Mastering Your Note Buying Buy Box

Jan 14, 2025

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Master Your Buy Box: The Note Guy's Guide to Note Investing Success

Happy Money Mondays, everyone! Scott Carson, The Note Guy, is back with another insightful episode, this time focusing on a crucial aspect of successful note investing: defining your buy box. Think of your buy box as your ideal note profile—the criteria that determine whether a note is worth your time and money. No more chasing every shiny object that comes your way!

Scott's approach is all about strategic focus and streamlined efficiency. He’s seen it all: the rookie mistakes, the near misses, the occasional big wins—and he's ready to share his hard-earned wisdom with you. He emphasizes that a clearly defined buy box keeps you focused on profitable deals, saves you time and energy, and boosts your overall success.

Key Elements of a Profitable Buy Box:

Active vs. Passive: Are you an active investor who enjoys hands-on deal-making, or are you a passive investor who prefers low-maintenance, high-yield investments? Your buy box must align with your chosen level of involvement.
ROI Targets: What's your desired rate of return? This depends on factors such as whether you're using your own funds or OPM (other people's money), the risk tolerance for your investment, and the timeframe for your investment. Scott suggests higher ROI targets for active strategies and lower targets for passive ones.
Geographic Focus: Will you focus on local deals or cast a wider net? Consider factors such as your familiarity with different markets, transportation costs, and the local laws and regulations governing foreclosures. Scott cautions against getting "spread too thin," emphasizing the importance of mastering your local market before expanding.
Asset Preferences: Do you prefer residential or commercial properties? What's your preferred price point? Scott suggests prioritizing occupied properties (to minimize rehab costs and potential headaches) and avoiding unique or overly complex assets.
Legal Considerations: Are you comfortable navigating judicial or non-judicial foreclosure processes? Judicial foreclosures can be lengthier and more complex, so consider your tolerance for this.

Humor and Relatable Moments:

Scott sprinkles his expertise with plenty of humor and relatable anecdotes, drawing on his extensive experience in the note investing world. He pokes fun at the "joker brokers" who claim to buy "everything," highlighting the importance of clearly defining your criteria for success. He also shares some cautionary tales about the pitfalls of buying vacant properties or chasing after low-yield, short-term deals.

He emphasizes the importance of avoiding "shiny object syndrome," which can lead to making emotional decisions and wasting valuable time and resources. He also cautions against unrealistic expectations and the need to balance active and passive strategies.

Actionable Steps to Creating Your Buy Box:

Self-Assessment: Analyze your investing style, experience level, financial resources, and risk tolerance.
Market Research: Gather information on local market conditions, property values, and foreclosure laws.
Define Your Criteria: Based on the previous two steps, create a detailed profile of your ideal note.
Test and Refine: Implement your buy box and track your results. Make adjustments as needed, focusing on what works and discarding what doesn't.

Building a well-defined buy box is the foundation for successful note investing. By sticking to your criteria, you'll save time, minimize risk, and maximize your potential for profitability. Listen to Scott's podcast for more in-depth insights!

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