Archives for August 2011

Finding Bad Cash Flow Notes

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...]

How Partials Reduce Note Discount When Selling Mortgages

Is the sticker shock just too much when discounting notes? It might be time to consider selling just some of the remaining payments. Note buyers have long used the partial purchase to reduce their exposure or investment risk, but it also has benefits for the seller. You see the time value of money makes payments due now more valuable than those further out in the future. The partial purchase takes advantage of this by letting the seller cash in the most valuable portion – the more … [Read more...]

How to Build MIStrust in the Note Business

Sometimes people just make more work of things than need be, and the note business is no different. I was in the bookstore yesterday. Not looking for anything in particular, but was amazed at the amount of networking books and books in particular about how to build trust among clients and prospects. For me, it seems easier (and more fun), to simply point out the ways you can build MIStrust. Want to be a lousy note broker or note buyer? Here's how to build mistrust among note sellers and … [Read more...]

Buying Mortgage Notes: 7 Tips for Calculating Cash Flow Notes

If you plan on selling or buying mortgage notes the pricing will eventually come down to some important cash flow calculations.  If you get cold chills or high school flash backs thinking about math you can always leave the number crunching to the note buyers. However, I challenge you to get outside your comfort zone and give these exercises a try. Why? Well knowledge is power and you will be able to know if you are getting a fair (or not so fair) deal when selling mortgage notes. … [Read more...]

Sell Mortgage Note to the Payer? What about Me?!

I will never forget the first time I was asked this question by a potential note seller. “Should I offer a discount to the payer before I try selling my note?” I was silent for what seemed like minutes. In reality, it was only a couple of seconds before I replied but during those seconds my mind was racing. Of course I was thinking... “If the note holder makes an offer to the payer; I may never get the deal. Matter of fact, the payer will probably even pay the seller more money than I can … [Read more...]