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The Buyline, January 2018

Thoughts from the Desk of Bob Repass…

At this time of the year, you can barely escape the over the top number of “top ten” lists. The top 10 movies of 2017, the top 10 books of 2017, the top 10 TV shows, podcasts, songs etc., etc. you get the picture I’m sure.

So it is only fitting, with that in mind, that I give you the top 10 things to do in 2018 to be successful in the note business:

10. Prepare a SWOT Analysis of your business. This is an exercise where you list all your strengths, weaknesses, opportunities and threats to your business. This is the first step in setting goals and deciding where to dedicate your time and resources over the next year.

9. Meet with your accountant, tax attorney and/or financial advisor and review where you are and where you are heading and make sure you are in the best position possible.

8. Review the performance of your current portfolio on a loan level basis. Is your portfolio diversified the way you want it? Are your performing loans paying as agreed? Are your nonperforming loans on the path for resolution whether it’s a loan modification, a deed-in-lieu or foreclosure are you making progress or are you just kicking the can down the road, losing time and incurring unnecessary fees and expenses?

7. Determine your investment strategy for 2018. How many notes do you plan on buying this year? Will you buy performing or nonperforming or both?

6. Evaluate your capital needs. Do you have money in a self-directed IRA that needs to be deployed? Do you have performing loans that you could sell a partial on and re-capitalize? When was the last time you met with a potential or existing private investor? Should you attend or start a meet-up group?

5. Assess where you can find inventory. The key to the note business is matching capital and deal flow. Everyone at one time or another has had capital to spend and no deals or has a deal that looks really good but none or not enough capital to buy. Knowing how to consistently source product will make a huge difference in your business.

4. Embrace and engage on social media. Join note investing related groups on Facebook and LinkedIn. Follow industry experts and media outlets on Facebook and Twitter so you can keep up with the latest industry news.

3. Make a commitment to read at least one book that will make you a better entrepreneur or investor. It is a great way to learn from other’s successes and more importantly their failures.

2. Register now for the Note Industry Event of the Year. NoteExpo 2018 is November 2nd & 3rd at The Intercontinental Hotel in Dallas, TX.

1. Plan your vacation – it is important to set aside time during the year to disconnect, recharge, relax and make sure you have your priorities in order. Angie and I have already planned our annual summer vacation to the Cayman Islands again in 2018!

I challenge you to tackle all ten of these and I truly believe if you accept that challenge you 2018 will be your best year in the note business yet! Good Luck!

Bob Repass
Managing Director

Stay up to Speed with Eddie

Focus on Your Focus

by Eddie Speed

In real estate, they always say: Location, location, location! But for entrepreneurs, we say: Focus, focus, focus!

Just like most people, I’m really good at only a handful of things but I’m average at about eighty things. The problem is, the eighty things still need to get done and they greatly outnumber the things I’m good at, so it’s an ongoing battle to stay focused.

You might not know this, but I’m dyslexic and have ADHD, plus there are probably a few other random initials floating around in my brain. So of those few things I’m good at, I have to admit that staying focused is not one of them. But it’s critical if a person wants to succeed in any field.

To go through the jungle, you have to know the direction you want to go. Otherwise you’ll be walking around in circles.

For myself and most entrepreneurs, it’s a struggle to stay focused. Every business has a lot of moving parts, so every business owner is like that guy in the circus spinning plates on sticks. You’re constantly rushing around keeping all your plates from falling. In the chaos it’s hard to focus on which plates are most important. The things we tend to enjoy doing the most are the things we’re naturally good at. But if you ignore all those things you don’t like doing then your business will come crashing down in a hurry. Once you decide which plate (or plates) to focus on, you can delegate the other plates to people who will do a better job at it than you. This frees you up to do things you’re good at, reduces stress, and makes your company run smoother. You’re able to work on the things you enjoy instead of the things you don’t, so your career becomes a source of enjoyment instead of a giant headache.

I realized early on that if I could focus my energies on what I’m really good at then I could move the dial on my business. I’ve spent a lot of time looking inward, and gotten feedback from people I trust, and concluded these are the things I’m good at:

  • I’m a Deal Guy.I can come up with nontraditional ways to accomplish what the other party needs and still benefits me.
  • I’m an out-of-the-box creative thinker. I like being in uncharted territory because it gives me the chance to innovate.
  • I’m a good communicator. I can take complicated things and make them simple. I can equip people with the information to succeed and the motivation to believe in themselves. (I wasn’t always good at this, but two things made me good: Experience, and I made up my mind to get good at it.)
  • I’m good when things go bad.I have a high “never give up factor” that gets me through when others throw in the towel.

When I look at my task list, if I can lock down my focus on these areas, I can move my business forward. When I get off in the weeds away from these things, my business sputters.

When you do your own personal assessment, your list will probably look very different from mine, and that’s great. Your unique set of skills are what give you the edge on your competitors.

If I spent most of my time doing all those things I’m only average at, I’d have a pretty average business. I see business owners all the time doing stuff they don’t need to be doing; they’re busy but not productive, and their businesses aren’t thriving. I don’t need to be the one opening every letter that comes in the mailbox, or answering every phone call, or paying every bill, or evaluating every deal. That’s why I’ve brought in topnotch people into my companies. I’m the first to admit they do lots of things better than I do. Thank goodness!

I know I’m not the first person to ever tell you to get focused. Most business big shots will tell you the same thing. That’s because it’s so critical to succeeding! If you read self-help books, or listen to talks by successful billionaires, they will always stress the importance of staying focused. Some of them put it this way: The main thing is to keep the main thing the main thing.

Ever had a dog that couldn’t resist chasing squirrels? Lots of people run their business the same way. They chase after this, and dabble in that, and monkey around with this, and dip their toe in that, and before they know it they have no focus or direction.

Your company should have a clear, concise mission statement, and you, as the leader of your company, should have your own clearly defined role in the company. Everybody who works for you needs a clear understanding of the company’s mission, your role as leader, and their own role for their position.

After a lot of thinking and writing and rewriting, we hammered out our NoteSchool mission statement and put it on our website:

Our mission is to provide superior training and vision concentrated on the note industry that is timely, relevant and accurate and is presented in ways that are easy to comprehend and implement so that it leads to superb results. NoteSchool takes pride in delivering the highest level of note training that produces a path that enables our students to create wealth and a secure financial future. At NoteSchool we are fully committed to educating each of our students to be successful, ethical and responsible leaders in the note community as well as in their own communities.

I’m sure your company’s mission statement will be completely different than ours. Just be sure to keep concise, and no more than a few sentences. There’s a temptation to shoehorn in too much stuff. The paring down part is where it gets tough, but it really makes you focus on what’s most important about your company.

NOT ONLY DO YOU HAVE TO FOCUS, YOU HAVE TO FOCUS ON WHAT’S MOST IMPORTANT

It ain’t just focus – it’s smart focus. When you decide what to focus on for your career, decide what is the highest and best use of your talents, time, and resources. One of every entrepreneur’s toughest decisions is choosing between good, better, and best. Focus your energies on what is going to move your dial the most. You have to be 100% cognizant of what you’re doing, and (more importantly) why you’re doing it.

Ironically, one of the hardest places to refocus your business is when you’re sitting in your business. Here’s what I do; I regularly attend MasterMinds, BrainTrusts, and business retreats. I get feedback from other folks and their input helps me focus on what I’m best at. Here at NoteSchool, we also take all our folks to our retreat facility near the Texas/Oklahoma border called The Note Recovery Center. We do four 90-minute sessions, and they’re intense. We help each person do an individual assessment of their skills. Everybody at every level gets equal attention. We also have lots of fun between sessions!

Even if you can’t attend a retreat, it helps to get away to a quiet place and ask yourself some serious questions. Look inside yourself. What are you good at? What are you bad at? What are your resources, talents, and passions? How do your unique skills make your company more competitive? What makes you tick? What floats your boat? What makes your blood boil?  If you could only focus on one part of your business to make it take off, what would that be? What can you delegate to other people in your company who can do it better than you? What can you outsource? What can you do that will have the most impact on your business? How can you simplify? But most importantly, think long term and ask yourself: What are you doing now that is going to change your future the most? Imagine the future you want to have, then take steps now to start shaping it.

If after all this soul searching you decide that notes aren’t your thing, that’s OK. I’ll still be your friend!

The best example I can give you for someone who has been through this focusing process is my wife Martha. She’s good at more than just two or three things. She’s done successful real estate investments, notes, fix & flips, rental properties, you name it. But there’s one thing she is over-the-wall good at, and that is building self-directed retirement accounts.

When it comes to this area, Martha is a sole practitioner. She does it on her own, using the same strategies and techniques that we teach a lot here in NoteSchool. It’s not that she has a secret formula for success ­– she just happens to have the natural talent to be really good at it, and she loves what she does. I can honestly say that of all the people I know who do this, she’s far and away the best. She’s crackin’ the whip and takin’ it to the wall. I’ve seen her double and triple a retirement account in a year! And that’s by building tax-free income for life.

THERE MAY COME A TIME WHEN YOU HAVE TO RE-FOCUS

As your career and business evolve, and as market conditions change, you will periodically have to re-evaluate your overall focus to get to the next level. Here’s a very simple process to think through:

  1. Where are you?
  2. Where do you want to get to?
  3. What steps are you going to take to get there?
  4. Now where are you?
  5. (Repeat steps 2, 3, and 4.)

You wanna succeed? Get focused and stop running around like a chicken with its head cut off. If the chicken had been focused, maybe it never would have gotten its head cut off in the first place.

The Trading Corner:

Save the Date: 2nd Annual Seller Finance Coalition Fly-In April 24-26, 2018.

Our first annual fly-in in July, 2017 was a huge success! There were close to 40 attendees from all over the country on Capitol Hill for a day and a half telling the story of how seller financing can impact a consumer’s ability to become homeowners as well as its effect on stabilizing neighborhoods to over 65 Congressional Offices.

Register now to be a part of the Second Annual SFC Fly-In on April 24-26, 2018! Stay tuned for more details

MarketPulse

Update on the Tax Cuts and Jobs Act

by Bob Repass

In case you have not heard (yea right), the biggest overhaul to the tax code in over 30 years has been passed and signed into law as President Trump signed the Tax Cuts and Jobs Act. When I say “biggest” that’s what I mean, no minor adjustments here or there but major changes across a wide variety of items.

I am by no means a tax attorney or accountant, but I definitely advise that if you haven’t already you should reach out to your tax advisor as I am sure there are possible re-structuring to your business or investment entities that may need to be made.

Here are a few of the changes that may impact you the most:

  • Lower individual taxes and set specific rates at 0%, 10%, 12%, 22%, 24%, 32%, 35%, and 37%
  • Roughly double the standard deduction for single and married filers
  • The new law limits state and local tax deductions to $10,000 per itemized return
  • Changes to the mortgage interest deduction – the new law allows taxpayers with existing mortgages to continue to deduct interest on a total of $1 million of debt for a first and second home. For new buyers, the $1 million limit is now $750,000 for a first and second home.
  • The tax break is a deduction of 20% of business income earned by the owners of so-called pass-through businesses. These businesses flow income directly through to owners’ individual tax returns, where it is taxed at the owner’s rate. Pass-throughs include sole proprietorships as well as partnerships, limited liability companies and S corporations.
  • Allow businesses to write off the full cost of new equipment
  • Protect the ability for small businesses to write off interest on loans
  • Double the threshold amount for the Death Tax

Everyone has their own opinion on whether this new law is good or bad. My thoughts are overall it is good for most folks and the economy but we will have to see how it plays out over the next couple years. Again I stress the importance of meeting with your tax advisors to determine exactly how it impacts you and what if any changes need to be made.

In the Spotlight

Best Advice for 2018

The past couple years we started the New Year off with something a little different in the “In the Spotlight” column, and this year we will continue this new tradition. Once again I reached out to some of my colleagues here at NoteSchool, Colonial Funding Group and Colonial Capital Management and asked each of them to share their best advice heading into 2018 for anyone in the note business. I’m not sure you will find any better advice all in one place than the following!

Most executives spend an average of 90 minutes a week focusing on what affects their impact the most. So for me (and you) in 2018 focus on what matters most. – Eddie Speed

Stay disciplined! Stay true to your investing strategies while always looking at new opportunities through the filter of growing your business and your portfolio. – Bob Repass

Stay engaged!  There’s no better way to know the changes in the industry. Record your documents!  When you buy a deal record the conveyance document to you so you don’t miss important notices, including tax notices. – Susan DeLaGarza

With the 2018 economy expected to set all-time record highs, investors will need to be even more vigilant about structuring their portfolios to be not only opportunistic but resilient for the inevitable correction period to follow. – Ryan Parson

“As iron sharpens iron, so one person sharpens another” Proverbs 27:17 – In business and life, it is all about connections.  Surround yourself with people who inspire you, motivate you, and encourage you. – Angie Repass

“Imperfect Action Is Better Than Perfect Inaction”  – President Harry S. Truman. Many of us detail people fall victim to paralysis by analysis and fail to take action.  This quote always reminds me that some sort of action is better than no action.  With NotesDirect we make it easy for investors to take action with full online due diligence packages on ready to purchase notes!​ – Tracy Z. Rewey

Stay focused on your vision, you’re never too old to set new goals. – Charles Mangan

Make 2018 a year of measurement. Measure how long it takes you to acquire a deal and work it out. Measure how long it takes to obtain or deploy capital. Make quarterly goals and if you’re looking to create passive income, determine how much you need per month. Everything measured gets better. – Czarina Harris

Seek more knowledge in your specific business because the more options you have at your disposal, the less stress you’ll have when encountering obstacles. – Ben Haught

Creating a daily routine will help you set yourself up for success for any endeavor.   What was once a goal will turn into one of your greatest accomplishments! I like the way Jim Rohn puts it: “Discipline is the bridge between goals and accomplishment.”  – Rachel Suttles

I’m reading a book by John Mason it’s called (Never give up) there is a paragraph where he says “never worry about how much money, ability, or equipment you start with: Just begin with a million dollars’ worth of determination”. I couldn’t agree more with that statement! In the note business you must have determination and the money will follow. Students that I talk to on a daily basis all think they need a lot of money to start investing in notes and that’s not true at all.  By having the determination you can accomplish anything it doesn’t matter how much money you have. – Duane Gibbs

“The best way to get something done is to begin.”  A lot of students are always waiting until “something” happens or thinking they need to get to a certain spot or situation, the perfect note, the right investor etc.  You can’t be waiting for things to happen, you have to make them happen! – Kevin Moore

It is not enough just to have goals loosely running around your brain. Put your goals in writing and look at them regularly. Written goals do make a big difference in achievement. – Kevin Shortle

Best advice I can give is for note brokering. As a note broker you need to “add value” to a deal. Don’t send the deal to investor and walk away expecting a fee. Many times note brokers just get basic information from note sellers and expect the investor to complete the transaction. As a note broker, it’s your responsibility to know your deal inside and out. Be proactive and request all the documentation needed from the seller for an investor to review. Know the right questions to ask the seller that you know the investor is going to ask. If you don’t know what those questions and documents are take the time to learn. Reach out to your investor and ask them what’s expected.

Be a broker who takes ownership in the deal by consistently updating your seller where you’re at in the process, what the next steps are and any potential items that might be requested from them before you can close the transaction (send them $$$). Practicing this process will keep your seller happy by just knowing what’s going on with their deal and eliminate unwanted follow-up calls from your seller that are avoided because you don’t have an answer for them. Sellers just want to be kept in loop whether it’s good or even bad information. Not knowing is worse than bad news. Not only will this keep your seller happy but it will also keep your investor happy which will enable you to continue to sell deals to them. – Scot Tyler

Don’t Follow the Crowd.  Focus on the 5% that will make you 95% of the money in 2018!  This will give you the momentum to take your business to the next level in 2018. – Joe Varnadore

Find ways to delegate repetitive task to someone else. This will allow you to focus on growing your business. – Nathan Cheung

The Note Business is a great business to be in but just like any other business in order to be successful it helps to surround yourself and your business with people you can trust to give you good advice, and diversity of thought so that you can always see things from different angles. In the end it’s the people you have around you and the hard work you put into any venture that determines your success – Matthew Edwards

Quote of the Month

“Many receive advice, only the wise profit from it.” – Harper Lee

This Month’s Poll Question

This Month’s Poll Question Who will win Super Bowl LII?

Connect With Us

Are you on Twitter? If so, be sure to follow us on Twitter @NoteSchool and @ColCapMgmt, if not, why not?

Bob Repass
Managing Director at Colonial Funding Group
Bob Repass is a 25-year veteran and expert in the seller finance mortgage and distressed asset industry. Over the course of his career, he has purchased over 40,000 performing and non-performing mortgage loans totaling over $2 billion dollars in volume, giving him an unparalleled track record in the industry. Mr. Repass most recently served as the President of Pathfinder Equity Holdings, LLC a mortgage consulting, loan trade advisory and real estate investment firm whose focus is to assist clients in realizing the maximum potential on their investments by improving acquisition returns, as well as loss mitigation and exit strategies.
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