Note Business Tip of the Month 

October 2009

 

For all new subscribers, Welcome! If you have missed any of Armstrong Capital's E-letters just click here to read our Archived Monthly Email Newsletters!

This year we have added a Question of the month to this regularly scheduled "Tip of The Month" e-letter. If you have a question you would like to see answered in this newsletter just email Jeff!

 

*Tip of the Month: 

       Did you know....

           Offering partial purchase options together with a full purchase option separates you from your competition?
         

*Quote of the Month:

         There is a big difference between smart and great. Smart is a degree on the wall, great is something very few people are willing to go after.
 

                                                                                        - Charley Johnson

*Question of the Month:

 

Q - Hi Jeff....  

    With most of the real estate values down across the country, what is the effect of purchasing notes where the fair market value of the property is lower than the balance of the note?
                       Rupert
A - Hello!

        Thanks for the question! When we get an appraisal of a property back and the value of the collateral is lower than the balance of the loan two things can happen 1)it's too much risk and we cancel the transaction or 2) depending upon other factors like the payor's credit, seasoning, amount of cash down payment, etc. we may only offer to purchase a small partial to effectively lower our risk. Good question, hope this helps!
                             Jeff
 

*Calculator Problem of the Month:

 

At the request of many of the subscribers to my monthly email newsletters and tips we will now have a calculator problem every single month for you to solve, using the simplest calculator for the note business the HP 10BII. This month we will calculate out the term of the note when we only know the payment amount on a fully amortized note:

 

Note terms - $75,000 note with monthly payments of $625.00 at 8% interest, fully amortized, no balloon. Verify the beginning term of the note:

 

1) This is what we know

 

    N   = ???

    I/YR = 8

    PV  = -75,000

    PMT = 625.00

    FV  =  0

 

        N     I/YR    PV      PMT    FV

    _?_    8   -75,000   625.00   0

 

When we have four of the five buckets filled in we can always calculate for the fifth empty bucket as follows:

 

2) Enter in the stated payment amount of $625.00 EVEN and solve for "N" the number of payments (push the "N" button):

 

        N    I/YR    PV     PMT    FV

    242.22   8   -75,000  625.00   0

 

You should have gotten...   242.22 months (a little over 20 years)

 

You will see this from time to time when the seller of the property gives the buyer and even payment amount and you will have to verify the term instead of verifying the payment amount of the note.  Did you get it? The fully amortized term for this note is 242.22 months. Great job! More to come next month!

 

*Highlight of the Month:

 

Reminder October Special!!! - As an aide to help you develop your note brokering skills I want to offer to you this month only my complete "Rainbow Package" of books (regularly $175) for the very reduced price of $130!  That's over 25% off of the regularly discounted package price.  But that's not all, in addition, if you are one of the first 10 people to order through this email I will also send you the Secrets of Paper 101 four disk audio set (regularly $99) with over 6.5 hours of straight-forward and honest beginning note business basics for FREE.  It includes the good, the bad and the ugly in addition to the myths of today's note business.  These are must have products in your note business library. Full descriptions of the products are on my website.  I am only offering this for the month of October.  To order your "October Special" package just click here TODAY!

If the link does not work for you, PLEASE email me and I'll send you a Pay Pal Invoice so you can take advantage of the October Special!

Jeff's Speaking and Instructing Schedule

         Location                   Date                        Event  (click for info & registration)       

Contact Jeff today for information about having him Speak or Teach to your group!

Jeff Armstrong is President of Armstrong Capital. He is a member of the Million-Dollar Club, a Master Broker, visiting instructor for the American Cash Flow Institute, instructor for Nouveau Riche and the author of several best selling industry 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 answers, articles and information about his Master Broker services and how Armstrong Capital can help you succeed.

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