Prospecting For Distressed Banks with Brecht Palombo

Episode 353 http://www.WeCloseNotes.com Scott: We are honored to have my buddy on here. It’s been a while since we’ve had him on a podcast or a webinar. It’s been too long but we’re excited to have the man, the myth,…

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Episode 353
http://www.WeCloseNotes.com

Scott: We are honored to have my buddy on here. It’s been a while since we’ve had him on a podcast or a webinar. It’s been too long but we’re excited to have the man, the myth, the Distressed Pro legend, Mr. Brecht Palombo, join us.

Brecht: Thanks for having me, Scott. I appreciate it. I’m looking forward to having that chat on here without all of the pressure. Usually when we’re talking, I’ve got something I’ve got to present over an hour and crammed it in there. It’s nice to come in here and have fun.

Scott: I’ve been on your podcast before and vice versa here. We’ve exchanged emails and I know you’re as busy as I am working on things. It’s finally nice to get connected and be able to share what’s going on. There are a lot of changes going on the market out there. Why don’t you share a little bit of who you are if in case they don’t know you? The reason why they need to know you if they’re in the note business.

Brecht: My name’s Brecht Palombo. I’m the Founder of DistressedPro.com. I had my nine-year anniversary. I opened the doors on that August 30th in 2009, then we had our first customer in October. Mark Ostroff was his name. I sold the thing from the front, the real estate investor and went in the back and took a check for $80 for a subscription to service that now has developed. We’re now four versions later. At that time, we were just doing REO and note reports on banks. Now, we have arguably the largest database of bankers and special asset managers that there is. We have every bank and every credit union. We’ve got 98% coverage on decision makers. I have a full-time staff dedicated to finding contacts and decision makers and then we pair that info with a non-performing note and REO sale indicators for every bank. That’s DistressedPro.com. The software is called Bank Prospector. We have some training around that for folks who haven’t done that type of work before. It’s been a lot of fun. We’ve grown a lot. We’re now serving a lot of people and that’s pretty exciting.

I should say probably how I got started with that. I started in real estate in 2000, 2001 right after I got shot out of the dot-com bubble in 2001. I said, “I can sell things.” I want unlimited product. I don’t want to go out there and be like beholden to some dot-com who doesn’t have a product and vaporware. I won’t want to do that again. What can I sell where it’s unlimited product? The answer is real estate. That came up pretty quick. I started with that and did really well. Around late 2006, I started seeing these weird deals going on. Everybody with a hammer and a van was a developer. You could go out and you get 100% financing. It didn’t matter. I had this deal where there are competitive bids from two guys who basically had hammers and vans and they were going to flip an old folk’s home into condos and both of them had zero down financing. There are a million too that do the whole thing. Both of them were doing this with no money.

I was like, “Something’s happening here. We might be getting there.” I got an auctioneer’s license and I said, “Here’s what I’m going to do. As this thing goes sideways, I’m going to be prepared. I’m going to go work for the folks who are in control.” When you’re in a crash like that and you were talking about collateral and housing and property, the folks in control and the folks who own the debt, that’s the banks and that’s where I wanted to be. I did that and I had a number of successful years there. I sold assets for banks, hundreds of them mostly commercial, some residential through 2012. Then this business took off enough that it didn’t need to do that anymore. That’s how I got here on your show.

Scott: You missed one part there. You’ve helped a lot of note investors and real estate investors, helped to focus in on opportunities in the market and then take away a lot of the hunting aspect that they know where to find. Your stuff is amazing. The way you target it, the way you teach how to identify opportunities. I’ll give you an example. We’ve had Joe Bayarena on here who is a client of yours as well, along with Jamie Kubiak and Adam Adams. They used Distressed Pro to reach out to a local San Antonio Bank. He bought a portfolio. Adam Adams helped them get funded and turning it out to be a phenomenal deal. We’ve used it on a regular basis to track down banks and asset managers too. Everybody is always curious about where the product is and what’s going on the market. We talked beforehand. You’ve got some things that you’ve been looking at and seeing where the markets at and commercial being asked for a little bit more so. Why don’t you look in your crystal ball and tell us what to expect?

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