I Buy Them Duckers, Too - Posted by Marvin Seawood


#1

Posted by John Behle on January 08, 1999 at 24:22:57:

One of the best voice mail systems I have ever seen is an oldy, but still ahead of their times. The only problem is it is DOS only and needs all the resources of the computer (no multi-tasking).

It has up to 999 voice mail boxes, for inbound and outbound calling. You can load a list of numbers and it will also do outbound calls for you. That’s a touchy area lately, so I don’t recommend it.

Incoming calls could be transfered to any extension or phone number in any state. If the call doesn’t connect because the line is busy or un-answered, it goes into the voice mail to leave a message, page someone or try another extension. Once their is a message, it will hunt you down like a starving bounty hunter to deliver the message to you.

We also used it with our 800 line to transfer to different extensions. I could call from out of state and talk to any employee, friend, client or relative by just pushing their extension. If they weren’t in, I left a message in their box which tracked them down to deliver it.

Voice mail can work great, it just can’t do the job on incoming calls that I can. I have all calls come direct to my cell phone wherever I am in the U.S.


#2

I Buy Them Duckers, Too - Posted by Marvin Seawood

Posted by Marvin Seawood on December 30, 1998 at 22:04:53:

When my answering machine picks up a call, the caller is
asked to leave a name and number so that I can return the
call.

I have a friend who has a very impressive message - more
than a half minute - when someone calls on an ad, they
are given a little more information to clarify what it
is that my friend can do to solve their problem.

Got me to thinking; When I run an “I Buy Mortgages” ad,
would it it be a good idea to provide more (recorded)
details on the phone. If so, what types of information
would pique someone’s interest?


#3

Re: I Buy Them Duckers, Too - Posted by Reg(TX)

Posted by Reg(TX) on December 31, 1998 at 16:17:54:

Marvin,
I do have some experience in this marketing area. If you are going to do it with a short message, the idea is not to sell them with the message but to give them incentive (make them curious enough) to leave thier phone number so that you can talk to them. Depending on what your ad said it will prompt people to call for that reason. Example: your ad says FAST CASH FOR YOUR MORTGAGE!
Obviouly the people that call need cash fast for a reason. You have to leave a message that taps there need for cash or that motivated them to call in the first place. They may need money for a vacation, medical bills, a trip to Disneyland, tired of rental property and tennats and 1000 other reasons. The question in there mind is WHATS IN IT FOR ME? By dealing with you they can get there needs met. To get them to leave thier number and want to hear more tell them what the benifit or end result will be when they deal with you. You do not want to give them information on a recording to make a decision, You want to get them curious enough to want to talk with a person (you).
Reg(TX)


#4

Leveragectomies - Posted by John Behle

Posted by John Behle on December 31, 1998 at 15:05:31:

LEVERAGECTOMIES AND OTHER LTV SOLUTIONS

By John D. Behle

Most of the notes that aren’t purchased are because of unacceptable LTV or “Loan to Value” ratios. Few note buyers realize the alternatives, so we will look at a few today.

  1. EXAMPLE ONE - LEVERAGECTOMIES - A “Leveragectomy” is to un-leverage a property. Many times a note can actually be split from one “bad” note into two notes (One good - one bad).

For example, let’s look at the following illustration. Lets say that a property was sold for a low down or went down in value to the point where there is a note with a 100% LTV.

Current property value = $100,000 Seller held first = $100,000 Equity = $0 LTV 100% Potential buyers = 1 (me)

A leveragectomy here would mean split the one $100,000 note into an $80,000 first loan and a $20,000 second loan. Now, who wants the first? - everybody! Who wants the second? - Just me or the seller. The second can be free, extra profit for me or I can let the seller keep it. The first now would be very marketable. Here’s a couple ways to go about it.

A - THE EVEN SPLIT - Let’s say this $100,000 loan has payments of $1000 per month at 10% interest. We could divide it evenly by creating an $80,000 loan with payments of $800 per month and a $20,000 loan with payments of $200 per month. Both at 10% for 216 months. Value of this 80k note would be $51,191 at 18% yield.

B - THE UNEVEN SPLIT - This note can also be structured by directing the entire $1000 payment to the 80k note which would then pay off in 132 months. At that time the payment would be directed to the second. This makes the first more valuable = $57,379 at 18%.

As I’ve mentioned before, any change in the note requires all parties to the note. The payor is going to need some incentive, like a trail of ten dollar bills to the title company, but there is plenty of profit to be able to share some with him. I might even give him a couple thousand dollars - written off of the back of his loan. What does that cost me? Very little.

EXAMPLE TWO - COLLATERAL CONVERSION - The collateral for the note isn’t written in stone. You can change the collateral. For example, what if the payor has another property that could act as better collateral? Change it. Again, another trail of ten dollar bills may be needed. What about adding this other property as additional collateral? How about fixing up or improving the property that acts ac collateral? All are examples of ways to improve the collateral. In fact, the seller of the note has a need for cash. The note isn’t the only way to get it. I have had sellers of notes offer to add their own properties in as collateral. We can also create a note against the “note sellers” (not the payor’s) property that mirrors his unsalable note except for the fact that it has a better Loan to Value ratio.

EXAMPLE THREE - PARTIAL PURCHASE SUBORDINATION - Purchasing a partial means buying a piece of the note instead of the whole note. When purchasing a partial, it is usually structured so that the interest that the note seller retains is “subordinated” to that of the note purchaser. This means that the note purchaser gets paid before the note seller in case of default. In a case like this you are looking at the “Investment to value” ratio, which is the ratio of what you have invested to the value of the property - instead of looking at the total amount of the note in question. Many buyers will weigh this ITV ratio heavily, yet not all will. You’ll need some legal advice on the first one or two of these that you do. In addition, there are many ways to do partials. Some are smooth and easy and some have some inherent pitfalls. We will talk more about partials in a special article on the subject.

An example of a partial in this situation would be buying 93 payments for $50,000 which would then yield 18%. There are some other fun and more profitable options we will look at some other time…

EXAMPLE FOUR - THE PAYOR PAYOFF
EXAMPLE FIVE - THE PAYOR PARTIAL
EXAMPLE SIX - THE DISCOUNT REFINANCE


#5

KIS - Posted by MN~Chicago

Posted by MN~Chicago on December 31, 1998 at 14:46:37:

Marv:

Keep it simple. I would stick with John’s
experience and the ad he uses.

My take is that you really want the person’s
phone number so you can get to talk to them.
It’s hard to make a sales pitch in a little
ad. What happens if it doesn’t pique the
right person’s interest?

The piqueing comes from you…once you have
their phone number.

Understand, now, this is not a prescription,
just a thought.

I finished the tapes a few days ago, and I
plan on going all out starting next week,
(once I find the starting line).

If I do anything “noteworthy,” I’ll let you
no. (I discounted the k,w for practice.)

Michael


#6

Personal is best!!! - Posted by John Behle

Posted by John Behle on December 31, 1998 at 14:43:21:

As I mention in the tapes, I like to be the first call and the LAST. Being the first call is a matter of how you word your ad. The “FAST CASH” part of my ad helps generate that first call. Being the largest, first in the column or most visually appealing is another factor.

Being the last call means connecting personally immediately. The best option is to take the call direct. My calls come into my cell phone with caller ID and call waiting. Even if I am busy or in a meeting, I still want that phone number and will probably take the call.

It’s that important. I may postpone what I am doing to go meet with the note seller or preview the property immediately.

If I don’t take that call immediately - they call someone else. If I do it right, they never call someone else. I want them away from their phone and “in process” of selling the note to me. Even in the rare times when I am not the first call, my goal is to buy the note before the other people return the calls on their answering machine.

The note seller wants to do a deal. They want it sold and their problem solved. Many do not know they can shop around for better prices or do not want to.

If taking the call immediate is not possible, then a better option is someone that takes the call personally and is rewarded for getting a call back number (most answering services don’t care). A shut in can be good in this way.

I don’t want to educate note sellers and most don’t want to be educated. I also don’t want them to pre-screen themselves. I do deals, I don’t looking for square pegs to fit into square holes. I may not know what I can do with a note until I ask many questions.

What on the surface looks like a bad or un-doable deal becomes a fabulous profit many times. LTV ratios are one of the major “dis-qualifying” factors. I know many ways to “re-qualify” a note. I’ll post an article titled “Leveragectomies and Other LTV Solutions”.


#7

Remember what you are selling - Posted by John Behle

Posted by John Behle on January 01, 1999 at 11:21:00:

My ad sells them on calling me first. Remember, if they are calling the ads, we didn’t do the job right in the first place. Someone usually directs them to the ads - like a Realtor. He should have directed them to us first. But that’s a different discussion.

My ad sells the call. My discussion with them on the call is both a pre-screen and selling an appointment. It’s my job to pre-screen them, not their job to pre-screen themselves. Voicemail can’t do the same job. It’s a “False economy” in this industry. It doesn’t necessarily save time or money, just minimizes the effect of my advertising dollars.

The pre-screen is crucial. The note business is NOT a cookie cutter business. Every note and circumstance is different. Even after 20 years, I still find new ideas and ways to approach things. I had one of my franchisees approach me with a note a few years back.

It was his first note and I wanted to say to “Forget this one”. Since he was so excited, we worked the numbers anyway as an example. All of a sudden a new approach and a way to put the deal together jumped out. He made a fabulous profit from that note.

There are powerful and profitable ways to use voicemail in this industry, but not in this scenario. There’s a neat Gary Halbert advertising technique that can work, but the ad has to be restructured.

Don’t under-estimate the value of taking that first call and taking it immediately.


#8

Re: Leveragectomies - Posted by Rob FL

Posted by Rob FL on December 31, 1998 at 16:57:42:

Great ideas John. Thanks.


#9

Re: Remember what you are selling - Posted by Reg

Posted by Reg on January 01, 1999 at 12:48:24:

John,
Since you have been in the cash flow industry a lot longer than me I will defer to your vast knowlege on how the buisness works. I have to say that any add of this nature does not give enough information to “sell” them on selling thier note to an investor. The ads naturally screen people because if it does not capture thier attention they will pass over it and call the ad that captures thier attention. I believe that Marvin wanted to know a way to get people to leave a phone number on his voicemail. The way I explained how to get it done works and works well I did this for a little over six years. From all that I have learned about the note business from you and what I can glean from my limited knowlege, this is still a numbers game (the more people you get to tell about your product the more chances you have to sell it to them). I agree with you that this is not a cookie cutter business and every note and circumstance is different but what motivates a seller to sell comes down to one thing. They need cash. How do you get them to leave a phone number on a voice mail if the ad was not motivting enough? Make them dream about what they can get by leaving their number and talking to you. The sole purpose is not to sell them but to get information (name and phone number) to give me the chance to buy a note.
Reg(TX)


#10

Sell the call - Posted by John Behle

Posted by John Behle on January 01, 1999 at 13:02:25:

Just as I said, the ad sells the call. My ad always generates the first call, so I know it works. Others advertising are wasting their money if I handle the call right.

That is the focus of my posts - to handle the call personally to make sure it is handled right. The second best is to get a call back number. I can do that better than any voice mail, answering service or other person taking the call.

I had an employee that altered my ad one time. I didn’t know about it. He tried to save money by lowering it down to a little two line ad. I found out about it when the calls stopped. There is nothing more important than getting the first call. Even if your ad says “Call me Last”, it is still intended to get the first call.

The ad should generate the first call. Only you or a highly trained (phone training) employee should take the call. Then the note is pre-screened - by a pro only - and if it looks good, then there is immediate follow up.

As I mentioned, there is a place for voice mail if the ad and voice mail are structured properly, but it is too extensive to go into here.


#11

Re: I understand what you mean, But:-) - Posted by Reg(TX)

Posted by Reg(TX) on January 01, 1999 at 13:22:31:

John,
I see what your saying. I think we are basically saying the same thing. However, You have to remember I don’t have a staff to take any calls when I am at work.:slight_smile: I have to get a phone number and call them back. I pay $7.95 per month for my staff (voice mail).:slight_smile:
Reg(TX)


#12

Employ technology - Posted by HR

Posted by HR on January 07, 1999 at 19:16:50:

Symantec’s new Talkworks 2.0 system allows you to set up about a hundred voicemails, fax on demand, and – most relevant to this discussion – a paging service. So when a call comes into my computer, my voicemail pick it up and takes the message, and it immediately calls my cell phone. I get the call, I can see its from my computer, and I returned the call. “Hi, this is HR, you just called… how can I help put cash in your pocket?” The system also can work with caller id, but I haven’t done that yet.

Talkworks 2.0 is about $180. The only criticism I have of it is it pages you three times if you don’t answer the page. The three time rule is default and can not be changed. This gets to be a pain when you don’t want to take the call at that moment.

Just my .02

HR