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

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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

The markets are going crazy and the Dow’s down to 1998 levels (yikes – hopefully you got out before the fall – I told all my family friends to go cash back in February of this year, so we’re doing OK as long as the mattress holds up).

So what does this mean for you in terms of buying defaulted mortgages?

Will Treasury snatch everything up?

No. There will be plenty of non-performing notes to buy. There is just too much bad paper circulating right now.

And regional banks and other smaller institutions, unlike Wall St broker/dealers, have a “normal” selling cycle that keeps putting paper out to bid every month.

Those are a great starting point for you.

For more info on the market, where to buy notes, who to target, and what the implications are, click on the note buying video below! (This is a snippet from this week’s Private Access Club webinar/conference call – where you can get ongoing training & support for your note buying business. Check out the 30-Day FREE Trial! It’s a great community! You can watch the full 90-MINUTE replay of this webinar in the members area, as well as TONS of other recorded note buying training sessions, interviews & role playing sessions with bankers & lots more).

OK, so I’m a victim of my own critique.

I admit it. I failed.

These past three weeks, I’ve put in bids on note pools and never even followed up. “I’m so busy that I’m just working too much,” is always my excuse.

Managing staff, reviewing new offers, handling tricky borrower calls where needed, reviewing financials for the fund, lining up Q&A sessions with the best people I can find in the note world, answering the never-ending questions from PAC members etc. etc.

So what happened?

Well, the basic rule of “polite persistence” – the process of following up and following up and following up with a new bank relationship in order to build it to the point where it takes off … just went out the window.

My mantra (to me AND to you) for today is … KEEP AT IT. (By the way, I prepared a short 3-minute VIDEO for you on this topic - SEE BELOW – which comes straight out of my 16-hour ‘A-Z Profiting from Defaulted Mortgages Business-in-a-Box’ Course!)

If you want to open a door to a bank, you have to learn how to knock.
If you want to open a door to a bank, you have to learn how to knock.
If you want to open a door to a bank, you have to learn how to knock.

Imagine you’ve just arrived at a huge castle. And you see some lights on in an upper floor window.

You knock once.

No answer.

You knock again.

No answer.

You knock louder this time.

Still no answer.

“Do I just leave?” you wonder out loud.

No … you see the light on and you hear sounds of pots and pans coming from another window.

So you bang on the door.

And you bang some more.

And you throw a pebble at one of the upper floor windows to catch someone’s attention.

You KNOW there are people inside and you’re just DYING to get in.

WAIT.

You hear noises. A door opening and closing.

Someone finally heard you!

But now what?

What do you say when the butler shows up at the door? “What took you so long?!”

Of course not.

Instead, you answer politely: “Good evening, I was wondering if I could …”.

OK – so enough with the story and back to polite persistence here..

Think of the castle as the bank.

You KNOW there is someone inside who can help you.

But you don’t get through just on one knock.

So keep knocking.

And then think of different ways to knock.

As long as you THINK there is someone in there, keep at it.

What have you got to lose?

Nothing less than a potential relationship that could bring you lead after LEAD AFTER LEAD.

Dean

Well…, we figured out a GREAT way to accomplish just that!

Enter: ===> PRIVATE ACCESS CLUB <===

Here is what you’ll get with PAC:

* Live Conference Calls/Webinars (Stay Current & Interact LIVE)

* Q&A Sessions (Get YOUR Questions Answered – listen to/download a Q&A Audio MP3 Sample HERE (= Good iPod ‘Food’!).

* Real-Life & CURRENT Case Studies (see a current deal of mine I shared with PAC members recently about to net me over $70K – and no reason, why you can’t do the same!)

* Role-Playing (How to talk to the bank & borrowers – get practice & coaching!)

* Special-Topic Sessions (Finding Notes, Raising Money, Calculating Returns, etc.)

* Interviews with Industry Insiders (Bank Reps, Top Brokers, Attorneys, etc.)

* Members-Only Forum (Exchange info with your peers, ask more questions, sell your notes, find partners, etc.)

* ‘HOT SEATS’ (Get 1-on-1 coaching on your deal/business challenge, as well as benefit from listening in on others’ deals/challenges & them getting coaching)

* and more to come…

And, no worries, if you can’t make it on the live call/webinar – everything will be recorded and promptly uploaded to the members area, so you can watch/listen to it whenever you please!
We are building a HUGE Note Buying archive/knowledgebase for you here!!

Multiple formats available where applicable: Online Videos, iPod Video downloads, MP3 Audio downloads, PDF transcript downloads, etc.)

30-Day Trial for $1 – click here

Here is what it will do for you:

You don’t have to do this on your own!

Wherever you are in your note investments, whether you are looking for your first deal, or raising a $20 Million Fund, there will be resources for you to build & grow!

* Get ongoing support! Get your questions answered.

* Learn from industry experts, learn from real-life case studies, learn from others being coached on their deals, learn from being coached on YOUR deal!

* Keep your hand on the pulse! Stay current with important industry news and market changes

* Exchange info with your peers in the members-only forum & grow TOGETHER

This market is Yours! We have 2-3 really good years ahead of us. Right NOW! Don’t miss it.

Here is what to do next:

Try it out for the first 30 days for $1! (No, this is not a typo!)

Charter Membership: $97 per month (after the 30-day trial for $1)
(Yes, the price will increase. NO, your price will never increase as a charter member!)

=> Purchasers of our ‘A-Z Profiting from Discounted Mortgages Business-in-a-Box’ Course are getting the first month for free!
(Please also note that this 16 hour+ Course will give you an invaluable foundation and solid base, which will make your PAC membership countless times more effective and valuable for yourself. You will be seriously prepared to have PAC support you in putting your note buying knowledge into high-gear ACTION!)

___________________

My reply:

Here’s something to keep in mind. First of all, why are you spending any time at all looking at note buying? Is it to make money?

Of course.

Is it to make lots of money? Sure.

OK, now. Why are you attracted to this more than some other aspect of real estate?

Well, one of the key reasons SHOULD be the repeat-ability of this business. The 1R, remember? (the ‘A-Z Profiting from Discounted Mortgages Biz-in-a-Box‘ Course will walk you through this, pounding this into your head!). “R” stands for “relationship”, and the idea that a single relationship can generate significant deal flow for you.

So to the question at hand.

If you’ve just spent a significant amount of time generating a lead on a note or pool of notes from someone, and come up with a data tape (a data tape is usually an excel spreadsheet with 1 or more notes for sale included on it), then you should be thinking 2 things:

1. how do I make money off the notes on this tape?
2. how do I make recurring revenue off of this relationship?

It looks like the company mentioned before may have addressed (1) above, but it may not address (2) unless you have “secured” yourself with some sort of contract to cover future transactions.

In order to help you to protect yourself as a note broker, here’s a draft commission agreement (right-click & ’save as’ to your PC) that you might want to use as reference (note that it’s California specific so you’ll want to edit it accordingly) – in order to “protect” your interests.

BEWARE THOUGH: a contract is really just a piece of paper. You need to litigate to enforce it. And to litigate, you need to have evidence that the terms of your contract have been violated.

What am I getting at?

Once you’ve signed a brokerage agreement (and I have brokerage agreements with people that are just verbal agreements, by the way), you then have to trust that the person who you’re brokering to will send you money each time they do a deal with the seller you introduced them to, at least for the duration of your agreement.

So now you’ve become an enforcer. If you don’t trust that the person you signed the brokerage agreement with is sending you money WHEN they do a deal, now you need to “check up on them” to make sure that they’re not doing deals and NOT sending you your commission.

And you may not like having to do that.

So what’s my advice on how to broker notes?

Broker to people you can trust.

Simple as that.

If you feel like you can trust someone, then go ahead and enter into an agreement with them.

But don’t ever do business with someone that you don’t have a good gut feel to.

Trust your gut.

Also, listen to/download (right-click & ’save as’) a Q&A Audio MP3 Sample HERE (= Good iPod Food!).

If like what you saw and want more ongoing note buying training support like that: check out our $1 Trial for 30 Days of the Private Access Club – a great support system to get your Note Buying Business jump-started – or taken to the next level!

However, I just finished the “Closing on a Note” Course for you – 4 hours and 23 minutes of no-nonsense note buying training and review divided into 4 parts (or 4 DVD’s if you prefer the hard copies).

And, as usual, watch the first hour (in this case: 90 min) for FREE!

Take a peek:

A couple of things to keep an eye out for (don’t laugh at my lame attempt at a music video – it’s “inspired by actual events” as they say in the movies):

• Fades – what they are and how to use them (minute 23:06 in part 1)
• Pulling apart the $405 million pool (minute 38:35 in part 1)
• How to tell between the Banker who’s the “Easy & All” vs. the one who’s the “Some & High” (minute 6:50 in part 2)
• Deconstructing your Competition – better known as the Johnny-Clegg-note-entertainment-bonanza – turn up the volume on your computer speakers and enjoy (minute 19:11 in part 2)
• The 43-minute drilldown on the one document you sign in a note purchase (starting at minute 2:59 in part 3)
• Boarding a loan – the A-Z checklist (minute 6:07 in part 4)

Enjoy. This is the final of the 4 note buying courses that I’ve just finished.

16 hours chock-full of no-fluff information, training, and insights to give you a leg up on the competition as you launch or grow your note buying business.

Note: I will very soon release most the material I created in one big package. Enter: ‘A-Z Buying Non-performing Bank Notes Business-in-a-Box’ – coming up shortly…
Actually, hint: you can check out the offer already if you click on the order link on the ‘Closing on a Note’ Course page. (One could argue I am giving away the farm here…) Plus, there will be even more valuable goodies in there that are not mentioned yet on the order link. So stay tuned for that.

Talk soon,

Dean

In the last week, we:

1) Received two checks totaling $7,000 from a borrower in Silver Creek, GA, on a loan we paid $65,100 for (Reperforming Loan)

2) Got a call from a borrower asking us whether we could get her refinanced if she brought her boyfriend on title to her home (Refinance)

3) Learned that a property we just bought a first mortgage on – and that was listed for sale – was just RENTED on a lease option contract (Refinance, Reinstate or Property Sale)

4) Filed for foreclosure on a borrower in Bossier City, Louisiana, who hasn’t responded to any of our letters, and were reminded about the special way that foreclosures are handled in Louisiana (Foreclosure)

5) Bought a $76K first mortgage on a home in San Antonio, Texas worth $160K, and laid out our plan to generate a 50% rate of return on our investment (Refinance)

6) Made an offer to one of our borrowers to sign a Deed-in-Lieu of foreclosure - putting $20K in her pocket and lining up for us a potential gain of over $100K on a $72.5K investment (Deed-in-Lieu)

In just one week in our note buying business, we’ve seen action on all 5 Exiting Options (you’ll learn these in the Course).

WANT TO LEARN MORE?

Join me Tuesday evening 2/26 (TOMORROW) at 7PM, for the first in a series of 4 Note Buying webinars on Step 4: Managing & Exiting Notes. (Again, if you can’t make it, or are reading this too late: no fear… we can still get you access to the replay links.)

If you missed it: we will put on various note buying online courses, for example one on Step 2 of the note buying process – How to Determine a Purchase Price – on any non-peforming note.

Or one on ‘Managing & Exiting’ your Note Buying deals.

Thanks again to all of you who came yesterday! Hope to see you at the next one or on one of the webinars.

Would love to meet you there!

If you are not close enough to attend: fear not… we are almost ready to launch a bunch of web-based note buying information over at NoteBuyingProfits.com. It’s gonna be fun & informative!

Plus, as always, we will put more and more free note buying resources on the blog as well!