Zig Zag Investing

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Zig Zag Investing

47:26 · 2019

Episode 447

This episode is a little bit based on a conversation. I got on the phone with one of our investors talking about the zig and zags and how everything changes over the years. That’s what this episode is all about because you have to evolve with the market. You have to evolve with the times and sometimes history repeats itself. Sometimes you’re going and doing one thing, and suddenly you’ve got to switch. I call it zigzag investing. You’ve got to duck and cover a little bit in your real estate investments out there because the market is changing. I’ll think back to when we got started in the note investing game back in 2008, 2009 and 2010. It will run up through the last few years, a lot of especially when I was traveling and teaching workshops across the country, we’d have 50 to 100 people at a workshop. Everybody kept asking, “When is the market going to change? When is the market going to end?”

We would have Joel Markovitz there. We’d have Val Sotir. We’d have Jack Krupey. We’d have Marc Gold. We have others that would show up from time to time like Brett Palumbo. We always kept saying, “We thought it was like a three to five-year market.” Who knew what would happen? It was longer than three to five years. The market has changed a couple of times. I think back to the different things that I have done in the last couple of years. When you see the market increasing in value over time, it affects a lot of people. The first round of people that had to do a lot of zig and zagging were people investing in seconds. They had to zigzag because when you have equity increasing in a property, your value is increasing. It gives you equity now versus being on over encumbered on a second lien position. You can change, but it means the pricing has gone up. There was less of them being created especially on a junior lien, second lien positions and their work on their first liens since the beginning for the most part.

Especially in the last ten years, there’s been a lot less originated than what was done previously back between 2004 and 2010. That’s one of the big zigs with that. People that were doing a lot of short sales had to zigzag because there were less of those assets available. Those that were marketing to the foreclosure lists had to evolve and change things because there were less foreclosures. You look at some of the different counties, especially here in Texas. I was talking to somebody here about Travis. I can remember when there are 500 plus foreclosures each month a year and has down to less than twenty. That’s what you see out there. You see fewer results from the things you’ve been doing or you see a lot of people playing in your space, you either got a zig or zag.

If you keep doing the same thing, you’re going to have difficult times. I talked to other investors out there. I’m like, “I bought from Candor. I bought was from Granite Loan Solutions.” If those were your only sources when everybody else found them, flocked to them, started buying from them and you’re getting outbid, or you were complaining about pricing being too expensive, you had to zig. You’ve got to zag. When people complain, “There’s Scott Carson and he’s teaching too many people, prices are too high,” you’ve got to zig. If you’re going to sit there and be stubborn and not market to move or to go find assets in other areas, you are just going to get run over by everything. A lot of us, real estate investors, are cows. We’re g


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