Re: The Art of The Deal?! - Posted by David Butler
Posted by David Butler on May 22, 2007 at 10:51:46:
Hello Again Whitney,
First problem you face is removing age from the equation. Only you can make that factor a problem. What are you doing that causes your age to even come up? Start with that, since it is the easiest thing to correct. Then… consider the bigger problem, which has nothing at all to do with your age. The trick to being taken seriously in the note business, is taking the business itself seriously.
Regardless of appearances, in the long run, people tend to appreciate people who are business-like in their approach. In the note business, the information gathering process is the most important function, and the foundation of everything else you do. In fact, if you think about it, you’ll recognize that everything else you do costs you money - money spent to find note holders. Once that occurs, it is “Showtime”. That is where you make your money.
Once you have engaged a note holder, you now have a 15 minute to 45 minute “Window of Opportunity”. Right then, you have one job, and one job only… and the process is exactly the same, for every type of cash flow:
- gather the relevant, meaningful information a note holder will need in order to make a decision about investing in that note;
a) the rate, terms, face amount, current balance, lien position of the note, date created, date first payment made, date last payment made, total payments made, total payments remaining.
b) how the note was created, and the terms of the sale if the note was a seller-carryback, purchase money mortgage.
c) Payor credit score and income capability, payment history/seasoning on the note.
d) type of collateral securing the note, and the value of that property.
e) what are the answers to the “Money Questions”
- why does note holder want to sell now?
- how much cash does note holder need now?
- what are note holders expectations?
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review that information by performing an “eyeball” test - i.e. does the information make sense on its face? If it does not, you need to get back to the note holder, or cooperating finder who provided the information, and get it corrected, before you present the package to potential investors. You would be amazed at how many folks start shopping “make-believe” notes that make no sense on their face??!!
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assemble the information in a submission form that is clear and concise, and which an investor can tell in 10 minutes or less (30 minutes or less if complex commercial note, development note, or business note transaction) whether he has an interest in that note, and if so, how much he will pay for it. A great submission leaves an investor with little or no questions to chase answers for.
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Present the information to investors. As a broker/finder, you do not sell notes. The notes sell themselves, based on the information you provide in the submission.
Again… the process is the same, every single time, for every single cash flow. There is only one shortcut. Doing it right the first time. Ask the note holder questions, and demand answers. If you are not getting the answers, move on to the next deal.
Happy Hunting, and…
Have Fun For A Living!
David P. Butler
