How to start out - Posted by Stephanie

Posted by Michael Morrongiello on November 01, 2005 at 13:58:38:

I suspect the “motivated property sellers” list is to be used to target these folks for potential new sales where owner financing may be involved and could be a soulution for their property.

I don’t agree with your “mentor” and suggest you save and use that list as best as you can. Sure your marketing will have to be multi faceted but trying to assist motivated property sellers to SELL their properties using owner financing is one marketing niche that is worth pursuing.

Often times these so called “mentors” have little real world in the trenches experience when it comes to the Note business.

As for creating your own “paper” this can be accomplished with buying properties at below market or wholesale prices, cleaning them up, fixing them, upgrading them, and them potentially reselling them and also FINANCING them with owner financed terms. The resulting “paper” can be held on to for cash flow and yield or ultimately converted into a lump sum through its sale.

Best to your success,
Michael Morrongiello

How to start out - Posted by Stephanie

Posted by Stephanie on November 01, 2005 at 09:35:45:


My husband and I are very new to the note business. So new that we just finished a course on how to purchase them a few weeks ago. My husband was very eager to start so I built up a huge list of motivated sellers (keywords from our course), but his mentor told him that we would have to create notes for each of them. I’m more comfortable with finding the notes and getting a referral fee until we know what we’re doing and holding off on creating them. We’ve already discussed just doing referrals for a while, but do we need to scrap our list or do you think it is still useable? Would building a list of owner/seller financed and 100% financed properties and reffering them to companies be a better way to go? Should I just do another “motivated sellers” list when we’ve been in the business awhile and are comfortable in creating notes ourselves? Thanks for any input you have.


Earn & Learn - Posted by David Butler

Posted by David Butler on November 01, 2005 at 16:51:56:

Hello Stephanie…

At first glance, it looks like you may have some very good… but apparent conflicting advice here. Resolution is clear though. Sounds like your mentor merely pointed out that motivated property sellers are not yet note holders - and you would have a lot of work to do on the front end of the deal in that respect.

And as you correctly suspected, finding and referring EXISTING notes is a much safer, and generally more profitable path for beginners - for several significant reasons. Not sure why it is, but given their lack of knowledge on the factors involved - far too many brand new folks tend to focus on “creating notes” - a very worthwhile, but very dicey, and potentially dangerous enterprise for the unknowing… as has been discussed at some length here in prior discussions related to “creating notes”, “simultaneous closing”, “table funding”, “ostensible agents”, “law of agency”, “usury”, “camoflauge loans” and similar closely related topical keywords.

So… without question, you made the right call here!

But - as Mike pointed out very well, such lead lists offer much potential - both for the opportunity to introduce them to the benefits of seller financing, as well as for possible future business as a result of any of those sellers who do wind up carrying paper - and then develop a need to sell it for cash at some point down the road.

In the meantime, as you become more familiar with the note business, and have some time to acquaint yourselves with the things you’ll need to be familiar with to also make simultaneous closes worthwhile, and safe for you (much of which you will find in the search engine here using the keywords mentioned above) - those lists can become even more valuable!

BTW… notes originating 100% financed properties have little to no interest for almost any note buyer, in most circumstances - and sellers carrying back small 2nds behind large 3rd party “firsts” - especially with little or no down payment going into the deal, are “dead in the water” right out of the gate.

Seasoning and developing payment history may cure those issues over time - again… another reason for keeping primary focus on EXISTING notes that already have these two features accrued to them - and keeping updated records on that “property seller” list as well.

By the way - am curious as to how you have qualified the list as one specifically made up of “motivated” property sellers? If that truly is the case, that’s a great list for both future note deals - and especially in the manner Mike suggested for buying and selling real estate for taking back profits in paper.

Hope this helps, and best wishes for your success!

David P. Butler