How to Find Notes – Do you speak-a my Language?

On How to Find Notes:

Do you remember that 1981 hit from Men at Work called
“Land Down Under?” (OK, so I was a big Men-at-Work
fan, I admit.)

Well, what made me think about it was this email that
I just received from a Korean by the name of “Joe”
(that’s what he goes by, I kid you not).

How is this related to buying Notes? Because Joe told
me a little story today that demonstrates one of the
most important lessons in the world of ‘how to find notes‘:
RELATIONSHIPS MATTER

In fact, not only do relationships matter, but
“commonalities” matter. In other words, what you want
to do when you’re looking for notes is to find out
ways to build ties with your seller.

These can be social, cultural, sports-related,
geographical, you name it. Almost any activity, sport,
hobby, pastime, event, book, play, food group or
Australian rock band can be a point of commonality.

Let me share with you Joe’s little gem of a ‘how-to-find-notes‘
story to demonstrate.

Here’s what he wrote to me today:

** I am the owner of Korean Investment club, but we
are not ready to think about buying notes yet. ( for
lack of understanding)
I was solicited last week from big Korean bank to buy
the note from the person in charge of the note.
He ask me to offer any amount for the first trust
deed with face amount of 2.5MIL or more (including
interest will be 2.7 Mil)
Collateral behind is the 79 room big motel with
restaurants. I am really interesting to buy it,
because I know it’s worth around 4MIl.
Is there any way to make it through.
Thanks for your advice.

So what are we looking at here?

We have Joe – the leader of a Korean Real Estate
Investment Club located here in th US. And we have a
big Korean Bank. And that bank has just sent a pretty
interesting lead to Joe.

Does Joe know anything about buying notes?

No – he admits as much in the first line of his email.

So do you think that he pitched to this big
Investment Bank that he would be the perfect guy to
buy their notes?

No – this opportunity just “landed” in his lap. And
from what he writes, they’re offering to him to make
“any” offer on that note.

Now for a moment, I want you to stop focusing on the
fact that Joe might actually be able to offer some
fantastically low bid on this note, like $1Mil, and
actually close this deal with this bank. That could be
incredible, yes, if the value of the collateral is
really $4Mil and if the borrower’s not performing on
the note and Joe can foreclose on the motel.

But hang on a minute. I want to point out something
that is so simple that you probably glossed over it
already, thinking that you’re supposed to be looking
for something complicated.

What kind of a bank is this? Korean. And where’s Joe
from? Korea.

So the fact that this note, which is on a California
property, happens to land in Joe’s lap, should
actually come as no surprise.

Very simply – banks often want to sell notes to
people that THEY CAN TALK TO.

And sometimes, the people they can talk to look like
them, talk like them, act like them, do business like
them, live like them, and entertain themselves like
them.

Chances are: even if I were Mr. Well Known Note
Investor and I found a way to that Korean Investment
Bank, I would probably NEVER GET THE SAME RECEPTION
AND CREDIBILITY that Joe has.

You see, they’d RATHER deal with him than you or me
because Joe is one of them in a way that you and I
never will be. So the process of “getting to know one
another” for Joe and this bank will always be a whole
lot smaller than the same process for your or me.

So get out and start applying this Note Buying Tip
101.

Find the Commonalities between You and your
Sellers.

Go find someone who speaks-a your language, and then
see if they have Notes for sale.

Talk soon,

Dean