One of the most frequent questions I receive is "What software must you have to invest or broker notes?" Without hesitation my reply is TValue. In fact, I will insist that brokers who work with me to have TValue. Why? Because you are going to need to be able to not only determine the balance of the note, but also be able to communicate with me when discussing the "number crunching" of note purchases. You will also need to properly ascertain different amortization schedules and balances.

Those who have followed me and taken my workshops know I very seldom endorse any product. TValue is one of the exceptions. In a nutshell, TValue is a financial calculator on steroids. Not only can you generate amortization schedules, you can discount notes, apply extra payments, modify loans and create APRs for Dodd Frank requirements, but you can also modify notes and payment schedules.

I called Markus Mollica from Time Value Software (Developers of TValue software) and conducted an interview to help you better understand what this software can provide. I even learned some functions that I was not aware.

Note Professor: How long has TimeValue Software been in business and who are some TValue customers?

Markus Mollica: TimeValue Software started in 1984 with TValue amortization software. All Top 100 Accounting Firms, Top Banks such as Wells Fargo, Bank of the West, Citigroup and even JG Wentworth are some names we all may be familiar with that use TValue software.

NP: Yes. I know the institutional Note Buyers I deal with all have TValue. But what can TValue offer not only the note investor, but also real estate investors desiring to buy or sell their property using seller financing.

Markus: TValue gives the ability for Note Buyers to offer a concise amortization schedule to note sellers. Of course, the real estate investor can also provide payment schedules to their borrowers and also create a payment schedule for the investor who is purchasing real estate via seller financing. The APR of a seller financed note can also be calculated to help comply with Dodd-Frank.

NP: I often get notes where extra payments, missed payments, or modified payments on the note come into play. Can TValue perform all these functions?

Markus: Absolutely. The program is user friendly where you can easily add a payment, increase or decrease a payment and change the terms and instantly create an amortization schedule so you can know the balance of your note on any given day. One way to jump start your knowledge and understanding of creating compelling offers is to start practicing on the "what-if" scenarios now and get familiar with time value of money, especially with when it comes to irregular payments or partials.

NP: Can TValue aid in the purchase of NPNs and workouts?

Markus: TValue has the flexibility to create repayment plans for workouts and modifications on non-performing or delinquent notes by allowing you to customize payments that your borrower can afford to make. You can gradually increase payments over life of the note and TValue will amortization the schedule so no money is left on the table. You may even generate a higher return by creating "workouts". Several lending institutions utilize TValue in their workout programs.

NP: Another feature that I like is I can convert TValue into Excel or Word to send to my customers. This is extremely helpful in computing partial purchases and educating note sellers "who gets what" in the event of earpayoff or default.

Markus: Yes, TValue is very helpful in calculating partial purchase offers and Schedule B payoffs. Since TValue can do practically any time value of money calculation, all you will need to do in TValue is enter the cash flows that you want to purchase, enter the yield/return you want, and let TValue calculate your investment amount or pay price for negotiating partial purchases, tail-ends, and buy full-sell short strategies. Then when it comes time for an early payoff, it is easy to pull the numbers from balances to determine who gets what.

NP: I remember several years ago when I had a TValue which was still on a floppy disk, (I am telling my age) I had a problem getting a balance on an irregular note. I sent you guys an email and 5 minutes later I got a call from Time Value Software wanting to know how to help me. I was quickly lead through the entries and my problem was solved. Does TValue still provide support?

Markus: TimeValue Software provides unlimited phone support with the annual maintenance service which is a minimal cost separate from the software cost. TimeValue Software answers the phone in Irvine, CA Monday through Friday 7am-6pm PST to answer your questions and even walk you step-by-step through TValue to ensure you input the calculations correctly.

NP: Markus, thanks for your time. I want to emphasize that not having a program like TValue and being in the note business or real estate business is like a carpenter not having a hammer. If you are going to be professional, you need professional tools. Markus, how can we get in touch with you.

Markus: I invite everyone to visit our website at www.TimeValue.com to look over our product information. You can reach Markus Mollica directly at 800-426-4741 Ext. 212 or mmollica@TimeValue.com with any questions or help using TValue. If you call or email me directly, I can arrange a discount for those who use Tom's name.

Note: This article was meant to bring to the attention of my readers that a program like TValue is a MUST TOOL if you want to be in the note business. Since this is a common question and I received three requests in one month from new people wanting to know what software is needed, I thought this is an issue that should be addressed.

I suggest you call Marcus and order the disc and manual, and ask him if he can download it immediately. If you know of a better software out there, please let me know. I will be happy to try it out.

I just got a call stating a note did not provide for any late fees and what can be done, In next month's issue of THE NOTE PROFESSOR NEWSLETTER I will give you the solution.

CONTACT ME if you have questions or comments. And remember, if you know of someone who has a note to sell, I DO PAY REFERRALS.

Copyright © H&P Capital Investments LLC
All rights reserved
Tom Henderson
a.k.a. THE NOTE PROFESSOR

Real Estate
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Federal Reserve Chair, Janet Yellen gave her first press conference on June 18th. I will try to "interpret" her comments. I say "interpret" because Federal Reserve Chairs have a tradition of talking in ambiguous terms so no clear message is received. Greenspan actually stated that if you understood what he said, he did not say it correctly. The Fed (Federal Reserve) has a talent for talking in circles.

An example of ambiguous "Fed Speak" are statements like the Fed will use "progress-both real and expected-toward its objectives of maximum employment and 2 percent inflation." To compound the Fed's perception of reality, is the Fed's use of "forward guidance" rather than concrete numbers to determine future action on interests rates. In other words, if the economy is not adhering to their computer models, the Fed will not heed reality, but rather be guided by their expectations.

Yellen's comment on rising prices is a case in point. With food and energy prices, along with other goods and services rising to all-time highs, Yellen chose to interpret the rise in prices as "noise", instead of acknowledging concrete numbers that inflation is rising. Yellen's total disregard to reality in favor of fanciful projections is the epitome of how central planners view the world.

The big news is how GDP (Gross Domestic Product) was a negative 2.9% in the first quarter. The unemployment rate has not declined, and inflation is starting to be readily visible. Instead of even considering the possibility that Quantitative Easing I, 2 and 3 did not work, Yellen's response was GDP was "less than expected", the unemployment rate "did not reach projections" and "inflation was higher than desired". Keeping with the fantasy of being directed by "forward guidance" rather than by concrete numbers, in the same breath, Yellen "projected" that everything would be rosy in 2015 and 2016.

However, if real numbers instead of projections are analyzed, we realize the economy is not going to be rosy in the next couple of years. The artificial low interest rates, along with easy money have created bubbles that must burst.

Another real estate bubble has formed. Only a year ago, the Federal Reserve was buying up over $30 BILLION a month in Fannie Mae securities. Fannie Mae's purchasing mortgages in the secondary market and artificially low interest rates is virtually the only thing that has kept the real estate market from dropping to even lower levels. Rising real estate prices will not continue if financing is not available. Next month the Fed will further reduce its funding of Fannie Mae to $15 Billion a month. When the Fed ceases to prop up Fannie Mae and low interest rates, real estate prices will decline just as they did in 2008.

Remember, the price of real estate is directly proportional to the financing available.

Likewise, a year ago the Fed had been pumping some $40 BILLION into easy, cheap loans for corporations. Since corps can rely on easy, cheap money to finance their operations, profits and efficiency take a back seat. Next month the Fed will reduce its indirect funding of corps to $20 Billion a month. When the cheap, easy money dries up for corporations, the stock bubble will burst, just as the real estate bubble will burst.

A bubble has also formed in the domestic oil industry. Like corporations, the big oil boom in North Dakota and elsewhere is being financed, not by private capital or investments, but by cheap money that can be borrowed almost instantly and easily. Moreover, the profit margin for drilling the shale and fracking is very small. When interest rates rise many of these companies will not be able to afford to extract the oil from the ground. The bubble will burst.

Last, but not least is the inflationary effect of pumping tens of BILLIONS a month of artificial money into the economy. Even with the "projections" of 2% GDP growth in 2014 and 2015, with 2% inflation, this translates into no growth. Not to mention that GDP encompasses government spending, which is also not economic growth.

Conclusion: The Federal Reserve does not deal in reality as admitted by Yellen at her first press conference.

Projections and "forward guidance" does not override economic laws and reality. The fact is the Federal Reserve has been pumping up to $85 BILLION a month into the economy. Although they say inflation is "on target" the price of food, shelter, clothing, ect. has risen. Federal Reserve has been tapering funneling money into the economy from $85 BILLION to $35 BILLION a month. The pumping of artificial money into the economy creates bubbles. This time the bubbles are in real estate, stocks, and oil. When the money ceases or interest rates rise to normal levels, the bubbles will burst.

Does this mean stick your head in the sand and do nothing? Of course not. It means be aware of what is happening. For example, if you can pick up real estate dirt cheap or with favorable seller financing, jump on it. Likewise you might think twice about purchasing real estate at market prices and be heavily encumbered. ARM loans can be very dangerous. Lastly, if you have notes you are considering selling, now is the time. If interest rates rise, the value of your note declines, not to mention if real estate values start to decline again. Act out of knowledge, not out of fear.

If you have questions or comments, CONTACT ME Tom Henderson /a.k.a. THE NOTE PROFESSOR .

Copyright © H&P Capital Investments LLC
All rights reserved

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

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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.