Here is a question I just came across on our new forum at: www.notebuyingprofits.com/forum recently:

Hi Dean,

I’m a newbie. I have read all the free information on your site. I plan to purchase your system next week. I have no money to invest in notes at this time. I plan to broker a few until I get comfortable with the process and get some investment money saved. Since this is my game plan, is this the right course for me just starting out. Does your A-Z note buying course give you the tools needed to only broker at first?

Thanks,
Sheryl

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And here is my reply. This may address some of the ‘how to get started in the note buying/defaulted mortgages business?’ questions going through your head as well:

Sheryl,

Brokering Notes is both an art and a science, and no – you don’t need money to broker notes. What you need, though, is a solid understanding of what you’re brokering if you want to make any money brokering notes.

Actually, brokering is a very useful way to start – you can learn about the entire closing process, and see a transaction in action, before you ever need to put any of your own money at risk.

Nothing compares to buying your own note in terms of gaining experience, but this can be a great way to start (making good money) before you build up enough cash to be able to buy your own note (where you can make great money).

There are a few really good brokers out there, however, that make excellent money doing what they’re doing.

Learn this right, and you can have none of your cash in the game, excellent relationships that you continue to build over time, and do incredibly well for yourself!

Let me give you an example of what sometimes happens with brokers:

If you were to call me up today (our office usually gets 3-5 of these calls each week) and say “Hi, I’m Sheryl and I’d like to broker notes to you – can you tell me what you’re looking for and I’ll go out and look for some?”, you wouldn’t make it through the door and we’d probably put your name down on the “do not answer” list.

Here’s why: if you, as a broker of notes, can’t demonstrate to me – a buyer of notes – why I should listen to you in 30 seconds or less, then you’re a time waster.

Here’s what the Good brokers do:

They call when they have product that they’d like to show us and have us bid on. And the only way to get product is to … talk to banks or other sellers of notes, and convince them that you know what you’re talking about and that you can help them out by finding buyers for their paper.
(Take a look at this recent blog post for more tips on why it’s important to understand what you’re brokering:  http://notebuyingprofits.com/blog/160/note-brokering-of-defaulted-mortgages-an-art-and-on-turnkey-investment-programs/)

So now – guess what – as a broker you need to actually demonstrate a similar understanding of notes that a regular buyer does like me.

Why?

Because banks want to deal with people who know what they’re doing.

And what a Bank will usually be looking for is someone who knows what happens in a bid and how bids are presented (stips and purchase contracts, fades, e.g. Step 3 of the A-Z Course and the note buying document toolkit that comes with it), what type of due diligence a typical buyer will be doing (title and BPO’s, Step 2 of the A-Z How to buy Defaulted Mortgages Course), and what individual buyers actually DO with the notes they buy (the 5 different note buying exit strategies, Step 4 of the A-Z note buying course).

My advice:

Give yourself a solid education in the note buying, the note closing, the note negotiation and the note workouts, so that you can (WITHOUT DOING A SINGLE DEAL), demonstrate a solid understanding of the note buying space.

No one likes dealing with newbies who don’t know anything – everybody likes to deal with professionals, or people who come across as professional, who won’t waste their time and who can get them product.

You can spend a lot of time getting to the point where you’re taken seriously by buyers and banks (you need both in order to broker successfully, which not many people realize in this market).

And the A-Z Profiting from Defaulted Mortgages Business-in-a-Box course will jumpstart you - I have absolutely no doubt about it.

Also, on brokering - you should really listen in to the Q&A session I had with a TOP Broker, Steve Cohen over at Nautilus – as part of our Private Access Club webinars/calls.

It’s a 93-minute review session on what defines a good broker, what they do for their clients, what indicative pricing is for certain pools, and other very valuable tips to give you some insight into how to succeed as a note broker.

It is  available for you to review for 30-Day FREE Trial that comes with the Private Access Club which you can find here: http://www.notebuyingprofits.com/privateaccessclub.html
Just click on the link at the top left of the page – the free 30-day trial; you can then find the recording of this interview (and a LOT of other great recordings) in the members area.)

I look forward to seeing you out there very soon brokering notes!

There are 3 people, members in PAC and buyers of the A-Z note buying course, who I have personally had broker some very good quality note pools to me in the past 60 days.

Be your success,

Dean

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* 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

It’s a bird, it’s a plane, it’s … Live.

Huh?

It’s Microsoft Live, which, for those of you who have not used it in your how-to-buy-defaulted-mortgages research of ‘looking’ at the properties you are buying notes on, you should.

It is fantastic.

What am I talking about? I’m talking about doing due diligence on your non-performing notes, and using the best tools out there when buying defaulted loans.

Microsoft Live is one of those.

If you want to jumpstart your due diligence on how to buy defaulted mortgages, and to give you an edge on anyone else out there (and for some comparison testing with Google Earth for you die-hard Google fans out there), you will definitely want to take a look at this 7-minute note buying video clip I’ve put together for you below.

For more where that came from, make sure you soak up the entire hour I spend on ‘What’s Your LTV’.

Yes, you can watch that Note Buying Video on how to determine your LTV (Loan-to-Value) when buying defaulted mortgages aka nonperforming notes for ZIPPO as well.

Talk soon,

Dean

PS: Here is the How-to-Buy-Defaulted-Mortgages Video I promised you:

If you really want to know the in’s and out’s of how to talk to banks to buy defaulted mortgages aka nonperforming notes, why not hear it direct from the horse’s mouth, so-to-speak?
 
I mean direct from a banker.

Make that TWO bankers.
 
That’s right….

Join me tomorrow (Wednesday) at 8pm EST, 5pm PST for a conversation with TWO bankers, Saprina and Janet (some of you may remember Janet from the ‘A-Z Profiting from Defaulted Mortgages Business-in-a-Box’ Course, others may have heard Saprina before in our Private Access Club – here is a brief snippet from our last call with Saprina to give you a taste).
 
So if you want to know anything about the following, then don’t miss out tomorrow:

* What are the first words to say to a banker to buy defaulted mortgages?

* Does it matter what language you use?

* The 3 Things never to say to a banker when buying defaulted mortgages

* The 2 Things always to say to a banker when buying defaulted loans
 
And if you want to test your phone calling skills, a few of you will get the opportunity to try a sample conversation with Janet and Saprina!
 
This could be the time that you perfect that banker call you’ve been dreading for so long.
 
Don’t miss it!

Short Sales aren’t going that well, aren’t they?

It’s NOTE BUYING TIME NOW.
 
Dean

PS: Again, here is the link to be on the webinar/call tomorrow.
(If you see this after the fact: no worries – all recorded!)

What worried me was when he said: “Dean, I want to get into buying defaulted mortgages in order to keep people in their homes and get some good cash flow.”

Don’t get me wrong. I’ll be the first to admit that Humanity counts.

But …

Don’t lose sight of the forest for the tree.

In other words – don’t try to force your Note deals down one note buying exit strategy.

It just won’t work.

You see, you may WANT to pursue A SINGLE exit strategy for the defaulted mortgages you purchase (in this case, he was looking to re-perform all the notes he bought – possibly by modifying them all – and then to hold them for cash flow).

DON’T FALL INTO THE SAME TRAP.

In order to invest successfully in non-performing notes, you need to be like Rafael Nadal.

Nadal is a really well-balanced tennis star. He has an amazing serve, excellent grass court experience, plays solidly on clay, and can fire a wicked forehand.

Follow the same approach to your Note buying. Learn how to pursue MULTIPLE Note Buying Exit Strategies at once.

Below is a useful Video snippet (straight out of the ‘A-Z Profiting from Discounted Mortgages Business-in-a-Box) to really hammer this point home to you.

Be careful you don’t “stick yourself” with one strategy. For example, one useful tool to get a borrower to cooperate with you in getting a loan modified can often be to start a foreclosure action.

Why? Because for someone who has been missing payments regularly and hasn’t been current for a while, sometimes a wake-up call with a foreclosure notice (combined with a helping hand from you to help them with a loan modification) is what prompts them to get their act together, take control of their situation, and to work their way out of their delinquency.

Don’t fall into the same trap the investor I talked to did. Don’t think that 1 Exit Strategy to your Note Buying business is enough to make you successful.

You really need to be a jack of all 5 Exit Strategies to do well in this business.

(You can watch a full hour just on Exit Strategies for FREE  right HERE, straight out of my massive 16-hour course on how to profit from defaulted mortgages.)

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!

just playing around with different formats of the blog posts.

Let me know in the comments section if you prefer Audio versus the written word.

I also will put up more Video answers again soon.

Talk soon,

Dean

PS: Below is the AUDIO answer to the question “What if the banker asks me for Proof of Funds? (And I don’t have any…)”. Just hit the play button!