Confessions Of a happy Note Investor - Posted by John Behle
Posted by John Behle on August 24, 2000 at 16:12:22:
The challenges you’ve run into are exactly why I encourage people to invest in notes and shy away from the over-hyped, over-saturated job of being a note “broker”.
The “note business” does not consist of “Simultaneous Closings” and being a bird dog for fickle institutions. That is one small facet of a business that has been around much longer than slick infomercials and their polished salesmen.
There a couple of these infomercial, individuals that you might vote as the most influential in the note industry in the last decade. In fact, they’ve even given themselves awards for their feats. An entire “occupation” has sprung up as a result of the hype. The trouble is - it is an occupation. A job, with the chains attached.
Note Brokering is a very profitable business. Tens of thousands have paid many thousands to learn it. It is profitable for the “hypesters” and a very hard working few that are at the top of the brokering industry. Most invest their time and effort to find an over-hyped, over crowded, under-trained, industry where few make as much profit with the time and effort invested as they might make in a more legitimate form of sales like real estate or insurance.
Some make some good profits “brokering” notes, but the greater profits are as a note “investor”. The difference is similar to real estate sales vs. real estate investing. Some sales agents and brokers make an incredible income (with HARD work), some make a fair living. The majority don’t make it at all.
Yet, a very high percentage of the world’s millionaires and those who are financially independent make their money investing in real estate. The majority are not agents or are not active in brokering.
Sorry to hear that “brokering” notes hasn’t worked well. Wish I could have warned you off a few years ago, but don’t give up the idea of investing in notes and creating cash flows. It is one of the best investments there ever has been and isn’t that hard.
It isn’t a matter of a great deal more money or skill to invest in notes than it is to broker them. It’s a matter of focus, direction and knowledge of what’s possible. Just as real estate can be “nothing down” and actually pay you cash as you invest, notes can be the same way. People just don’t know what’s possible and when they hear about notes - they hear the hype about brokering, not the age old wisdom of buying cash flows.
I’ve seen hundreds of real estate investors come and go in our local area over the last 24 years. Yet, the note “investors” I knew in my area 20 years ago are either still investing or retired. Hundreds have passed through as potential “Note Brokers” because of the traveling circus recruitment that comes through. I can’t think of one that succeeded for long - AS A BROKER.
I love note “investing” and it can be extremely profitable. “Brokering” is generally a short term, low paying job.
I applaud your decision to step back into what works for you. Just keep in mind, that the note business is much more than brokering and note investing can be a great companion to your real estate.
To me, it is like two wheels to a bicycle as compared to the one wheel of a unicycle. I would never want to be without either my real estate or note knowledge and tools - just as I would not want to be without my right or left arm.