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One Lesson on How to Buy Notes
One Lesson on How to Buy Notes You know, some things that are a big deal to your borrowers, may seem so little to you. You ask, what do you mean? Well, let me tell you two little stories about Judy and Natalie, both of them borrowers in our portfolio. Natalies Story on How to Buy Notes Natalie pays regularly and on-time (hers was a performing 1st mortgage that I bought in a pool of non-performing notes), and she owes us approximately $93,000. She pays $680 each month, like clockwork, but right around the 5th of the month - her payment is actually due on the 1st. When I actually called Natalie for the first time, I suppose her next question shouldnt have surprised me at all. Reluctantly, she asked if it was possible for me to change her due date to the 7th of every month, giving her paycheck sufficient time to clear. How is this relevant to an investor who is trying to make money while learning how to buy notes? Because it points to one simple thing in todays market, and in human relations - EVEN when it comes to peoples financial relations. The little things matter the most. As an investor in non-performing notes, when a borrower like Natalie asks me if she could pay her mortgage a few days after her due datehow did you think I responded? I answered her: Sure. What date would like to be your new due date? You mean, you CAN do that for me? She sounded incredulous. Thats all it takes, just me asking? Let me just tell you. This served as an eye-opener to me in the business of how to buy notes. Changing something as simple as a due date could make such an impact with my borrower. Wow. Needless to say, when I asked Natalie if shed be interested in refinancing her real estate note and asked if shed mind if I put her in touch with someone on my team who could help her explore a refinance, she provided all the information that was asked of her immediately. A Lesson on How to Buy Notes Listen to what your borrower wants or needs, and then, to the extent that you can deliver on that, do it. Youll build a sense of I-owe-you-one from your borrower that might get you out of a deal. How to Buy Notes, A Story About Judy Heres another recent story that I want to share with you. Judy called from Tennessee - she has one of the thickest accents Ive ever heard. Her accent is so sweet, you cant help but smile every time you hear her voice. And when Judy spoke, what do you think she said in regards to her defaulted mortgage? Dean, you paid my taxes! I owe you a HUGE thank you! I was at a loss. Taxes? I quickly searched for her file online in my database. Ah yes, two weeks ago wed run a tax review update (we do this the last business day of the month, calling the tax assessors offices on all of our loans to confirm status and amounts), and decided that itd be best if we paid her 2005, 2006 and 2007 taxes current. How to Buy Notes-Benefits to Both Borrower and Yourself! We advanced it to her loan obviously (property taxes advanced by you can be charged to the principal of the loan), and since her delinquent note rate is pretty high, we get to accrue interest on that advance. So from my perspective, it was both protecting our interest as well as making a smart business decision that would make us money. And from hers, it was the sweetest and nicest thing we could have done, because we were looking out for her. The actual words she used with me were: Dean, I want to thank you for helping me keep my house. Ive been here 20 years and now Im finally caught up thanks to the patience youve had with me. I was speechless. How amazing is that? One simple decision that I had made to protect our real estate note, paying those taxes in order to avoid the threat of a tax sale, was perceived as an act of kindness. I have to tell you, it felt good to sit there and listen to all the praise that I was receiving over the phone. I felt touched. Needless to say, the rest of my day went great because in this business of buying notes, it is not often that you receive such a warm thanks from your borrowers. And I also learned today how useful it would be to explain advances to pay taxes and insurance for any other borrower in terms of helping to protect their home and to help them to protect their home. The old adage win-win-win isnt that much of a cliche now, is it? Not when you look at what Natalie and Judy taught me about the experiences in how to buy notes. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Interested in learning more about the Note Buying Business? Watch Hours of FREE Training Videos here: How to Buy Defaulted Mortgages Real-life, Up-to-Date Information for You. Visit NoteBuyingProfits.com or Call 718-783-7605 Or Click Here: How to Buy Discounted Mortgages From Dean Engle & NoteBuyingProfits.com - This time on How to Buy Notes |