Most newer brokers do a great job of building the city then waiting for the people to come……. Taking courses….. Building web sites…sending mailers… and muffin baskets to Realtors, etc…. then the phone rings and they just roll over & let the Note seller control the conversation.
When the phone rings, that’s your chance to apply for the job of cashing a commission check.
- Remember, YOU are the specialist
- Build rapport/educate/diffuse & reprogram.
- Tone, inflection, cadence all = confidence and all project professionalism.
If you sense resistance to the process:
“I promise you Mr/Mrs. Note Seller, after this 15 minute conversation you will know more about your note and your options with it in these current markets… At no cost or obligation. This is what I do for a living so please untie my hands and trust the process as you would with your insurance agent or tax preparer”
Or something to that effect.
The Interview
Think of it as three different 4 to 5 minute conversations.
1) The Property:
- Location/address
- Description of improvements
- City water/sewer or ….
- Deed restricted subdivision
* What have the Payor’s done/added since purchasing *
(As to additional “skin” in the game.)
- Curb appeal/pride of ownership?
2) The Payor(s) and “Curve of Life”
- Two income household (H & W) or ?
- Ages 20’s , 30’s, 50’s or ?
- Occupations outside home for each and whom/how long…
- Children … extended family in the area
- Did they ever own in the past or rent?
* Who extends credit to someone they know nothing about *
As to Credit • Pay by check … or …
- Drive a late model vehicle
- Do you have socials y/n
- Did someone pull credit prior to sale? That score was?
3) The Math
- Sales price, down payment, note information verified
- Did this close at a Title Co., or Law Firm
- Who servicing the account …. can it be released
- Escrows or not
- Prepaid interest collected, date of note vs. date of 1st payment
- Any additional principal reductions
- Lost payee clause on Hazard Policy
- Lender’s policy or not ? (See Hud for charges)
* Chain of Sales Price*
A triple check to insure equity to the invested dollar.
- Seller’s initial purchase price/date
- Current tax assessment and the percentage of market value
- BPO w/ comparables very local to subject
All ties back to your sales price to the purchaser
* If your purchase price and improvement dollars invested a secret, so is my offer for this note! *
The Days of “buyer beware” paper and Investors chasing it are over. No need for false starts on the note purchasing efforts…!!!
Please use the comments section of your submission sheet liberally. Share the good and the bad as you know it. Do not get branded as a “Liar by omission”
Regionally speaking: Be concerned with flood zones, hurricane or earthquake zones, etc….
Follow up your e-mail or fax offers with an old fashioned letter via 1st class mail and suggest they keep it together with their collateral documents should their situation change.
Partial Purchases
- Not many folks invest out past 65 to 70% ITV (Investment to Current Market Value)
- Provides an alternative to discount sensitive sellers who still need to unlock cash for an opportunity or an emergency.
- Stay in the deal (Seller ) Don’t totally forfeit your participation in this compound interest vehicle…. (heck, everyone needs a newer car every 5 – 7 years)
- T-Value Amortization schedules
- Schedule A Whole loan @ Par
- Schedule B Partial stream @ Par
- Benefits, loan is professionally serviced, a bonus as to facilitating balloon refinancing
- Repurchase provisions, as loan seasons and amortizes down and credit improves the account can be marketed as a whole loan for competitive bids
- Several disbursements over time will eclipse the value/math of a full sale.
- Down payment
- TTL payments collected
- Partial Advance
- Remainderment Sale
- Total Dollars > Sales price
- Tax advantages of spreading out fundings over several years.
Investor Relations
- The true customer in the note sales process
- Respect the opportunity to practice/hone your craft
- Take/keep notes on purchasing parameters, closing mechanics, submission package requirements, cover letters, etc….
- Remain accessible when you put a note purchase opportunity “in play” for follow up concerns
- Acknowledge offers & give feedback/results of this joint effort
- Keep in touch, keep the communications lines open, the rapport up, confidence boosting sessions lead to results.
Wrap up/Scattered thoughts
- Strive to maintain a consistent tone of professionalism in your voice mails, e-mails, written correspondence & answering machine message too
- Communicate assertively …. Get sellers to “see things your way” a la the power of persuasion
- When on the phone your Tone, Inflection and Cadence all project confidence and a successful demeanor
- Your refined people skills will translate into referrals as well
- Strive to build rapport with your investors as you do your note sellers.
- In all your communications ….. clearly confidently and succinctly
- Desire can not be taught or purchased, it comes from within
- Practice your skill sets on calls you think are going nowhere. You will occasionally be surprised as to what it may lead to.
- Any most importantly …. Stop confusing activity with results!
Thank you for you time and attention. Have fun with the process and do not forget to purchase for your own account along the way
Respectfully
