Note Brokering Notes in Multiple States...Strategy?

[Jessica Swingle]

Hey all,

A few questions re: note brokering in multiple states...

1. My ideal situation would be to build a long term note business (buying, selling & brokering) based in my home state of Ohio...however, I'm told that in order to have enough business to sustain a living, I will have to branch out into multiple states (that there aren't enough 1st lien records to mail to in OH...also, that there aren't many buyers for OH notes).

However, I've noticed that a few of the educators in the industry seem to focus on one geographic area or state (especially for their own portfolio)....wouldn't it make more sense to focus on 1 (or 2) states and instead of covering 1st lien notes in multiple states (with different processes, laws, etc.) to focus on OH exclusively and branch out to 1st & 2nd position & business notes?

2. For those of you brokering in multiple states, how do you handle the licensing issue? Are you assigning/doing a simultaneous close to get those deals done?

Thank you in advance for any help!

Jessica

[Bill Gulley]

I agree with Dion that it's a process and Jackie's warning is a good one to be aware of.

I pumped through thousands of notes and I never had a bait and switch thing so much as a buyer simply backing out at the offer. I suppose many did make a second offer but none were taken as I recall, may have been. Often there may be rather small adjustments for issues that arise, the negotiation really doesn't end until you have money in hand.

As to your market, I really doubt you will ever need to go over 50 miles away from your office. I didn't get much further from my office and my market it very small compared to yours as to potential business.

I'd say anyone saying you need to work multiple states to make a good living doesn't know how to find notes or work with holders to facilitate a transaction.

There is a difference between institutional paper and privately held notes, my comment was to privately held notes. For bank NPN types you may have fewer opportunities due to competition on a larger scale, especially bulk tapes.

For an small investor or group of investors, that's under ten million, if you use good methods of marketing and acquiring leads in private notes you can enjoy a very good income. Actually, it's not marketing in the conventional way as much as it is networking, having persons in areas of influence or in positions that can facilitate opportunities that feed business to you.

Consider building a loan servicing activity in your name. You can obtain a "sub-servicer" as your back room to grow and retain selected notes for servicing if you like. Most of the servicing business is actually done on a sub-servicing basis.

My advice is stay close to home and dig deeper.... good luck! :)