Learn While Your Earn… - Posted by Michael Morrongiello
Posted by Michael Morrongiello on November 14, 2000 at 13:29:12:
Your question is one that I hear all the time from beginnng brokers who are just getting started.
Essentially, you can charge whatever the market will bear and can negotiate between yourself and your note seller. However this is where many novice brokers tend to lose out on potential deals because they are mishandled or poorly negotiated. A fee of somewhere around 3%+/- of the amount being funded by the note funder is average these days, however as mentioned above some will charge more and some will charge less.
The other way many new brokers can work is to establish a “FLAT FEE” arrangement with their designated note funder. The note funder can work with the broker to walk them through the entire transaction process, the documentation gathering, negotiating phases, processing, closing, and funding procedures, etc. and essentially LEARN while they EARN along the way. These fees can be typcially $1,000.00 on up depending on the size of the note being purchased.
Many note funders will NOT work this way with new brokers as it is not effective for them to do so. However a few other principal note funders are more than willing to work in this fashion (We invite you to call us as we will work in this fashion).
Hope this clarrifies how one can be compenstated.
To your success,