Need Input For A Business Plan - Posted by MN~Chicago

Posted by MN~Chicago on November 17, 1998 at 14:35:56:

Thank you. I hope all goes well.

Need Input For A Business Plan - Posted by MN~Chicago

Posted by MN~Chicago on November 16, 1998 at 14:27:24:


My own business keeps me from pursuing things
during the day, so I have been trying to devise
a way to jump into the note business and have it
be financially viable from the first month.

I made one presentation to a lawyer who said he
can provide unlimited funds if I bring him the
deals. You already commented about that earlier.

Trying to find notes part-time is not feasible, nor
would it be economically worthwhile for me.

I have someone to whom I have mentioned investing
in paper, and he likes the idea. This person would
have no trouble fronting $500k, or more. I have an
idea I would like to pursue with him further, but I
do not know what kind of income stream to include in
my approach.

Part of what I want to do is have this person put up
the money as a partnership, and I would do the investing
portion. What I am lacking is what to say regarding
how much in paper $500k would bring, (I was guessing
around $650 -$750k), what the average yield might be(you
often quote an average 24% yield), and what amount of
cash flow could be generated.

I am really only looking for reasonable estimates for
establishing game plan and establishing some targets.
I would like to be able to say, "This kind of money
can make $XXX per month or $YYY per year if we do
everything required to create a poertfolio.

Can you provide some helpful figures to complete what
it is I want to present?


M Noonan

OK here I am - Posted by John Behle

Posted by John Behle on November 18, 1998 at 23:14:59:

$650-$750K is a fair estimate. The yield of 24% that I mention in some articles, books, etc. is from the 80’s. The Paper Game was written in 1982 and at that time, 24% was my minimum yield. Yet, at the same time, my cost of money from private investors or institutions was 18-21%. IT’S ALL RELATIVE.

What I deal with in notes is the difference between my cost of funds and the competitive yield I can get in the marketplace. I still get 18-24% quite often, but I also dip down as low as 14%. Others pay much more for paper, but they are fighting with the flock for the “easy pickins.”

My sources of finding notes, creativity in structuring deals, ready cash and ability to move quick get me deals others never see - OR BID ON! You can do the same in your marketplace by staying away from the flock of fledgling “finders” with little training or experience. Most have no clue how to find or structure deals in the way I do.

What you want to talk with an investor is what he might consider an acceptable minimum rate of return. Then have some split of profits on the “upside”. This is just a profit subordination. He gets his rate first - then you split after that.

Become acquainted with the types of yields and techniques relating to improving both good and bad paper. You can then tantalize the investor with this and also assure him with the “unspoken” message that he couldn’t even dream of doing this without you.

It’s simple to find out what types of yields you can get in your market. Call the ads and get quotes from them on notes. Work backwards to the yield and you will know your competition. I’d take them all to lunch also. I’ll locate and post an article about how to scout out your competition - but it won’t be tonight.

John: Am I Asking The Wrong Question…? - Posted by MN~Chicago

Posted by MN~Chicago on November 16, 1998 at 21:28:34:

A few weeks ago, I asked what a note portfolio
might look like with a certain sum, and the
question went unanswered.

I am asking a similar question for a specific
purpose. I am not looking for pinpoint numbers;
just a general idea for a pro forma-type discussion.
For what ever reason, you seem to not want to answer.


Re: Need Input For A Business Plan - Posted by Lee

Posted by Lee on November 16, 1998 at 15:14:14:


It was $200.00 for the class when I attended, worth it!

Babies, Car accidents, Broken “Windows” - Posted by John Behle

Posted by John Behle on November 17, 1998 at 12:56:39:

Between one sister in law having a baby, another having a car accident, and a crashed computer and health problems, I haven’t answered many posts.

I start with the simplest ones and usually get interupted. Didn’t mean to single you out. Even now, I need to run, but I promise I will respond.

I have whittled my email inbox down from almost 300 to just 226 - so there is progress!

Re: Babies, Car accidents, Broken - Posted by Paul Macdonald

Posted by Paul Macdonald on November 17, 1998 at 15:25:17:


In the name of enlightened self-interest take your time and get healthy. I am developing an intense desire to know more and this board is like water in the desert.

May you have a healthy, bouncing baby computer and nephew/niece, recovered in-laws, and less short emails to answer!

Paul Macdonald