Did you know....

          You should pay close attention to the "gut feelings" you get.  It's your intuition trying to tell you something.

Product Highlight

       Redesigned and completely updated the books that started it all, the Original Combo includes:

       * Scripts and Tips - In this handbook Jeff shares with you how he runs his business including finding notes, gathering information and negotiating. Jeff has also included are many valuable scripts, tips and forms that will put you on the fast track to success as a Real Estate Note Broker!  (includes industry documents disc)

       * Every Single Profitable Note Marketing Idea In The World (almost) - Yes, there are powerful techniques for finding a steady flow of profitable mortgage notes. You'll find dozens of practical tools that you can start using right away to turbo charge your note business.  You must have a marketing plan in place that will generate a steady flow of mortgages for your consideration. A powerful marketing plan! (includes the customizable Note Holders Handbook on disc)

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President's Corner

       This week I would like to address the single most common question, issue or concern that note brokers and note holders ask me about almost daily. Here is a sampling of the many different ways that it comes up:

   - I don't have the payor's Social Security Number (SS#).

   - I'm not allowed to have the buyer's SS#.

   - The buyers won't give me their SS#.

- The Title Company, Escrow Company, Realtor, RE Attorney, etc won't give it to me.

- With all of the identity theft out there am I (the note holder) allowed to check the payor's credit?

- Are you (the note buyer/investor) allowed to look at their credit?

- Etc, etc., etc.

        Now, I am not an attorney or accountant or representative from the credit bureaus but from my experience, knowledge, professional associations and personal inquiry's into the subject I can tell you that the Note Holder (seller of the note) and Note Buyer (investor) do have the right to check the buyers/payors credit under the Fair Credit Reporting Act.  The Note Holder has the right to check their buyer/payors credit pursuant to the Fair Credit Reporting Act, Section 604 3a.  The Investor has the right to check the buyer/payors credit pursuant to the Fair Credit Reporting Act, Section 604 3e.

        When pricing options are given to a note broker they are given based upon the best case scenario. Meaning that the investor is assuming that the credit of the buyer/payor is decent and acceptable; that the property will appraise for at least what it was sold for; and that the title to the property is clean and clear.

        Once a Note Holder accepts a pricing option he/she must be ready, willing and able to provide to the Investor the buyer/payors SS# (among other things) to pull credit and firm up the price.  This is non-negotiable, especially in today's note market.  In the past there was a way to get the buyer/payors credit with just a complete name, current address and previous address but not any longer.

        Should the Note Holder be unwilling or unable to provide the SS# some investors will simply pass on the transaction while other investors may give you a price based on "no credit" which usually drastically reduces the purchase price of the note.

        Now that you are armed with this information go out and make it a great month!  Remember, Success Demands Action! Keep on marketing, it’s going to work! TWITA!

Question of the Week

Q - Hi Jeff,

            Hey, a colleague of mine is purchasing and rehabbing properties with his own cash, and I've been trying to convince him that he's working too hard for his money, and that he should consider the note business. That said I'm looking to potentially joint venture with him by purchasing discounted properties (outright) and disposing of them with seller financing. However, I'm still trying to figure out the best and most lucrative way of going about implementing this strategy. At this preliminary stage, I'm thinking that a typical transaction would look something like this: 
 

Property Value: $300K 
Purchase Price: $240K 
Sale Price: $300K 
Down Payment: $60K 
Seller Note: $240K at 9%, amortized of 30 years, due in 7 years 
Sell Note: $216K 

*Assumptions*:  1. Investor can acquire the subject property at a 20% discount (minimum) 2. The note is perfectly underwritten to maximize its value, and sells at 90% of the face value.  First and foremost, do you think these assumptions are reasonable? Secondly, do you see a better way of doing this? In the ideal scenario, my investor gets back the sum total of his initial investment (i.e. his "basis" in the deal), walks away with a chunk of money, and small second, with residual monthly income. If I can achieve anything even close to that, I'll immediately have his attention, and I think we start doing some deals reasonably soon. I'd love to hear your thoughts.  All the best!

                                                              ~ Anthony W. 

A – Hi Anthony! 
          Not really a quick question but here it goes.  Your terms are right but there are a few more pieces of info you need. 
          #1 - the absolute best price for a note these days is about 80 cents on the dollar so the absolute best note of $240K would only get you $192K MAX. 
          #2 - Rehabber notes usually need to be seasoned for AT LEAST 12 months before myself and my investors will consider them for purchase. Statistics show that up to 80% of rehabber type notes default in the first 12 months so that is why we have that requirement for rehabber notes. 
          #3 - You could do a down payment plus a second and sell the first but it will still only be a MAX of 80 cents on the dollar if everything else is AAA AND after 12 months of seasoning for a rehabber note. 
Hope this helps!  TWITA! ~ Jeff

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