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How To Find The Right Realtor

GDNI 34 | Realtor


One of the most important people you must have on your back when note investing is a realtor. However, with our different personalities, we have to make sure that we end up with the right one for us. If not, we may end up with a real torture rather than a realtor. Gail and Chris help with this as they share some of their personal stories and experiences when dealing with multiple realtors – from doing Cash for Keys deals to listing flips on MLS. They also talk about how we can determine the qualities good realtors possess – from doing interviews to looking at the listings they currently have.

Listen to the podcast here:

How To Find The Right Realtor

Gail, how are you?

I’m very good. How about you?

It’s a good day, but it’s just another day.

Another day with a giant check in it to brag and to inspire everyone.

Why don’t we roll right into the show and why don’t you give an example of what happened?

I’m having a good couple of days too. I have two closings. I sold a house, I’m selling another one and we’re selling one, plus we’ve sold some notes. I feel temporary flushed with cash. I’ll buy something else and it will all be gone.

I’ve got some notes that we’re selling and closing. Also one of the people on, David, I did get the package for a property we’re selling in Maryland. I’ve got the final documents on that for closing on that asset, which is good. One thing I’ll share is a story of a property. I’m not going to name the location because this is active and I’m not sure how it’s going to turn out. I had a borrower who hasn’t paid in a while and he doesn’t have the greatest of income. The taxes have gotten pretty high on the property. I’d say 99% of people will probably be, “You haven’t paid. We’re going to foreclose on you because you haven’t paid. You don’t have a lot of money and stuff.” The woman was trying hard to do everything and anything. Maybe it was a wakeup call for her. I ended up after thinking about it.

I was all gung-ho to basically proceed with the forfeiture on the property and take the property back, but I’m going to give the borrower another chance. We’re going to rip up the land contract and write a new land contract and see how it goes from there. I paid off the taxes and just rolled that into the new balance. I tried to work a payment that will work with the borrower that is something that hopefully she can afford if she budgets it properly. I’m hoping things turn out for the best. Could I have taken the property back and made a lot more money on the asset? Probably yes, but in this instance, it would still be a good return. It’s also what this podcast is about, doing good deeds. I’m going to try and give this person another chance to make things right.

Is the land contract going to be recorded and if it was, would she be able to get a homestead exemption that would reduce her taxes?

It’s something that I’m going to write down and then look into because it wasn’t recorded. It is in the State of Michigan, but that’s a good point that if I get that recorded, maybe we can try and get that homestead to get those taxes down.

It was a little extra shot at success.

It’s interesting because we both learned from each other on this one as well. We do have a topic we want to talk about and share some stories but before we run into that, we did get some questions emailed to us. Do you want to ask the question to me and I’ll answer and we will go back and forth, Gail?

Let me find the part that I know and I’ll ask you the other one. You ask me the first bullet point.

This all comes back to a loan sale agreement and we had our episode a month or so ago about a certain language in a loan sale agreement, making sure that the lien is enforceable that you’re buying. You don’t want to buy something that’s not enforceable. I have language that I’ve included in contracts if they didn’t have it in there to note that. The first question is, “Is it standard in note sales contracts that the seller does not guarantee the note is a valid lien on the property described in the document?”

I have actually limited experience with notes and I’ve only bought from a seller that used to be yours and my favorite. It is my understanding that the sales contracts from the sellers do guarantee that it’s a valid lien. Otherwise, what are you buying? It would be fraud if they were selling you something that wasn’t a valid lien, would it not?

I bought a note before. If you buy them off of DebtX or places like that, even, you do have to read the agreement because some of them say as is. You’re responsible to do all your title work. There are clauses in there that they did not alter the loan or change anything that would make it like they sold it off to someone else and is selling it to you or anything that would be pretty much illegal. There are a lot of instances sometimes where it’s as is, buyer beware. I’ve seen a few contracts like that in the past. Those are more typically from when you’re buying off of exchanges.

You’re buying from irresponsible and slightly sketchy characters.

It’s like anything people will try. They may have their attorneys and write these contracts and make them as one-sided as possible. That’s one of the reasons why I love Brian because he understands that some of that stuff won’t even stand up in court.

If you’re buying on a portal and there’s a middleman, the middleman is not going to guarantee anything but a seller should certainly be on the hook. What if it’s not a first lien? Anything that’s a misrepresentation that is part of your buying decision, that seems very arguable and you would totally get your money back. It could be a major fight to get your money back and you don’t want to be in a situation where it’s going to cost you in legal fees as much as you are trying to recover it and get your money back.

If it’s a property that was lost at a tax sale, some owners of notes don’t pay attention and they may have lost some property at tax sale. You might buy that note and they want to say it’s as is because some people buy notes that were sold at tax sales and they try and get deficiency judgment on the people. There are things like that as well.

GDNI 34 | Realtor
Realtor: If you’re buying on a portal and there’s a middle man, the middle man is not going to guarantee anything, but a seller should certainly be on the hook.


I did almost. I was doing due diligence on a CFD once that had been sold at a tax sale. I had to tell the seller that they had already lost it. It was one of those situations where even after they lost it, they had a year to redeem it and they had received notices. It takes a lot of sleeping at the wheel to lose something under those circumstances.

I know of people who have.

I do too. It’s amazing how not that brilliant you have to be a lot better than other people at this job, in this business. It’s unbelievable. A lot of the people that we buy from who have thousands of liens and thousands of notes don’t seem to even want to pay a minimum wage to have enough staff to pay attention to what’s going on with them. That’s my little soapbox.

The next question is, “Where was the before edit wording taken from? Was it the sales contract?” That was a loan sale agreement and I did get that from EP4 documentation. It’s a fund that I’ve probably bought twenty notes from. It’s a fund that I have a good standing relationship with. There was actually an issue with one of the notes at one point in time. Basically, I called them up and he was like, “We’ll work through it,” and he came to resolve pretty quickly. It’s nothing that would have been found in due diligence and so forth. That’s one of the things where it’s buying from a reputable seller, I think it’s important in knowing who that seller is.

It’s someone who cares about their reputation and wants to stick around for a while. You’re a big fan of side letters in contracts. I have to say they make me very nervous because I always feel like it’s way easier not to give up your money to someone than to try and to get it back from them.

It depends on what it is though because at certain times, I’ve had side letters. What a side letter is most people have a standard contract that they use and each seller typically has their own. As you start selling notes, I would also recommend that you have your attorney review and create one for you. The reason I say that is like Harbors’ sales contract says they’re going to pay to record all the deeds or something like that or they may charge you or something like that. If you use theirs, you’re starting to record all these deeds which you may not have included those costs for how to make it great. You pay someone to create all the deeds. You’ve got to be careful. A side letter is like an addendum to the sales standard, where sometimes there might be a missing assignment. It’s basically as part of that say, “I need a side letter to make sure that I get this assignment within 90 days or you have the right to get the money back.”

The reason why I like to do them is sometimes you may have a nonperforming note where you check the servicing notes, the borrower wants to put that $2,500 payment and start getting on a new plan. I don’t want to hold off, let the seller continue managing that note and then I get it. I don’t want them getting into a deal that I’m not going to like. For example, I have a note where the borrowers got $7,000 in back taxes. The seller was like, “We’ve got a $2,500 agreement and basically you can go start work out the taxes with the county.” That was one of the agreements they were going to do and I was calling almost like, “Time out. Don’t do the deal,” because I didn’t want them to get to $2,500 before I took it over. Also, I was going to take that $2,500 and put it towards the taxes.

That would be like getting a lollipop with too fuzzy ends. You don’t get the $2,500 and you do get the $7,000 tax refund.

If there’s something in the contract that you don’t agree with or have questions, you mark it up, send it back to them and say, “Under item six-part D.” That’s where this actually was. I was looking at it because I signed a loan sale agreement with this seller. They sent me the contract and they didn’t include that language in it. I said, “We have the standard contract already.” “You’re right.” You send them in the comments and say, “Can we change it from this to that?” I would also say the first time you buy from somebody, and we’ve already talked about this on a podcast, always have your attorney review that loan sale.

I was going to say, “Does anyone read the agreement cover to cover?”

You don't want to buy something that's not enforceable. Click To Tweet

Here’s a bigger question I’ll ask for people. This would be great if I could do a poll. I would love to create a poll that is how many people re-read the contract with their servicer?

I actually did the first time, but I was very shocked at their interpretation of it the first time. One of my borrowers sued them. I was very surprised when they immediately referred them to me, “We need an attorney and it’s going to be up to you to pay that person.” It was something that was completely their fault. It was not arising from the natural organic servicing of my note. I was very surprised to find out that we indemnified them. Meaning we have to take responsibility for any legal costs they incurred on our behalf, even when they were wrong, even when they were at fault.

Different servicers have different language because I’ve seen other language where the servicer if they screw up, they have to indemnify you. It depends on the servicer.

What does Madison’s contract say since they’re super popular?

I haven’t read it in a while. I’ve been reviewing actually another one going through it because of something that I’m not going to talk about because I can’t.

I’m talking about FCI, which does not have that language. You’re saying Madison, you don’t know. We’re talking about a third mystery servicer.

I’m going to have it remain nameless because there was a dispute.

Do we want to finish answering here? I don’t even understand this next question because it’s about the wording.

How did you add the edits? Were those changes accepted? Do you use it for all note purchases? The seller sends you the contract. You don’t send them the contract. That’s what you’re forced to work with essentially. That’s why we mentioned when you’re buying a note for the first time from somebody, have your attorney review their contract because they’re going to send it to you. Every person I know, for example, John Keith who sells a lot of Window Rock assets, their contract is 25 pages. I got one that was two pages. This is great. I sent it my lawyer and I said, “I’m nervous because there’s not enough in this.” He added some language, stuff and added one clause that basically covered me in the seller. I was like, “I’m fine with it.”

They sent you a contract and then you sent them back a completely different contract?

GDNI 34 | Realtor
Realtor: The first time you buy from somebody, always have your attorney review that long sale.


They were someone I hadn’t bought from before. The contract came in and it was two pages. I was like, “This looks a little light.” I sent it over to Brian, the attorney I use and I said, “Take a look at this. Here’s what I’m buying from them. Let me know if this has me covered.” He replied back the next day with maybe three lines of edits and changed a few terms, added some language to it and stuff. Sends it back and said, “You’re good to go.”

We should move on. We’re talking about realtors. What is the actual value?

Is it a realtor or a real torture? Depending on the realtor you have and I know there are some realtors. This is by no means knock against realtors in any way, shape or form. Realtors save my butt all the time, but we do want to stress the importance in note investing in making sure you have the right realtor.

This is the topic I feel like I can talk to because I have tried my darnedest not to use realtors. I’m an avid do-it-yourselfer as you know Chris since you laugh at me all the time. Particularly on these low-value assets where you get these CFD houses back and you have to get rid of them. My preferred exit strategy was always to create a new note. I had a realtor in Flint say to me, “That neighborhood is a low success neighborhood for a borrower.” That’s interesting to say. I never thought about the fact that certain kinds of houses, just by virtue of the fact that you are selling them to such low-income people and things like that. It feels like you are oftentimes setting yourself up for more heartache when you resell a contract for deed house to a new, very unstable borrower. Even though we’ve probably screened them better than maybe Harbor and Window Rock did originally.

I definitely have the sense with a lot of the stuff that we buy, the contracts for deed that anybody with a pulse basically and $500 that’s slipped into one. We work a lot harder, but I don’t know. Even people with more income also default. I don’t know what the magic rule is. We know what the rule is. The likelihood of default decreases with the size of the down payment that someone puts in. It’s always about how much skin in the game they’ve got. I put up to contract for deed houses up for retail sale thinking they both tend to sell for less than $50,000. I didn’t even know whether people could get mortgages at that. In fact, both of them have sold and they’re cash sales. It went well. One house I renovated, the other one I didn’t renovate and they both sold right where I wanted them to. I don’t know whether to give the realtor the credit, if it was good timing or something. It’s spring, they can buy anything. They have their tax refund may be. I don’t know.

Gail has had some of the good stories. I’ll share a story on the other side of things where I’ve had a realtor who owns a property. We were working out of Cash for Keys deal. In any time, you do a Cash for Keys deal, make sure that it’s contingent upon an interior inspection beforehand. Typically, clean everything out and leave the rooms swept, but also you want to make sure you get an idea of your property to make sure that they didn’t totally destroy the place. You don’t want to give somebody a few thousand bucks to destroy it. What happened with this property as we were working on a deal for Cash for Keys. We’re offering the borrower $3,000 contingent upon inspection. The realtor goes in, he went in because he took pictures, came back and said, “The house is worth about $45,000 to $55,000.” He said, “If I was going to list it, I’d probably list it in the low $40,000s if you want to have it moved quickly.” Basically, we finalized $3,000 Cash for Keys because we bought the asset for around $20,000 at that time and then I had some taxes and stuff. We were all in probably around $25,000 on this asset.

The borrower moves out, gives this check and the realtor puts it up. Days later, the realtor comes back and goes, “I actually think it’s only worth about $30,000.” Going from $40,000 to $30,000 is a big hit. I would not have given the guy $3,000 on Cash for Keys especially when the realtor comes back and says, “The floors are bad, this is bad and place was destroyed.” I’m like, “This is what I hired you to do to go check out, tell me the value and let me know.” I ended up selling it. In another episode we’ll have a conversation about, do you sell it for cash or owner finance it? In this one, I ended up owner financing it because the cash offers we were getting are in the low $20,000 where we got an owner finance offer in over $30,000 with some money down and 10%. It ended up doing okay but that’s when where realtors give you a value, whether it’s Cash for Keys or during a BPO because most of us get BPOs. You always tell them, “Expect the worst in some instances,” and they are just completely way off. In this instance, it was about 25% off. Gail, you could share a very similar story that we went through.

We have a house that we took back on a contract for deed. It’s up in New England. Everything has broken this winter up there and we just found out, “Isn’t that the guy who got arrested and he’s a disgusting individual?”

They offered to drop the charges.

It wasn’t enough that they were cheaters, annoying but they’re actually felons, allegedly.

Anything that's a misrepresentation is part of your buying decision. Click To Tweet

I guarantee it all ends in a happy ending.

We lowered the price. This realtor told us, “This house will go in the $50,000.” There’s absolutely nothing else available. I’m listing for $59,000. I’m very confident. It’s been a month or a month and six weeks maybe. He was like, “You’re not going to get anything for this place. We need to knock the price down to $39,000.” Someone was showing it and found that the basement was full of water because the water meter had frozen and broken. Thank goodness we got an offer for $35,000, which we are thrilled to walk away with $7,000 profit on this place if it comes to.

Part of that story is interesting because it shows too how much room you have if you buy a note at the right price.

I don’t know if this is a normal thing but the realtors obviously to get listing, will be very positive, enthusiastic and have a big number that they are confident that they can get. Do you think they do that purposely? They purposely exaggerate or mislead you to get the listing and then they know they’re not going to get that.

I compare it to being in the construction industry and stuff. A construction schedule where you put this schedule together and everyone puts it together and says, “Here’s our schedule.” It’s basically all the moons have to align and hit that schedule. I don’t know how many of you have done renovation construction or anything and have seen what the percent of jobs actually finish on time. I’ve had two in my life happen and I’ve done a lot, but that’s how I think. It’s like the rosy best picture perspective sometimes of how they put it out there and stuff. This is where interviewing your realtor is important because I’ve also had it on the flip side where I have a property that we are in it for $15,000 to $20,000. We did a Cash for Keys deal because the borrower wasn’t even living in the property. She came in and said, “It’s worth the mid $30,000s but there’s a lot of activity right now. If you list it in that price range, that’s where it will go and so forth.” We ended up selling it for $39,000 because of a little bidding war.

Those are two strategies. One is setting the price high, hoping someone will offer you. Even if it’s a low-ball bid, it will still be acceptable on the other strategy where there’s a lot of heat in a market that is pricing it low so you get more than one bidder and you can fit them in against each other to bid up. It’s very hard for me to pay $2,000 to a realtor when you’ve got something that’s going to sell for $30,000 or whatever or maybe you have $20,000 in it. You have to pay for your realtor. If the other realtor is not a realtor, it feels like all your profit gets whittled down so quickly. We’ve tried alternative methods. When you and I had vacant houses that were very low value and we actually didn’t even know what the value was, we just hired local people.

We basically put them up on Facebook, the Marketplace. We got lots of people interested. We didn’t know which of our four vacant houses was exciting to people. We found out once we put them up there, it was like a shockwave. On one case, over a hundred people were interested. We knew we had a winner that time. We hired normal local people off of Craigslist. Usually, people who had looked at the houses for us go and be like monitors letting people in for an open house and got offers that way. You and I famously in Flint, Michigan where we have a reliable guy that we used to do the renovation.

You have a reliable guy.

I’m not talking about the realtor. I am talking about Robert. Is Robert not reliable either?

Robert’s reliable. I was going to say I haven’t used a realtor yet.

GDNI 34 | Realtor
Realtor: Any time you do a Cash for Keys deal, make sure that it’s contingent upon an interior inspection beforehand.


He’s ignoring you because you gave your listing to someone else and you’re being punished as you should be. We have a local handyman. We each had a house in Flint. The race was on to see who could sell. We were both using the same handyman to let people in for showings and we put the houses up on Facebook. Did you put yours up on anywhere else?

Facebook, BiggerPockets and Zillow, basically the standard places.

Chris did a major marketing push. We did one open house. In my open house, fifteen people said they were coming. One actually showed up. They had an unbelievable winter, snow-wise. It wasn’t a good time to try and do stuff. I eventually gave that to a realtor. You’ve now hired a realtor; mine is closing. You get to a point where you are way past that point, where you just cannot be this involved in these many projects. I throw in the towel, hired a realtor and he sold it in three weeks.

One thing I’ll tag on to that is when you don’t have a realtor too, you have a lot of people who window shop and say, “I’m interested in.” Then you send them like, “Here’s the offer and here’s what I need to go through with the sale,” and you never hear from them again. On this property I have in Flint, I think I had ten people who wanted to put offers in and not one of them ever actually came to the table.

What I think what might work and I didn’t think about doing this because the last time I did it, I had a yucky house and it didn’t really work. Most people know that you can put your own listing up on the MLS, which automatically blasts it out to do Trulia, Zillow, and all those places. When it’s on the MLS, then you also get buyers and brokers see it, recommend it and bring people to see it and stuff. I didn’t do that but I’ve had a lot of success doing that with flips that I’ve done. My flips were in this area. The trick is if someone calls to see it, you want to know that they’re qualified. You don’t want to waste time showing it to people who aren’t qualified. You have to make sure that they either are prequalified for a mortgage or they have the cash to buy it, but most of the time a lot of the buyers will have their own realtor who’s helping them shop. Then it’s a breeze. You give that person the lockbox code, you just sit back and wait for an offer which is awesome.

There is never an episode if I don’t digress a little bit on some things. Pay attention to this class action lawsuit which a lot of people aren’t even aware of. That is in most major markets, where some sellers are suing the NAR, National Association of Realtors, which could almost cause inelastic collapse because essentially, it’s a class action lawsuit against sellers having to pay the buyer’s broker fee. It’s interesting to read. Google it.

What is the alternative? Who’s going to pay the buyer’s broker? The buyer?

The buyer. The way it leads is actually interesting because in order to be a part of the NAR or to list on MLS, the clauses with a lot of these major firms has to be written in the contracts that there’s no way around it that the sellers have to pay for the buyers. A lot of these big firms have it if they want to be affiliated with the MLS or NAR. It’s similar to the anti-competition. It’s very interesting.

When you put your own listing onto the MLS and they have these flat fee companies that will put them on, they have a blank for you to say what percentage you’re going to pay the buyer’s broker. I was helping a friend sell a house that eventually sold for almost $900,000. You don’t have to put 3% down. Particularly with an expensive house, it’s not like people who bring buyers to look at a more expensive house work any harder than people who sell cheaper houses. I felt no remorse about putting it down to 2%. The only thing to be aware of is if you do lower it, you’re taking a chance that they will steer their buyers to other houses rather than yours because the return isn’t as high. Most realtors want a sale and they’ll show them your house anyway.

If you’re selling a property and it’s a low-value asset, most realtors will have a minimum. They’ll say, “I don’t care if this thing sells for $5,000 or $25,000. I have a $2,500 minimum.” I’ve got a house that I took back. The owner on the land contract actually lives right across the street from the property. They must have left in a hurry because they left the power on. There’s fish in the fish tank and thankfully, the cockroaches are being fed. That’s a good thing. The roaches are doing pretty well. A property like that, which you thought may have been worth $40,000 might only be worth $15,000 to $20,000. Thankfully, I’m in it for single digits in the thousands but it’s something that when you are going to list it, be careful because they’re going to charge you a minimum fee.

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Bad realtors don’t do very much, even good realtors. I was surprised the first time I listed my own house on one of my flips on MLS. Most realtors quite honestly will list your house. Hopefully, they write a good listing that’s exciting, compelling and they arrange to have taken very good photographs. Once they put it up, they don’t do very much. They pretty much wait for the phone to ring. This is the reason that I questioned whether they are needed in this, particularly if they are needed out of a minimum $2,500 price. This is one thing that may make you happy that my realtor didn’t call you back in Michigan. His agency charges an additional $495 fee, which I’m told is getting to be more normal, “Just give us extra money fee of $495.”

Junk fees. A few questions I’ll pose to people out there too in regards to realtors and stuff. My listing in Flint, by the way, has a spelling error in it when you’re talking about realtors. One thing to look at too is what listings do they currently have? If they have all $200,000 homes, they have five or six of them and then you’ve got a $40,000 home, where are they going to focus most of their time? What pays them more money? It’s the same amount of work to go to a house and show it.

You’re acting like they’re doing something active to solicit buyers to begin with, which they’re not. They put it up, they are waiting for the phone to ring, whether it’s somebody for you or somebody for the other people.

I’ve put it on Facebook or I’ve put on Craigslist as well and then I’ll give the phone number to the agent. Then I replied to him, “Did you ever get a showing?” He was like, “No, I never heard from the agent.” That is frustrating. Just because you have an agent, it doesn’t mean you can’t also market the property. I put it on Craigslist, BiggerPockets and a bunch of other sites as well to try and spur interest. Then if they reach out to me, I’m like, “Here’s my agent. Call him and set up a showing.”

That’s probably a good idea to have a Google number, call your own agent and see if they call you back. That would be a little bit of quality control research you could do. Can you fire an agent? We had this conversation because you hired the wrong agent in Flint.

I know we have some realtors on. Someone said, “You can fire them.” I know you usually sign up a listing for up to six months but I’m guessing that you probably could fire them. The question is do you need a cause or can you say, “I don’t like the fact that you don’t return phone calls or aren’t working ambitiously for me.”

He’s asking if you don’t have a realtor if you’ve ever tried selling through REIA clubs. That is very interesting. I have not had a lot of success and I have contacted REIA clubs and I have posted it on their Facebook groups. You probably know that on Facebook, there are multiple REIA groups for different areas. We were talking about Northern Indiana. There’re three big groups on there. I don’t know how to explain why those groups are not more responsive. I don’t have luck on Craigslist either. Do you get a lot of responses from Craigslist? Facebook is the overwhelming source if you put something up on Facebook Marketplace.

I usually don’t put it up on Facebook Marketplace because it shows up under my profile and my name. I don’t want my name being flashed.

Are you shy about people knowing you’re in real estate?

In some of these locations, I don’t want my name out there. I have done okay on Craigslist. One of the things why with REIA groups is because it’s a bunch of investors who want to try and get it for as cheap as possible and they are trying to sell it for as much as possible. The reality of it is if we want to pay $20,000 for a house that’s worth $35,000 that you might want $28,000 for it. The numbers typically don’t work in those instances. The only times they may work is if you’re going to owner finance it to him and carry the loan for them while they renovate it, if you are willing to take on that risk.

GDNI 34 | Realtor
Realtor: If you do lower your percentage, you’re taking a chance that MLS will steer their buyers to other houses rather than yours.


I’m going to make an outrageous allegation. People can argue it with me. I hope you will. Real estate people, wherever they are, BiggerPockets, Facebook, our little circle, whatever, the number of people who are saying they’re in real estate versus the number of people who are actually doing deals, interested in deals, you look at a real estate group on Facebook that’s got a thousand members, I guarantee you 50 of them regularly buy things. The likelihood that any of those are interested in your particular little hovel that you’re trying to sell maybe or maybe not. I’ve offered some nice deals. I have a house for sale in Jackson, Mississippi. There are things wrong with this house but I didn’t say that in the ad. I presented it and it’s quite a beautiful house. No one has even inquired about it. No one is like, “Tell me more,” in a regular Facebook group. If it was in the Marketplace, I know I’d get a lot of action.

I’ll tag to that where I think BiggerPockets has 300,000 people on their website, which that’s a lot of people.

Ten of them are doing real estate.

I was going to say I would bet under 10% have done more than one deal.

10% sounds high. That’s 30,000 people, seriously.

It’s the same thing in the note industry that we see. People sometimes can’t get over the fear of the analysis paralysis and pulling the trigger. I saw a post about somebody talking about how many tapes have you seen? A lot of people were saying, “They’re all junk, everything’s junk.” The only thing junk is if the property is falling or it’s in a bullet zone. There can be properties that aren’t the greatest but if you can get them at a great price, then it’s not junk.

Do you want to comment about our note tape?

We put our tape out and we had over a hundred people download the tape. We probably had 15% made offers may be on the tape. A lot of people were maybe, “I only buy seconds. I’m looking for this. I’m looking for that.” You get a lot of excuses for things. “I don’t invest here, I don’t invest there.” We had about 15% of the people who downloaded the tape put in bids and some of them were performing assets. They are bidding at nonperforming prices. That was a toss aside. Overall, I would still call it a success.

I agree but I think people would be surprised to find out. We were too because we have not been sellers for very long. This is our first foray. It’s the same thing. People talk about not being able to find deals. I understand that probably the people that follow us are way more non-performers and most of ours were performers. We got great buyers out of it and people that I had not known before. That’s to me golden. I was shocked at how few people, even if they were unsure, didn’t ask or didn’t say anything after they got the tape.

At the end of the day, we sold over 40% of the assets, which I think is actually a pretty good hit rate honestly.

Oftentimes, you are setting yourself up for more heartache when you resell a contract for deed house to a new and very unstable borrower. Click To Tweet

I’ve got a bunch of money. I’m super happy. It was a surprise. I’m always surprised how often you’re still surprised.

Part of it too is I know for the ones that I owned, I wanted to leave some meat on the bone for people, whether they’re performing or non-performing. You had the same opinions as well on these of leaving some meat on the bone. For people out there, we’re going to update the tape. We’ve got some new assets that I know I have that. I’m like, “Why did I put this asset on there?” Gail and I have some assets together and people are looking for non-performers. I’m like, “Why don’t we put that one on?”

Be sure to sign up on for our mailing list if you would like to receive our tape, our new updated and new stuff put on their tape.

For the people who are registered or if you’ve signed up through some of the stuff I’ve put out, if you signed up to register for the podcast, when you filled out either the Q&A or an NDA or something I sent out, you’ll get that as well. The people who have signed up for that gets to tape 48 hours in advance. The other thing that surprised me is not one person took advantage of that. That’s what shocked me.

Take advantage of what?

The 48-hour advanced time. You had a 48-hour window to bid it basically against nobody else.

You’re saying nothing happened in the first 48 hours.

People took the tape and I’m like, “You’ve got a 48-hour window where you’re bidding against nobody.” When the bids come in again, we try and respond to them and if you quickly get on the agreement, any bids that come in after we push aside and stuff. It seemed almost all the bids came in one or two days.

We should be clear about that because I’m not even sure myself of what our theory is about. We accept bids on a rolling basis. If you make a good bid for everybody else, we’re going to accept your bid. We’re not going to wait to see if somebody else bids more. If you make a bid then a couple of days later, someone else makes the same bid and we’re going to give preference to the person who made the bid first. We’re going to give preference to people who are in our little circle, our little trust family group.

One of the things I mentioned to people too is when you start buying from certain sellers and stuff and you show that you close on deals, trust me, that goes a very long way. I don’t know how many notes I’ve bought over the past months where someone said, “I’ll give it to you at this price but can you close by this time because I’ve got a higher offer? I know you’re going to close on this deal.” That’s important.

GDNI 34 | Realtor
Realtor: There can be properties that aren’t the greatest, but if you can get them at a great price then that is a definition of a good deal.


They can go to the broker and they can go to their seller and say, “We’ll have the money on Friday.” Then it’s not a big deal to brush off the higher offer. We’re like everyone else. We would go with that but the people who have been closers, they’re at the top of my list.

Any more questions that people have?

Somebody asked about listing your own property on MLS. Is that through a listing? There are several flat fees MLS listing folks. For my last transaction, I used a company called If you google flat fee MLS listing, you’ll see a bunch of them and they’re pretty interchangeable.

Mike asked the question, “Why would you use a different servicer? Why do you have more than one servicer?”

I started with one servicer and then I got mad at them, so I started using another servicer. I’m mad at both of them. I’m back to the first one.

I use one servicer. I’ve looked at putting some performing notes over to another servicer because their rates are significantly cheaper. One of the things that I’ve struggled with is on some of these performing notes, “Do I do that?” I’ve got different reports coming from different companies. They are trying to track everything down, getting reports from one versus the other and then working with my bookkeeper on it. For me, the ease of using one, which a lot of times you don’t want to put all your eggs in one basket. Sometimes it depends on where you are in your business. I would say when you’re getting started, start with a few servicers to see which one you like best, which one fits your goals, desires, which one you find to be responsive and respond to you.

I use Madison Management. I saw a post on one of their Facebook groups about people upset with Madison because they’re not responding and they’ve screwed stuff up. Do they make mistakes? Absolutely, sometimes it was loan mods that they didn’t put in the system. They send the wrong payment to the borrower saying, “You owe me $700 when it’s $500.” The reality is that is going to happen and you’re going to have to deal with it. I don’t curse at them for it. I said, “What can we do or how can I work with you to make sure that when I send it to you that it gets put in the system? Should I send it to somebody else?” What’s the best way to try and avoid this from happening versus complaining about it and not trying to do anything about it?

Chris also has a clever thing where he gives gift cards to people to motivate them and gets huge payoffs from that. Madison is probably everyone’s favorite among equals. I’ve been trying to get Madison to adopt some of FCI’s reporting features. FCI is an annoying servicer because they’ve gotten incredibly restrictive and rules-bound. For example, the biggest issue is that if you have a note or CFD that starts re-performing, they will not escrow. They will not allow them to do ACH unless they are current. It’s a current and performing note. We all know that people who are not current and not performing consistently are the ones who need ACH and need escrow the most. That is the hardest part. Other complaints about FCI, if you have to hire a lawyer, it has to be someone that they’ve approved. If someone declares bankruptcy, they will charge you $200 to oversee the bankruptcy, meaning to do absolutely nothing but collect the fee, in a nutshell.

An idea just popped in my head. On our next episode, I say we do a bracket with the servicers. We are going to do a bracket of analyzing the servicers and do their strengths and weaknesses. If there are certain things that you want us to compare them, this is a chance for everybody to ask us what should we be comparing them, because we’ve used them and understand how they work. Let us know. We’ll put that down and we’ll do a little servicer bracket. Someone asked the question about DebtX and 10% down. While I do my due diligence, I’ve actually never bought from DebtX. I used them as an example. I have bought from FFN, which is First Financial Network. I’ve been on their list, which was painful that I had to have my accountant on audit. You have to provide audit to financial statements and all this fun stuff to them. I haven’t bought from DebtX. I’m not familiar with the 10% down, while doing a DD.

How much does it cost to get your financial statements audited? Are we talking hundreds or over a thousand?

People sometimes can't get over the fear of the analysis paralysis and start pulling the trigger unknowingly. Click To Tweet

I don’t know. I have a family friend who basically did it for pro bono for me to audit the statements but I’m guessing that it’s probably going to cost you $500. It depends how big your books are too. If you run a multimillion-dollar company, of course, it’s going to cost you a lot. If you’re running three notes in your business, it’s probably not going to be that much.

Most of us are somewhere in between. Anything else in business, old business?

Gail, do you have a Notes and Bolts for people?

No, I’m sorry. I’m all tapped out.

Here’s a question I have for you that you can help maybe be Notes and Bolts. How did you find Robert and how did you find this realtor in Flint?

Robert is our handyman in Flint. That was a Craigslist situation. I have to say it’s obviously hit or miss on Craigslist. I have gotten several Roberts and he’s absolutely fantastic. He renovated the entire house for me, a 1,300 square foot house for not a lot of money. It took a long time because he works alone. The realtor, he answered me on BiggerPockets. I like realtors who are out on social media, actually trying to contribute and add value. We all know in the realtor community there is this thin delicious layer of great realtors and then there’s this big tasteless sponge cake underneath them of bad realtors. The biggest problem of bad realtors is that they’re lazy.

They think the job is you put the listing up and then you wait for the phone to ring. When I see a realtor out there making an effort, I’m like, “That’s the guy. I’m definitely going to talk to him.” My particular realtor in Flint, Michigan, who I highly recommend is an active investor himself. He buys a lot of rentals. He’s very committed to that area. He knows neighborhoods down to the block. I don’t know that he does anything more than listings and wait for the phone to ring. I’m fooled, he did sell two houses for me in a matter of a few weeks.

My Note and Bolt tape is for people. I hope you’ve all joined the Facebook Notes and Bolts group and many who were on have already seen. We talked about this. I showed it in a prior episode of John Keith puts out from Direct Source a lot of contract deeds. A lot of times you see the same ones over and over again. Notes and Bolts started by Gail coming up with the idea, there are so many people buying the same O&E reports on these assets that are junk or have major title defects. We started creating a Google sheet that lists all those properties and we’re over 50 properties on this report.

I see several of them on this new tape that came out.

You always wonder, “Was this on the list? Was it not? We created an Excel spreadsheet that essentially imports that information and highlights the assets on the tape in red that are toxic assets. If there are 300 assets on the list, 50 of them are already getting highlighted to say don’t bother with. You cut 15% of your review possibly down for reviewing those. There’s one in Ohio. This house looks awesome on the outside. Everyone always bids at it. I know another borrower, I saw in his newsletter, put it in there and I was like, “Don’t buy that asset because it’s got $8,000 on liens on it.” He was like, “I ordered the O&E report.” I was like, “Should I join the toxic asset list?” I am going to share that with people that we put out the spreadsheet that downloads the information. When you get that tape, you copy and paste that tape in there, click on two buttons and it hits those up. I have not gotten that yet. Go on to Facebook, join the Notes and Bolts group and then under the announcements, there is a link to click to fill out the NDA. You fill that out and then you’ll get put into my Infusionsoft system, which will automatically send you the video I did along with the link to download it.

GDNI 34 | Realtor
Realtor: When you start buying from certain sellers and you show that you close on deals, then that will go a very long way.


We are always giving.

We love to give. We love to do good deeds, Gail.

There is an idea for a name. We should use that.

I’m going to go right up some loan sale agreements.

Thank you all for joining us once again. Please give us reviews. We have special gifts in mind for people who spontaneously, without any manipulation or begging on our part, leave us reviews. Please sign up on for our mailing list to get those early looks at our hot tapes and other great tools. Chris cannot stop himself from thinking and creating great tools. You want to be sure to get them.

Thank you, Gail. One last thing is the reviews, please leave them on iTunes and Stitcher. Thank you.

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