All Forum Posts by: Tim Fitzgerald

I fully concur with Tracy that, far and away, learning how to find and then refer note transactions to institutional investors is an excellent, risk-free way to learn note investing from ground zero (for someone with little or no experience). If you find the RIGHT investors to work with, you will find them to be very receptive and also very helpful in guiding you throughout the entire process. You just need to make sure that learn how to prequalify and SUBMIT notes the right way, i.e. you need to be thorough and complete. Absolutely, having a "mentor" or someone experienced to guide you is a big, big help and will GREATLY cut down on your learning curve, saving you a great deal of time AND you are earning referral fees with zero risk because the worst that can happen is that a potential deal does not go through or gets rejected and you are out $0 but at the same time, you are gaining invaluable knowledge as to what's good, what's bad, etc., so that you can learn to "key in" on the good notes.

I have to tell you that I'm a big believer in referring notes to institutional investors and I'm not exactly the new kid on the block--- this is the way I learned myself starting way back in 1996.

To this day, I still work with my preferred (national) funders on a regular basis AND I can tell you unequivocally that they are constantly looking for new referrals but one of the key frustrations they continually relate to me are inexperienced brokers who sloppily submit incomplete quote requests or, worse yet, simply "copy and paste" note information they picked up from some "daisy chain" that will go nowhere. This is a sure way to lose all cred with a potential funder.

In short, there are plenty of good potential deals out there that you can make money on, but not as many good quality referrals from the outside as my preferred funders would like to see. These funders typically do not employ their own marketing or training departments and thus rely on organizations like mine to find people willing to learn and help them develop the skills necessary to get them FINDING and referring quality note transactions to them.

And, yes, FINDING them is key, and IMO your #1 most important task, if you are looking to get into this at little to no cost with no risk, is MARKETING and I am NOT talking about going to FCI Exchange and trying to find deals that way.

Anyway, if you want to know more about getting into this, feel free to PM me and also if you want to see how easy it really is to REFER notes to funders you can go to my profile where I put together a video about it that you may find to be informative.

Interesting choice of phraseology here, "the jam". Never heard it before, I looked it up, still not sure what you mean by that. At any rate, there's nothing new or 'trendy" about note investing. In fact, it's as old as the hills, albeit a lsub-specialty that certainly isn't as widely known as mainstream REI. For my part, I fully concur with Bob M in that I prefer NOT to deal with "tenants and toilets" , so I love dealing with notes. It fits my busy lifestyle to a tee.

Also, through the years, I've picked up quite a number of techniques/approaches to making creative offers on notes, and as a result have increased my acceptance rate considerably. I did post a few of them awhile back:

https://www.biggerpockets.com/blogs/7809/48236-dis...

 I fully agree with Chris-- relationship building is the big key. That's how you get multiple referrals per year from your good referral sources.

If you've never invested in notes before, you can learn the "ins and outs" from the professional (institutional) note buyers who tend to be National in scope. They're always looking for product, which is why a good # of them welcome referrals from people who are willing to "bird dog" through effective marketing, which doesn't have to cost much at all. If you're willing to just put in a little time finding potential notes to buy, these investors will put up all of the money and take all of the risk. You earn money through referrals. You're not putting up any of your own money (no risk on your part). .. you're using other people's money (OPM).

By referring a # of these transactions and watching the professional funder perform due diligence and close deals, you're earning fees with no risk on your part, essentially getting paid to learn. By building a file on every transaction (all the while familiarizing yourself with the documentation involved), you're preparing for the day when you'll invest in your first note for your own account (and the money to do that with will come from your referral fees), having gained invaluable experience by leaning what's good, what's bad and why-- which is why the "no-quotes" from a funder are just as valuable a learning experience as the ones that do go through.

For me, location is immaterial because one of the major allures of note investing is not having to drive by or deal with the underlying property in any real "hands on" manner.

If the underlying property WERE in your backyard, would you ACTUALLY make a point to drive by it from time to time? That's a question you will need to answer. At any rate, in the event of a default or bankruptcy, I would personally take my lumps on that individual loan if necessary but I've already mitigated the potential damage by performing the requisite due diligence at the time I acquired it, factoring in the balance owed on the 1st position along with the cost of liquidation and whatever potential I can assess for the underlying property to lose value.

That said, if I am buying a note to keep, I've always preferred firsts. I'm looking for high returns and safety.

As Bill mentioned, FINDING good notes is the key. All of the successful note practitioners that I know are very good marketers. Like any other business, this is a numbers game. The more QUALITY leads you develop, the more "Yesses" you'll get and the more transactions you'll close. A certain percentage of the notes you'll quote on will or will not ultimately close, due to some of the "pitfalls" mentioned above. But again, this is true in ANY business- some of your leads or foot traffic or whatever are going to convert and some will not. Just concentrate on your marketing and DEVELOPING LEADS and then know that, at any given time (if you're doing a fair volume of business) you're going to have "X" number of transactions at various stages leading up to closing in your "pipeline", some will be actually closing and some will not go through for any # of reasons or "surprises". At the end of the day, the paydays is this business are very good.

Hi, before you even consider buying a note for yourself, I would recommend you first broker (or refer) several notes to corporate funders. In this way, you will learn a great deal by watching the pros quote on, perform due diligence and fund transactions while providing all of the necessary documentation. What better way to learn, not to mention the funder (not you) assumes all of the risk. So, this way, you get paid while you are learning and then when you get a bit 'seasoned" you can start buying notes for your own account.

The Jimmy Napier book is as old as the hills (it was, i think, the first book I read on the subject back around the mid-nineties) and I think it's a really good book to start with. Eddie Speed has good stuff, too and he's (from what I understand) closed somewhere in the area of 30,000 + notes in his career-- pretty impressive.

But also, if you click through to my profile and company info, you will be lead to a lot of free information about the note business-- investing, brokering, marketing, etc which may well be useful to you in learning about the business.

If you've definitely decided to start investing in notes or are still perhaps in the exploratory stage, I've been there and have a lot of information compiled starting from around 1996 when I first got into the business. I'd recommend you start part-time, think long-term with respect to the investing side and flip (do not buy) notes in the beginning so that you can watch the professional (corporate) funder perform the due diligence and close the transaction(s). This way you'll develop a feel for what's good, what's bad, what's a good deal, how deals are done, what's involved, etc. If you would like the benefit of some of my articles, etc which go into a lot more detail just email me or PM me and I can get it to you.

Chuck, the three big keys to finding privately-held notes are 1. Marketing 2. Marketing and 3. Marketing. There are many ways to do go about this and I've found that developing a network of referral sources in the professional sector can be invaluable for repeat business. As in attorneys (any specialty), accountants and financial planners. These professionals tend to cater to clients who may be holding notes or other types of cash flows and who may (at some point) need a lump sum of cash but don't know how to go about getting it. If you can educate these financial professionals who are amenable as to what to look for, they can turn into valuable referral sources for repeat business... like maybe 2,4,6,8 or even 10 transactions per year each and every year. You can also purchase leads for private note holders culled from public records. There are also online note exchanges but that's a relatively new animal and I don't have any recommendations there as of now. And, re NPNs, that's a different animal than performing notes and for those you'd want to work with hedge fund managers and the like.