Thoughts from the Desk of Bob Repass…
As I write this column this month, it is the last week of September and I am juggling a lot of balls right now. As Fund Manager for our Colonial Impact Fund-II, we are wrapping up the 3rd quarter of the year. The end of the quarter is always a hectic time trying to fund as many new acquisitions as possible, as well as close as many individual loan sales as we can, in order to maximize the returns for our investors and their quarterly dividends.
On top of the fund activity going on, this week we also hosted a group of NoteSchool Titanium members for a 3 day office visit. Monday through Wednesday we put these elite members through due diligence analysis on a portfolio of both performing and nonperforming loans, as well as exercises and examples of creative strategies to both maximize your returns and attract private capital.
I also covered some time management tips with the group. I told the folks good entrepreneurs know how to delegate. You only have so many hours in a day, so don’t waste them on tasks that don’t require your direct involvement. Pass these on to others so that your focused work on your top priorities isn’t compromised.
If all that isn’t enough, there is this thing called NoteExpo 2017 coming up in just over 30 days that I am finalizing the plans for! Not only are we the Host Sponsor of the event but my role is to be the Host and Emcee of the event as well. Our team is rapidly trying to finalize all the details as well as coordinating the speakers on the main stage, the panel discussions and the dozen breakout sessions we will be having over the two day event.
Oh and one more thing. The Buyline! I had to fit in the time to write my columns and put together all the other great content from the others featured in this month’s edition. I quickly realized that time is a resource like any other. If you aren’t treating it like the investment it should be, then start to think about budgeting your time in the same way you budget your money.
I’ll leave you with a quote from Peter Drucker, arguably the best management consultant ever, “Until we can manage time, we can manage nothing else.”
Got to go….
The Trading Corner:
Note Industry Professionals to Convene at 4th Annual NoteExpo Conference
By: Bob Repass
The note industry will soon convene at the 4th annual NoteExpo Conference beginning Friday, November 3rd and continuing through Saturday, November 4th at the Hyatt Regency in Dallas, Texas.
NoteExpo 2017 is the largest real estate note conference in the nation, with six general sessions presented by some of the nation’s most successful investors and entrepreneurs along with 12 breakout sessions by leading industry experts. There will be three panel discussions with subject matter experts on the topics of asset management, capital market trends and self-directed IRA investing.
“NoteExpo has always been about bringing together leaders in the note industry to discuss issues that are most impacting the market,” said Bob Repass, Managing Director of Colonial Funding Group and Colonial Capital Management, both host sponsors of the event.
“The talent level – from the Jeff Watson’s of the world, and Nathan Long from Quest IRA, PPR Note’s Dave Van Horn and Matt Keelen, every single panel is loaded,” said Eddie Speed, founder of Host Sponsor NoteSchool. “Compared to any other note conference, speakers here are of the highest quality. Attendees are going to hear directly from the people that are running these companies.”
On Friday evening, November 3rd, FCI Lender Services will sponsor the Welcome Networking Reception for the over 500 attendees. “NoteExpo 2017 provides FCI Lender Services with a unique platform to connect our company’s goals and aim with the note industry,” said FCI Lender Services President and CEO Mike Griffith. FCI, which currently manages over $6.5 billion in active loans and is the only number one rated private loan servicer in the country according to MorningStar rating agency, has been a top sponsor of the three previous NoteExpo conferences, and once again in 2017 FCI is at the forefront as the Leadership Sponsor. “We appreciate and recognize the level of experience and knowledge the attendees of NoteExpo bring to the table.”
Once again Granite Strategic Investments will be a top sponsor of NoteExpo 2017. Managing Director Chaz Guinn said, “Granite is a long-time supporter, friend, and sponsor of hosts Eddie Speed and Bob Repass’ NoteExpo events. This event continues to evolve year after year by bringing the nation’s best vendors, sellers, buyers, capital raisers, and great networking opportunities for everyone to assist in the growth of their Note business. We look forward to this year’s event and being back in front of so many of you and discuss growing our business with one another.”
NoteExpo 2017 has an incredible combination of speakers who will deliver inspiring keynotes on the spirit of entrepreneurism. Friday morning’s opening keynote address will be presented by Kent Clothier, the founder and CEO of Real Estate Worldwide. In his own words, “Being the son of an entrepreneur and thus, a serial entrepreneur by nature. Beyond that, I am a proud husband and father of three amazing kids. I’ve dedicated my business life and ventures towards awaking the human spirit in all of us and inspiring thousands of entrepreneurs to escape the “rat race” and create the dream lives that they’ve always wanted.”
On Saturday, the audience will hear a keynote address from Pat Johnson, CEO and founder of Root Whole Body Health, Inc. Pat is a self-described “futurist, anthropologist and entrepreneur.”
A 25-year brand veteran, she’s principal of Ammonista – a unique consultancy that merges brand strategy with entrepreneurialism.
Transforming future trends and cultural insights into authentic business strategies, Pat helps companies create brands of significance. An entrepreneur herself, she brings thought leadership to the alternative investment space – participates in several investment funds – and advises many start-ups.
The conference will conclude on the afternoon of November 4th with a dozen breakout sessions covering a wide range of topics across the entire note investing spectrum.
To register or to find more information on NoteExpo 2017 click here.
Stay up to Speed with Eddie
Why Change Can Be an Entrepreneur’s Best Friend
by Eddie Speed
Don’t let people tell you that death and taxes are the only two things you can count on. There’s a third: Change.
How you deal with change is not a matter of your tactics. It’s a matter of your mindset!
If you’re perfectly happy the way things are, and you only know how to do things one way, there’s nothing scarier than change. Change is also scary if you don’t see it coming until it gets here. But the fact is, things are always changing and you’ll never be able to stop it! That’s why I want to help you develop a mindset that’s always on the lookout for change so you can anticipate it, take advantage of it, and even welcome it so you can benefit from it.
No market condition is identical to the last one. If you’re a note buyer, you’re either facing change right now or will be facing it very soon. The more seasoned we are, the easier we are to recognize the need to tweak. We never get everything totally right up front, so there’s always the need to fine tune various aspects of your deals.
Almost everybody who gets into the note business started out in some other aspect of real estate investing. Except me! I’m probably the only guy you’ll ever meet who started his career in notes. Other folks started by flipping houses, or landlording, or breaking large tracts into small ones, and so on. (Landlords are the easiest to switch to notes because they’re tired of midnight calls to fix a leaky toilet.) All these investors get a good basic knowledge of one dimension of real estate, but as things change, the niche they’re familiar with often becomes more competitive or less profitable than when they started. Once they realize the wealth building potential of note investing, they shift their efforts to where the action is.
Having said that, once a person gets into note investing there are lots of changes here, too. Even though I’ve stayed in the note business for 37 years, I honestly feel like I’ve morphed, changed, adapted, and evolved more than anyone else in the industry. When I realize there’s something I don’t know, I learn it. I’m always keeping an eye on the future to see which opportunities of the note business are heating up and which are cooling off; which are getting overcrowded and which are wide open for opportunity.
The details of the moment let you close the deal at hand, and guide you in chasing the next opportunity. This applies to the most seasoned note buyers in the industry as well as the least seasoned note buyers. That’s why smart note investors are always on the lookout for what’s coming down the pike. If you happen to be new to the note business, make sure the info you’re absorbing is coming from seasoned people who understand change and aren’t dealing with an obsolete model. Here at NoteSchool and Colonial Funding Group I’ve got an experienced bench of people who have sold more notes than any team in America.
The lifespan of a typical model will last 4 to 5 years before it requires major retooling. But you’ll need to be making tweaks at least every year or more. That happened to us recently. We went in with a model we were familiar with and pursued dimensions of it, then we pulled back and had to make tweaks. It can be humbling to admit that something you did before isn’t working anymore. You learn a lot more when you’re humble than when you think you already know everything there is to know.
But change doesn’t just happen in the real estate. Did you know:
- Delta Airlines started out as a crop dusting business. Good luck finding a Delta plane to spray your crops today!
- Avon started when a door-to-door book salesman offered perfume to get female homemakers interested in his books. He soon realized people were more interested in the perfume, so he ditched the books and shifted to cosmetics.
- William Wrigley first sold soap and baking powder and offered free chewing gum as a sales incentive. You can guess what happened next.
- The Plymouth Iron Windmill company offered a free air rifle to boost sagging windmill sales. When customers were more excited about air rifles than windmills, the Daisy Air Rifle took off.
None of these companies were locked in to doing things the same way forever. If they had been, they probably all would have gone the way of the dodo bird. But because they could recognize the advantages of change and embrace the opportunities it presented, they thrived.
No sailor is without distinction on calm seas – it’s when the storm kicks up that shows which sailors know what they’re doing. When you’re in the middle of the ocean, you can’t control the wind but you can trim the sails. Entrepreneurs enjoy the thrill of change and get bored when things are stagnant. Smart investors always have a wet finger in the breeze so they can tell when change is coming.
Here’s an example of change. Back in 1992 there was very little subprime lending. There was FHA, Fannie Mae, Freddy Mac, banks, and consumer finance companies – but there was no alternative option for those who didn’t qualify through the normal channels. So I developed an alternative product for the “just missed” buyer – the underserved customer who barely didn’t qualify for the typical options. Then in 2000, this model fell apart. Why? Subprime lending took over. They’d finance anybody who could fog a mirror. This required a major retooling of my business model. But that was then.
What’s the biggest opportunity today? By being in the trenches I’ve learned today’s biggest need is home financing for people who have come to America legally with a green card but who aren’t American citizens. They can’t get a mortgage, so that’s a huge niche to jump into.
Wanna know my secret to knowing what’s going to happen next? It’s by knowing history. The best way to look forward is to look backward. Cycles come and go, then come back again and go away again. I’ve got a long memory of all the twists and turns I’ve lived through in the note industry. It’s my mission to keep identifying things based on history. But it’s not enough just to know history, you have to learn from it. I’m always watching for the mile markers I’ve seen before, then draw the relevance to today’s conditions. I look for reasons why one guy succeeded at a time when another guy failed. It’s smart to learn from your mistakes, but it’s a whole lot smarter to learn from the mistakes of others so you don’t make ‘em yourself.
Even though I’m always on the lookout for change, there are some things in my life that haven’t changed. I call them my cornerstones:
- Understand customers.
- Understand if an idea is doable or not.
- Understand things are always changing!
Here are a few reasons why you shouldn’t be afraid of change:
Change allows you to stay ahead of the curve instead of behind it.
There’s nothing worse than getting to the party right when the other people are starting to leave. It’s the same in business. A smart entrepreneur has already set things in motion to take advantage of the next big opportunity well before other people start panicking because their niche is drying up. When people realize that opportunities aren’t what they used to be, they tend to make bad decisions based on fear instead of knowledge. They just react instead of making a strategic game plan. Always keep your antennas up for what’s ahead. Be a trendsetter, not a trend follower.
Change will weed out your competition.
The people who don’t survive are the people who don’t change. One day you’ll remember somebody you knew who used to invest in notes, but they’re nowhere around today. The people you compete with today won’t be around a few years from now if they can’t adjust to change. The people who get into the note business but get out after a few years are the people who are afraid of change and failed to adapt.
Change keeps it fun and interesting!
There was a great headline in a magazine ad for a sports car awhile back. It said: “Happiness isn’t just around the corner. Happiness is the corner.” Entrepreneurs enjoy the thrill and challenge of change even when they don’t yet know exactly where things will end up.
When the market changes, don’t think like a victim – think like an entrepreneur!
When your source of income dries up, don’t fall into the “woe-is-me” mentality. Always be looking ahead for opportunities so you can take advantage of change before change takes advantage of you.
Never rest on your laurels,
In the Spotlight
6 Keys to Effective Networking
With the note industry event of the year NoteExpo 2017 fast approaching, we wanted to share six creative networking techniques that are not difficult to apply but you may not have thought about then let alone utilized them.
- Start with a plan (who do you need to meet?)
- Be selective with your efforts
- Use the “Host Principle”
- Make real connections
- Build and keep your network current
- Pay it forward by helping others achieve success
To hear more on these 6 keys to successful marketing CLICK HERE!
Capital Markets Update
If You Love Someone, Read This
By Jeff Watson (reprinted by permission www.watsonivested.com )
Jeff will be a featured speaker at NoteExpo 2017
Last week was awkward. It was the first of several meetings with a lady who had suddenly lost her husband, and she’s looking for help and guidance. The harsh reality is that he died with no life insurance coverage in place.
That same week I had a meeting with another lady who had also lost her husband but was fortunate enough to have been the beneficiary of a large life insurance policy. Even in her case, that policy was scheduled to lapse less than 30 days from when her husband suddenly died.
I’ve seen it over and over again – widows left to deal with the unexpected passing of their husbands. They can be put into two camps: those who had a husband who loved them enough to make sure there was adequate life insurance in place, and those whose husbands, for some reason, didn’t have life insurance coverage.
As you know, I like to share with you practical tips regarding life, business, asset protection and investing. If you are a business owner, real estate investor or agent, or entrepreneur, you live in a world where if you don’t build it, sell it or run it, you don’t get paid. Well, life insurance is pretty much the same. You need to have it in place.
If you don’t have life insurance, you need to get it NOW! If you do have life insurance in place, you need to evaluate whether you have enough coverage. I don’t sell life insurance, so I’m not going to make any money from promoting this, but I recently increased the amount of 10-year level term insurance that I carry for several reasons: the cost of living continues to go up; I have one or more elderly parents who depend on me; I have employees who depend on me to have a functional, viable business or a transition plan if something happens to me; I have a spouse and I have children.
Those same reasons may apply to you. It may also be that you have accumulated a lot of real-estate-related debt, and you may be the person who is best at managing those assets. Your survivors and heirs might not be, so leaving behind a life insurance policy with adequate cash in order to reduce or eliminate that debt so your heirs can manage it would be a prudent way to continue your legacy.
In the current economic environment, certain types of life insurance are as cheap as they’ve ever been, especially level term life insurance like what I have. This isn’t a campaign in favor of one type of insurance over another, and I’m not interested in getting into long debates with anyone about that. The important thing is that everyone needs to have enough life insurance in place NOW.
I paused just now to replay the two scenes from last week. One lady looked at me and said, “What do I do with this money?” The other looked at me and said, “What do I do now? I have nothing.” Neither conversation was easy, but one was certainly much more difficult than the other.
Quote of the Month
“Succeeding in business is all about making connections.” – Richard Branson
This Month’s Poll Question
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