How To Overcome Analysis Paralysis


As a Note Investor, many of us share a common trait when we begin our note investing career. We over analyze every aspect of the business before we acquire our first note. We call this “Analysis Paralysis”.

From my personal experience, it took me six months before I bought my first note. I cannot tell you how many Scott Carson videos I watched online; the number of articles I read from other well-known investors; and the hours I spent scouring Bigger Pockets trying to make sure I was not missing something. This was all in addition to taking a virtual note buying workshop and a four-day online event with 30+ speakers in the industry.

One of the challenges I had was the educational content was extremely valuable and I wanted to continue to learn, but there comes a time when you have reached that pinnacle where you need to transform from a learner to a doer. How does one accomplish this? Here are my 3 tips for overcoming Analysis Paralysis:

1. Keep it Simple - Do not try to overeducate and over think things. Create a plan and a due diligence checklist and follow it.

2. Do not over-educate - You do not need to know advanced techniques like selling partials, hypothecating notes and knowing every state law that exists where you are not going to invest. This business is about learning through experience.

3. Find a mentor - I believe this is extremely important. You will want to network with others in the note industry and find someone who would be willing to provide assistance. They will not hold your hand but many investors will spend 15 minutes on the phone with you to discuss an asset prior to placing a bid to make sure you considered all exit strategies.

If you are still uncomfortable and cannot pull the trigger then you may want to look into a joint venture with a more experienced Note Investor until you are comfortable to acquire a note on your own.

While I am an avid believer that it takes time to get properly educated and your education should come from an experienced investor, looking back the most truthful statement mentioned at a conference I attended was:  

Investing in notes is like golfing. You can watch 1,000 hours of video on how to hit a golf ball, but until you step up to the tee and swing the driver, it is a completely different feeling and you do not truly learn until you play the game.
— Experienced Note Investor

The same logic can be applied to note investing. Let me know your thoughts and other advice you would like to share for those currently experiencing analysis paralysis.

Should Real Estate Investment Strategy Change In Light of New Tax Laws?

In this article by Max Sharkanskythe discussion focuses on how the new tax law may have an impact on real estate investments.  While the rules may be adjusted slightly, for those investors who are small businesses, I do not see this having as major of an impact as it does on the larger commercial investors and REIT's. While the tax changes have its positives and negatives, I agree with Max that:

As always, it is critical to evaluate every aspect of potential real estate investment opportunities when an individual is considering diversifying his or her portfolio with real estate investments – whether they are new or seasoned in the sector.

Rental property investors: here’s where to buy to maximize ROI

There is always a great divide on where to buy investment property. There is the never ending balance of do you invest for cash flow or do you invest for equity. There is no right or wrong answer and each individual investor has specific goals, criteria and priorities in life that determine their decision and form their business plan. In this article by Aly Yale, she provides where the highest yielding rental markets are currently in the US.

Like any investment, this will be subject to change, but these areas would not be a bad place to start getting boots on the ground if you are out of state and start looking into making double digit returns

Negative Equity - Soothsaying For Note Investors

In this research article by Zillow, they profile that underwater homes - homes where the value is less than what they owe has dropped below 10% for the first time since the great recession. While this number is below 10%, there are still over four million homes which are upside down.

As a note investor, we need to review these areas and see if there is inventory. If not, now would still not be a bad time to start building a team in these areas. Why you may ask? It is WHEN, not if we have our next market downturn. When that happens these areas will be hit the hardest. Therefore now would be the time to start putting a team in place (realtor, other investors, rehabbers, attorneys etc). Now as a note investor my goal is to keep the borrower in the property. But there are instances when people are upside down they will want to walk away. Therefore be PROACTIVE, not reactive. Remember the early bird catches the worm.

We would love your feedback on this post, thus leave comments below. Thanks

Solutions To Common Problems In Note Investing

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Check me out on this episode of the Note Closers Podcast

Your note investing horror story happens more often than you think. Problems with vendors, deals and other people in the note investing industry can really affect your quality of life. But even the ugliest of stories can contain valuable nuggets of wisdom to be used for next time. Learn how to pick the most effective solutions for common problems in note investing with Chris Seveney of 7E Investments and Gail Greenberg of Win Win Notes. If you’re a borrower in need of multiple options with the opportunity to stay in the home, then Chris Seveney of 7E Investments is your guy. Located in Washington, DC, Chris specializes in the acquisition of first position nonperforming and performing notes. Over the past two years, his company has acquired over 50 assets and have provided their investors with above average returns. Guest host Gail Greenberg is a social media expert. One of the things that Gail did at Note CAMP was running daily promotions to see who puts out the most creative posts. At the end of it, she won the grand prize of having a year membership for the Note Mastermind and came to a Fast Track training, which she leveraged to kick-start her way into the note industry.

Effective Tips For Note Investors

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Recently we had the opportunity to host the note closers podcast. You can listen here. Just starting out? A lot of folks getting into the note business will go ahead and commit to getting the free online training courses, listening to the podcast. That only gets you so far. It’ll give you a 40,000-foot view of what the note business is about. But when you get down to it, there’s so many moving parts in a note transaction. It can just make a complete left turn on you if you’re not careful, so having that additional safety net is crucial. Learn more tips for note investors with guest hosts Chris Seveney of 7E Investments and Gail Villanueva of Noteworthy Investments.

If you’re a borrower in need of multiple options with the opportunity to stay in the home, then Chris Seveney of 7E Investments is your guy. Located in Washington, DC, Chris specializes in the acquisition of first position nonperforming and performing notes. Over the past two years, his company has acquired over 50 assets and have provided their investors with above average returns. Gail Villanueva has been a licensed real estate agent since ’84; but the market changed. When everybody was zigging towards overbidding on rehabs, Gail decided to zag into notes. How many notes? Noteworthy Investments just closed on their eighth note, going from zero to 17,500 miles an hour. That’s what you need to do achieve orbit.

Motivation When Going At It Alone

In this article by Taylor Gordon there are great insights for those who are going at it alone. As someone who is going at it along and working full time. I have to agree with this article. The biggest challenges I see for those going at it alone is proper planning and timing. Building a business does not occur overnight. Some interesting stats for small businesses:

  • 40 percent of small businesses are profitable, 30 percent break even and 30 percent are continually losing money.
  • Leading causes of small business failure:
    • Incompetence: 46 percent;
    • Unbalanced experience or lack of managerial experience: 30 percent;
    • Catchall category (includes neglect, fraud, and disaster): 13 percent; and
    • Lack of experiences in line of goods or services: 11 percent.
  • A bit more than 50 percent of small businesses fail in the first four years.
  • In fact, of all small businesses started in 2011:
    • 4 percent made it to the second year
    • 3 percent made it to the third year
    • 9 percent made it to the fourth year
    • 3 percent made it to the fifth year

These are some eye opening statistics. Share your thoughts and comments below. 

Home Prices Are Not Sustainable

In this article by Diana Olick, like many others, the run up on home prices will be coming to an end. Like many other analysts, home pricing continues to increase and how long can it last. We have interest rates rising and construction costs rising which are also driving up pricing. From my personal POV, working in the commercial multifamily sector, rental rates are flattening; construction costs increasing and loans more expensive. What this equates to is a potential slow down in multifamily construction. We have had a run up of apartments being built and I see the multifamily sector slowing down. What are your thoughts? Do you think we will continue to see housing remain strong? Leave your comments below.

Facebook Business Page - Do you have FB Manager?

Recently I was watching a mentor show some advanced facebook advertising and the first comment made was "how do you login to facebook business manager?". There were about ten of us on the call and we all asked the same question - what the hell is facebook business manager and how come we do not have that listed under our facebook pull down menu. Low and behold, this not well advertised feature is highly recommended. In this article by Caroline Forsey, she provides step by step instructions on how to setup your facebook business manager page. Check it out and if you have any questions or need assistance setting it up, feel free to hit me up and I will either assist or guide you to the proper person who can resolve your issue.

Thanks for reading.

Key Changes Coming To Single Family Home Investors

In this article by Nathan Brooks, he points out some key changes coming to single family investors particularly related to financing on larger portfolios. The program is brand new o there will be some nuances and the details could possibly change. I am curious the impacts this may have on hard money lenders. I am also curious how this will effect the market as will it make financing be a little "too easy" for those looking to ramp up there business. Let me know your thoughts below.