A bank failure is not the same each time around. And they all represent different opportunities for a well-tuned note buyer.

Here are the four key things to look for in bank failure announcements:

1)   Did the failed bank get taken over? There are 3 types of bank failures:

Note: The 3rd category above is by far the most common. Through September 1, 2009, there have been 77 Purchase Assumptions; 1 Insured Deposit Transfer, and 6 Payoffs, for a total of 84 bank failures in 2009.

2)  Who took over the failed bank? If a bank fails and another bank takes over its assets (which includes a bank’s loans), then pursue the acquiring bank to find out how they’ll be selling the failed bank’s loans. It’s not a matter of IF, but WHEN.

3)  Finally, how exactly did they take over the failed bank? Was there a Loss Share agreement in place or not? A Loss Share, simply enough, indicates that the FDIC and the acquiring bank are sharing the losses on the loan portfolio. These are probably the best places to start in terms of pursuing note sales, since these banks will often be looking to sell off the acquired bank’s loans.

4)  What’s the contact information of the acquiring bank? This seems pretty straightforward, but it’s worth checking the FDIC website rather than just Googling the acquiring bank. Here’s why: the FDIC often appoints a point of contact within itself for REO vs Note sales. Go to the FDIC website, then select “Failed Banks”, then “Failed Financial Institution Contact List”, then type in the date range you’re looking for and then search.

Write a comment below and let me know what you think,

Dean

In today’s economy, news of defaulted mortgages have become a constant refrain. Despite the obviously negative tone you find in the reporting on this subject in the media, many people see the current housing situation as a once-in-a-lifetime opportunity to make money. Today, we’ll talk about one of the hottest trends in real estate investing now–the buying and selling of non- performing “notes, ” i.e. defaulted loans.

Assuming that you’ve learned enough about note buying to want to get into the game, what would you say is one of most important elements in your note buying decision?

Note Buying Basics

Let’s start with the basics. When you’re initially searching for notes, due diligence plays a major role. Take a look at any of the important decisions you make in your life. Don’t you always do your homework? Weigh the positive and the negative? Well, ask yourself, why shouldn’t you apply these same principles to your note buying business?

Exactly…there isn’t any reason why you shouldn’t.

Buying Notes – 4 Source to Determine Value

If you are going to buy some notes, you need to know what those properties are worth. How can you do this? Here are a couple of tips on how you can evaluate those properties without leaving your home.

Your four best sources for estimating value are:

1. Trulia.com 2. Realtor.com 3. Zillow.com 4. Local MLS data (from a local realtor)

How to Buy Notes – Online Research Tools

Let’s focus on the first three for now. Each of these online sites allows you to research comps near your property–all from your computer, without leaving home! You can access recent listing prices, average sold prices, and how long the properties have listed before they were sold. All of this information can give you insight on what these properties (that are attached to your note investments) are worth.

In one online session, you have determined the value of the property. You know generally what the note is worth and furthermore, a price that you should offer.

How to Buy Notes in Today’s Market

Note buying isn’t rocket science. With the correct guidance and knowledge, you can profit in today’s real estate market. Knowing what actions you need to take and how to perform them is a step in the right direction. As with any investment, know what you are investing in.

Stay tuned for my next article as we look further into the last source on my list. In the meantime, get on your computers and explore the three websites we mentioned. Become familiar with all the free information that is available to you.

Check out our Note Buying Forum.

Check out our ‘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.

Want ongoing support?

Test drive the PRIVATE ACCESS CLUB’ (PAC) 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, and ‘HOT SEATS’ to get coaching on Your Deals/Business Challenges, and more

I wanted to share with you a specific example of someone…

* * Buying Notes- The Process of Bidding as an Art * *

You see, if relationships didn’t count for anything, and if the principle of High-Bid-Wins always applied in every single real estate note transaction, I wouldn’t have worried about my friend on his way to bid this commercial loan pool on DebtX (an online bidding platform for bank notes).But because a high bid does NOT always win when you’re buying notes, then I do worry about my friend bidding on that DebtX note pool.

======> Why?

Because if he’s not talking to the Seller of the notes, and doesn’t know the Seller (or the rep at DebtX that manages his account), then he’s not dealing with a full deck – he’s not playing all his cards right.

======> Why does this matter to you?

Because you may be the equivalent of my friend bidding that non performing note pool.

And if you ever are in that situation, you’re going to want to:

* * When Buying Notes, Engage Your Seller* *

This will improve your chances of winning the bid.

Winning bids in any market, but especially in this market, is not just tied to the price that you’re willing to pay for a note or a pool of notes.It’s tied to your ability to demonstrate that you’re a trustworthy and credible counter-party (fancy name for a note buyer), who can deliver when and how you say you will.

As former GMAC traders Matt Kennedy and Mike Mand pointed out in a recent discussion I had with them in our Private Access Club:

* *Buying Notes -Highest Bid, Not Always the Winner* *

And their “BEST” relationship was actually a note broker who ended up calling them almost once a day with information and news about other trades and deals that were happening in the note buying industry.

No matter if you’re bidding on a single note or on a pool of notes, take the time to develop and build a relationship, and you will see your success rate improve.

Guaranteed.

If you haven’t already, check out 4-minute video that I prepared for you at the top of this post.

Talk to you soon,

Dean

P.S. If you enjoyed this info, check out my 16 hour course. We have a special right now where you can try the whole course for 30 days for exactly $1.

For those of you out there that are trying to sell your defaulted mortgages and looking for…

***Prospective Note Buyers***

Always think of ways to use publicly available information that will help you in selling notes. (conference attendees and foreclosure auction buyers are ones I’ve mentioned in the past).

One other source for potential defaulted mortgage buyers is:

* * * The list of Commenters on the FDIC’s Legacy Loans Program includes a number of Self-Identified Note Investors * * *

Go to the public comments section and collect the following data about these note buyers:

* Name

* Title

* Affiliations

* Email address

Voila … a PROSPECTIVE BUYER LIST that might just be all that you need for your note buying business!

Here’s the link to the comments list on the

========> FDIC’s Website

(Probably won’t stay up forever, so be quick!)

Talk to you soon,

Dean

P.S. Did you enjoy this information? If so, my note buying course is full of no-fluff info like it. 16 hours to be exact. And you can try it for a buck!

Learn how to buy Notes:

My 16-hour course for A BUCK? (YES!)

I would like to share something with you that may appear slightly crazy.

And my business partner Falk sure thought the same thing when I suggested this to him…

Here’s ‘a little experiment’ I am conducting:

I am so convinced that you will be completely blown away by the quality of my course that I decided to let you try the whole thing for a full 30 days for a whopping $1 with no obligation to purchase!

Yes, you heard that right. Try it for 30 days at no risk.

Think about this for a moment:

Do you believe I could make such a ridiculous offer if I couldn’t back up my claims here with 100% high- quality, no-fluff information?

I didn’t think so either.

As a matter of fact, I think this unsolicited comment from Will Seminario from Miami in our Forum says it best (he was answering somebody’s question about the course):

“The bottom line… Everything in the course is the way Dean says it is… Period. It’s VERY rare that you see the actual delivery of a course directly mirror what it says it offers. There are absolutely no fillers in this course, just meat and potatoes.”

So, If you don’t think the course is everything it promised to be, and then some, you can just send it back within the first 30 days and won’t be charged. Period.

If you like the course, you’ll keep it, and you will pay after 30 days in three EASY monthly payments.

Plus, on top of that, as if that would not be enough, I am happily offering you a 90-day No-Questions-Asked 100% Money-Back Guarantee!

It’s as easy as that…

You don’t like it?

Send it back within 90 days and I simply refund you all your money. No questions asked.

I think you will agree that it doesn’t get much more straightforward than that.

This market is Yours!

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

‘Mhhhh, should I RISK that dollar? Should I not risk that dollar…? Should I risk that dollar? Should I not risk that dollar?’

You be the judge.

Tomorrow never comes.

To your success t.o.d.a.y.,

Dean PS: I have never done this before and I hope it’s not gonna turn out as a big ‘let’s take advantage of Dean’ extravaganza. But I feel it’s the right thing to do, and it will help a lot of people ON THE FENCE (you?) to TAKE ACTION – and in a safe, risk-free way.

Any questions or comments? Just call us at 718-783-7605 or simply leave a comment below and type away.

I just got off the phone with the Sr. Vice President
of a California bank in charge of note sales, and a note broker friend of mine who
set up the call.

The SVP has 3 non-performing loans – they’re
commercial loans in the LA area – but ignore the fact
that they’re commercial right now.

———————————————-
* * * A Buy Notes Lesson about Golf Clubs and why to
Communicate with Your Borrower * * *
———————————————-

Stay with me here

So the SVP told me that one of the loans has a
foreclosure sale scheduled 2 weeks from now.

And that she hasn’t spoken to the borrower (a
builder/developer) in several months.

I asked her if she was concerned about the loans or
not, and if she was worried about whether she would
have any problems taking over the properties through
the foreclosure.

She answered: “No, because we feel the value of the
properties is sufficient to pay off our loan.”

====> I was concerned about this buy notes situation.

Why?

Because if there’s one thing I’ve learned in this buying notes
business:

—————————————-
* * * Buying Notes: Managing the Relationship with Your Borrower is
KEY in 60% of all Cases * * *
—————————————-

And if you don’t work with your borrower, then you’re
really hurting your chances of getting out of a note deal.

Let me explain the 60% of all cases claim.

There are essentially 5 Buying Notes Exit Strategies for all Loans:

* Reperformance

* Refinance

* Short sale or deed-in-lieu

* Note sale

* Foreclosure

=> Only 2 of those plays, foreclosure and note sale,
can succeed without any communication at all with the
borrower.

But the risk that the foreclosure runs – and
foreclosure is the path that the banker is taking in
this example – is that the borrower may file for
bankruptcy and postpone the time when you recover the
property.

Take this buying notes advice from me:

—————————————-
Make Fantastic Returns when Buying Notes
without having to foreclose or
to sell the note on to someone else
—————————————–

If that’s true, then losing contact with your
borrower essentially kills 60% of your note buying exits (3 of the
5).

Would a professional golfer get onto a course with
only 5 of 12 clubs?

Would that be somewhat limiting to their game?

Probably.

But boy would it look funny hitting a putt with a 9-
iron.

So my note buying advice to you is:

————————————-
* * * Note Buying Exit Strategies: Don’t ever limit yourself if
you can avoid it * * *
————————————-

Much as it can be painful or unappealing to some of
you – working WITH your borrower is essential when you buy notes.

That was the advice I gave to the SVP at the LA bank
today.

We’ll see if she takes my advice – we’ll be tracking
her nonperforming notes to see if any of them end up in bankruptcy.

And if those notes do – there’s a good chance that she’ll
regret not having kept in touch with her borrower.

Dean

PS: Did you enjoy this information? If so, my note
buying course is full of no-fluff info like it.
16 hours to be exact.

And 4 hours just on the 5 Exit Strategies alone.

(Already own the course? Did you really extract all
the info you could out of it yet?
I am confident that, if you didn’t go through it at least
TWICE, you are not getting all your value out of it…

Hope you enjoyed this post on how to buy notes.

I just put together a short new, free Note Buying Video
on our homepage at www.NoteBuyingProfits.com for you.

Plus, I put together a FREE 20-page Note Buying Report, called
‘The Great Recession Buster Report’ for you as well.
You can get it right on the homepage at www.NoteBuyingProfits.com

In it I share some of my path from Frustrated Cubicle Dweller
to Short Sale ‘Slave’ to… drum roll… ‘robbing’ banks (legally,
of course) – and how YOU can, too.

It’s 100% F.REE and I bet you will learn a thing or two, and
you can probably identify with parts of my note buying journey
yourself.

If only ONE person reads this & gets inspired to TAKE ACTION
and take advantage of the insane note buying o.pportunity out
there (yes, it takes something to NOT listen to the nay-sayers and
dream stealers!), I will be happy that I took the time
to write it.

Feel free to pass this on to your Real Estate buddies as well,
they may be quite ’shocked’ to learn about this. ;P

Let’s face it: 95%+ of them have absolutely
NO CLUE about note buying and this o.pportunity…

Check it out at www.NoteBuyingProfits.com now!
(Did I mention it was F.REE? )

Talk soon,

Dean

PS: Let me know what you thought of it by leaving a COMMENT BELOW.
Would love to hear your thoughts on the Video & the Report.
What did you like best? Worst?

What is your biggest concern to get into the note buying game?

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

* 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, and ‘HOT SEATS’ to get coaching on
Your Deals/Business Challenges, and more

* Questions? Chances are I already answered them at www.NoteBuyingProfits.com/blog.
(Use the ‘Search’ feature or click on the ‘FAQ’ category on the right to see them all!)

* Want to make Easy M.oney telling Your RE Buddies about our Kick-A** Products? Click here.

You’ve probably heard of Sun Tzu’s (the famed Chinese
warrior) instruction to his soldiers to “know your
enemy” before going into battle.

Well the same is true with note buying.

“Know your seller” should be the mantra for every
note buyer (and broker for that matter!).

Why?

Because if you don’t “know” your note seller then you
might be entering a negotiation with them without
having any idea of their key negotiating points.

Let me give you an how-to-buy-notes example,
based on a note we recently bid on:

A bank has a 1st mortgage on a single family home in
Salt Lake City that they want to sell.

The borrower hasn’t paid on the note in over 120
days, and the note matured over 2 months ago, so the
whole loan could be called due.

The bank hasn’t served the borrower with a
foreclosure notice.

And they’ve called you in order to find out if you
want to buy their non-performing note and mortgage.

I looked at this loan first from the standpoint of
price – how much could I offer for it. We pulled a
title report and a BPO and looked at comps that a
local realtor provided to us.

And we put in our bid.

My rep at the bank hinted that she would need
approval from a committee of senior staff at the bank.

But she was very cagey about answering any of my
questions about where she needed pricing to be in
order to sell, and what the status of the borrower was.

I became a little suspicious and tried probing for
more information, but she immediately clammed up and
said: “I’m not at liberty to say more about our
borrower.”

Something was up in this note buying deal.

It was odd that the bank rep would react that way -
in fact it was the first time I’d seen that kind of a
response to an individual loan before.

How-to-Buy-Notes Tips when talking to the Banker

So I called her back again, and tried a little
“exploratory” language with her.

“Would it be safe to say that the bank has a unique
relationship with this borrower?” I asked her?

“Absolutely,” she immediately replied.

I was curious – what was going on here
in this defaulted mortgage deal?!

So I kept fishing, understanding full well that she
couldn’t reveal any information to me, but that she
wasn’t opposed to my pressing for more information as
long as she could answer in yes or no terms.

“And there’s a reason why the bank isn’t foreclosing
in this case, correct?” I asked.

“Yes,” she answered simply.

“And you’re probably not at liberty to tell me, but
this sounds like it’s a difficult relationship for the
bank to foreclose on, is that correct?”

“Absolutely,” she answered again. “I can’t tell you
any more than that.”

“One last question,” I asked. “Is it safe to assume
that the bank may be more open to a bid on this loan
that clarifies what exit strategy we’ll be pursuing
with the borrower rather than an actual purchase price
for the nonperforming note?”

“Yes,” she answered briefly again. “That would be
correct.”

So what was going on in this note deal?

Well, what I learned in two more phone calls with the
woman I was negotiating with at the Bank was that the
borrower was extremely well connected in Salt Lake
City political circles, and her ex-husband was a close
friend of the bank’s President.

Foreclosing on her could create a political ruckus
for the bank, it turned out. So the bank was exploring
discreet options to rid itself of its non-performing
loan – namely via a note sale to a 3rd party investor.

——————————————————-
* The lesson you should take from this How to Buy Notes example *
——————————————————–

If you don’t take the time to probe WHY the seller is
looking to sell a loan, and the circumstances around
the sale, you may completely miss the seller’s key
negotiating points on a transaction.

In this case, it wasn’t price. It was what we were planning
on doing to work out the note with the borrower.
Price was much less of an issue.

Your how to buy Notes Action Items from this:

1)    Always try to understand WHY a bank wants to sell
you a note or a pool of notes.

2)    Try to find out what the key negotiating points
are for the bank for selling you this defaulted mortgage

Usually it’s one or more of the
following:

a.    Price

b.    Speed with which you can close

c.    Your ability to close (in other words, the Bank
cares more about WHETHER you can close rather than
what price they Buyer is offering for the discounted note)

d.    Your note buying exit strategies (in other words, the
bank may determine whether to accept a bid or not based
on what kind of Buyer you are – are you a foreclosure
operation with no attempt at loan modifications, for
example?)

So keep all this in mind when you’re next talking to
a Bank to buy notes.

It’ll make you that much better a note buying warrior!

Talk soon,

Dean
PS: If you enjoy this kind of no-fluff info, you will be delighted
with our A-Z NoteBuying Course. It’s full of it!
(And our insane 33%-off Special will not go on forever. Hint, hint.)

And to say it in the words of  Josh Gray
from UpgradedProperties.com in Chandler, AZ, who put the
following (unsolicitedly, I might add) on our forum:

“Dean, I truly appreciate all the information you have provided in
the A-Z Course. I have read ALL the competition’s materials and
it comes nowhere near yours.”

Here is a question I got asked recently:

“My understanding is the federal government is going
to be offering financing to private equity and hedge
funds to buy up the bad debt.

If anything it would seem this would at the very
least invite a whole heck of a lot of competition.

What are your thoughts on this?”

Well, here are my thoughts:

I’ll address your concern in detail on 3/25 in
our Private Access Club live webinar.

* * * The “Competition” merely adds to the
Deal Source for buying mortgages from banks * * *

====> There are 4 “buckets” in the note industry:

a) Big boys – buying $100M and above

b) Mid boys – buying $20-100M

c) Small boys – buying $1-20M

d) Mom and pops – buying <$1M

The majority of the shuffling is happening, in my
opinion, at the big and mid-boy stage, in terms of raw
dollars.

Now, think about their financials for a sec: these
are investors, not originators.

=> They’re hungry for yield.

If you’re a Mom and Pop or a Small boy, the Mid and
Big boys are now Deal Sources to buy Notes for You!

They’re looking for a big IRR (e.g. quick flip) and
they’re buying more competitively than the Small boys
and the mom and pops.

VIEW THEM AS NOTE BUYING DEAL SOURCES, partner up with
them, come up with some transparent “Cost plus 5″ type of
approach where you give them 5 points in exchange for
cherry-picking their portfolio and piggy-backing off
their due diligence, and why wouldn’t they be
interested in selling notes to you?

Trickle-down. (I will talk much more in detail on that on
tomorrow’s Private Access Club webinar.)

So if you’re worried about the drip from the water
fountain (or the firehose!) being intercepted in some
way, just shift yourself a little so that you catch
the drips from the guy who just got in front of you.

And you can always go look for another water fountain
to buy mortgages aka nonperforming notes.

I assure you that the Mid and Big boys are NOT out
there building relationships with the 8,000+ FDIC
insured banks.

And last time I checked, those 8,000 have a few non-
performing notes in their portfolios!

Hope this was useful (and inspirational) information for you.

Talk to you on the Private Access Club webinar?

It’s time to TAKE MASSIVE ACTION.

It’s all out there, for those that choose to see the buying notes
opportunity (and ignore the naysayers &’recession whiners’).

Dean

PS: BTW, this was originally a post in our forum.
To see some responses by some of your peers,
check out the original thread here.

Or, you know what…

Some of the other comments were so valuable, I want to
make sure you read them.

See what Will had to add to this:

“Yes, there is pretty healthy window, an “area” where
the mom and pop and small operations can work with the
mid boys and Big boys.

Where you can either profit by
purchasing directly from these big boy investors, or
develop the right relationships by getting the word
out there that you are a direct source for obtaining
defaulted assets.

If one of these mid size to big boys
know you can bring them pools of 10-50M (residential
or commercial) and they don’t have to go take the time
to find and form those relationships with the right
people themselves …then you become VERY valuable.

At that level, the big boys are looking for convenience
and efficiency in order to simply “stay on course” of
investing and exiting.

I believe the more well rounded
you become, the more you master this industry, whether
that is by brokering or being a principal bidder, the
more opportunities will be presented to you.

All I have seen in the few months since I’ve been involved
has been an enormous need and really, a desire for
people to connect with others…to work with each
other.

There are so many more bridges to be formed.

“I assure you that the Mid and Big boys are NOT out
there building relationships with the 8,000+ FDIC
insured banks.”

In that one statement, if truly recognized, lies HUGE
opportunity.

I need your help on this one…

As you may know, we are in the process of creating a product
for Note Brokers.

I want to make sure I cater this exactly to YOUR needs.

=> Please take 30 seconds and tell me the #1 thing
that should be addressed in it!

(Feel free to elaborate, if you want to; or to list more
things that should be included.)

In case you are now going ‘But, Dean, I really don’t care about
brokering notes… I just want to BUY notes myself…’

Consider this:

Even if you are already buying notes or are in the process of buying
your first one:

There may (read: probably WILL) come a time where you are presented with
a GREAT non-performing notes GREAT op.portunity, but for one reason or another
you can’t close on that note deal yourself…

Do you just want to say ‘Thanks. But, no thanks’?

Or would you want to pass that note or that pool of notes on to somebody
else for a commission…

(Of course you would.)

Well…, you just brokered a note.

What would you really want to know about that process?

Thanks for taking 45 seconds out of your day to help me out!

Dean

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

* Check out our Note Buying 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, and ‘HOT SEATS’ to get coaching on
Your Deals/Business Challenges, and more

* Questions? Chances are I already answered them at www.NoteBuyingProfits.com/blog.
(Use the ‘Search’ feature or click on the ‘FAQ’ category on the right to see them all!)

* Want to make Easy M.oney telling Your RE Buddies about our Kick-A** Products? Click here.