person 1 note or 2, then I usually strike them. I don’t ever send them anything again.

There’s a lot of no-response stuff that I get.

They come back with a ridiculously low embarrassing offer. They should know better than that. I don’t waste my time with them either. They still hit you over and over because I’m on their email list. They’ll find my name as an asset manager and they’ll hit me over and over again. Logan, we have a couple of hundred assets. We’re asset managers and we manage our assets. Here’s the biggest thing that I talk about is building a rapport and a relationship.

As you talked about, Logan, that you get to speak with PennyMac’s asset manager. When you build that rapport and relationship, that’s everything. If the note doesn’t work, I always tell people, “A no is as good as yes for me.” I don’t sell the note. I’m doing you a favor. You hit me up. I’m like, “Here, let’s test you with this one note. I’ll give you one that’s pretty damn good. Take it. I know the number you should take it at. If you don’t take it at that number, you’re not real in my book. I don’t want to work with you.” Here’s the thing, if you don’t get back to me, you didn’t build a relationship with me.

Even with a deal, I tell people all the time, if I have a property and it comes across my desk, I’m very particular where I buy because I buy real estate, I don’t just buy notes. In fact, I buy more real estate now than notes. Even on that asset, if a deal crosses my desk and it doesn’t fit my portfolio to keep, I will sell it off. I have a specific parameter for my portfolio. It might not work for most people. I bought the upper-end houses, then rents don’t make sense for that price point. It doesn’t pencil out, but for me, I’m buying it cash. I’m not getting a mortgage. I have to spend the money somewhere. It’s a legacy thing for me at this point. I’m not a wholesaler, but if properties hit my desk and they don’t fit my portfolio, I’ll wholesale them or sell them off. If you’re hitting me up left and right for deals, I sent them to you and you don’t say yes or no, because as I said, a no is just as good as a yes. At least I know where you stand. I don’t send them out to 100 people at a time. I try to build relationships with one person at a time. I will give an investor. “I’m going to show you the house at this point, I’ll be there. You come this day. Let me know if you want it or not.” Most of them don’t get back to you.

When you build that rapport and relationship with asset managers, that's everything. Click To Tweet

I was selling notes quite a bit on Paperstac. That side has helped me a lot to move product, but then you get the one-off. I’ve got a good performing note out in Georgia. We’re fourteen months from origination, never missed a payment, great borrower and house. It’s done nothing but appreciates since the homeowner got into it. A little smaller down payment than I would have preferred, but this is a solid-paying note. It’s $85,000 UPB on a $100,000 home, I was offered $55,000 for it. It’s a broker.

The same thing happened to me on a note from somebody we both know. An $85,000 UPB on a $100,000 property. If the loan is underwritten the right way, which I know you have underwritten it the right way and I know it’s professionally serviced, that loan’s going for par over par, depending on the yield. What kind of yield is it making now?

The yield for me is probably around 14%.

People wouldn’t be happy with a 10% yield on that deal.

You should be. They did some due diligence on the property, so I give them some credit, but the initial response was, “The tax records show that this thing is only worth $25,000.” I said, “I’m not sure what the deals that you dove into.” This gentleman talking to me and he’s like, “The property was bought and sold within four months of purchase.” I said, “It was an REO from a bank. It was fixed up, rehabbed and sold to an owner occupant. We bought the note subsequently after that. I partnered with a fix and flipper who buys REOs and had his good contacts. I get his notes at a good price for myself and I can turn around and still allow a second investor on the note side to make money.” He’s like, “It was bought and sold for $25,000.” I was like, “Yes. It’s an REO.” The guy turned around, put money into it and then sold me the note.

What would have been your strike price on a deal like that?

I’m asking $75,000. If you can hit me between $68,000 and $75,000, I’ll let it go.

What’s the principal and interest payment?

$740.

$740 times 12 is $8,880 a year divided by $70,000. Somebody would be looking at about 12.5% yield on their money. That’s a deal.

To be offered $55,000, I was like, “That’s not a serious offer. While I appreciate the reconsideration, thanks, but no thanks.”

Where is it being serviced?

Madison.

It’s being professionally serviced and was it underwritten by an RMLO?

Yes.

I talk about this lot with an owner occupant, it has to be underwritten by RMLO, which is a Registered Mortgage Loan Originator by law to make sure that they meet Dodd-Frank and CFPB compliance. Essentially, this property is worth about $100,000.

PTP 12 | Building Rapport

Building Rapport: Everyone is in their own investing stage. Just because one deal didn’t work for you doesn’t mean the same will happen to another.

 

Give or take it. It’s Zillow/BPO. We had a range of $92,000 to $104,000.

Do you own this in your personal name?

No, company name.

What about licensing out in Georgia?

We’ve got it.

That’s the only caveat in Georgia.

If it’s an IRA, you’re good.

We’re not selling anything here. If Logan’s selling it, that’s something somebody should jump on.

For me, it’s moving cash around to put some stuff back.

Are you selling this now?

Yes, I’m selling now.

I’ll buy it from you.

I’m super transparent too with, “Why are you selling? If it’s such a great note, why are you selling?”

It’s because you’re recapitalizing cash.

I’m recapitalizing cash and I’m putting it into some short-term rentals in Oklahoma. I got nothing to hide.

My deal is I got so much cash coming in that I’m trying to spend it on passive income. I’m not saying that to impress people and impress upon you like, “My cash is sitting around and does nothing.” I generally like to make at least 15% of my money, but this one might be a little shy of it, but we can come pretty close. I know Logan and the type of business he does, so I’m okay with that. We’ll talk about it afterwards. That’s how you work with an asset manager with something like this. Logan’s an asset manager and I’m an asset manager. He has a deal. He’s telling me what he needs. I’m telling him what I can do. It works. If you have IRA money for it, you can make it work. That’s how he did business. If I tell Logan, “I want it,” and I come up with every reason in the world why I don’t want it afterwards, then I wasted his time. I’m a bullshitter.

Even though you take on deals that didn't fit your box, they can still offer a lot from a relationship standpoint. Click To Tweet

You want to close. He knows me. It’s a different story, but let’s say I’m brand new and he sees I close on a deal. I tell him that I close. It’s not a problem. You’re able to do deals. Here’s what I tell people. Be very specific on what you want. When I call an asset manager, I tell them exactly the markets I’m looking for. I even tell them the class areas I’m looking for. A lot of them don’t know class areas, but I tell them, so they understand like, “I’m not looking to be in the ghetto. I’m not looking for that $20,000 valued house. I’m looking to be in a B to C area. I’m looking to be in this price range. The average value of the house is going to be between $70,000 and $125,000. I’m going to be looking for a three-bedroom and 1 to 2 baths. I’m going to be looking for a single-family. I’m looking for multifamily.” Whatever it is you’re looking for, be as specific as you can be with them. Be honest. Don’t come off, as Logan said, fake it until can make it. There’s a difference between faking it until you make it and looking like an idiot out there acting like you’re a big shot when you’re not.

Be honest with them. Say, “I’m a note investor. I could buy one-offs. I could buy a few deals. Maybe we can take down a little bit bigger tape. If you’re willing to let me bring other people in, I could do that. I could share it with other people.” If you don’t like the asset, tell them why you don’t like the asset. What used to happen with me is I used to have one of the biggest asset managers at Ocwen hit me up. This was years ago. This was before Auction.com and Hubzu came out and all those sites came out. They used to hit me up. He would call me up. He doesn’t work there anymore. He’d be like, “Dan, I got offers on this property for $110,000. Give me $70,000 and it’s yours.”

He had offers for $110,000, “Give me $70,000.” “Why?” It’s because we had a relationship. I closed and I solved his problem. He owns the bank. He had commissions on how much he sold before. The thing that I tell people is, “This is how I got it.” I was in on a decent amount of asset management. This is how I got it back in the day with Ocwen. He came to me. I remember I was emailing and calling all the asset managers. He says, “I got something for you.” He hit me with it. He gave me these two assets. They were complete garbage. They were junkers. I had no interest in them, but I took both of them off his desk.

It was the end of the quarter. He needed to get rid of them. I took them off his desk, these two pieces of garbage. I sold the good stuff to other people like Logan back in the day. He gave me the stuff that nobody else wanted. Everyone picked through it like a buzzer and then these two crap deals left, he gave them to me. I had no interest in them. I took them. They weren’t a lot of money. I took them and I got rid of them. I did pretty good with both of them. I didn’t fix them up. I wound up seller financing to contractors who fix them themselves and lived in them. That was back before Dodd-Frank and I can do owner occupants without the whole underwriting thing.

You make a good point there. You took on a couple of deals that you knew didn’t fit your box, but from a relationship standpoint, that was going to lead to a whole lot more. I’ve done that a lot of times. I’ve overpaid for some stuff, simply so I could get access to future deals.

That’s all it was about for me. I remember back in the day, I was a mortgage broker and banker for many years. It’s the same thing with a relationship with anything. We were talking about relationships and it doesn’t have to be notes. Let’s take this relationship. I was in the mortgage banking business. I was a young guy. I was in the Navy at the time. I was 22 years old. I did mortgages as an assistant. In high school, I was playing football. It was something I could get back into on the side to make money. It was good money back from the day. I still look young. I don’t have the experience that somebody’s older mortgage brokers had. I have to go out there and build a relationship with real estate agents, who they all got on locked up.

Back in the day, they used to pay off real estate agents for mortgages. Everyone was on point for a deal. They didn’t care about being legal or not legal. I wasn’t doing any of that stuff. I was running it ethically. I said, “I’m going to build a business.” I had to go out there. I had to beg people for business. I’m knocking on doors, bringing donuts and begging for business. I’m not looking to pay anyone off. They came to me. When those old-time mortgage brokers or bankers couldn’t get a deal done, it flopped, those are the ones, “Do you want some business? Here, get this done.” The junk works that nobody else can get done.

I would work my butt off in any way possible to get this. There was a broker. I’d call all my lenders out there to see who I can get it done with. To see if I can get waivers and variances on them to get these done. If I can get a state of income with no docs, come up with more money, gift money and grant money. I was coming up on everything. I’d get a lot of them done. As I get them done, then they’d still give me the good deals, and I have to do it again. Eventually, I got to the point where I said, “If I’m going to keep doing these for you, I need to have some cherry as well.” They’d have that cherry on the top as well.

You build a relationship, but too many people come to me. Maybe I’m an old-timer but bring value to me. Make my life easier. Come to me and don’t be a pain in my ass for a deal. If you ask me for a deal, come look at the damn thing. If I show up and you don’t come and then I see you sending emails out or your Facebook, “We’re cash buyers. We want deals.” You don’t show up or you come up with every reason why you don’t want a deal, I’m not going to give you the best freaking house in the world that’s all fixed up and you could just close on it, turn around a real estate and make $100,000. It’s not going to work.

PTP 12 | Building Rapport

Building Rapport: If you say you’ll close and you miss something on a deal, you better still close.

 

If that’s the case, I’ll do it myself. I don’t have the time to rehab. Even if I rehab them, they don’t fit my portfolio. They’re perfect for your portfolio. You want to make $30,000 on a rehab. I’m in a different place in my life. Maybe the rent numbers, that 1 to 1 rent-to-value ratio where I live in Delaware, don’t work for me. It works for you. It’s perfect for you, but for me, I want that 0.5% rent-to-value ratio. I want those houses $250,000 and up and $1,400 in rent. I want to be in a higher-end area because those are legacy properties from me. I have the cashflow ready. I’m more looking at building net worth for the family for the generational wealth. That’s where I’m at.

Somebody may be looking at those numbers where you’re saying, “I want a $250,000 house and a $1,500, $1,600 a month rent.” It’s like, “How the hell does that even work?” What a lot of people and I thought the same way several years ago when I was getting into rental properties. I’m hearing somebody else’s strategy or perspective and I’m like, “That doesn’t work.” No, it doesn’t work for me or may not work for you, but it works for Joe or Susan or whoever because we’re all in different investing stages. For me, when you think about a $250,000 house with $1,600, $1,700 rent, look at the intangibles. The type of tenant that property is going to attract, the type of neighbors that are in that neighborhood and the upkeep that’s being taken place versus going and finding a 2% house in the Midwest that will never appreciate.

I’ve got a $60,000 pig that rents for $900. The numbers sound amazing, but what’s the long-term strategy? There isn’t one, because that $60,000, $70,000 house is going to be $60,000 or $70,000 several years from now. If anything, it’s going down because now you’re talking about CapEx and all the other stuff that takes into a place of keeping a home up and running and having a tenant in there. While you’re maybe getting $900, and let’s say rents are appreciating at 3% a year, great, but for me, I need a good balance of equity of appreciation and cashflow. I don’t need to kill it on both sides.

It’s not normal, but we send some crazy appreciation in the Midwest for the last several years. Houses that I was selling for $50,000 to $60,000 are now going for $90,000 to $110,000. It’s crazy, but I don’t ever sell an appreciation out there. When I get those properties, I sell them in cash, their cashflow in a good area. You could still have an $80,000 to $110,000 a house in a B area where it’s a blue to white-collar area.

That’s the key, too. This is a B area, not a D, not a C.

I won’t do D areas. C-plus to B-minus is the lowest I go because I want to make sure my tenants stay there and they take care of them. If you give them a nice house, they have a pride of ownership.

They take care of it. You will have fewer maintenance calls and all kinds of stuff.

That’s the thing is to let people know. You got to know what you’re looking for. I always tell people when they hit me up, “Do you have any houses?” First, “What are you looking for? What’s your goal? Is it big cashflow?” I don’t like someone that says appreciation. Appreciation is a guess.

If you are hedging them long-term, sure. If you’re a 30-year holder, it’s fair. You can probably bank on some appreciation, but I’m not looking to hold a deal for 30 years.

Speculation is the worst thing they do in this business because those are the ones that got hurt in 2009 and 2010. They’re the ones that are going to get hurt again soon. The people who are overpaying for properties are going to get hurt. You have to know. When you call Logan or you call Dan and you say, “I want to buy an asset, a property and a note. I want to be one of your lenders.” You got to know what you’re looking for. If you tell me, “I want to invest in your deals.” I ask you, “What are you generally looking for? What type of returns you look for?” You tell me you’re looking for 10%, 12% to be a lender to me, I don’t need you because right now I’m raising money at 6%. There are people out there that need you. New investors that can’t raise their own money, they’re going to probably want that 10%, 12%.

Speculation is the worst thing anyone can do in the investing business. Click To Tweet

People that I lend money to, I have to make a certain amount because I’m raising money at 6% to 8%. I might be charging 10%, 12%, 14% in 2 to 4 points depending on your experience level, “How much work I have to do with you, how much risk with this deal is and how much you’re putting into the game.” You need to know all these questions, but you need to figure them out before our speak. What I’m saying is even when you raise private money, you need to figure it out first before you get on the phone with your investors or your asset managers or your sellers, whoever it is. Once you figure it out, you need to follow up. You need to stay in touch with them. You need to build rapport. It’s all relationship. You need to do what you say you’re going to do. If you say you’re going to close and you missed something on that deal, you better still close. That’s your problem that you missed it. It’s not my problem that you missed something on that deal.

I’ve had it a couple of times where somebody missed something on a purchase from me. They came back even after we closed months later and say, “I missed this. I’m looking to see if you could do a buyback.” No, I’m not trying to be rude or take advantage of you, but I’m not buying the asset back because you missed something in due diligence. I’ve been there. The first two notes that I bought, one in Columbus and one in Augusta, Georgia, I missed something on both those. I still made money. I’ve still got one now that I’m about to exit. I sold one and got the investors their cash back. They’ve been earning interest along the way, but I didn’t make near as much as what I penciled out.

That’s simply because I missed some stuff. I didn’t go back to my broker and say, “I probably should have paid about $3,000 or $4,000 less.” “You probably should have, but that’s not how it went.” What happened is that relationship with that individual then turned into three more notes and then four more notes. I’ve ended up buying 63 of them in a pool at the end of 2019. That is what took us to the next level from a relationship standpoint, but also from credibility and being able to close because it builds on top of each other. It doesn’t happen overnight. I built a reputation that now I know what to look for on the next one. He sent me deals and it got to the point where I was 1 of 10 investors that he was bound to. He has 3,000 contacts. It was, “I know these ten people will close. I’ll give them first shot.” I was starting to get priority picks and getting good pricing on it simply because they report back to the asset manager.

That’s what’s it’s all about. Logan said something important. He says, “It’s not a get rich quick scheme.” As crazy as it sounds, I’m okay with losing money on a deal, but that doesn’t define who I am. I’ve lost money more than I can even share with you. If somebody says, “I haven’t lost money.” They’re either not in his business at all or they’re lying to you. One of two things is happening because you’re going to lose money if you haven’t lost it yet. You have to look at this as averages. Look at this baseball. If a guy goes out and goes 4 for 4 now, his batting average is 1.000. He goes 0 for 4 tomorrow essentially, he’s batting average is 0.500 because he’s 4 for 8.

At ten at-bats, he strikes out seven of them. He hits home runs on three or gets hits on three of them, he’s batting 0.300. He’s in the Hall of Fame. You got to look at that. The problem is social media. When I work with a student, the first thing I do now is get them off social media. I’m like, “Get off social media for at least 30 days while we’re working. Let’s put a plan together for you, who you are and what you do. Let’s build your social media up. Your LinkedIn, your Facebook and your Instagram, let’s build it the right way so you look right.”

This is what you and I did.

We did that with you too. Let’s get off social media because you start watching what everybody else is doing and you think you have to be rich right away. You have to put these fake checks out there and you think, “I lost $3,000 on this deal. I’m out of the business. This sucks. I’m staying in the job that I hate.” It’s not like that. You might have lost $3,000 on this deal, but on the next deal, you make $50,000. In two deals, you made $47,000. It’s not bad. It’s an average output of $47,000. You’re at $23,500 a deal. That’s how you got to look at it. I say this because I want people to learn this from what Logan and I are saying. Look at the long-term. Logan bought 63 notes. My biggest no deal is a $5.1 million Fanny pool we took down. Ten people in my inner circle, all took it down. Think about that, especially in the second space. If you buy notes in the second space, you’re going to lose 60%, 70% of them.

One of my buddies here in Dallas, he’s big into seconds. He and Martin are teaming up and getting after it.

Who’s that?

Martin Saenz.

Who else did you say?

My buddy from here from Dallas.

Martin’s a great guy. I know Martin when he came into the business too. I started in the seconds before I went into first. If you buy ten assets, 3, 4 of them, you lose. It’s bankruptcy. You get stripped. Let’s say 4 of those 10 you lose. In about 2 or 3 of them, you’re lucky to breakeven. Now, you’re at about seven. On three of them, you’re making big money on. That’s how the business is. You’re not going to be microeconomic. You’re looking at the macro of this business. I have a good relationship with some asset managers. I’m friends with them and some of them, you’ll see what they sell off at. Some of them, 80% of their assets they’ll lose money on, but it’s 20% that makes their fund profitable. Think about that. If you want to be in this business, you got to start thinking like this, “How do I build relationships? How do I stay in for the long-term? What do I do when I say what I’m going to do and I’ll take this one step at a time?” That’s all I have on this. Is there anything else you got for them, Logan?

You made a good point with the social media stuff. That’s one thing that I see a lot. It annoys me because it’s false. It’s not truly how it happens. The fake checks and showing, “I just closed on this one.” They got six checks lined out and they’re fanning it. If I see any of that in my feeds, I remove that person because it’s not how it happens. Maybe there’s somebody out there doing it. That’s awesome.

It does happen, but it takes a little while to get there.

It’s like the guy that gambles all the time. The only time you hear from him is when he’s winning, but you never hear from him when he’s down. To me and for you too, I like the sharing the losers as much as I like sharing the winners because I’m trying to create rapport with people. Not a fake rapport, but to show people that I’m in it every day and we don’t always win and that’s okay because we’ve got a deal tomorrow and we’ll have a deal next month. We’re looking at it from a bigger picture. It grows. It’s not me. It’s not my personality, but if it is you to flash what you got, cool. There’s nothing wrong with it. It’s not who I am. We’re a product of who we surround ourselves around. I prefer to surround ourselves with more humble people in my opinion. It’s not a knock on anybody. It’s how I prefer to do business.

We’re not going to say it’s a knock, it’s you got to be careful of not them, but how you act, because if you think that you’re a failure because you don’t have those checks coming in, then you’ll be out of business quick. That’s not real life. I’m in this business for several years. Logan’s doing this now for several years. In the beginning, we weren’t that. We haven’t now, so why am I going to do that? I want you to start with one deal at a time, but what I want you to do is build that relationship, know what you want and take action. It’s important to take action. A lot of people are scared to take action and most importantly, do what you say you’re going to do. If you say you’re going to do something, do it. If Logan sends you a deal and you don’t like the deal for whatever reason, and you ask them to send you that deal, get back to him, say, “Thanks so much for sending me that deal. I’m ready to buy. I just don’t like this one because it’s in a rural area. I want to be in an area with a population of at least 10,000 people or more.” Tell him straight, “Next time I get something, I know that this is exactly what Dan wants. I’m sending it to him.”

The guy from Ocwen call me up and be like, “Dan, I got something for you.” I didn’t have to look. That’s how I am with wholesalers I buy from and realtors. Realtors call me up. If I’m around, I’ll go look to hang out with the realtor and have some laughs, but generally, I don’t even look. Sometimes they’ll snap some pictures and send them to me. They know exactly what I want. They know I’m going to close, so they call me and I’m like, “It’s a done deal. Write the contract and send it to me.” We beat a dead horse here and we gave you a ton of knowledge. This should be one of our first episodes you read because this will get your mindset right on how to build those relationships with anybody you are doing business with. Thanks so much for being on. Take care.

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