Armstrong Capital Newsletter

September 2007

Jeffrey R. Armstrong

Editor of the NoteWorthy Newsletter

President of Armstrong Capital

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Hello again! J  It’s over 100 degree's here today but supposedly we are approaching the end of summer.  I hope your businesses are ramping up for the fall. Over the last several months we have been adding details to the flow of a private mortgage note transaction.  We’ve discussed several different ways some consultants and note brokers subtract their flat fee after they have obtained the prices and we touched on how to present your adjusted offers to the sellers in a positive light. Last month we looked at two of the most common options that are currently used by our funding sources, the Full Purchase Option as well as the Front End Partial Option.  This month we will look at two more options we can present to our note holders, the Full Purchase – Split Funding and the Partial Purchase – Half of Every Payment.

Full Purchase – Split Funding and

Partial Purchase – Half of Every Payment

Again, our Note Example:

•  Single Family Home – owner occupied

• $95,000 Sales Price

• $90,000 Face Value Note

• 10% Interest Rate

• 15 Year Term (180 Payments)

• $967.14 Monthly Payments

• 24 payments have been made. 156 Payments remaining. The current

• Balance owed is $84.257.15.

• Loan To Value = $84,257/$95,000 = 89%

 Possible options from a funding source:

3 – Full Purchase – Split Funding. Sell one half of the note (the next 78 payments) now and the other half of the note (the remaining 78 payments) after the first 78 payments are paid.

NOTE HOLDER GETS:              $48,010.47       CASH NOW

                                                   $48.010.47       Cash in 78 months

                                                   $96,020.94       Total Cash to Note Holder

 4 – Partial Purchase – One half of each monthly payment. Sell one half of each monthly payment and continue to receive the other half.

 NOTE HOLDER GETS:                      $33,114.72       CASH NOW

                                                            $483.57   Per Month for 156 Months

 Explanation of Options

Full Purchase - Split Funding

In the split-funded purchase, the note holder is selling all of the payments but is only selling part of the payments now and part of the payments in the future. This type of sale is really a hybrid between a full sale and a partial sale.

In the example, one half of the note (the next 78 payments) is sold now and the other half of the note (the last 78 payments) is sold after the first 78 payments are paid. $48,010.47 is paid in cash now and an equal amount in 6 ½ years.

This is only one variation of a split-funded sale. The note could be split into three, four or more equal or unequal parts and you can Split balloon payments too!

Partial Purchase - One Half Of Each Monthly Payment

In this type of a sale, the note holder sells on half of each monthly payment and continues to receive the other half. This is a particularly attractive way to sell a note if you need some cash now but also want to keep part of the monthly cash flow. The example shows that one half of each of the 156 remaining payments can be sold for $33,114.72 and $483.57 keeps coming in every month.

Again, this is only one variation of this type of sale. Many different variations are available to suit your needs as a note holder.  Many other options are available. Options can be designed specifically for the cash needs of the Note Holder.

So these are just two more of the many options that we can give to note holders. Once you have these in your arsenal and are able to find the note holders need it is easy to present yourself and your services to note holders in a positive light. 

Next month we need to talk a little bit about the basics of a Seller Carryback note and the documents that we are actually purchasing when we buy a real estate secured note.  I have had quite a few consultants and brokers contact me with scenarios, documents and agreement that we just can’t buy and in my opinion you shouldn’t spin your wheels on.

Keep on marketing, it’s going to work!  J

Jeff Armstrong

Final Reminder!

I again would like to extend and invitation to all of my Armstrong Capital Email Newsletter subscribers to join me at the 21st Annual NoteWorthy Convention in Las Vegas October 4th-7th, 2007. With the recent changes in the real estate note industry and a major funding source closing its doors (Note One on July 31st) you need to be there if you are in the real estate note niche.

Click here for more info on the NoteWorthy Convention.

The room block at the Tuscany Hotel Expires on August 31, 2007 (they may extend it till the day after Labor Day), so book your rooms early to get the lowest rate possible!

Some of the speakers already scheduled for the convention include Ed Lisogar of National Capital Corp, Lonnie Scruggs, Barbara Graff of Graff Liquidation, Rick Callihan of BayView First Funding, David Butler of Hotspur Investment Group, Marty Granoff of Granoff Enterprises, Joanne Allen of Unifunds, Eddie Speed of Colonial Funding Group LLC, Joel Cassway of Financial Seminars Inc., Scott Harenberg, Jeff Armstrong of Armstrong Capital, Jon Espersen of Expert Processing Services, Steve Drucker, Angela Whiteway of A-1 Note, Henry Dvorken of Courtman Mortgage Companies, Michael Morrongiello of Sunvest International, Inc., Tom Henderson of H & P Capital Investments LLC, Bill Tan, Kendal Blunck, and more TBA!

Click here for the Current 2007 Convention Agenda PDF

Click here for the Thursday Pre-Convention Workshops

Sign up immediately.  (Get the early special with this pdf download.) Or call 800-487-1864 for the form.  Don’t miss out on the 21st NoteWorthy Subscriber’s Convention. Early Registration good through June 30, 2007. For more information call NoteWorthy at (800) 487-1864
For discounted room rates, call the Tuscany Casino and Hotel at 1-877-887-2261 before August 31st!

Make sure you check out the Pre-Convention Workshops on Thursday October 4th as well.  I will be doing a new One-Day Beginner Class.  I hope to see you there! :)

Jeff is the Editor of the Noteworthy Newsletter, a printed monthly publication.  If you are new or experienced in the Cash Flow Industry I encourage you to check out and subscribe to the Noteworthy Newsletter, an indispensable newsletter for Note Brokers, Note Buyers and Real Estate Investors. Just click here and then click on "Newsletters" at the top of the page. This month you can subscribe for only $55 per year! 

***Free gifts when you subscribe***

Jeff's Speaking and Instructing Schedule

         Location                Date                          Event  (click for info & registration)       

• Las Vegas, NV         October 4-7, 2007                  NoteWorthy Convention

• San Francisco, CA    May 22-25, 2008                   Growing Wealth 2008 Convention

For more great strategies, don't forget to check out Jeff's informative cash flow books for Scripts, Tips, Marketing ideas and more!

For a complete description of all Jeff's books just click HERE today!

Purchase the "Consultant Combo" which includes "Scripts and Tips", "Every Single Profitable Note Marketing Idea In The World (almost)" and Jeff's newest release "Personal Cash Flow Prosperity"!  That's all 3 cash flow books today for only $135.00!

Includes FREE Glossary of Private Mortgage Note Terms too!

Personal Cash Flow Prosperity With Tail Ends: How to Keep a Piece of the action	Every Single Profitable Note Marketing Idea In The World* (Almost)	Scripts & Tips: A Handbook for the Serious Note Broker

All Books Now Available as E-Books, click here for E-Books!

Jeff Armstrong is the Editor of the NoteWorthy Newsletter, www.noteworthyusa.com and President of Armstrong Capital. He is a member of the Million-Dollar Club, a Master Broker, visiting instructor for the American Cash Flow Institute, and the author of three best selling books. He can be reached by calling 800-845-3055, faxing 818-865-2323, e-mail jeff@armstrongcapital.com, or visit www.armstrongcapital.com and click on "Note Brokers" for questions and information about his Master Broker services, Mentorship program how Armstrong Capital can help you succeed.

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