Notes???

Question

I would like to visit with someone who has experience with finding and selling notes!!!

Joshua Dorkin · Answer

Does anyone want to actually share with the user a bit about finding notes, or are you all here to sell something?  Please try and help out guys.

Thanks,

Frank Adams · Answer

I'm just going to throw this out for general information.

I've been a note holder for about 20 years now, both firsts and seconds, purchased and originated ones. As a result of anyone who's taken a seminar or read a book being able to access my address I get, on average, about 2 postcards and letters a DAY.

In general I have no interest in selling my notes, nor, in my experience, do other note holders! (More about this in a minute though.) However, I have occassionally contacted some of those who've sent me letters and here's what I've found:

1. They are complete newbies, who don't understand the terminology.
2. Even though the course they took told them to buy, and learn to use, a financial calculator, they are not comfortable doing so.
3. While they may understand some of the financial concepts outlined in the course, they don't understand the value of fixed rate instruments.

I once told a "note buyer" that I had a FIRST TD, with a rate of 14%, 2 years seasoning, 8 years to run until it ballooned. He tried to offer me a 40% DISCOUNT on it! Right then I knew he didn't know what he was doing.  While the gurus may tell you that it's possible to earn 40%, in reality it's not often that you will. Here's my reasoning why:

1. People who have the fniancial wherewithal to carry a mortage on the sale of a house, probably have some financial SMARTS. After all, they didn't reach that stage by being stupid, or very young usually. If they carried a mortgage they probably ran it past THEIR attorney and THEIR CPA, before deciding to do it.

In other words, if you think someone is going to sell a house (FMV of $100K) today for $100K, and then turn around and sell the mortgage tomorrow (or even in 6 months) for $75K, you're (almost always) wrong! Before they decide to carry the mortgage they'll ask their CPA what he thinks they'd be able to get for the mortgage in the secondary market.

If they hear anything like that much discount they'll elect to just DISCOUNT the property and get cashed out.

I know some of you will say that "people's life situations change", and that is definitely true. But if you're doing a mail campaign remember this; you're mailing JUNK MAIL to the recipients, unless it arrives on the day they discover they need the money!

Insurance agents and Realtors do a lot of mailings, knowing that the success rate is about ONE TENTH OF ONE PERCENT. However, they know that if they do it often enough, to enough people some of them will arrive in a prospects hands at the time that they're contemplating selling the house, or (in the case of insurance guys) on the day they found out that a friend died unexpectedly, which causes them to call the person who mailed.

Ask yourself how many cards and letters you'll have to mail to hit those few folks.

all cash

Mike Wood · Answer

I have worked with finding and buying notes for a few years now and I am enjoying it.  I have an e-book written on the subject and I would be happy to talk to you about the business.  Send me a message.
-Mike

Marc Faulkner · Answer

KnickKnack101 You are right on the money.  If you are looking for notes to buy for cashflow all you need to do is go to a reputable note broker that has been in business for a while and they will be happy to help you find a good note to buy!  I have been both buying and selling notes since 1999 and would welcome the chance to work with the investors on this board looking to get into the note business as a buyer.

Account Closed · Answer

Just to place in my thoughts lol. You can just go to a Note Broker, just like there is a Broker for commercial properties, residential properties there are also these that handle buying and selling notes as Reps on both sides. I had someone tell me there is no such person but I proved them wrong lol. Have a Awesome DAY  :)

Marc Faulkner · Answer

While I agree with Frank that most note brokers are newbies that have no understanding of how to actually valuate real estate notes.  I disagree that "other noteholders" ,  " have no interest in selling notes".  There are a lot of note holders that took back a seller financed mortgage because they saw that as the quickest or easiest or only way to move the property at the time.  They would have gladly taken all cash if that was an option but, for some reason it wasn't.  
Some of the best ways to find notes are to do courthouse research looking for evidence of seller financing.  I also like to network with attorney's, CPA's, Realtors that understand paper, experienced note brokers and others that are likely to come into contact with note holdrs that are looking to raise capital.  There are a lot of real estate professionals that sell homes using seller financing and regualrly sell of notes to recycle the money to buy more homes to create and sell more notes!  These professionals are by far the best source as they are not just a one time deal if you treat them well they will come back to you again and again!

Stephen James · Answer

I want to buy totalnotesolutions premade newsletter, but there's no answer to jtheir 800 number and they are not answering their email.  Also the links on the site are broken in several places.  Allcash, do you have their contact info or the newsletters.  I want to pay them.  They are not asking a lot, but I don't see any point if they are no longer in business.

Are you sure this marketing is worth it?

Mike Mitchell · Answer

Thanks flipper,
I'll give it a look 8)

Mike Mitchell · Answer

Would anyone be willing to give us an example or two using actual numbers to show the profit potential of buying a note?

Jason F · Answer

Before you do an ounce of "marketing" I would make sure you know the in's and out's pretty well. I would also make sure you are ready to act once you do get some response from who you are marketing to.

It would seem silly to spend a lot of time and money on a marketing campaign to get responses and have no money to buy the notes or not really know how much you should pay for it.  RE professionals will see right through you at your initial meeting with them if you don't know what you are talking about.

Notes???

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