Greetings! 

Do you ever reflect on the decisions you have made that have gotten you to where you are today? In particular, business or career decisions ?

I have been thinking about this a lot recently. I'd like to share a story that explains why.

Last month, I had lunch in the Los Angeles area with some folks that are the biggest institutional buyers of owner carry back notes. Very nice people with interesting backgrounds and engaging personalities. They shared where they grew up, colleges they attended, and how they navigated their way into the note buying business.

I was asked how I found the note business. I gave them the short answer and will try to do the same here( forgive me if I fail!) In early 2002, I was let go - downsized, fired, etc. - from a long career in the insurance industry. The last few years in particular had been successful financially, but the changing corporate culture made me very unhappy and disillusioned. I decided immediately to take some time off and then never work for someone else again. I would be in business for myself.

Over the next 5 years or so, I plowed through most of the money I had accumulated in the prior 30 years by making a few bad decisions and not cutting my losses soon enough. Very painful. Lot of sleepless nights. I kept telling myself "this is what you wanted - suck it up, figure it out." I kept looking for something else to get excited about, something I could see myself enjoying for years to come that would be totally dependent on me. Looking back, it's interesting how "things" come to you when you are looking or open minded.,

I was watching TV late one night and this infomercial came on. It was a guy named Russ Dalbey, sitting by a pool overlooking the Pacific Ocean in Malibu, California. He was talking about this business - the note business - that was simple and easy, anyone could do it, he said. I was intrigued and requested a booklet he was offering for $30 or $40. Reading the booklet, I remained intrigued. I liked the simplicity of the business he was promoting. I was also smart enough to sift through the sales pitch and schmaltz to understand that this business may be simple, but like any business, it would not be as easy as he was suggesting.

In 2007, I found myself in a meeting room in Colorado with over 100 people, each of us paying about $7000 to spend three days there. We were here to learn about this business most of us did not know even existed - brokering and buying owner carry back notes secured by real estate.

As the program evolved over the three days, I became uncomfortable with certain aspects. First, most of the "presenters" were pretty young - 20's and 30's. So, how much business experience do these folks really have? Second, people took the stage applauding the fact that they were successful in the note business and were using the tools Dalbey had provided. Third, each of us was given a list of 200 names and phone numbers of people who had sold a property and taken back a note. Dalbey had a bullpen setup of phones, where a bunch of us could go in there for a few hours, and script in hand, call these people and try to get enough information to give them a "quote" for their note. Having started in the life insurance business many years earlier by cold calling prospects on the phone and in person, I found this approach very unprofessional and hated it with a passion.

On the last day, the group was offered the following incentive - if any of us brokered 10 notes in the 12 months following, and could document the fact, the $7000 we paid would be refunded.

As I talked to other attendees, I asked if they were going to do this business. Everyone I spoke to said "No." Why? They didn't like what they were hearing. They thought there was too much bull___t. They hated making cold calls. They didn't know if it was a real business. On and on and on.

I decided the following - I found the business I was looking for!

I saw all the negatives. I agreed with most of what these attendees were saying. But the bottom line for me was I saw a great business opportunity. I pushed aside all the bad stuff and got myself to the core - finding a note holder who wanted to sell and helping him get the cash he wanted. I liked the idea of helping people, one on one.

Simple! But hard!

As always in business, it comes down to marketing, finding your niche, and allowing people to find you and trust you. When I got home, I took several months to form an LLC, get stationery, put together a marketing plan, etc.

2008 was my first full calendar year in the note business. Remember what was happening in 2008? The home I was living in at the time had dropped almost 50% in value. I was talking to note sellers whose buyers had horrible credit, whose note terms made it too easy for their buyer to walk away if necessary, and whose property had no or negative equity. Their note was not marketable. Plus, some of the biggest institutional note buyers either stopped buying notes or went out of business because of their aggressive pricing during the housing boom. The industry was in the doldrums.

This was my business opportunity? What the hell was I thinking? Didn't I see any of this coming? Am I an idiot?

It was as if I was oblivious to market conditions and simply fell in love with my own business model.

Fortunate for me, I met some great people in the industry who had been around much longer than I had. They were suffering, but adjusting to the market conditions. I learned from them. And, we all survived and prepared for the time when the market would come back and we could have fun again. That time is now. The first 6 months of 2015 beat any full year of business results since 2008.

Back to Russ Dalbey. In the June 2015 edition of The Paper Source, David Frankel, a Federal Trade Commission staff attorney who led the agency's efforts against Dalbey for his business practices was quoted as follows: "Over about 15 years, approximately 949,000 customers purchased Mr. Dalbey's courses. Only 296 people are documented to have made a penny or more using the system, and only 129 people made more brokering notes than they spent on the courses.

Dalbey was shut down by the FTC and a federal court, fined $330 million and forever banned from telemarketing, selling business opportunities and producing and distributing infomercials."

Looks like I am one of the 129 people mentioned in the report. And, by the way, my $7000 investment? I got it back along with a great career. Who knew?

"There are 3 things we should all do every day. The first is to laugh. The second is to think. And the third is to move your emotions to tears. Laugh, think and cry every day. That's a heck of a day."....Jim Valvano, North Carolina State Basketball Coach.

                                         Zillow Options

Millions of people use Zillow every day, and for those of us in the real estate industry it is a valuable tool. But you may not be aware of 2 other sites you can access to help you in your business activities. For another option to check out home values, try www.eppraisal.com. And, if you want more information about a particular zip code or area - especially if you are considering an out of town or state purchase - check out www.city-data.com.

Most of us think our home is worth more than it really is, especially when we remodel our kitchen, or add a pool, or add that lush landscaping. However, appraisers will tell us that there are always valuation dynamics that are local in nature that will dictate what percentage of our "cost" or "investment" will be returned. Many times we get disappointed, simply because we do not understand this dynamic.

Tom Henderson, a veteran note buyer in Texas, is fond of saying to a note seller with a very high price expectation: "We can't buy your emotion."

                                      Know Thyself

"People make themselves appear ridiculous when they are trying to know obscure things before they know themselves." ....Socrates.

"Understanding oneself would enable thyself to have an understanding of others as a result." ....Plato.

"People whose faces are lighted by glowing screens look like zombies. Your charisma secret: keeping the technology out of your personal interactions."

Holiday Mathis, Aries Horoscope.

                         www.savesellerfinancing.org

I continue to remind you about this website. It's goal: Fighting for the right of a property owner to sell his property by creating a note and accepting installment payments from his buyer. Visit this site, learn stuff, sign the petition and donate what you can.

                       2 Tier System Affects Home Loans

I want to quote a few paragraphs from a recent article by E. Scott Reckard, where he discusses borrowers being shut out of the mortgage market:

"Even as the housing and mortgage markets are stabilizing, many borrowers with good credit remain shut out of the home loan market or saddled with a new array of fees and extra costs.

Lending standards may have loosened since the end of the Great Recession six years ago, but mostly for buyers with excellent credit scores of more than 700, analysts say.

Borrowers with minor credit dings, or down payments of less than 20%, still can't get access to federally backed loans once considered mainstream. Lenders are instead routing them into higher cost Federal Housing Administration mortgages, designed for low-income or bad-credit borrowers.

Those with fair-to-good credit - scores of 620 to 700 - usually can't qualify for low-cost mortgages backed by government-sponsored financing giants Fannie Mae and Freddie Mac, which buy or guarantee more than half of the nation's mortgages. In the first three months of this year, only about 1 in 6 of the loans written to Fannie Mae standards went to such middle-tier borrowers, according to Fannie Mae data."

The data here tells us something important - there are many qualified buyers looking to buy a nice home for themselves and their families - and they can't get a loan. If you have a nice property, one of these folks is out there - for you! Have your realtor find them for you. Have your realtor confirm their credit scores, history and employment background. Offer to carry the note. Create terms that are strong, protecting both parties. Help people and help the real estate market.

                                Questions to Haunt Us

"How important does a person have to be before they are considered assassinated instead of just murdered?"

"Once you're in heaven, do you get stuck wearing the clothes you were buried in for eternity?"

"Why doesn't Tarzan have a beard?"

"Why do banks charge a fee on 'insufficient funds' when they know there is not enough money?"

"Why do Kamikaze pilots wear helmets?"

Just asking.

Source: Little Ditties.

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