Did you know....

              Successful note professionals like to read things about and from other successful note professionals.

Product Highlight

       Redesigned and completely updated the Note Business Complete Starter Package includes:

* Secrets of Paper 101 audio set (Beginner's Introduction and Overview of the Discounted Note Business) * Scripts and Tips (with industry documents disc)

* Every Single Profitable Note Marketing Idea In The World (almost) (with the Note Holders Handbook on disc) * The Original Note Holders Handbook (to customize and use as your own) * Personal Cash Flow Prosperity (with 2 audio CD's) * Calculator Secrets (with over 60 transactions to learn and practice on) * FREE Glossary of Private Mortgage Note Terms! * FREE 14 Steps to getting your note business started!

Click for more info and to order TODAY!

Coming Soon

Exclusive

Note-able

Membership

with Videos,

Notes for Sale,

Training,

Tools and

Support!

President's Corner

       October is here and the worksheets are flowing in!  This week I want to say something about getting quotes.  I personally don’t like to use the word quote because to me the word quote sounds like it is negotiable.  Instead, I use the word price.  So I am submitting my completed, legible worksheet to an investor for pricing options.

       Notice I used the plural, OPTIONS.  Lots of consultants and brokers don’t ask the investors for anything other than a full purchase option.  In the bottom left or right hand corner of most worksheets there are spaces for options and other prices.  USE THEM.  (More on this subject in a future newsletter).

When I or any other note investor evaluates a worksheet and determines their price, the numbers they come up with are non-negotiable.  If they say they will buy an $80,000 note for $75,000, they will… subject to their due diligence.  The price they write down on your worksheet is their best price assuming everything checks out ok.  The price they write down assumes three things (is subject to): 1) Decent credit of the payor/buyer, 2) An appraisal of the subject property to appraise for at least what it was sold for, and 3) Clean and clear title. 

I hope this helps you understand a little better on what the numbers mean when a note investor writes down some options on your worksheet.  Remember, Success Demands Action! Keep on marketing, it’s going to work! TWITA!

Question of the Week

Q - Hi Jeff,

          Please help me with this question about rate of return.  The note holder wants to know your rate-of-return (expressed in a percentage) if they accept your offer - that is, what your company would earn based on the $80,000 purchase of a $103,000 note. As I mentioned, the note rate is 6% on a 30 year amortization, and we would only be interested in the sale of the entire note. This was from the quote request for Boise ID note.  I'm not sure how to calculate his request. Please help me with this.
                                           - Barbara

A - Hello Barbara!
          It is my experience when a note holder asks about our return or how much we are going to make it is very questionable that they will ever do a deal. The fact is that it doesn't matter what our return is or how much we will make. What matters is how bad do they NEED the money. When they ask questions like this it shows their need isn't that concrete yet. There is still hope and they may still sell their note to you but I just wanted to tell you this for your own information.
          Now for what to tell the note holder - The actual calculated return after expenses, costs and overhead for the investor is initially about 12% for the investor on this example. And that is IFF (if and only if) the note goes the full term with no delinquencies, defaults, collection costs or foreclosures. If any of those things happen the investor will be lucky to at least get their money back and have NO return on their money.
          What the note holder has to realize as well is that on the initial price we gave he is receiving about 80 cents on the dollar which is top dollar these days. But that may not be true much longer, with the disastrous stock market the last couple weeks and the economy still in question, even 80 cents on the dollar may be gone soon. In addition, if the buyers credit is poor or the value of the collateral is less than the sales price the price will go down even more, IFF we will even consider it anymore.   What you need to try to do is to set the note holders expectations on the first phone call and really try to find their underlying need, if any, and the story behind the note.  Well, that's it for now.

          Hope this helps!  TWITA! ~ Jeff

So you want to invest in or broker notes?

Been trying for awhile with limited or no results?

Check out the most talked about, current and innovative educational tools, training, mentoring, assistance and support services in the industry! Updated for 2012, click here to start growing your note business today!

If you have missed any of our Newsletters click here for our

Archived Monthly Newsletters!

If you have a note business question you would like to see answered in this newsletter just email Jeff!

Get started in the Note Business with the Complete Note Business Starter Package - the more in depth Secrets of Paper 201 Home Study Course

Your Launching Pad to Success in the Note Business - OR the all-inclusive Note Business ALL-IN Package (all include consultation's with Jeff)!