Is For Sale By Owner The Best Place to Find Notes?
May 9, 2012 by Fred Rewey · 2 Comments
One of the most common items new note brokers run into is they start seeing the “For Sale By Owner” or FSBO signs pop up around them.
Granted, those signs have always been popping up, but now that you are in the note business you begin to see some additional opportunities.
But are they good opportunities?
The existence of a “For Sale By Owner” sign does not necessarily equal a potential cash flow note deal.
If anything, it may be a distraction.
Let me explain.
1. “For Sale By Owner” does not mean the seller is willing to owner finance. It just means that they are attempting to sell the house without using the services of a Realtor. It could be they are trying to make a few extra bucks. If that is the case, they will most likely not be interested in carrying back a note (and then selling that note at a discount).
2. “For Sale By Owner” does not mean they have the ability to carry back a note. In other words, there is no guarantee the seller has enough equity to make for a viable note sale. It is more likely they have a large underlying lien (bank loan) that they need to pay off. Could be another reason they are trying to cut out a Real Estate Agent and keep the fee.
3. Sometimes the reason someone is selling “By Owner” is that they did not believe the real value their home was worth. A real estate professional may have told them what the value was, but the seller is trying to sell for more than that (above the fair market value).
4. Just because the property is for sale by owner, does not mean that the potential buyer has any need for owner financing. The sale could end up involving a bank loan or even a cash sale. In either case, there never would be a private note created; to be later purchased/brokered.
5. At this point, there are very few Note Buyers that are interested in a “simultaneous closing.” A simo is where the Funder purchases the note without any seasoning (or payments having been made). Many people want money now – which is why they are more apt to take a slightly lower cash offer than deal with the hassle of selling a note later.
It is not that “For Sale By Owner” properties do not have the potential to be notes – some do. But most do not.
Do you want to spend your valuable time looking for notes that are already in existence or do you want to spend your time looking for deals that may be created.
I spent a lot of time with “For Sale By Owners” when I was first starting out.
It was a great experience builder and my best financial calculator got quite the workout. But in the end, I would guess I only closed 1 out of 100 people that I actually spoke with. (1 out of 500 that I contacted and never heard back from). And that was during a time that simultaneous closings were popular – those numbers would be even less now! (See the article Selling Mortgage Notes: Where Have All the Simos Gone?).
If you do come across a “For Sale By Owner,” it is a good idea to simply let them know what you do.
Don’t spend a lot of time – again a note may never be created. Send the seller a card or direct them to a an article on your note business website. Keep them on your radar and see if the property sells with some sort of owner financing. If it does, now you have something to work with. Or improve your odds by targeting sellers that have already indicated they have an interest in offering seller financing (see the article Finding Mortgage Notes with Reverse Ad Marketing).
Focusing your marketing efforts looking for existing notes (as opposed to notes that may be created) will always yield better results…and profits!
Building a Winning Cash Flow Business Website Video
January 18, 2012 by Fred Rewey · 3 Comments
Wondering what makes a winning website for the cash flow business?
Watch this video walk-through to answer these important questions for finding cash flow notes online:
- Why should I bother with having a website?
- What is the best engine for running a site?
- What should my website say?
- How do I get potential cash flow note sellers to contact me?
- Where can I find an affordable website for my cash flow business?
- How can I keep control and update my site?
If you would like to view the demo web sites shown in the video just click here:
When the link opens just click on any of the photos or site names to demo each website live.
Note Business Holiday Giveaway
December 1, 2011 by Note Investor · 97 Comments
We Are Giving Away One Note Present Each Day For The Next 12 Days!
And there are TWO WAYS you can win… Read more
Should I Visit The Courthouse to Find Cash Flow Notes?
November 22, 2011 by Tracy Z · Leave a Comment
Wondering if courthouse research is a good for finding notes? It seems this question is making the rounds again, which is undoubtedly due to someone selling a “How To Find Notes at the Courthouse” training course for note brokers.
Let me start by asking a question in return.
Pardon my directness but… What year are we in? Is it 1981 or 2011? Read more
How to Build a Note Business Website in 7 Steps
November 8, 2011 by Tracy Z · 2 Comments
Why do you need a website for your note business?
There are over 239 million users online making up 77% of the US population according to Internet Word Stats – and that number is only growing!
With potential customers online there are great reasons for note buyers and note brokers to build a website. Your site will Read more
Discover Real Estate Notes – Interview With Lisa Moren Bromma
Looking for marketing expertise? Lisa Moren Bromma has been finding cash flow notes for over twenty years.
In addi
tion to buying real estate notes as a private investor she has provided marketing consulting to the nation’s top institutional note buyers.
The author of several acclaimed books published by McGraw Hill and a past board member of the National Association of Real Estate Investors, she will wow you with her knowledge and dynamic presentation skills. Read more
How to Use Google Places for Your Note Business
September 21, 2011 by Tracy Z · 2 Comments
3 Tips for getting your mortgage note business found online using Google Places and Local Maps.
When was the last time you used a phone book?
Chances are you’re more likely to use it as a booster seat or doorstop than to look up a business. Online search has quickly replaced the yellow pages. In fact many cities like Seattle are looking at requiring opt-outs for phone book delivery.
With about 65% of market share, Google is undoubtedly the “Big Daddy” of search engines and…
they’ve just made it easier for small businesses with Google Places.
Formerly known as local maps, a Google Places page provides a free listing containing contact information for your business. Google uses this information to serve up results for local search and place you as a “pin” on their maps. In fact it’s not unusual to see a Google Places page showing higher in the rankings than a company’s own website.
Steps for Using Google Places for Your Note Business
1. Claim your Note Buyer Listing Read more
5 Myths About the Cash Flow Notes Business
September 13, 2011 by Fred Rewey · 5 Comments
I want to have a very candid conversation about working in the cash flow notes business.
Just what it is, how you may be part of it, and some common myths and facts.
I have been in the note industry for over 15 years. Read more
Free Financial Calculator for Cash Flow Notes!
September 7, 2011 by Tracy Z · Leave a Comment
Is the best financial calculator now free?
If you struggle with calculating cash flow notes on the HP12C , HP10B, or the Texas Instrument BAII then you will want to check out this great offer!
Advanced Seller Data Services (ASDS), a leading provider of marketing lists for seller carried notes, has released a series of free financial tools for note brokers and note buyers.
Here’s a sneak peak at the power behind these calculators from a recent ASDS press release:
Tool #1 – A Financial Calculator to Find the Missing Variable in a Cash Flow Note!
- Greater ease of use and faster than the HP12C or other calculators.
- Allows user to instantaneously confirm information provided by note seller is correct.
- Provides user with feedback on which variable is being solved.
- Gives warning message and possible solutions when inputted variables cannot compute correctly.
- An automatic note quote system to quickly calculate full and partial bids as determined by the user.
- A Net Sum calculator to find the present value of a series of partial payments.
Tool #2 – A “Simple” Amortization Calculator
- Creates an amortization table for straight line mortgages.
- Calculates schedule on exact day or 360 day basis.
- Includes columns to track loan payments and reserves.
- Calculates loan payment for common loan terms for any loan amount and interest rate.
Tool #3 – A “Complex” Amortization Calculator for Irregular Cash Flows
- Allows user to input in any date order:
8 interest rate changes and
12 payment amount changes and
12 bump payments
- Calculates schedule on exact day or 360 day basis.
- Includes columns to track loan payments and reserves.
- Calculates repayment amount for common loan terms.
The only requirement to run the programs is Excel 2007 or higher installed on your computer. An Excel 2003 version is also available by request.
Programming the Excel worksheets with financial calculations is similar to the exclusive proprietary programming ASDS uses to identify seller carry back notes out of millions of recorded documents each year.
“Creating these programs to help our customers become more profitable was a natural progression of the services we offer” said Scott Arpan, owner of ASDS.
You’ll be happy to know that ASDS is committed to keeping these programs available to note brokers and note buyers at no cost. The motivation? They would like to have you keep coming back to the site and consider their list services for finding cash flow notes.
These tools may be downloaded for free at http://notesellerlist.com/Free_Financial_Calculators.html.
I’ve already downloaded my version and have been putting it to the test with these examples from Buying Mortgage Notes: 7 Tips for Calculating Cash Flow Notes! You’ll be glad to know they are matching to the penny!
Finding Bad Cash Flow Notes
August 31, 2011 by Fred Rewey · 2 Comments
No one has ever asked us,
“How do I find BAD note deals?”
The funny part is, that as a note buyer, we see more bad deals than we do good ones.
But isn’t that just the nature of the business? Yes, but it doesn’t need to be so.
When beginners start in the note business they spend an inordinate amount of time on what we consider “bad” (or at least extremely “challenging”) deals.
These are mortgage and trust deeds that will most likely never be purchased. They include things like: Read more
