Starting Out as a Note Finder

[Glen Stone]

A few years ago I had bought into a cash flow system that introduced me to the note finding business. I started out going to the county recorders and collected leads and tried to find note holders. I didn't stick with it due to my circumstances and I never made any money. I am thinking about starting again with being a note finder and later on investing in notes. Can someone tell me what the process is as a "note finder" or note broker after you collect the information on the note? What legal documentation will I need as a "note finder" to conduct business between the note holder and investors?

[Marc Faulkner]

Glen Stone - Most likely you bought into the Russ Dalbey, Winning in the Cashflow Business program off a late night infomercial. Russ got shut down and is no longer selling his pie in the sky. I worked with several folks that had paid over $30k for his teaching and still have no clue what they are doing. Books are written on this subject and, there is more than one way to skin a cat! There are all kinds of notes out there; real estate notes, automobile notes, mobile home notes, business notes and, notes secured by most anything that can be financed or held as collateral.

The idea is to find a note holder that needs a lump sum of cash now vs. collecting small monthly payments over time. You then collect information from the note holder such as the sale price, down payment, note amount, interest rate, term, date of first payment, number of payments made, number of payments remaining, current balance, property type, address, owner occupied or not? etc.... It is important to collect enough information about the note to paint an accurate picture for the note investor. Always get a copy of the Promissory Note and always double check the numbers against an amortization schedule. You also want to check out the tax values and provide some comps and pictures if possible.

Once you have compiled an accurate Quote Request Form and short due diligence package together, you will send this out to a couple of the most likely buyers. (Get to know your potential buyers prior to sending them quote requests as it would be a wast of time to send a real estate note to a company that only buys business notes and vice versa) You will take the best offer, DEDUCT what you would like to make, and present this number to the note seller. The Deduction or discount is how you make your money!

Some Note Buyers will handle all of the details from the point where you have a verbal agreement with the note holder. You just call them and tell them you have a deal and let them know what you agreed on.

Others will want you to wrap the note holder up under an assignable Sales Contract. They will want you to collect all of the note documentation such as the deed, credit application, bureau report, proof of insurance, payment history, etc. Since this is a buyers market, and the buyers make the rules as to what their process is. If you collect and compile a complete and accurate worksheet and initial package, you will find that your quote requests go to the top of the list and are taken more seriously. This goes a long ways in getting investors to help you with the process. I hope that helps.