Setting Expectations and Getting Fee Agreements

Hey, and welcome to this. Week’s Q and A. I know it’s Tuesday, but we had a holiday week and so I appreciate you being here.

Let’s dive right into it. All right. 

I’m going through the training, very satisfied with what I’m learning. Do you have any metrics of past students to help a new subscriber, to set their expectations with what is required to see their first deal?

So these aren’t, we don’t ask people to track these things or submit them as you know, so we don’t have those kinds of stats, but what I can tell you. Is that what we ask you to do in the course is to come up with a list of 100, between banks and credit unions, a list of 100 accounts. And then for each of those accounts, you’re going to need usually between two and four contacts, which you should be able to easily get in BankProspector. So once you get through that list, you should start to have some communication, start to see some deals, whether it’s an appraisal or a tape or whatever it is, depending on what kind of deals you’re looking for.

Now, the. Pace at which you get through that is largely up to you, right? Are you going to contact a hundred of them? And so then the two or 400 contacts aggressively over a one-week period, is it going to be over two months? And so that’s really up to you. So there’s two goals that you should set.

And the first goal and probably the most important goal at this stage when you’re just starting out. The most important goal is going to be your activity goal because you won’t have a real good idea of what your results look like on the back of that activity until you’ve done that activity for a little bit.

So what I’d suggest you do is say whatever time you’re going to carve out, you say, I’m going to, maybe it’s going to be 10 a day. Maybe it’s going to be 20 a day, right. A contacts that you’re going to make and then make them, and whether that’s by phone or email or LinkedIn, or however, it’s going to be, make sure you do that activity and you’re recording and you say, okay, did I do this?

What were the results. And if you do that, even just for a little bit, you’re going to start to see patterns about what’s working and what’s not working. And there are a lot of different factors that come into it. If you’re making calls it’s who are you calling? What time of day? What are you saying? How do you sound?

If you’re sending emails, what’s the subject line? What are you saying? Who are you sending to? When are you sending it? And so all of those things will have an impact and that good. We’re going to learn more about that as you progressed. But first, it starts with the activity where you say, okay, this is the volume that I’m going to do.

And I know that if I do this for a hundred accounts, I have a good expectation that I’m going to start seeing some deals coming out of that. And once I start seeing some deals, then you can look back and you can say, okay, well, I see that I had to reach out to 20 of them and then 10 of them got back and I’m making numbers up.

And then 10 of them got back to me and then I had a real conversation with five of them. And then I got, you know, a tape sent over from one. So , that is how this thing is gonna roll out for you. But it starts with the activity goals. I’ve got a link down below to a plan that you should take a look at that I think is going to help with this question.

Read this post about how to execute your plan.

Next question is…

Do you think I can ask the bank management to sign a private representation letter with me so I can represent them in an off-market manner in this way I can send an NDA to potential buyers and ask them to pay me a referral or a finder’s fee. If deals are closed.

The backstory on this one is a small bank located on the east coast. Recently emails me a list of their REO properties, such as condo, small commercial properties and apartment land. The bank did place an ad in their local newspaper that caught my attention, but there’s no listing. They will not pay me any commission and did not want me to represent them.

I cannot list their properties anyway, since they’re out of state, .

I don’t know about a private representation letter, but you may very well have luck with , an agreement, a commission agreement.

And so that would basically say that , if I procure a buyer , who closes  on a property that you have for sale at you you’ll pay X amount. I’m not familiar with private representation letter, but certainly a commission agreement or a fee agreement, depending on how you want to position that and whether or not you have licensing and that kind of thing, but certainly a fee agreement is something that you should consider trying to get signed. If you can’t get an exclusive right to sell, then  a fee agreement is a great, the idea to go after. 

Next thing is…

When narrowing down our banks list, is it best to avoid banks with zero non-accrual loan sales? Does this mean they do not or will not sell these assets?

So, we can tell a lot from the numbers but we can’t tell everything. Okay. So, just because a lender isn’t showing past non-accrual sales doesn’t mean that they weren’t sell something with you and, and it doesn’t mean that they don’t have any on their desk right now.

And so  if all the other things are in place, If this is a lender who has the type of asset. So you’re looking for, they look like they’re healthy enough to sell at a discount. They’ve got some charge offs on there and they’re in an area and they have offices around. I would definitely use power search for this.

Then they have offices in and around the area that you’re, you’re looking at , just because they have no non-accrual sales, that they’re currently posting that doesn’t mean that I wouldn’t contact them. I would still contact them. So I hope that’s helpful.

I love getting your questions and I can’t wait to see what you ask next week.