Do you know the note you hold, even if it is a second, might be more valuable than you first recognized. If you believe the only uses for your notes is to either collect payments and/or sell your note for cash, you are overlooking the numerous other profitable options to utilize your note. Speaking of options, have your ever considered using notes as options?

Using notes as options is a very lucrative method of securing real estate, while giving you time to get your ducks in a row to either to get financing or to find a buyer to assign the contract. For example, say you have found a property that is a sleeper. It is a great deal, and you do not want to let it get away, but at the moment, you are in a state of financial embarrassment. You cannot immediately come up with a down payment, nor get financing. All you have to work with is a second lien note where the payor is making payments. What can you offer?

Why not offer to assign the payments of the second lien to the real estate owner for an option for a period of time until you can obtain financing. If you cannot make the deal work, there would be an end time when the option would expire and the payments would revert back to you.

Of course, you could also just make your option in the form of monthly payments directly to the real estate owner, and have the amount you are paying equal the monthly payments you are receiving from the note. In other words, the payments you are making on the option, will be the same as the payments you are receiving on your 2nd lien note. This is a form of compensating notes. Be sure to get the option notarized and recorded, or at least a memorandum of an option.

Another slant on this technique is to offer the entire 2nd lien note as an option for a longer period. You would have a problem if the note went bad during your option period. What would you do? You might guarantee the note payments should the payor quit paying for some reason. Notice I said guarantee the payments, and not guarantee the note. You would then have to come up with only the payments to keep the option alive should the note go bad. This is a far cry better than having to come up with the entire amount of the note.

Using notes as options for future purpose of real estate is a very powerful "arrow" in your quiver. Do not overlook it.

When you try this technique, contact the Professor, and tell me how it worked. As always, consult an attorney and CPA. I cannot emphasize this enough.

Using notes as an option is but one technique described in THE NOTE PROFESSOR NOTEBOOK. This technique, as well as others, will be discussed in more detail when Tom speaks at the Tulsa Real Estate Investment Association on Thursday, August 9th.

Tom will be teaching an all day workshop Saturday, August 11th, where he will discuss some advanced note techniques that can are profitable in any economy, but especially in today's chaotic environment.



If you have questions about how to structure notes for maximum value, please contact me

Remember, if you know of someone who has a note to sell, I will pay referral fees at the least, and will also split my profits if you would like to "co broker" a Note with me.

I have a Get a Note Quote web page that can be filled out and submitted for professional pricing. Check it out.

Tom Henderson /a.k.a. THE NOTE PROFESSOR .

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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.

"I got your news letter. It was great, purchased your (Notebook) and it was awesome. I used your renter technique and it worked also. I am getting 41% return thanks to your expert advice. I have spent hundreds and not able to do any thing thru other gurus" Gary W. Garland, TX

"It blew me away what a powerful tool notes can be. Lots of great information, worth every penny! Highly recommended."
Jeff C. The Colony/Investor

"Your manual is short and straight to the point, it's rare to buy something today that gives you your money's worth. Thank you" Stephan B. Phoenix, AZ

You will learn at least one new usable concept to increase your profit in buying or selling notes and real estate.
Tom Henderson, author

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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Current ARCHIVES (end of 2009-2012)

As I am writing this article, the political and economic topic of the week is which candidate outsourced the most. I am not going to address the political factors of outsourcing to spare you from getting entwined in the political circus we are forced to watch on our news programs. With that being said, the popular consensus is outsourcing is bad because it will cost Americans their jobs. Is outsourcing "bad"? Does it really cost jobs? If we examine outsourcing from an economic perspective we might come away with a different point of view.

For brevity, I am going to use the analogy of an individual purchasing a product not made in America, as opposed to a corporation. The same principles for individuals apply to corporations, but it takes longer to explain a corporate example.

With this in mind, let's start out by defining "outsourcing". Is outsourcing nothing more than going outside your geographical area to obtain a good or service because the product is either cheaper, better or both. For example, say you live in Dallas, TX and need a good handy man to do some repair work on your property. Because he can do the job $100 cheaper than his competitors, after several bids you decide to purchase this service from a person who lives in Plano, a suburb of Dallas. By definition are you not outsourcing a "Dallas job" in favor of enhancing a job in the City of Plano? Remember, as a result of your decision, you now have $100 more to spend on something else. In other words you are a $100 wealthier. Keep in mind the handy man will probably spend his money with Plano merchants. How many of you think this is "bad"?

Ahh, but Tom, in your example the money stays in the US and does not go overseas, and therefore depriving Americans of their jobs, so it is not the same thing.

Ok, let's look at a "foreign" example. Let's say you can buy a sweater made in America for $50. You can buy the same quality sweater made in India for $35. If you purchase the $35 sweater, are you not outsourcing your sweater purchase to India and therefore costing an American job, much like hiring the handy man from Plano rather than Dallas? Let's apply an important economic principle of looking not only at what is seen, but what is not seen.

In the above example, let's say you chose to purchase the sweater from India for $35 rather than the American made sweater for $50. Let's look at what is not seen. You now have a sweater PLUS $15 left over to purchase another product. You decide to take your EXTRA $15 to a local restaurant to enjoy a good lunch. (You could use the $15 at any establishment; I am merely using a restaurant as an example) From your point of view, which would you rather have; a sweater PLUS a lunch, or just a sweater? Moreover, by trading at your local restaurant have you not enriched a local merchant and contributed to saving a local job? This is what is NOT seen.

Contrast this with your purchasing the American sweater at $50. What do you have? ONLY a sweater. But Tom, by buying American have you not saved a job at the sweater factory. The answer is "yes". This is what is readily seen. However, when you bought the more expensive American sweater, and "saved" the job at the sweater factory, you no longer have the EXTRA $15 to spend at your local restaurant. By not purchasing a lunch, you "cost" a job at the restaurant. In other words the job you "saved" at the sweater factory was at the expense of the job at the local restaurant. In reality, NO JOB WAS REALLY SAVED overall. This is what is NOT seen.

Which is more desirable for you? Would you rather have a sweater PLUS a good lunch by outsourcing your sweater purchase to India; or just a sweater by purchasing the American product? Is it not obvious that you are wealthier by outsourcing your sweater purchase to India? Add to this the job that was saved by your having an extra $15 to spend at a local establishment. Is the local merchant not enriched by your "outsourcing"? Is it becoming clear that going outside your geographical area to purchase a good or service, whether it is your city or your country is not "bad", nor does it cost jobs from an economic standpoint.

Just as you would not hesitate to go outside your city to purchase a service to save money, the same principle applies to corporations going outside the country to purchase goods or services. Likewise, purchasing a sweater from India results in having extra money to spend at local establishments, and thereby saving local jobs., By outsourcing, corporations can also save money to purchase other products, or pass on the savings in the form of dividends. In other words, the money corporations save can be spent by direct purchases or dividends; which will "save" jobs wherever the extra money is spent. Again, these jobs saved is what is not seen.

Less expensive imports, whether it is a product or service, is the market's way of keeping prices from inflating, as well as keeping quality high. Outsourcing is nothing more than competition. Corporations and labor unions alike must come to the realization we no longer live in a world which is based on post World War II economic conditions where America had the only economy intact.

We live in a global economy, which means competition from outside America, or our geographical area. (As a side note, remember in the 60s when factories moved to the South to take advantage of cheaper labor. There were objections that the corporations were going to devastate the economy of the North by "moving jobs" to the South. Did not happen, did it.

Conclusion: From an economic standpoint, outsourcing is neither bad, nor does buying products from a different geographical region cost jobs overall. It is merely consumers obeying the laws of supply and demand. Purchasing a good or service outside your geographical region actually provides products at a cheaper price, and thereby empowering the consumer with more money to spend on other products. The money saved by outsourcing leaves money to be spent on other goods and services which creates and/or "saves" other jobs. Am I saying you should always buy foreign products to save money? Nope. That is your choice.

Am I saying you should buy only American? Nope. That is your choice also. Choice is what makes the market work. Just realize that outsourcing per se is not bad, nor does it cost jobs overall.

If you have a topic you would like me to discuss or comments, please CONTACT ME.

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