When things aren't going very well for a sports team, it is easy for the players to become infected with a bad attitude. Regardless of talent level, the lack of success can eat away at a player. Next thing he knows, he does not play as hard, does not care as much. He looks around at his teammates and it becomes obvious - they've given up, they've quit. He follows.

Anyone who has played sports and been on a bad team knows the feeling. But, it is amazing what a new or inspired coach, or a new player with a strong will and positive passion for the game, can do to change the entire culture of the team. The same guys get a belief because just one other person has it. Suddenly, players play hard, have fun and win games.

The same principle applies in the real estate market and specifically the note business. Closing deals validates to the marketplace that there are buyers and sellers out there. Psychologically this is very important. Buyers and sellers need each other, and they must know that regardless of the "bad attitude" that is so prevalent today, there are people with will and passion to get things done.

Some old time pros in the note business estimate that as many as 70% of all notes are not saleable. I don't know if that number is accurate, but my personal experience tells me it is pretty high.

That means that note buyers will be picky when it comes to looking at the 30% that they might be interested in buying.

So, how can we get picky buyers and cash needy sellers together and do some commerce? First, understand the reality of the marketplace. Second, understand the needs and concerns of the other party. Third, talk about buying/selling just part of the note.

If you are a seller, understand that the buyer you are talking to will be cautious about where he invests his dollars. If something about your note turns him off or scares him, he may back away. The market we are in has created this. Buyers are more risk averse.

But, buyers are buyers. They want to buy notes - understand this, please. As for sellers, they usually see their note as the best source for the cash they need right now. That cash will either provide a better opportunity someplace else or perhaps pay off some lingering debt. What to do?

Sell part of your note. If you really like your note but need some cash right now, just sell a stream of payments. Let's say you have 180 payments remaining. A buyer may be very interested in buying the next 24 or 48 or 60 payments. Why? Because it limits his risk. He gets an opportunity to see how the note performs while not having all his capital exposed if things go bad. And, if his experience with the note is a good one, he may be interested in buying more or even the balance of the note later. Good deal for him.

For you, the seller, this allows you to get some cash right now. The discount will be less and you will start receiving payments again at the back end. Good deal for you.

The reason people like me ask so many questions of you, the seller, is because we are trying to find out your true needs and the quality of your note. That's our job. On the otherhand, if you understand the buyer's concerns and needs, then you know he wants to buy notes. So, can the two of you find common ground and make his next purchase your note?

In this market, consider selling part of your note and keeping the rest. You may be very pleased with this arrangement.

Sincerely,

Denny Stanz

760-245-5366
760-245-5367 fax
[email protected]
www.CaliforniaNoteBuyerLLC.com