www.armstrongcapital.com

July 4, 2012

www.secretsofpaper.com

Volume 1          Note-able Newsletter          Issue 27

President's Corner - Tip of the Week - Weekly Quote - Feature Article

Upcoming Events - Subscriber Question - Product Highlight


Can You Help Me? Please...

Click here to take a short survey this month to give me your input on the Note Business.


 
Tip of the Week

        Did you know....

              A note investor's favorite holding period is forever? Never ending passive income is the ultimate goal.


Product Highlight

       In easy to understand language, the many topics that are discussed in the Note Holder's Handbook include the following:

·         How much is your note really worth?

·         Why record keeping is vital to your note's value

·         A simple technique that can avoid tax problems.

·         What to do when the payments are late.

·         What to do if the payments stop and when to foreclose

·         A simple step you can take to verify the safety of your note.

·         How to get top dollar if you sell all or part of your note.

The Note Holder's Handbook also includes a Handy Reference Data area to keep all of the pertinent information regarding the note in one place AND a simple to use Payment Record chart to keep track of the payments received.  This handbook is a must for someone receiving payments on a real estate secured note as well as a fabulous marketing tool for note brokers and investors. good saleable note as well as suggested property sale and note structures.

Click for more info and to order TODAY!

Upcoming Events

 

September 8, 2012

     Santa Clara, CA

     Real Estate Investment

     Expo - Silicon Valley

 

 

Fall 2012

     Chicago, IL

     Secrets of Paper

 

Fall 2012

     San Antonio, TX

     Note Symposium

 

Fall 2012

     Los Angeles, CA

     Secrets of Paper

 

Ask Jeff to come and speak or teach to your group or at your event!

 


Coming Soon

Exclusive

Note-able

Membership

with Videos,

Notes for Sale,

 Training, Tools

and Support!


Quote of the Week

 

"Obstacles are things a person sees when he takes his eyes off his goal."

                                                            - E. Joseph Cossman


President's Corner

       I once saw a handwritten note above a jar for tips: “If you fear change, leave it here.”  Yes, the note industry is changing right before our eyes and it’s nothing we haven’t seen before.  But you need to adapt and adjust your business to the current note market.

       We all fear change. Yet we all want to change. Sometimes, no matter how hard we try, we just can’t seem to make it work.

       One problem is we want change to happen overnight.  We go on extreme diets or change business direction suddenly.  We want to be able to push a button and immediately get from one place in our life to another.  Change is a process, not an immediate outcome – a journey, rather than a destination.  When you plan on making a change recognize you will go through several stages.

       Contemplate. You start thinking about your goals, but they still seem unachievable.

       Reframe. You start saying, “This is going to happen; I can make this work.”

       Plan. You convert desires into specific, realistic actions you can take.

       Commit. You make a real commitment to your goals and plan.

       Try. You begin to make changes, but you’re inconsistent; you fall back into old patterns.

       Now comes the critical, hard, part of the trip.

       Recommit. You remind yourself of your goals, your plan and your belief that you are capable of success.  You start again.

       Make it a habit. You consistently change your behavior.  The most difficult stage of change is when you’ve come partway but haven’t left the old ways entirely behind.  Experts say it takes at least a year for change to become a habit.  So be patient with yourself and others.  Change takes time.

       Remember, Success Demands Action! Keep on marketing, it’s going to work! TWITA!


Feature Article

Not All Deals Close

         Some note brokers may think that just because they found a potential note seller and filled out a worksheet that it is a deal. That is far from reality. It only gets to the deal stage when a note holder says yes and accepts one of your offers. Then you have a transaction. As a Master Buyer for seller financed notes and an experienced note broker and note buyer I have all kinds of stories as to why a transaction might not get to closing.  I have definitely had my share of transactions fall through. In looking over this past year I wanted to share with you a dose of reality and just some of the reasons why a transaction may not get to the closing table even after the note holder accepts your offer... Read More...


Question of the Week

Q - Hi Jeff,

          I am doing a deal on 18 houses that are free and clear. I want to finance the deal by doing private notes on each property. What qualifications (terms, seasoning, etc.) will result in the smallest discount off the face value? We will be financing these properties with notes at face value of no more than 80% of current Fair Market Value, 9% interest, 30 year amortization, 7 year balloon. 
                                                          - Thomas S.

A - Hi Tom!
          Thanks for the email! We need to discuss several things to completely address your question. First, congratulations on being knowledgeable enough to realize seller financing is a great way to sell your properties and for your goal of providing quality, affordable homes for 100,000 families by the year 2020. :)
          To structure a "good" note on a residential owner-occupied Single Family Home we currently suggest the following terms:

10% CASH down payment or more
9% interest rate
Amortized for 30 years
Balloon in 7 years
Buyer/Payor credit score of 650+

          If a note is structured in that way that will get you top dollar in today's market (right now that's about 80 cents on the dollar). If anything is different like a lower credit score, less down payment, lower interest rate, longer or shorter term or non-owner occupied the discount will be larger and the note will be worth less.
          The other issue I need to address with you is seasoning. With a regular mom and pop that lived in their home for years and years and years we will consider buying their note with only 1 month of seasoning. With a rehabber, fix-n-flipper, real estate investor note where the seller of the property is buying properties for cheap, fixing them up and then selling them a few months later we will usually require at least 6 months if not 12 months or more of seasoning (depending upon the area) before we will consider buying the notes.
          The reason for the seasoning requirement is, in short, that a lot of note buyers that purchased rehabber paper in the past discovered that approximately 7 out of 10 rehabber type notes that they purchased would go into default within the first 12 months of the note. So with us making the requirement for 12 months of seasoning we figure that the ones that were most likely going to default have already done so and the remaining notes will be the better quality notes for us to purchase.

          One last note is that Fair Market Value should be the value the property is sold for and the value we get back when we order our own appraisal.  Note holders should understand that the number one reason that note buyers purchase notes is to receive the monthly cash flow and NOT to get the property.  Hope this helps!  TWITA! ~ Jeff


So you want to invest in or broker notes?

Been trying for awhile with limited or no results?

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