All Forum Posts by: Scott Arpan

@Linda Willis I just sent you a PM. You should receive notification in you email inbox with a link to open the PM. 

@Linda Willis  It sounds like you are finding seller financed notes for a company who sold you a little training then sold you an expensive mailing list to find notes exclusively for that company. If so, you are missing a major part of our little world.

I have been involved with mailing and seller finance lists for 20 years. If you want to PM me with your brochure I will critic it for you. I could send you two very effective letters used by subprime lenders to by seller paper before those companies imploded. I can also point you to the real end buyers of these notes and the best list sources for seller carried notes. 

I created the list for Tracy based on the records I pull for my mailing list of seller financed note holders. I plan to release a new comparison this winter after a complete year of data is accumulated post DF.

I use two methods use to separate the "mom and pop" note sellers from the "professionals" creating paper. If the same legal entity i.e. "SWE LLC" was creating notes multiple notes within a year, they, and all their notes counted as a professional note creator.

Other professional paper producers close using a different legal entity for each or many of their transactions. is "Scott Witzig LLC" or "S Witzig" I can usually identify them since they use the same mailing address.

I have not done any analysis for 2014 but seeing the raw data come in, my feeling is many of the companies who were producing large numbers of notes annually have left the market or hidden their activities so they can not be easily identified. There are a few large producers such a one in San Antonio which was the subject of a different thread who brought in a RMLS to create their loans. Other former large producers have only created one note so far in 2014.

My gut feeling is the total number of seller financed notes (1st position, over $30K loan balance) is flat year over year. However, the number of professional loans created will have dropped fairly significantly as the mom and pop or small time land lord created notes increased just enough to fill the void. 

Stay tuned for the actual results in mid to late January.

Feel free to ask any question about the counts. I will answer them as quickly as I am able.

Scott Arpan

Since Charter operates in my space, seller financed notes, I run into Charter students every now and then.

The crux of their program is to teach you to find notes for them. My impression is their students have a decent beginner level understanding of how to market and ask general questions of potential note sellers. They know enough to find notes and submit a basic package to Charter.

There are programs like Russ Dalby’s American Note Network mentioned above by Jay were proven fraudulent. The new breed of seller financed note buying trainers will teach you enough to find notes for them. They can earn far more from the note transaction then the training. Money you can put in your own pocket if you know where to go with a deal.

I can’t say if the cost for their training is better and more organized than reading free information available to you. If the price low, it could shorten the learning curve. There are plenty of good books about note investing to explain the real estate and financial side of the business. There is not much material out there on marketing specifically for seller financed notes. Some of the Yellow Letter information applies and some doesn’t.

Experience and reading through some of the more technical information on finance, real estate and marketing discussed elsewhere on BP is the only way to move from beginner to a level where you can earn a sustainable income.

Erik,

If the property has been listed for $515K and now it is selling for $575K raises all kinds of red flags for note buyers.

Selling unseasoned rehab paper will likely give you a few offers from knowledgeable note investors to purchase 36 to 60 payments assuming the note meets DF requirements and you can prove all of the repairs and improvements were done appropriately.

Rick,

Purchasing a partial should be allowed by any custodian that allows note purchases.

If your custodian is like mine, you describe your investment in terms of the number of payments purchased for the funds you are investing. Your custodian’s customer service reps can tell you specifically how to complete their forms.

Just like when you purchase a whole note, your custodian or servicer will hold the note for you. The note will be endorsed (without recourse) and trust deed will be assigned to your custodian fbo of your IRA, like you were purchasing a whole note. Avoid fractionalizing the note between you and the seller unless you have a securities license.

Once the borrower has made the payments and fulfilled whatever terms you and the seller agreed in your purchase agreement, the note is endorsed and trust deed assigned back to the seller.

Some of the key details in your partial purchase agreement should include:

• How is each payment applied toward the note returning to the seller?
• What happens if the note is paid off early or payments are later than anticipated?
• What happens if the note goes into default? What happens if you foreclose and take the property back? What are your fiduciary responsibilities to the seller? When will seller be notified and what are his rights and options in event of default?
• Seller is never allowed to cure the default on behalf of the borrower. That could lead to your transaction being deemed a loan.

I started my IRA buying $5K to $10K partials since I did not have much cash and more time to service notes this size. Servicing often eats into much of the yield on smaller investments so you will need to take that into consideration.

Let me know if you have any other questions.

Scott

@rene martinez  @brandon sturgill

Two books that comprehensively cover the 55 to 80 year age groups are Marketing to Leading-Edge Baby Boomers by Brent Green and the No BS Guide to Marketing Boomers & Seniors by Dan Kennedy.   Dan Kennedy's No BS series of marketing books in general offer some interesting and unconventional marketing tips.

Another really insightful book for understanding the mindset of older seniors who are making decisions contemplating how to handle assets near the end of their life is How to Say It to Seniors by David Solie. This book is written for children of aging parents to understand aging issues from the parent's point of view. Some of the reading can be dry but gems on creating win-win transactions with this group are spread throughout the book.

Brandon,

There are many good books specifically on marketing to seniors that will give more in depth advice. Here are observations and experiences using direct mail for older prospects.

They must trust you before they will engage with your company. They need to feel they are in an equal relationship. The are cautious about being taken advantage of, particularly by younger, faster talking “sales” people.

They have plenty of time and will use it to find out all they can about you. Use multi page letters to not only tell them how they benefit working with you but build your story and why they can trust you to work for a win/win solution for them. A 3 page letter costs minimally more than a 1 page letter. Some will search for you on the internet.

You will likely need 3 or 4 letters before reaching the tipping point where you will receive a good response rate. Each letter should have the same look and conversational style as you build your “relationship” with them. Change your message to so far as why they would want to sell.

Motivations of older people in general:

• 60s to 70: Retire, downsize, travel, spend time with grandkids/kids, buy new toys
• 70s to 80: Leave a legacy to loved ones, protect their nest egg, maintain health.
• 80s plus: Simply their estate, leave legacy so loved ones will remember them, slow decline in heath, stay out of nursing home or being a burden on family.

I have a couple of sources where you can get the age of your prospect if you want to tailor a message to each age group. Just PM me.

Keep your sentences simple and at a easy reading level. Use large fonts (size 12 or 14) so they can easily read your message. Images of other happy seniors help. Many prefer to be addressed as Mr. or Mrs./Ms. until you have spoken with them and entered their circle of trust.

If you are using a mailing software program it should have a method to mark "flag" certain records and a "find duplicate records" function. These programs are sold at any office supply store and work well for databases under 50,000 names. I think most are $25-$50.

You can flag any record in your list to exclude it from mailing again. When you refresh your list use the find duplicate records to match up any flagged records to records in your new list that you do not want to mail.  

I don't have any specific programs to recommend. I use Access to manage my list but it is overkill for a smaller list.

If you are using Excel or other spreadsheet, create a new field to flag records to exclude from your list and use the help button to find tutorials how to filter out records you don't want to mail. It is not that hard but their tutorials can give you better instructions then I could.

Thank you for your help. The law looks to be pretty one sided in favor of the buyer.