Hello! J We are well into the year and I hope these monthly emails have been helping your cash flow business. Here in Southern California, the bass are biting and the transactions are flowing.

Over the last seven months, we started to look at the different property types that notes are secured by. We also looked at the different situations and the additional information that funding sources would like to know to initially give you accurate pricing. We have covered Residential properties, Mobile Homes with land, Condominiums, Commercial properties, land, properties sold with no down payment and second position mortgages. This month we will cover some additional questions to ask the note holder when the note is secured by a property with hazardous waste potential.

Situations & Information Needed – Part 8

Properties with Hazardous Waste Potential

As you are talking to the note holder you will come across many types of properties and situations. A gas station, salvage yard, marina, auto body repair shop and an industrial warehouse are all examples of properties with hazardous waste potential. Hazardous waste could be gasoline, oil or any other chemicals that could potentially leak into the ground. If there is a spill or an accident that causes these elements to seep into the underlying land there could be a huge clean-up bill for the owner of the property or for the note holder when the owner of the property defaults on the note. The clean up could be very expensive and cost hundreds of thousands of dollars or more. Following are some good questions to ask and answers to get in addition to the information on your mortgage worksheet when the note holder carried back a note secured by a property with hazardous waste potential.

Properties with Hazardous Waste Potential

- Too many negatives. Need some positives to help outweigh the negatives.

- What is the experience of the current buyers in this type of business?

- How long has the property been operating at its present use?

- Describe possible hazards. (Asbestos, toxins, gas tanks, oil, etc.)

- Age, size and condition of the property?

- Alternative uses of the property?

- Present zoning of the property?

- Describe the properties on each side of the subject and properties across the street.

- When the property was sold was a complete Phase I and Phase II environmental inspection and report prepared?

- You might also ask things like how old are the gas tanks? How old is the oil receptacle tank? When was the last EPA inspection done?

As I have been reminding you, what you are trying to do while completing the worksheet is to get the story behind the note. The more information we get up front the more likely the prices we get from the funding sources will not be cut later on down the road during the due diligence process. You will save yourself and the funding source lots of time and wasted effort by just asking a few pointed questions.

Since we now have learned to get the story behind the note over the past several months, next month we can start talking about what we do next, getting prices from the funding sources.

Hope this helps! Keep on marketing, it’s going to work!

Happy Spring! J

Jeff

Armstrong Capital
800-845-3055
fax 818-865-2323
PO BOX 6517
Westlake Village, CA 91359
visit our website at www.armstrongcapital.com

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Jeff Armstrong is president of Armstrong Capital and Editor of the NoteWorthy Newsletter, www.noteworthyusa.com. 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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