Raising Money to buy Defaulted Mortgages. Some Raising Money Insights…

Raising money to buy notes aka defaulted mortgages aka nonperforming notes is obviously an important part of the note buyer’s business (not necessary for brokers, however).

Here is an email I recently got from someone who’s landed a few meetings with some venture capital funds (kudos to him – there is a TON of interest in distressed debt funds right now!) on ‘how to raise money to buy notes/defaulted mortgages’:

“Dean, I watched the 84 minute video on raising money to buy notes and it was impressive. To me it seemed like you were modeling your current portfolio to prospective investors for funding.

My question now is: how can someone who has not bough his first not yet make use of the platinum raising money toolkit in order to present himself to prospective funding investors?
It’s a little confusing because a newbie will not have a done deal to show the investors.”

Here is my reply:

Owen,

Here’s my recommendation: the best way that I’ve found to demonstrate competence and understanding to venture funds is as follows:

a) walk them through the Basic How to Raise Money single page excel file with the 2 example deals – it’s easy to understand, easy to walk through, speaks to their need to understand yields in terms of return percentages and profits. (BTW, it’s included as a BONUS in the ‘A-Z Profiting from Defaulted Mortgages Business-in-a-Box’ Course!)

Keep in mind the following: I’ve had 2 investors in Oklahoma tell me that they used the Platinum Toolkit IN COMBINATION with the Basic Toolkit exactly as I’ve suggested here. They had NEVER bought a note or defaulted mortgage before and they used the Basic as an example of what they could do. “It opened doors to at least 6 different investors for us,” they told me.

b) After you’ve done that, then walk them through an OVERVIEW of the entire business – e.g. the Powerpoint presentation from the Advanced How-to-Raise-Money Toolkit – that you customize in order to define who your team is, what you see the current opportunity to be, and what your summary financials are.

c) then, when you get to the summary financials page, you turn to the Platinum How-to-Raise-Money Toolkit to give them a drilldown on the P&L, Balance Sheet and the Roll Rate Model for how YOU will be running your distressed debt fund with THEIR money – e.g. the Platinum Toolkit. It’s customizable, so what’s nice about it is that you can model it to YOUR needs (e.g. you want to present a $5million investment from the investor, rather than a $27million one, or you want to add or subtract employees based on how big or small you expect you’ll need to be, or your assumptions about what you’re buying don’t really include foreclosed on notes, but mostly delinquent notes, etc.)

Let me clarify something here – the Platinum Toolkit is a sophisticated model, yes. But what’s sophisticated is that it’s all been built already. Now you just need to customize it to the size you want it to be. It’s NOT that hard to do, and the beauty is that it’s all interlinked and it runs itself.

In terms of getting ready for this presentation (congratulations, by the way, no one will give you the time of day unless they believe in what YOU can bring them, so just getting a meeting scheduled is a very big step – GO FOR IT!), you’ll want someone on your team (you or someone else), who understands Excel well, in order to run through the financials with you and customize the Platinum Toolkit to your needs.

The reason for our hesitation in terms of doing customization of any models for you is that it’s in doing that YOURSELF that you REALLY understand how it works, and how your BUSINESS is – or needs to be – structured. It’s not that we don’t want to help you to get the Financial Model exactly to the way you need it (and that we wouldn’t want to charge you the hourly $495/hour consulting fees that I charge now!) but in order to demonstrate competency and understanding to your venture funders, YOU really need to get inside this model. If they feel that you’re not comfortable – REALLY COMFORTABLE – with your own numbers and your own financials, you will not inspire their confidence and trust.

That being said - the Financial Model in the Platinum toolkit has been used for $6million and $30million presentations to GREAT effect. It is simple, it is complete and it is TOTALLY geared towards a note-buying business.

You should take a look at the new 35-min FREE Video on how-to-raise-money that I did to walk you through each of the different component parts of the Platinum toolkit – it’s a 35-minute overview of the model itself that I think you’ll find really helpful.

If you get into it, learn it, study it, and customize it over the next two weeks, you will have a MUCH better shot at securing financing than if you don’t.

Be your success.

Dean

=================================

* Check out our NEW FORUM: www.NoteBuyingProfits.com/forum

* Ready to REALLY get down & dirty?
‘A-Z Profiting from Discounted Mortgages Business-in-a-Box‘.
-> 16 hours+ of Video Training, 23 pages of checklists, a complete 8-Week Roadmap, an extensive Table of Contents for quick reference, plus TONS of Bonuses.
[===> You can check out Hours of F.REE Training Videos of the actual Course Content HERE.]

* ‘PRIVATE ACCESS CLUB’ (PAC) – Test-Drive it for F.REE for 30 Days!
Get Your Questions Answered LIVE & get Ongoing Support & Training!
Conference Calls/Webinars, Interviews with Industry Insiders (Bank Reps, Top Note Brokers, etc.), Real-Life Case Studies, Role-Playing, Members-Only Forum, and ‘HOT SEATS’ to get coaching on Your Deals/Business Challenges, and more