Posted by lukeNC on July 15, 2007 at 07:27:29:
cash flow is cash flow, anything that pays is good for me. Judgments, bad notes, credit card paper, anything…
I purchase and keep everything “in house” i dont re-sell any notes.
lorelei stevens “fast cash”-startup… - Posted by lukeNC
Posted by lukeNC on July 14, 2007 at 12:38:46:
I just got done reading the Fast Cash book on Mrs. Stevens’ note business and her experiences. A very good read indeed.
One thing that really struck me was how does she or her company actually fund these purchases? I noted that a number of the purchases were right around 80-90% of face value. That means that quite a bit of money is required to purchase. And they don’t sell them, they keep themn. Are they private investors or banks? Or both? Is this the typical note business? Going in huge debt to fund note purchases?
I’m assuming the company holds a very large credit line with a number of banks and just uses that to fund the purchase. But, every credit line I know of has a very high interest rate. So, the spread would either be nothing or negative since they are holding the note. I may be wrong on that end.
I do mostly bad debt deals where I can buy for nominal upfront costs. The “conventional” note business intrigues me though and I’d like to get started in it. But, I’m wary of going in “debt to my eyeballs” to do so.
Luke… - Posted by acw
Posted by acw on July 30, 2007 at 09:30:13:
Luke…can yhou point me to where that John Behle comment is…
thanks!
found my answer - Posted by lukeNC
Posted by lukeNC on July 14, 2007 at 13:16:31:
i just searched and found a john behle comment that answered the questions!!
Re: found my answer - Posted by Jason (AL)
Posted by Jason (AL) on July 14, 2007 at 15:00:21:
Where did you find the answer, Luke
(better yet, the source of funds)?
After reading the book as well, I’m intrigued
as to where her funds come from.
Seeing that you are buying all that bad
debt for pennies, are your funds from your
own?
Thanks.
re: - Posted by lukeNC
Posted by lukeNC on July 14, 2007 at 16:25:36:
yes the ones I buy I’m buying anywhere from 5 to 10 cents, sometimes as high as 50 cents on the dollar but no more. And, they are small notes $2500, $1000, etc.
I read her book and she deals alot with large mortgages and business notes and I wondered how she funded those.
John Behle’s comment explained investor funding and institutional lenders as the main sources.
Re: re: - Posted by Jason (AL)
Posted by Jason (AL) on July 14, 2007 at 19:08:05:
cool stuff, Luke.
Do you prefer judgments over
those ‘other bad notes’, or
is cash flow, cash flow for you?
Also, what’s the ratio of those judgments being purchased vs. being assigned?