I was talking with a person yesterday who had purchased a couple of articles in THE NOTE PROFESSOR NOTEBOOK. He told me he had no idea what the article HAPPY "TAILS" TO YOU was about. "Ouch!!!" I said. Perhaps there are more who are missing opportunities partials can offer because they do not know the benefits of partials.

I need to start out by explaining what a "partial" is. A partial is when you sell a "part" of your note, not the entire note. There are several ways to sell a partial. For example you can sell any portion of a ten year note; like only 60 payments. Or you can sell a percentage of the monthly payments themselves; such as $125 of a $250 monthly payment. Another example is you can split the payments you receive. For instance, you have $100K note, and are offered $50K now for half and $50K in the future for the 2nd half.

"Tails" or tail ends of notes refers to the remaining payments when a note buyer has purchased part (partial) of the note. For example, you have $100K note with 360 payments. Often times arranging for the buyer to purchase the first 120 months of payments, at which time the note would revert to the sellers, satisfies both parties. The remaining 240 months not purchased is called a "tail end" or "tails".

This situation often occurs when the seller needs only $20K, and does not want to sell the entire note at a huge discount. The seller gets his $20, without a huge discount, and the note buyer will get his yield and security. Win/Win.

Another example of a partial is a rehabber, or flipper who sells his/her property using owner financing, but does not qualify for an installment sale. Come April 15th, they find out they owe taxes, but have only a note to pay their taxes. This is a perfect candidate for selling a partial, especially using the TEN FOR TWELVE technique as outlined in THE NOTE PROFESSOR NOTEBOOK.

In the article HAPPY TAILS TO YOU, I show how it is possible to buy an entire note, and sell off the first half of the note for enough to purchase the entire note. You virtually get future income FOR FREE. This is an excellent program for your self directed IRA.

"Can't be done", I am hearing people say. Yes, it can. It IS being done frequently by those who know this powerful technique. HAPPY TAILS TO YOU teaches you how to recognize such opportunities. If you are not using notes in your IRA, you should strongly consider them.

The articles "Partial To Partials" and "For the Greedy Only" explains in simple, easy to understand language the concepts of buying partials and tails.

Be sure to check with competent legal and tax advisors when dealing in notes. You do have an attorney and accountant, don't you?

Be sure to contact THE PROFESSOR with questions or comments. This is where I get my topics.

As usual, consult a CPA and attorney before dealing in notes.

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If you have not attended a Note Professor "How To Get Rich with Notes" class, be sure and purchase the Note Professor Note Book manual to enhance your knowledge of creative real estate financing and note buying and selling.

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You will learn at least one new usable concept to increase your profit in buying or selling notes and real estate.
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By popular demand, THE NOTE PROFESSOR NOTEBOOK is now available in easy, downloadable E- book form for a the low, affordable price of $39.95. Other products are also available, including HOW TO MAKE OBSCENE PROFITS with SMALL MONEY, and GUIDE FOR SECOND LIENS. There is also a FREE download of CHECK LIST FOR OWNER FINANCING. Simply go to the NOTE BUYERS STORE. I can think of nowhere that you can find such information packed products at such incredibly low prices. We are still working out the bugs, so if you have any problems, be sure to contact me.

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With all that is happening in the world, it is difficult to pick the most important economic issue facing us. At first I was going to discuss that 40% of our corn production is being used to produce ethanol, which is not really an efficient fuel, yet our politicians seem to think it is mandatory to convert food for our livestock, as well as for ourselves into an inefficient fuel source with the world food prices rising. While this is true, I think our attention should be focused not on specific absurdities of regulation of markets, but rather of the general way our politicians and "economists" erroneously measure the economy. These false measurements tend to make us believe everything is looking great, when we know it is not, as well as give us misleading information that government programs are working, when we know they are not.

I heard several times over the weekend terms like "aggregate demand" and "on the average" when politicians and pundits were describing the economy and how it is improving. It seems like this was the talking points of the week. Some of the aggregates that government and "economists" use frequently are Gross Domestic Product (GDP), Gross Domestic Income, Aggregate Demand etc. I have discussed "aggregates" in previous issues so I will not go into detail here.

However, I will point out that "aggregates" are a false means by which "economists" try to measure the economy. Without "aggregates" there could be no data to enter into computer models to predict outcomes, nor to measure past performances. And without data to enter into computers, no matter if the data is false, economists would have little to write about or papers to publish.

Remember, "aggregates" in general are not reality unless you average a specific target, in a specific geographical area, in a specific time. Take for example, "aggregate demand". Demand for what? This is the important question that is never discussed. By taking demand "in general" without being specific, these economists would have us believe that the demand for food has the same affect on our buying habits as the demand for going to a movie. In other words, in this illusion, let's say the demand for food increases 2 points because of population increase; but the demand for going to the movies decreases by 1 point, then the "aggregate demand" will have increased by 1. In this over simplistic example, if the increase in the "aggregate demand" were plugged into a computer model, would the model not indicate the economy is improving because aggregate demand has increased? Couple this false signal with a regulation or "stimulus" package that politicians may have recently enacted, and the economists will have concluded that generating money out of thin air, increased the "aggregate demand". The false conclusion would be the regulation or stimulus package was the cause of the increase in "aggregate demand", therefore, intervention into the free markets is beneficial.

A prime example of false assumptions and formulas being accepted as true can be found in some "statistics" for the Great Depression. The National Bureau of Economic Research (NBER) indicates the economy was in recovery from March 1933 to May 1937. Never mind that the unemployment rates were 21.7%, 20.1% and 17.0% in the intervening years. By their ambiguous aggregate models, the economy was "in recovery". These unreal indicators also gave false credit to harmful government policies. Was the economy in recovery from 1933 to 1937? Nope. The Great Depression lasted several more years, even though "aggregate demand" increased.

A more recent example would be the NBERs exclamation in September of 2010 that the recession has officially ended-15 months earlier in June of 2009. If this is not comical enough, according to the definition of a recession, we were in a recession from December 2007 to June 2009. ( The definition of recession according to NBER is 3 month's decline in GDP. Those aggregates again!) Yet it was not until December of 2008, a full year later, the NBER ascertained what every layman, especially those in real estate, already knew; the economy is not doing well. However, we are supposed to believe them when they tell us 15 months later we are in recovery, and the politicians tell us the stimulus package worked, just as they told us we were in recovery from 1933 to 1937.

Conclusion: Aggregates are at best false indicators of the health of an economy. At worst, they are non existent because as we have shown, you cannot compare the demand for food with the demand for going to a movie. Yet it is from these "aggregates" that political intervention into the economy gets its justification. Do not be misled.

If you have questions, CONTACT ME. I will address them in future issues.

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