All Forum Posts by: Tim Fitzgerald

Yes-- What  @Jay Hinrichs said.

That's IF it would sell at all. A payment history of at least one year is much more attractive to investors than zero payment history.

There is plenty of opportunity as long as you know where to look and what to look for.

Feel free to PM me, as well-- I can put you on to a wealth of info about marketing to find notes, especially "Ma and Pa" performing notes. Knowing how to market is the big key. You need to be a good finder. Unfortunately, I see too many people "decide" to get into note investing but they have no long-term marketing plan in place and don't really know where to look.

Yes, to get the ball rolling more quickly, you can immediately network with some investors who sell one-offs, which can be good deals with reasonably good returns; but to get great returns and a consistent stream of deals, you need to have a long-term marketing plan.

Usually, new people do not want to hear this. But the good news is, the longer you've been marketing for notes, the more deals you will turn over. I close most of my deals with note holders (and referral sources) who have seen several of my marketing communications over a period of time.

Marketing pays off big time. Works the same in any business.

Suppliers of seller-financed note leads absolutely do exist. I've been sourcing private note holder leads for about 9 years now through some solid sources who have really streamlined the compilation process over the past couple of decades. Used to do my own courthouse research, but that's now ancient history.

I use direct mail and then field the callbacks I get from the interested parties (motivated note sellers). The lists itself breaks down the year originated, property type, LTV, note holder address, etc. I don't need to know encumbrances at this point because that will all come out during the due diligence process when I get callbacks.

If you would like some suggestions on list compilers, you can PM me.

There are institutional note investors who accept referrals, even from new "note finders", and will then purchase the note by 'walking" you through the entire process. It's good to have a mentor or consultant,in your corner, too that can answer your questions on the fly. I found that when I first started (as with anything else) I didn't know what my questions were going to be until I got to that particular bridge and needed to cross it.

I know of some note investors who can teach youthe business as long as you can send them qualified referrals. If you want, just PM me and I can probably point you in the right direction.

I would strongly advise against putting up any of your own money with such limited experience. I believe you should strongly consider using "OPM" (other people's money). That is, don't buy any notes at first.

Instead, get good at marketing for notes (that is, finding notes through either direct mailing from purchased note holder lists or networking through professional referral sources)-- I like the preformingnote space (the "ma and pa") note holders as I am good at finding them and I'm used to dealing with these types of people...a lot of the time, they need guidance and that's where I come in. I pre-quality the people who want to sell their notes and then I REFER them to my own network of note investors who accept referrals and who pay out referral fees. These investors buy notes every day, and if you watch them work, they will teach you everything about the business and the due diligence process. You're earning money as you learn.

After you refer (or "broker' or whatever you want to call it) X number of note transactions, after some time you become well-versed enough in the business whereby you can invest in your first note for your own account (using the proceeds you've amassed from your referrals) that you can then comfortably put up some of your own money to build your own note portfolio.

If you want some pointers as to how I'd suggest you start, you can PM me.

For me, purchased lists of private (seller-financed) note holders is the way to go. Doing your own courthouse research is extremely laborious and time-consuming. My lead sources regularly compile customized lists of private note holders broken down by state, property type, LTV etc so that there are no junk notes in the list. That way, I know I'm mailing to a bona fide note holder. My supplier also accounts for the 15% of people who move every year so that out-of-date addresses are, in large part, eliminated.

From there, all that I need to do is direct mail the note holders. Usually I do at least 1,000 mailings at a time, sometimes 3,000 per month. I keep my mailing cost down by using post cards. And, since I'm mailing only to known note sellers (what I like to call "high grade ore"), every name on the list is a potential (good) deal.

At any given time, somewhere around 2% of note holders are MOTIVATED to sell NOW, which equates to 20 out of 1,000 so that's 20 (real potential) closed note deals per 1,000 leads at somewhere around 20- cents per lead so if you do the math, that's about $200 spent per 1,000 leads + mailing costs and I find it's really well worth it. Also, I follow up every month or two with subsequent mailings, as today's non-motivated note holders become motivated sellers over the ensuing months. Also, when I market them, I build credibility and can turn over quite a few deals through followups.

If you want my suggestions re some note holder lists, PM me.

I would go one step further... if you are just starting out looking to learn by doing,why do a JV and use your own money, even for part of the deal?? Instead, I would suggest finding and referring notes to institutional investors (they'll pay you for that) and then you learn the entire process by watching what they do. You're also learning what's good, what's bad, etc without risking your own money.. then later (after you've been exposed to X number of note transactions) you can start funding all or part of your own with the money you've earned.

The big key is MARKETING.. you need to be able to find notes. That is the skill you need to focus on.. if you can find them, you can make money even if you've never done a deal before provided you know what to look for and you only gain taht from experience which begets more experience.

But I would start marketing part time at first. Learn what to say, who to say it to and walk before you run. I can offer up some more suggestions on the marketing end of things is you would like to email me.

Developing relationships with asset managers is no doubt a solid strategy, but I see no one talking about developing ongoing referral sources from other financial professionals like attorneys (any kind), accountants and financial planners. get just a few of these guys in your corner referring one or several of their note-holding clients to you per year and you now have an ongoing referral system that keeps on giving. Granted, you oftentimes need to EDUCATE them as to what you do and how you can help their client but it pays off big in the long run.