Note Course Bonus: Beware Of These "Note Buyers"
Published: Wed, 08/27/08
In this Note Course Bonus, Certified Public Accountant Michele
Robbins, president of Note Funding Resources, exposes some of the
lies of the infomercial gurus and gives you invaluable advice on
how to succeed in the note business.
The 22nd NoteWorthy Convention in Las Vegas is fast approaching.
This is the one time each year where the majority of our industry's
intellectual capital gathers to share ideas, strategies, and
knowledge with other cash flow professionals. Where will you be
October 2nd -5th, 2008? If you're serious about succeeding in the
world of seller-financed notes, there's only one correct answer
to this question. My wife and business partner Alison and I plan
to be there and hope to meet you. See the attached flyer or call
1-800-487-1864.
Cheers,
Bill
W. J. Mencarow
President, The Paper Source, Inc.
www.PaperSourceOnline.com
www.cashflows.org
BURNING BRIDGES
by Michele Robbins, CPA
This is a very small industry.
Some of the big seminar or infomercial gurus would have you
believe that is not true. They lead you to believe that there are
hundreds if not thousands of investors just waiting to buy
your note. This is a big fallacy that could lead you into trouble.
For example, if you really believe there are hundreds of
investors and you go into processing a note with one specific
investor but that investor troubles you for one reason or
another, it would be easy to justify going to another investor - or
ending that relationship altogether. In many cases, you can do this
- but my word of caution is never burn bridges with your investors.
The hard truth of the matter is that there are NOT thousands
of note buyers at your fingertips. While it is true that there
probably are hundreds of note buyers, the fact is that most of
them are private individuals that buy local notes... of which you
will likely encounter very, very few. They do not shop websites
for notes. They do not call people from advertisements. They
have established relationships with those they work with and rarely
will they buy a note outside of their established circles, much
less from a new note broker.
But do not fear. All is not lost. There are other avenues
to sell your notes!
Institutional Investors
I put note buyers into three distinct, separate groups:
First are the institutional investors. They will buy notes
nationwide for their own portfolio, with their own money. They may
securitize and sell them on the open market later, or hold them
for their own portfolio, or occasionally trade them to another
institutional investor at a later point.
These buyers want you to bring them notes. They will pay
you a broker fee or allow you to deduct your fee net of their quote
to you. But you must know who they are. They advertise to attract
you. Many times they call you to introduce themselves to you.
Beware Of These "Buyers"
Why, then doesn't everyone know who these buyers are?
I can answer that question with one simple word: DECEPTION.
The reason many brokers do not know who these buyers are is
because they are constantly being deceived by others in the
industry that use the same tactics to solicit you for your notes.
These 'others' are usually new note brokers that are trying to find
notes, just like you, perhaps. They will call other note brokers
and tell them they are direct note buyers. They advertise also.
They shop notes posted on websites. They do all of the same things
that institutional buyers do. If the new note broker believes them,
then that is just another broker fee being tacked onto the deal,
giving the seller less for their note, the note broker less control
of the deal, and usually a big waste of time for everyone.
How do you overcome this huge obstacle? RESEARCH.
Ask around. Get references. Any institutional buyer should be happy
to give you a reference to another broker that they have
purchased notes from. With a little discussion (if you know which
questions to ask) you should be able to determine if your buyer is
really a buyer, or just another broker looking for an easy
deal. And always consult the PAPER SOURCE REGISTRY OF NOTE
INVESTORS (www.PaperSourceOnline.com/registry.htm).
To be continued...
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