Note Business Tip of the Month
April 2009
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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....
You will never buy a note from someone that doesn't need the money.
*Quote of the Month:
"Associate yourself with
people of good quality if you esteem your own
reputation; for 'tis better to be alone than in bad company."
- George Washington
*Question of the Month:
Q - With the changes in the market recently, what are the most important parameters of a perfect note to broker, and how do they relate to each other (the variables)?
- T. Boyer
A
- Here's the way I see it right now in order of importance:
1) Down payment (really nothing less than 5% down but of course we prefer more)
2) Payor credit (600+ credit score only, very tough to sell a note with less)
3) Terms (we are seeing way to many interest only for short term notes, you know
4% interest only with a balloon in 12 months, where are these people going to
refinance in a year?)
4) Property type - collateral (very tough to sell a raw land note right now,
possible but tough)
5) Geography (Michigan, Ohio and Indiana very tough to get a note sold there,
possible but tough)
6) Full or partial (most deals we are closing now are partial purchases)
7) ITV (the reason for more partials being done, we don't want to be in a
property too much because the value of the property keeps going down, so we
lessen the risk by keeping ITV lower than usual for now)
8) Seasoning and Pay History (always a big factor)
9) Note Size ( tough to sell anything over $300,000 right now (investors don't
want to lay out a half a million for a note right now, except for the companies
who are only buying $1 million plus notes)
10) Yield (lots of prices we are seeing are based on ITV rather than a specific
yield requirement)
11) Cash required to purchase note
Jeff's Speaking and Instructing Schedule
Location Date Event (click for info & registration)
Glendale, AZ April 6-10, 2009 Nouveau Riche
Agoura Hills, CA June TBD, 2009 Secrets of Paper
Glendale, AZ July 13-17, 2009 Nouveau Riche
Glendale, AZ October 5-9, 2009 Nouveau Riche
Glendale, AZ December 14-18, 2009 Nouveau Riche
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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