July 5, 2021

Thoughts from the Desk of Bob Repass…

I was 16 in the summer of 1978, when I worked my first manual labor summer job. The previous two summers I worked first at a local “Five & Dime” where my father was the district manager and then at a fast-food restaurant at our local mall. Then at 16, I believed I should be able to make some real money, so I went to work with a paint company, Sam Jones Painting. Sam happened to be my Babe Ruth baseball coach and his two sons also worked for Sam and coached my team. It was quite the “family” affair. I spent most days with a paint brush, electric sander, and paint thinner. I learned a lot.

Each morning I drove over to the Jones family house to load up for the day. Mrs. Jones would always have sausage biscuits for all of us to take with us. As the kid with no experience, I got to ride in the back of the pick-up truck and do all the tasks no one else wanted to do. Time to earn my keep.

Usually, we were painting single family residences both inside and out. Before I actually got to sling a paint brush or use a paint roller, I had two responsibilities.  The first was to use an electric sander to get the previous coats of paint off the outside of the house. Now this consisted of climbing a ladder and removing the paint from top to bottom all around the house. Keep in mind summers in Eastern North Carolina tend to be hot and humid, so it didn’t take long before I was caked with dust from the sander.

At the end of the day, my second responsibility was to clean all the brushes and rollers used by the crew that day. Enter the paint thinner. I made the mistake of asking one of Sam’s sons who we called “Peanut” why I had to clean all the brushes and rollers? Peanut laughed and said “because Sam wants you to, and we need these to use on tomorrow’s job.” Major lesson learned.  I was on a team, and the team had its rules.

The next lesson took a couple weeks to realize and that was the value of pacing myself. Now I’m not talking about “looking busy” or “sandbagging” I’m talking about making sure I had enough energy left at the end of the day to finish all my responsibilities.

On many mornings I, young and fit and eager, would work so briskly that by noon I was tired, and the hot summer-afternoon sun was still looming ahead. I soon learned to set a pace I could hold throughout the long day. How I began to long for 4 o’clock when I knew we had only one more hour to work!

I watched the rest of the crew all older than me who did this for a living, and I began to appreciate the brutal realities of a life of manual labor. They weren’t there just for the summer. When I left to go back to school, they would still be painting. They would be there working in the family business in the heat of the summer and in the bitter winter cold. For them, painting was their business. Looking back now I realize the Jones family was just a small business that thrived and survived by knowing most of the folks in town and doing what they said they would do, do it right and charge a fair price.

As much as I admired that, I knew I had to apply myself if I aspired to something else. Thus, the central lesson was the value of education. I realized manual labor was not the future I wanted. I knew my education was the means to do something else although at the time I was not sure what that would be.

Sam Jones Painting gave me a priceless form of education. I thought spending the summer working for my baseball coach would give me the freedom to be able to get off whenever we had a game and let me earn more money than I had earned the last couple of summers. It was that and so much more!  I learned teamwork, pacing and most important the value of education. There was no classroom, but I never forgot those lessons.

Oh, and I can still paint pretty good, but I hate cleaning the brushes!

Bob Repass

Managing Director

Stay up to Speed with Eddie

I WANT SOME OF THAT!

by Eddie Speed

Have you ever met a truly confident person and thought, “I want some of that!”

Mark Twain described a great paradox that leads to success: “All you need in this life is ignorance and confidence. And then success is sure.” Why would ignorance be an ingredient for success? It’s because an ignorant person knows how much they need to learn, then once they learn they gain confidence which leads to success. The guy who always thinks he’s the smartest person in the room is not on a quest for knowledge. He thinks he’s already got it all figured out. Unless a person is trainable there’s no point doing anything with me.

I teach people the art of creative financing, but I can only teach teachable people. And I’ve seen them get amazing results. Like buy a 30-year note, then sell the first 12 years of payments for the price you paid, plus get 18 more years of payments on the back end. Or buy a house and get the seller to carry terms in your favor, then resell the house on a wrap note and make $30K today plus $500 a month for decades to come.

Creative financing helps you build wealth, but you also build something just as valuable—and some would say far more valuable.

Confidence! Everybody wants it, but where does it come from?

People join NoteSchool because they want our content. Once they master the content, they’re pleasantly surprised to discover they also get our confidence.

People mistakenly think learning the art of creative financing is just memorizing a giant checklist; containing things like workflow, process, negotiation, math, closing deals, paperwork, hypothecation, and so on. And we cover all those things. But people don’t realize that a huge part of the curriculum we teach is the entrepreneurial side of the business.

Some of the best people I’ve trained didn’t know how much potential was inside them. I’ve seen some smart people who were too confident and unteachable, while the not as smart are low on confidence but eager to learn. Once any student starts applying what they learn, every step they take makes them stronger, more confident, and more successful.

Confidence helps you step out of your comfort zone, and makes you more comfortable outside your comfort zone. Confidence comes naturally with success, but success comes naturally to those who are confident.

I know lots of people who never dreamed of becoming as successful as they have become. When they first started, they didn’t even have the courage to dream big.

But there’s a difference between dreaming it and executing it, which of course underscores the importance of learning content. Confidence without knowledge can get you in deep trouble fast.

I would never say that success is automatically guaranteed. But I’ll tell you what is guaranteed. Obstacles! Having confidence, tenacity, creativity, and an entrepreneur’s mindset is what you need to overcome those obstacles. My confidence comes from my natural tenacity. (If I had my druthers I would have chosen brilliance.) Tenacity kept me in the business when lots of smarter people dropped out.

Soon after you start making deals, one day the light bulb turns on between your ears and you realize something you never knew before. You’re an entrepreneur. And you love being one!

Most people begin their note careers while still holding on to their full time job. They might be in some other facet of real estate, or some field completely unrelated like engineering, graphic design, or dentistry.

But when they realize they’re an entrepreneur, it doesn’t mean they’re unemployable and they don’t have to stop being an engineer, graphic designer, or dentist—but they could stop if they wanted to. This freedom gives them a huge amount of boldness. They know they don’t have to rely on the safety net of a regular paycheck, or keep trading time for money. They never have to lose sleep or bite their nails in fear of being laid off and losing their home. They know they could stroll into their boss’s office anytime with a huge boombox on their shoulder, hit the play button, and blast Johnny Paycheck’s “Take This Job and Shove It” at full volume for all the company to hear. Then do doughnuts in the parking lot on the way out.

Or not. My point, once again, is that the decision to stay or leave is your decision. And you have the freedom to make that decision at the time of your choosing instead of your boss’s choosing.

When your company’s paycheck is your only source of income, a job loss can be devastating. But when you have multiple sources of income and one happens to come to an end, you can only get fired a little at a time.

Please don’t ever confuse confidence with arrogance. I’ve known lots of rich, fat cats who love to brag about how loaded they are. (And the real estate business has some of the worst.) I love the quote by author Stewart Stafford, “Confidence is when you believe in yourself and your abilities. Arrogance is when you think you’re better than others and act accordingly.” That’s why I always admire people who are smart and successful, yet humble; like “the millionaire next door.”

Successful entrepreneurs have the financial freedom to decide what kind of future they want to have. Jack Welch, the legendary Chairman and CEO of General Electric, summed it up this way: “Control your own destiny or someone else will.”

Echoing that same thought, but in a much more poetic form, was the great author Theodore S. Geisel (more commonly known by his pen name, Dr. Seuss):

“You have brains in your head. You have feet in your shoes.

You can steer yourself in any direction you choose.

You’re on your own. And you know what you know.

You are the guy who’ll decide where to go.”

Ever wonder why people want to climb Mt. Everest? Someone asked that question to Sir Edmund Hillary, the first person ever to conquer Mt. Everest, and he gave the perfect answer: “It is not the mountain we conquer, but ourselves.”

Don’t let fear hold you back from controlling your future. Here’s to conquering your fears by gaining the knowledge, confidence, creativity, and tenacity to decide for yourself where you want to go.

Capital Markets Update

Stress Tests: Putting Plans Through Their Paces

By: Ryan Parson

You can do thorough investment and wealth planning and implement a financial product, tool or strategy only to end up with unexpected and disappointing results.

Why? Perhaps something about the strategy you implemented changed. Or maybe a new law was passed that impacted its effectiveness. It’s also possible that something occurred in your own life that made your current strategy insufficient or less than ideal. Let’s face it: Life isn’t static and new developments can sometimes mean existing solutions no longer cut the mustard.

Those who are financially independent, or working to be, are fully aware  of this. What’s more, they often take steps aimed at avoiding being surprised by negative or undesirable results from their investment and wealth planning.   Here’s how.

Stress testing for the financially independent

Some investors and their families who are financially independent engage the very best professionals to help manage their finances and address lifestyle concerns.  Those investors understand they need other advisors who are dedicated to the financial (and often personal) well-being of their family.

A major reason investors and their families engage advisors with specialized knowledge is to ensure the family is getting the best results possible. Consequently, one objective most investors have is to work with the best of the best.

The complication: There are times when even seasoned investors are not working with the best of the best. Sometimes they end up working with pretenders – well-intentioned professionals who are just not as technically proficient as circumstances require. But sometimes mistakes and oversights happen even when the absolute best professionals are engaged.

So what do they do? To make sure they’re getting what they need and want in terms of expertise, services and solutions and to determine whether those solutions remain on track to deliver expected results, the financially independent engage in stress testing.

Stress testing Is a systematic way to evaluate whether the financial (and other) expertise the family is using likely will deliver the results they expect and to ensure they are not missing any meaningful opportunities that could enhance their outcomes. 

A popular approach

Stress testing generally is done because of anxiety about the current state of affairs. The financially independent and especially those using alternative investments, might opt to stress test when they feel uncertain about their overall current financial or legal situation or about some particular aspect of their situation. By stress testing, an investor, and their family, can help make certain that they are indeed getting or employing the best solutions for their unique circumstances.

You don’t have to be extremely worried that something is amiss with a strategy before you engage in a stress test. Stress testing can be valuable even when the probability of something being wrong with a solution is quite low. Say, for example, that a mistake or error involving a particular strategy you’ve implemented likely would be extremely harmful to your financial well-being. It might make sense to stress test that strategy just to be certain that you’re not headed for a disastrous result.

Two types of stress tests

It’s important to note that stress testing is not one approach. There are actually two types of tests: comprehensive and focused.

Comprehensive stress testing involves many aspects of a family’s financial and nonfinancial lives. For stress testing to be considered comprehensive, we believe three or more particular sets of services or investments initiated within the same 18-month period should be assessed. In contrast, focused stress testing involves fewer than three sets of services or investments initiated in the same 18-month period. Often just one aspect of an overall wealth plan is tested at a time.

Comprehensive stress testing is much more involved, time-consuming and costly than focused stress testing. In contrast, focused stress testing is more targeted (and thus less expensive and time-intensive).

Focused stress testing is far and away the more common approach used by high-net-worth families, individuals and entrepreneurs. Generally speaking, only when the family is experiencing a system failure of some kind-something dramatic that impacts many aspects of a family’s world-is it likely to undertake comprehensive stress testing.

Finding faults

The goal of stress testing is to identify errors and missed opportunities. And it turns out, that’s what happens fairly regularly.  Clearly, mistakes occur, even among top professionals. Thanks to stress testing, they potentially can be fixed before problems get serious.

It is important to note that stress testing can and often does extend beyond addressing wealth management, investments and related legal and tax matters. It also is applied to evaluating lifestyle decisions. For example, more of the wealthy are stress  testing their family security measures-such as making sure their homes are truly well    protected from burglars.

What’s  that? You don’t feel like you have enough to stress test?

Anyone can engage in stress testing to help determine whether their wealth management  solutions and chosen investments, especially alternatives and real estate, remain on target to deliver the desired results. And you still can use stress tests  to see whether there are any opportunities that you aren’t currently taking advantage of but should consider, given your goals and situation.

Many mistakes are just that, mistakes.  They are      unintentional but can have severe consequences. By stress testing, you can make sure the professionals you are working with are indeed getting everything right and you are not missing out on meaningful opportunities.

Some areas where we frequently see focused stress testing being done include investment portfolios, estate plans and business succession plans.

The upshot: You can put some, many, or even all aspects of your financial life through their paces to see whether they’re still set up to do what you want them to do and deliver the results you expect. If you take this step and engage in stress testing, you’ll be following in the footsteps of some of the wealthiest, most successful investors.

To your financial independence,
Ryan Parson

The Spotlight

A New Asset Based Lending Program

By: Charles Mangan

Did you know that Colonial Funding Group launched a new Asset Based Lending Program (ABLP) for Real Estate & Note Investors? Our ABLP provides the opportunity to borrow money using existing Note or Rental Portfolios as collateral for the loan. Our program offers loans starting at $200K.

Real Estate & Note Investors can use our financing to unlock your existing equity, consolidate other debt or obtain additional capital to grow their business. Our loan programs are flexible to meet the ever-changing needs of investors while providing access to financing at a competitive fixed rate. Recapitalization puts money back in your pocket and your portfolio. If this is a fit for you, please contact us at ABLP@colonialfundinggroup.com.

The Trading Corner

How is Your Follow Up?

By: Scot Tyler

Let me ask it again. “How is your follow up?” If you answer this truthfully, I think many of us underestimate the value of follow up. It’s funny, in our normal everyday lives we follow up daily on many pressing issues we might have with our children, home, a car, finances, school issues but in our work life we seem to procrastinate making those calls. The seller was not real nice or talkative on the initial call or I know they are just going to want more money. For whatever reason we are hesitant to follow up with that customer. Not sure why that is after the thousands of dollars spent on getting that lead and making the phone ring. Over the years many of the loans I followed up on are the loans I got under contract and ultimately funded. These calls are essential to feeding your pipeline and tells the seller you are a professional and sincerely interested in helping them with liquidating their asset into the most cash possible.

Handling follow up calls correctly can be a slippery slope. First, you want to make sure the seller knows you are their option but don’t want to seem like you are over selling or let’s be honest, annoying. Every situation/follow up call is different depending on how the last conversation went but either way you want to be persistent without being seen as irritating. Being persistent doesn’t mean you follow up multiple times a day or even daily. Following up with a seller daily can be very annoying. Think about when people follow up with you.

Recently I started researching for home warranty companies to see if this service might be a fit for me and my home. After reviewing many websites, reviews, and requests for policy pricing I had multiple home warranty companies calling me for my business. One particular company immediately picked up the phone and called me after an on-line submission for costs. Of course, I took the initial call and explained I was just researching companies, services, and costs and that I would decide by the end of the week as to which company I might move forward with. They continued to follow up with me daily and sometimes multiple times a day via phone, text and email which was very aggressive and aggravating. Long story short I ended up going with another company who respected my time and decision to decide by the end of that week. I’m not saying the company I went with didn’t follow up because they did as they said they would. There was no multiple phone calls, texts, and emails. Now it didn’t hurt they also had the best reviews, fees and a salesperson who wasn’t annoying. 😊

There is no specific process as to how you are to follow up but like I said earlier each scenario is different. Before ending your call with the seller make sure you are asking them their preferred way for you to communicate moving forward. This request lets the seller know that you WILL be following up without actually saying it.

“Would you prefer me to text you before I call you? Do you have an email you check regularly?”

If the seller request via phone that doesn’t mean you can’t text them or email them but instead are additional contact options if you are unable to make contact when you begin your follow up.

Put a game plan together as to how you are going to attack your follow up leads. Unless you and the seller specify a specific date and time to connect again, which I try to do after every call, I normally follow up 2-3 times a week with a phone call and follow up email if available. If my first follow up call message was left in the morning the next call will be made in the afternoon or early evening depending on where the seller is located.

What does your voicemail say to the seller? Does your message sound like everyone else’s message?

“Hey John, this is Scot Tyler with Colonial Funding group. Just following up on the real-estate note we spoke about earlier this week. Give me a call when you get a free moment.”

If your voicemail doesn’t have a call to action (CTA) for the seller then you sound like everyone else leaving a message and giving the seller no reason to call you back.

“Hey John, Scot Tyler here with Colonial Funding Group. I was looking at the terms again on your note and want to confirm a few things that could help me get more cash to you. I’m in the office now if you can call me back as soon as you can so I can firm up these options. Talk to you soon.”

Of course, part of your game plan is to have an item or two ready that you wanted to confirm when they return your call because they will return your call. You gave them a reason, a call to action to get back with you. Moving forward work in the “Call to Action” on your voicemails. Be persistent, but professional and NOT annoying while giving the seller a reason to call you back.

Here is a note that came across our trade desk that we recently funded. If you’re interested in purchasing it, email me at: scott@colonialfundinggroup.com

Performing Loan – Single Family Residence and Double-wide Mobile Home on 2.29 acres   
Blythe, CA
BPO $224,000.00 – September 2019
$175,000 sales price with nothing down payment
$175,000 / 4.25% / $860.89 for 360 months
46 made / 314 left
Current UPB $162,948.28

Until next month.

Quote of the Month

“Don’t count the days; make the days count!” – Muhammad Ali

This Month’s Poll Question

Describe the real estate market where you live?

Connect With Us

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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.