March 5, 2020

Thoughts from the Desk of Bob Repass…

Throughout the month, I jot down thoughts and ideas about what topic I want to talk about in this column each month. I usually come up with a topic that I recently read about or that is in the news.

This month has been challenging. For most of the month, I was planning on discussing the importance of being a life-long learner. I started making notes after watching an interview with Microsoft CEO Satya Nadella. In the interview shortly after taking over as CEO in 2014, Nadella said “The one thing that I would say that defines me is I love to learn. I get excited about new things. I buy more books than I read or finish. I sign up for more online courses than I can actually finish. But the thing about being able to watch people do great things, learn new concepts, is something that truly excites me.”

I have notes about the importance of being an effective listener as well as why every leader should be a reader. I was ready to finalize my column. But then the markets started going crazy and the global impact of the Coronavirus was getting closer to home here in the United States.

If I were to describe the markets over the past couple of weeks, it would simply be “a rollercoaster ride.” Now back in my “younger days” I always enjoyed rollercoasters. I still remember the first time I rode “The Cyclone” at Coney Island when I was about 10 years old. I enjoyed riding them with my son Robbie when he was growing up, our two favorites were Space Mountain in Disney World and Dueling Dragons (now a new Harry Potter themed coaster) at Universal Studios. For the record, Angie and my daughter Kristin, are not big fans of rollercoasters.

Here’s my quick two cents (well three cents I guess!) on the impact of the Coronavirus. First, there’s still a lot we don’t know and uncertainty definitely impacts the markets. Secondly, while impactful, the coronavirus is meaningful but not permanent. Finally, there will continue to be frequent and wide market swings.

Alternative investments, such as investing in real estate secured notes, provide stability to the rollercoaster ride of the stock market. In my opinion in today’s world the market will continue to be more volatile and reactionary. Whether it’s reacting to a tweet from the President or other World Leaders, or from a global threat such as potential war, trade agreements or the coronavirus, the market swings are quick and at times dramatic. Sometimes especially when you get older like me, you stop riding rollercoasters and just enjoy the steady log ride attractions.

One final note this month, one of the world’s legendary CEO’s Jack Welch passed away at the age of 84. Welch became well-known for leading the turnaround of General Electric Co. from 1981 to 2001. “My job is not to know everything about each business,” he told The Wall Street Journal in 1999. “It is to pick the people who will run the business and to decide how much money business A versus business B or C gets.” His firm but simple mantra was “fix it, close it or sell it.”

Two of the best business books I’ve read Welch co-authored with his wife Suzy, Winning that came out in 2005 and the 2015 book The Real-Life MBA: Your No-BS Guide to Winning the Game, Building a Team and Growing Your Career. Rest in Peace Jack Welch.

Tomorrow I start jotting down notes for the April column, I still have the importance of being a life-long learner to work on. But we’ll see what else may come up.

Bob Repass
Managing Director

Stay up to Speed with Eddie

Whether You Think You Can, Or You Think You Can’t – You’re Right

by Eddie Speed

I wish I could take credit for the great title of this article, but it’s actually a quote by Henry Ford. I can only imagine what kind of pushback he must have gotten when he set out to not only launch a car company from scratch, but to also completely reinvent the entire manufacturing process for all of industry.

In so many types of achievements, the thing that determines whether something is possible or impossible is pre-decided by what’s inside your head.

On May 6, 1954, the “unbreakable” 4-minute mile was broken by Englishman Roger Bannister with a time of 3:59.4. His training not only involved vigorous physical training, but also relentless mental training where he visualized himself breaking the record to create a sense of certainty. Once the impossible achievement was finally proven to be possible, more and more runners broke it as well. It’s now been broken over 1,400 times.

When we teach people about notes, we explain the important technical side of the business so people can know how to structure their note deals. And pretty much any thinking person with common sense can learn how it’s done. But what’s harder to teach is the head game. By that I mean the battle inside your head where you’re debating with yourself whether you can succeed or not.

What percentage of your business is the head game? Even I can’t say exactly, but it’s a whole lot more than half. After decades of coaching people, I know that if you can’t conquer the head game, the technical side is worthless.

If the person advising you doesn’t have knowledge in your field, then all they’ll have to offer is bad free advice. We all have well-meaning friends and family who love us dearly, but they’ll naysay you to death. They’re always ready to pour ice water on your hopes and dreams. They think they’re protecting you from failure. Truth is, they’re protecting you from success! They’re destroying your own confidence that you can make it in your chosen field.

When an entrepreneur needs advice on an entrepreneurial decision, they ask an entrepreneur.

That’s why it’s so important to surround yourself with a community of likeminded people who can offer encouragement, and help you believe you can succeed. Logs burn more brightly together, but take one away from the fire and it soon starts to smolder and goes out. The same is true with firing up your passion and confidence. You have to be around other people who want to succeed. When you get together with our students, you know that the gut feeling you get is a creative idea and not bad pizza!

My good friend Pat Precourt is a coach for entrepreneurs. If you were at our most recent NoteExpo, you heard him give the keynote address about having his first MMA fight at the age of 42. I’ll never forget how he described sitting in the locker room before the fight thinking, “What am I doing here?” A seasoned fighter saw him there on the bench, looking down. The guy gave Pat some advice that applies to far more than just MMA. He told Pat, “The fight is won or lost before you enter the ring.” Now that was a guy who understood the importance of the head game! Pat’s MMA record is now 1-0-0!

I used to compete as a cowboy. (If you don’t believe me, my chaps are framed on the wall.) I had a friend who had a great description for certain competitors. He would say, “That guy is just unconscious enough to win.” What he meant was that some guy might not have the best technical skills at riding or roping, but because losing wasn’t on the guy’s radar, there was a good chance he could win.

I’m sure you know the feeling of when you’re trying to get mental clarity on something, but it seems your head is filled with fog. That’s when I know that there are certain people I need to avoid because they’ll make it even foggier. But I have a few trusted friends I can reach out to who can always help lift the fog; or at least offer a fan to blow a lot of it away.

Your mental state is the biggest factor for succeeding as an entrepreneur. You’ll either conquer the head game or it’ll conquer you.

Well, I opened this article with a quote, so I’ll close with another. This is a famous poem by Walter D. Wintle called: “It’s All In a State of Mind.” I suggest you frame it for your office:

If you think you are beaten, you are,

If you think you dare not, you don’t,

If you like to win, but you think you can’t

It’s almost a “cinch” you won’t.

If you think you’ll lose, you’ve lost,

For out in the world you find

Success begins with a fellow’s will;

It’s all in the state of mind.

Full many a race is lost

Ere ever a step is run;

And many a coward fails

Ere ever his work’s begun.

Think big and your deeds will grow,

Think small and you’ll fall behind,

Think that you can and you will;

It’s all in the state of mind.

If you think you’re outclassed, you are,

You’ve got to think high to rise,

You’ve got to be sure of yourself before

You can ever win a prize.

Capital Markets Update

Discovering My “Why”

By: Ryan Parson

Have you ever stopped to wonder why you want to grow your wealth? What do you want it to do for you? What is your why? For this month’s newsletter, I’m sharing the story of how I discovered my why in the hopes that it’ll help you learn more about your wealth development and management strategy so you can live your best life possible.

Measuring Happiness Against Wealth

When we’re kids, we might be scared of the dark. As we become adults, we are still fearful of the dark, but in a different way. We’re afraid of financial darkness. Traditional society conditions us to “work.” We’re expected to take on a steady, nine-to-five job that provides a consistent income and little else. Supposedly, that’s the way to be “happy” and “comfortable,” but the reality is that this standard – for our finances and for our happiness – is what we need to be afraid of. The standard is not enough.

In the past, lying in the dark, what kept me up at night was not just thinking of ways to amass enough passive income, but feeling confident that my passive income would create the scaffolding I needed to sustain my financial future.

There comes a point where you have to ask yourself what you truly want out of life and what will make you happy. Is it your spouse? Your kids? What about your health? The fact of the matter is that we all only have limited time. If you truly want to harness your time to the best of your ability for a future where your wealth works toward your happiness instead of against it, you need clarity and a process to create the basis of your financial independence operating system.

My Departure From Corporate America 

For me, following the “happy” and “comfortable” path that was expected of me hit a dead end when I realized my role was no longer fulfilling. I packed my bags and made the incredibly difficult and gut wrenching decision to leave Corporate America. What I didn’t know was that my personal dead end came at just the right time. Just one month after I stepped out of my role, full of worries and a drive to do something different, my previous job position (and the jobs of over 500 of my colleagues) was eliminated. In startling clarity, it showed me how quickly financial darkness can become a brutal reality and it also fortified my belief that my fears had changed. I was no longer afraid of growing my passive income. Instead, my fear was ever having to go back to work for anybody else after I had finally found my true financial independence.

Making Financial Leaps Without Fear 

Today, what keeps me up at night is rooted in opportunity and excitement, not fear and anxiety. Once I got to my financial freedom, my mindset was truly able to change. Now, I spend my time doing exactly what I want to do, not what I feel like I have to do just to survive. However, that doesn’t mean that financial hazards have ceased to exist. Economic stability is always precarious to some degree and many investors have been looking at the stock market as of late, questioning where their wealth will go.

It hits a new high one day and then seems to drop like a rock a week later. This is classic stock market volatility as the market is testing new ceilings. The questioning comes from the fact the market has been on one of the longest increase sprees in modern history, if not since the inception of the stock market. Most know it can’t continue to keep going up, can it? When does it reverse? Nobody knows.

But you know what I say? Seize the day.

What those who are really and truly going after their financial freedom know is that you need to harvest market gains when they are presented to you without hesitation and without fear. Because in the end, the market has no problem taking it all away from you when it comes toppling back down.

Cultivating a Fearless, Like-minded Community 

The financial world can be an intimidating space and it can be difficult to make those fearless decisions. That’s why you need to immerse yourself in the right culture and be around people with the right attitude. You have to be surrounded by other like-minded investors who realize that following the traditional path is not necessarily the right path for you. This community, like the one I’ve worked hard to create at the Mile Marker Club, has discovered the most meaningful paths towards financial freedom don’t always move in a comfortable, predictable, quick manner. The alternative investment road can be long and winding. It’s not necessarily for everyone and it’s not even for most people, because it requires deliberate planning and a clear strategy. But if you’re ready to discover true financial freedom, there’s a whole community that’s ready to welcome you with open arms and guide you along your journey.

Living Your Why 

Today, now that I’m truly living my “why” and have a community of like-minded investors around me who realize their path, I have the greatest level of clarity and confidence in my own financial freedom that I’ve ever had. Especially compared to when I thought that following the traditional path to financial security and happiness was the right one. While I’m grateful for my formal education, doing what I was “taught” to do would have kept me on a path that would have otherwise smothered my true desires and ability to live my best life.

It’s out there…for those who truly want it.

The Trading Corner


By: Scot Tyler

If you remember February’s edition of the Buyline we spoke about once the seller says yes, what do I do now? What are my next steps getting the process going? I wrote about by having the seller execute a bid letter (letter of intent), request a complete file/package with all the documents the seller and buyer signed at closing etc. Now you’ve submitted this package to the investor and the due diligence wheels are in motion.

Each investor has their own process but just like us many will order an updated title report and an appraisal/BPO on the subject property for a current value. As we all know, we now begin the waiting game for both of those items to be completed and submitted to the investor for review. So what are you doing while you’re waiting? My advice during this 5, 7 or 10 day time frame (rural properties seem to take a longer for property evaluations) is one word, “Communicate”.

You as the note-flipper (middle man between the seller and investor) must have open lines of communication with the seller. Let them know the process, set proper expectation, tell them what you’ve done so far (submitted package to investor) and what the investor is currently doing (ordering title and value on the subject property).

Check in with the investor in a few days and request an updated estimate on when the title and value will be back. Then call the seller, let them know you’ve been in contact with the investor and you should have some news for them in a few more days. When sellers receive consistent updates many times it puts them at ease and eliminates them calling you every day for an update. Keeping the seller updated even when there’s nothing to update will continue the rapport and add to the trust you’re building with them.

Sellers just want to know what’s going on. Good or bad. Waiting weeks before communicating with the seller will do nothing but lessen the chances of the deal being competed in timely manner or even completed at all. As an investor, it’s refreshing to work with a note-flipper who is professional, organized, reliable and keeps their sellers updated every step of the process. Ultimately, this should help you continue to grow your note business and your relationships with sellers and investors.

Here’s a loan that came across our trade desk that we recently funded. If you’re interested in purchasing it, email me at [email protected]

Performing Note – SFR-O/O

Dallas, TX

BPO $113,000.00

$79,900 sale with $2,000 down

$77,900 / 9.00% / $755.39/month for 351 months

201 made / 150 left

Current UPB $56,610.39

Until next month.

Quote of the Month

“An organization’s ability to learn, and translate that learning in action rapidly, is the ultimate competitive advantage” ~ Jack Welch 1935-2020

This Month’s Poll Question

Do you still have money in the stock market?

Connect With Us

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

Susan DeLaGarza