When to start? - Posted by Stacy (AZ)

Posted by John Behle on December 15, 1998 at 22:17:44:

In addition, some of the funding companies try to provide statistics at times. The problem is those statistics only apply to “brokers” that sell to them.

Those - like myself - that develop their own funding sources - and make a great deal more profit - don’t exist as far as the funding companies are concerned. I and my most successful students don’t even get invited to their annual conventions - because we don’t exist (as far as they are concerned). Those who fund their own notes or use them in real estate transactions are on the top end of the income scale. Those limited to just brokering notes are also limited in their income.

Here’s an example. A student/client of mine named Mike finds a Motel in foreclosure. I step him through the deal and help him negotiate to buy the defaulted note - with 100% financing from the insurance company that was foreclosing.

He steps into $1.4 million dollars in equity for nothing down and a yearly cash flow of $154k after expenses and debt service. He doesn’t exist as far as the statistics go.

When to start? - Posted by Stacy (AZ)

Posted by Stacy (AZ) on December 13, 1998 at 13:15:23:

I’ve been devouring everything I can get my hands on to learn about the note business. I want to learn as much as I possibly can before making any decisions about whether or not to pursue this full-force, full-time. But, like anything new, there’s a point when there’s more to be learned in the “doing” than in the researching.

Much of the material I’ve been reading highly recommends putting together a business plan, including a highly developed marketing strategy, which is the most important part of the business: getting a steady stream of notes coming across my desk in order to filter-out the majority of notes to find the few worth purchasing is paramount.

I’ve read statistics about the failure rate for new note businesses. Scary. The implications are that unless I’m completely prepared, and have invested heavily in planning and education, I shouldn’t start into this field. It begins to sound like a new note business requires a full-time commitment from day-one to be successful.

What are your opinions regarding the ability to “ease in” to a note business on a part-time basis? Do you think there’s a way to start “feeling-out” the biz before a 100% time-commitment is required? I’m currently holding a management position in a fortune 500 company, making a good living, but my “intention” is to be self-employed (I guess like most everyone else on this forum). But, due to family resposibilities, it makes sense for me to prove some sort of success and competence in the note business before leaving the “security” I’ve built with my employer.

Thanks in advance-

Stacy

Statistics? - Posted by John Behle

Posted by John Behle on December 14, 1998 at 16:53:16:

I know of no damaging statistics about the note busines. There are some statistics related to some extremely high priced get rich quick programs - THAT IS NOT THE SAME.

There is a particular one that has been attacked a great deal lately. Let me be the first to say that there is some extremely valuable information in the 5 day presentation. I haven’t taken those seminars, but know their roots, background and success rates. I sat through some of the one getting the most heat right now because they were trying to get me to teach for them - so I can speak to the content.

There are a couple problems with the whole scenario - both on the side of the attendee and the seminar promotors.

Let’s start with the “pitch”. They sell it as so simple any one that can fog a mirror can do it. As an employee of mine used to tell people “if it were easy, the Girl Scouts would do it”. The fact that it isn’t as simple as promoted does not mean it can’t work.

Part of why I spend my time on this forum relates to this. Bring the potential “mortgage millionaires” that have attended the seminars here and they can get the tools they lack.

I originally started teaching people about notes for a couple reasons. One is that I do enjoy the teaching. Another is that I learn while teaching. The way my mind works is to come up with ideas and solutions when presented a problem or challenge. That solution then becomes a valuable and profitable technique. I also pick up some new ideas, tidbits and approaches from my students. It’s probably not proper to admit that, but being “politically correct” has never been a high priority to me. My ego doesn’t need to be boosted by pretending I’ve never learned anything from anyone else.

At first, I taught seminars because people asked me to and were excited about the information. Through the years it changed. Much of my motivation became “spin control”. Trying to undo some of the false, watered down, misleading information out there.

The funny thing is I think I respect the many thousands people have paid to learn this business from some of these traveling side shows more than the promotors themselves.

It’s a frustrating position. Someone like “Scott” takes a $7,000 seminar and does nothing with it for over a year. He pays $50 to come take a one day seminar from me on how to find notes. He comes back two weeks later to a one day seminar on how to “fund” notes. He’s puchased 4 notes and invested his daughter’s college fund at 31% yield.

Next time I see him? - On a new infomercial for the promotor of the expensive seminar. Ironic? People can succeed in this business if they are given the right tools. Another one of my students comes up to me at a seminar and tells me how he ran into Bob >>>>> in the same Hotel and was chatting about my student’s successes. He turned down being on Bob’s infomercial and told him he had learned it from me - not him.

Ok, back to the original point. The makeup of the students in these expensive seminars generally (not always, but most) are expecting to learn everything they ever could hope to know or need to know for success. They are then given a sample of the “Cash Flow” industry and a few hours worth of information on each type of cash flow. Not enough to be anything but dangerous. Not enough information to be successful.

The focus is on becoming a bird dog for the instructors or promotors. Some of which actually make some money in the note business and some of which NEVER have.

In one case of an informercial promoted seminar, (not the one Jane Bryant Quinn is attacking - the one she should attack) the so called note people have only been in the business a couple years and have little if any experience. Their funding company that is supposed to be one of the powerhouses of the industry has never been heard of by anyone in the REAL industry.

One early paper informercial promotor went into it solely for the profit of selling seminars at $7,000 a shot. Over several years I only ran into one person that had sold a note to his company. She said she would never go near them again.

SO, some of the so-called education in the area of paper is lacking in depth, reality, and experience and in some cases taught by instructors that have never even done the business. One was actually hired out of a “Silo” store and trained like a monkey to give a presentation.

On the other hand, some of the students at these seminars expect immediate success. “They paid their money - now where’s the profit?” is the attitude of some of them. Many never even make an attempt. Some try and fall on their face for lack of knowledge of the real world. Many fail for lack of learning how to find notes. They fumble around at the County Recorder’s office or sending mailers to lists. A waste of time and money for most. Yet that is all they know.

With what they know, success is like the old Farmer’s advice when asked directions - “YOU CAN’T GET THERE FROM HERE”.

It’s like they have been given an incorrect map. That doesn’t mean the destination doesn’t exist. Like the Wizzard of Oz, the road just leads to a huckster behind a curtain making a big show out of smoke and mirrors.

Most of these students have invested so much money they are reluctant to spend a dime more. We targeted some of these students for a series of $50 one day seminars one time. Many were angry at the thought of spending even $50 more - especially when they had been sold on the “fact” that they would learn everything in their expensive seminar.

We’ve even charged as little as $100 for a 5 day advanced course to help get these people going the right direction. I’ve even considered a “Trade in” program. Bring in your used ??? course as a downpayment on a new Behle.

Some that quickly caught the lesson of continuing education and the fact they didn’t know it all have gone on to be successful.

There are extremely successful people in this business. Nothing has changed and the doors haven’t closed for anyone. It just takes some real world education and works best with some day to day training and supervision.

As to a business plan, that is a very individual thing. I would have to know a lot about your circumstances. Like any business and marketing plan, it is best based on a S.W.O.T. analysis. You analyze Strengths, Weaknesses, Opportunities and Threats. It involves getting to know your market and competition and looking at your individual strengths. Marketing is the same way. Study is the first step - particularly in the areas of finding and funding notes.

The second step is to study your market. When you’re ready, I’ll go into that with you. If you’re the Stacy that just ordered the video training, I go into all this in the 5 days.

The third step is to test and try things in a risk free manner. This is done through shadowing some deals, apprenticing with someone and “proficiency exercises” to further learn skills and deepen knowledge.

The business works today like it always has. What doesn’t work is sparse, hyped up, impractical information. What does work is learning how to find and fund notes, do your “due-diligence” and profit through creative ideas and techniques.

Proper training makes it so that you can effectively own your local market. You can learn how to make your competition work for you and be your employees.

Work From Within - Posted by MN~Chicago

Posted by MN~Chicago on December 13, 1998 at 14:34:13:

Stacy:

You are dealing with some very cogent issues,
and they certainly need to be addressed. You
may find “The Path…” helpful as you struggle
with the unknown question of “When.”

Most all of your legitimate concerns focus on
the external, really more ancillary, aspects of
what to do and how. When your preparation and
efforts are drawn from within yourself, the
question of “When” will become self-evident.

Certainly the question whether the note environment
can allow you to do reasonably well, financially,
once you do decide to commit, has to be known.

Max gave his opinion and his experience which seems
to suggest difficult goings early on. I am about
to find out myself in the next few months. I am
still waiting to receives John’s video course, but,
like you, I have read everything else here and feel
committed to moving forward in notes.

This is just my opinion, being in a similar situation
as you are, but John has presented the paper business
in such a positive light, and he offers to provide
the arsenal of tools necessary to build a business
in notes, that it warrants taking enlightened action.

What is missing, and something he can never determine,
is the “self” factor, being you, or me. That is why
the “within” element becomes the most important
consideration. It is hard to see clearly when your
imagination is out of focus.

Each of us has the answer; sometimes we have to
spend a little time and effort finding it.

Don’t tell John, but I extrapolated a lot of his
material into a presentation. I have used it a few
times, and it has been well received. If you would
like, send me your fax, and I will send it to you.
It’s about 12 pages.

What it tells me is that getting the investor money
is the easiest part of the equation. I have already
been given unlimited access to funds for deals from
an investment attorney. Finding the deals, as in any
endeavor, is the key.

Max’s input about how few new people in notes make
it actually reenforces John’s posture that the
educational part of the equation is so anemic that,
in the land of the blind, a one-eyed man is king.

My choice is to be a handicapped king.

Good luck to you,

Michael Noonan
BEATA.J@postoffice.worldnet.att.net

Re: Statistics? - Posted by Reg

Posted by Reg on December 14, 1998 at 21:04:35:

John,
An extremely powerful post for me. I went to one of the seminars, liked what I heard on the concept but was a little shaky on how easy they made it sound. One of the hosts claimed she made $250,000 her first year. Lucky for me I found this site and others that exsposed these charlatans. the most important part of this post for me is that education should be continuous. the rules on how to operate in certain industrys can change at the blink of an eye, but if you learn the priciples of a business and how to change with the times there will always be a place for you. Rules always change but priciples stay the same.
Reg

Re: Statistics? - Posted by Stacy (AZ)

Posted by Stacy (AZ) on December 14, 1998 at 17:45:20:

John & Michael, thanks for you replies. Your comments help a great deal. I understand the level of education of those currently trying to make it in the note business could be quite low, and this would explain much of what I am reading and learning about the note business environment.

John, just for clarification, I’d like to quote the source of my information. Russ Dalbey, of ANN, states in one of his articles:

“I talk to people all the time who are trying to build a business in notes. Very few ever really make it. In fact, a little less than 5% end up making a living at it. The people who don’t make it fail because they don’t have a well thought out business and marketing plan.”

Now, I realize the potential problems posting this, and I don’t know enough about the note business to know if I’m stepping on toes. I’m just trying to understand whether or not it’s legitimate to test the waters before devoting 100% of my time to the business. My question is simply, is there a way to do this part-time to help prove a level of competence before committing it all.

Yes, I ordered your boot camp tapes and trilogy series, and I’m captivated…enjoying them very much.

Stacy

I like the analogy - Posted by John Behle

Posted by John Behle on December 14, 1998 at 17:08:05:

I like the “Anemic” analogy. Most of the people coming into the industry actually come through some of this anemic education, but it sure doesn’t mean it is all that way.

Those that are successful have generally either come into the industry through the other channels or have gone on to deepen their education from the pros in the industry willing to share their knowledge - Most very reasonably.

Your other analogy also applies. A deep, practical knowledge of the industry - that doesn’t have to take a long time or cost a lot - gives such an edge on the majority of those “Trying” to do the business, that it is no match.

Yet, even better, your knowledge can be a great asset to the others. Instead of viewing them as competition, your knowledge and skills they lack will make them a great resource as the bring you deals. There is gold in what they turn down or don’t know what to do with.

By the way - Posted by John Behle

Posted by John Behle on December 15, 1998 at 22:22:45:

Remember also that some of the pitch men and instructors at some of these seminars never attended the seminar they are pitching or instructing. In one case, two of the instructors - a husband and wife team - got their start at my bootcamp. After that they went on to take other courses and have a broad education.

So, what you mentioned in your post about the presenter claiming a 250k profit doesn’t mean it isn’t true, but a student attending that particular seminar would be dreaming to expect the same success.

Wouldn’t use the term - Posted by John Behle

Posted by John Behle on December 15, 1998 at 13:40:07:

I wouldn’t use the term Charlatan, I really think some mean well and there is value there. As I mentioned, I mostly have a problem with their prices, sales tactics and the depth of the education - especially in light of the promises made. It just isn’t enough. Michael used the term “Anemic” which I think is appropriate.

Re: Statistics? - Posted by Bud Branstetter

Posted by Bud Branstetter on December 15, 1998 at 13:40:01:

Stacy,

What the exact success rate is on the average is misleading. Even Johnathan Richards uses a low success rate because of what he sees as returnees to his convention every year. I would expect a higher rate from someone like John because he isn’t looking for birddogs. He is also more experienced teaching and nowing what it takes for success.

Whether it is notes, flips, MH, L/O or something else the knowledge and marketing sure helps. One can make up some for the other. If someone sets and watches TV and doesn’t take the action they will fail. I feel the personal development to learn how and when to take action can be as important as some of the other aspects.

Re: Statistics? - Posted by John Behle

Posted by John Behle on December 14, 1998 at 18:22:53:

I wouldn’t doubt the numbers Russ put out. It goes hand in hand with what I said about students in the other post. The lack of plan would be more of a symptom than a cause.

A business and marketing plan is a sign of their lack of knowledge and direction, not the cause of it. When you are finished with the videos, you will see why. We can formulate a specific plan for you then.

Re: By the way - Posted by Reg

Posted by Reg on December 15, 1998 at 22:53:50:

John you said:
>>So, what you mentioned in your post about the presenter claiming a 250k profit doesn’t mean it isn’t true, but a student attending that particular seminar would be dreaming to expect the same success.<<

That is excatly what I ment John. I had a good idea that it is possible but they made it seem as if you just sign up for the $7000 traning and when you finish, BAM! $100,000 income without much sweat. So I have noway to prove or disprove her income but I know $100,000 incomes don’t come easy.
Reg