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Seller Financed Notes Part 2

Seller Financed Notes Part 2

Livecast #

12

The second episode of investing in seller financed real estate notes. We'll take you deep into the details of exactly how to profit from the huge market of owner carried notes secured by real estate.
Transcript

Ron Happe: Good morning everybody. Again, let me start out today with another apology about what happened on Tuesday. I guess Google was doing some work and the site was down, therefore I spent 30 or 35 minutes talking to myself. I hope I learned something and I think most of you that know me know technology is not my thing. You're here to learn about notes and I guess I apologize for the last two things getting so screwed up.  

Again, thanks for being here and I'm really excited to have you here. Today we're going to have some fun. I'd like to start out by asking you if there are things that you want to cover on this live cast, the first questions that you have or any topic that you really want us to cover, please let us know and we will include them. We're not going to keep secrets from you. If you have questions on the tools that we use, the software that we use, how we do certain things, please give us a call or send us an email and tell us and we'll certainly cover them.

Today we're going to talk about making money in this business and how we can enhance the business even after we think it's successful. We're going to talk primarily about Firsts today and we're going to talk about both performing and non-performing.

First, we're going to get an idea of how we go about pricing them and then if they are non-performing when we buy them, once they become performing, what do we do with them and how do we enhance their value after that. I think you're going to find it to be quite fun and I think you're going to be really excited about the business. That's our intent. We want you to really know what's going on in this business and how to do it and how to be comfortable with it.

Again, we got to start out with a disclaimer and that is that the presentation is for informational and educational purposes only. We're not trying to sell you anything, not trying to sell securities or notes or anything else. It is for educational purposes only. Today we're going to be talking about seller financed notes first. We're going to use one general note purchase for the information that we're going to assess and the information is as follows. This is a single family residence property. The original sell price of this property was $110,000. The buyer put $10,000 down, the original note then written by the seller of the property was $100,000 with an interest rate of six and half percent for 30 years or 360 months. The note had been paying for 27 months and the seller contacted us to sell the note with 333 payments remaining. The original date that the house was sold and the note written was October 1st, 2012.  

Now, the first thing that we're going to do is, assuming the note is current when the seller of the note calls us and then we'll go through and assume that the note is past due or it's non-performing. We're going to tell you what we do to determine price and what kind of offer we would make to the seller. When we're looking at the seller financed notes that are performing, we're looking at all three of these conditions, the qualification of the buyer, the collateral or the real estate that supports the loan. Also, that it becomes very important is how much down payment was made, in this case it was $10,000 or 10%. The terms of the note, that is, the interest rate and how long the note is for. In this case the interest rate is six and half percent and it was written for 30 years. Then how long it's been seasoned. In this case, the seasoning was 27 months.  

Then we want to take a look at the paperwork. I this day and age, after the Dodd Frank initiative took effect, January 2014, the paperwork is extremely important. On this case, the paperwork was written 27 months ago, so it doesn't really fall under the Dodd Frank rules, but anything written after January of last year does, and you're assuming all the responsibilities of that paperwork. That paperwork may have to include the ability for the buyer of the house to pay the note. Please, be aware of all the ramification of Dodd Frank, of the Consumer Finance Protection Board and all the legislation that surrounds mortgages now because you can have the same problem with seller financed as you do with institutional.

In this case when we determine the yield and that's how we're going to determine the value of a performing note, is we're going to determine, first of all, what yield do we want out of that note? Some key factors that are going to determine that are those three points, the three Ps; the price of the note, the product, that is the collateral that supports it and the paperwork are going to determine, in large part, how much we want for a yield. The better the note, the lower the yield we can accept. If it's a high-risk note, we're going to want a higher yield.  

If we took that $110,000 purchase, $10,000 down, and financed the $100,000 for 30 years or 360 months, our monthly payments would be $628.66. We're going to assess a little bit of our risk today by saying that there is 333 months left and if we look at the amortization schedule we can see that the balance today is $97,379. Now, the note started out with a 90% loan to value, that's what the LTV is, the loan to value. Today the balance of the note is $97,379, that divided by the BPO, or the Broker’s Price Opinion that we determined by calling an agent and finding out or doing comps or doing Zillow, on our initial offer we would just take Zillow, Trulia and Realtor.com and average those three and come up with a price and that's what we would use for the BPO until we really had a deal with the seller.  

Then we would probably do an ActiveRain or use an agent that we already know in the market and have them do that broker's price opinion for us. In this case we're going to assume that the property is worth $112,000, so the $97,379 divided by $112,000 gives us the 87% loan to value. Now, we'd like to see more loan to value, the more the better. Certainly our loan to value of 60% is better than a loan to value of 87% and we may accept a return or a yield of 9% on a loan to value of 60% and we might want 12% yield on a loan to value of 87% or we may want 14 or 15 if there is 100% loan to value or, in a lot of cases today, 100 plus percent because the houses are on the water.

You, as the investor, have to decide what kind of yield you're looking for. Now, we have a list of investors who will buy these notes that are performing and typically if it's a seasoned note, with a loan to value of what we just saw, they probably would want somewhere in the neighborhood of a 10% yield. How are we going to determine what we would pay for this note? We have 333 months left, we want a 10% yield and the payment is $628.66. On a $628.66 payment for 333 months and we want 10%, what would we pay?

Let me get my calculator up here. If we take six ... I wanted you guys to be able to see this. The payment $628.66 in 33 months. Let's do this. $628.66 is our payment. 333 months is our N. We want a 10% yield. Our future value is zero. This is a fully amortized loan. By the way, be careful now with balloons and the Dodd Frank laws. You don't want a balloon, and there are things that you can do to overcome that, which we can talk about probably the best being step payments instead of a balloon.

Now we know 333 months at 10% yield at $628.66, what are we going to pay for that? We're going to pay $70,681.21 to give us a yield of 10%. Now, what if we wanted 12%? Well, it's easy to just change the 12% yield in the interest per year and then solve again for present value. If we wanted a 12% yield, we would pay $60,578. There is a little bit of error in this calculators by the way, and you may get a different ... I probably did this one on my telephone calculator and the one on the not here get a little bit different price, but that's okay over the course of 333 months. It don't matter that much.

If there is $97,000 remaining on the note and we're going to pay $61,189 for it, that is a discount of 27% or $26,109 is what we're subtracting from that $97,379 to get the $61,184 or we subtract $61,184 from %97,379 and the seller is giving up $26,109, that's the discount, that is equal to 27%. Is that acceptable to the seller? Maybe, maybe not. It is dependent entirely upon the seller's need for cash. If we insisted on a 12% yield, and I think that's, in most cases, that's a fair yield for the note that we just looked at. The seller says, "No way am I going to take that big a discount." What can we do? Well, we can a partial. A partial is simply us purchasing either a certain number of months of the note or a certain percentage of the monthly payment.

We can buy, let's say 12, 24, 36, 60 months of payment or we can say, "All right, we're going to divide that 628 in half in 314, we'll buy $314 a month and you keep $314 a month." Primarily we buy partials by the month. Here is the situation in this one here. The payment was $628.66 a month and we want to buy 60 months. Again, using our calculator, then, let's clear this off. 60 months that we are going to purchase. 60N, we're goin to expect a 10% yield. Excuse me that's wrong. I'm going to go 10% yield, we're going to get $628.66 per month, what are we going to pay? We're going to pay $29,588.11. Let's do this, I think maybe I've done 12% but ... We're going to pay $29,588.11 for 60 months of those payments. Now, at the end of five years or at the end of 60 months the seller gets the note back.

In this case there were 333 month left when we bought it, 60 months that we get. When he gets the note back, there is 373 months of payments left and the note still has a balance, principal balance of $90,364. This is much more palatable to the seller than discounting it down to $60,000 total. To be honest with you, most of the seller financed notes that we buy, unless they are from an elderly person who doesn't want to wait, doesn't want anything in 60 months, they want to get cashed out today for possible state purposes or whatever or somebody absolutely needs the cash today for something and they'll accept that big discount.

We purchased a note on a property in Las Vegas, where we've actually purchased two notes from the same lady. She had a commercial property that went vacant and it was costing her approximately $20,000 a month in payments on that property. She had two homes that she had financed for a builder, and she absolutely needed the cash to carry her through until she was able to rent that property again. In order to make it work, we did a 60-month partial on one of the notes and purchased the other note completely.  

On one she took a discount that was fairly heavy in this 27 to 30% range and on the other one she took a 60-month. It jus so happened that on that 60-month partial that property sold about 14 months after we bought the note. We got really nice payoff on that. We can certainly talk about those kinds of deals on ow much the buyer of the note would get and how much the seller would get if that property sells or if it paid off, refinanced. Whatever prior to that 60-month period, because it's a special calculation that need to be made at the start.

What can we do after we buy that 60-month partial? We, as investors, purchased that 60 months of $628.66 payments and we paid $29,588 for it. Do we know somebody that might like to make 8% return on a note that's collateralized by real estate? Well, here is what you can do. You can sell half your payments for $314.33 for the 60 months and in this case we had paid $29,588 for a 10% yield. Now we're selling half of it and we're selling it for $15,502. That person that pays that is going to get an 8% yield and $314 a month for 60 months. We now have 60 payments of $314.33 that we're only paying $14,228 for. Our return now jumps up from 10% to 12.14% and we can go out and do it all over again.

When you were purchasing a performing first, and really, really it doesn't matter if you're buying it from a seller financed or if you're buying from an institution, however, when you're buying it from an institution you usually can count on the note, the paperwork being better than if it was sold by a seller financed. You just got to be sure that the paperwork is in order on both of them, especially on the ones that were seller financed. Please, always determine who wrote the note. Did a legitimate broker write the note? Did the seller write the note or did an attorney write the note? Very important because you could find yourself in a position where the seller wrote the note himself or an agent who doesn't have the authority to write the note wrote it and now you're in a position where you cannot force a collection.

Always consider your yield on the condition of the property, the loan, the value, the creditworthiness of the seller and the paperwork. On a non-performing, first mortgage, we're going to determine value in an entirely different way. We're going to determine how much we'll pay entirely differently than we did on the first where we utilized yield. On a non-performing first, the most important part of the three Ps is the property, the collateral, because in the event that you need to foreclose, it's the value of the collateral that is going to provide you with your profit or your loss, so be sure that you know what the collateral is and you've researched it very well and you're comfortable with it.

Now, I will tell you that in most seller financed cases, the seller financing is done for a reason. That reason is, that something is wrong, and it could either be that the collateral is wrong or the qualifications of the buyer were too weak for them to get a loan from a standard lender or the terms of the note were poor. Low down payment, interest rate or something that is creating a need to do seller financing. Now, in some cases, of course, there are sellers who want that seller financing as a form of income or retirement income or whatever, but in most cases, and I'm saying over 50% of the time the reason for seller financing was that there was a defective portion of this triangle.

The price of the real estate, the value of that collateral is of utmost importance when you're buying a non-performing first. Here we go again, this is the same note as we had before, $628.66 as a monthly payment. There is 333 months left, the balance today $97,379 and the BPO or the price today, the house is worth $112,000. How do we determine what we're going to pay for that note? This would be amongst our favorite notes. If we can find these we feel like we've found a nugget, and the reason is, is that the seller financed note seller, the guy who sold the house and carried back the funds to sell it doesn't want problems and doesn't know what to do with them when they have them. They will do just about anything to get out from under that note.

An institution who has defective or defaulted notes, they're used to dealing with it and they're not as anxious as that seller financed guy as to get rid of it. We're going to value them both the same way however, it's just that our negotiation can be a lot stronger with a seller financed than it can be with institutional but this is how we value and what we will pay for them we will not pay more usually unless they're some very good reason. The way that we do it is, we have had a BPO done where the best thing that I can suggest that you do is to sign up for ActiveRain.com.  

Sign up for it and when you get a property, let's say that property is in Florida, let's say it's in Miami, Florida, you would put an ad on ActiveRain that you are looking at a property in Florida. You would like them to go out and take pictures of it for you and send you what they consider to be a 30-day sell price for that property. You just tell them that the first one that gets that information back to you will get the listing on that property if you have to foreclose or do a short sale, and I almost guarantee you within probably 10 hours you will have answers to that request.

In this case, the answer we got back was $112,000 was a 30-day quick price and that's what we asked for, give us a 30-day quick sale price and that property also asking is it vacant, is it occupied, what's the condition, can you send us a couple of pictures? Were you able to see thew inside, so on and so forth. You'll get that information back.

Once you have that information now it's easy for you to determine how much you're willing to pay for that loan. In this case what we want to do we is we want to determine, what is our worst case scenario? Well, the worst case scenario, of course, is we have to foreclose, and need to know how much a foreclosure cost I whatever particular state this property happens to be in. Let's just I this case assume that the cost of foreclosure is $5,000.

Now, one of the real problem in this is that if you're not dealing in a very significant volume and you're trying to do all of the work yourself, if you've not bought a property, let's say this is in Florida. If you've not bought a property in Florida before and you need to foreclose, or you need to start foreclosure for the home owner to start talking to you, and you call an attorney in Florida, that probably what's going to happen is, that attorney is going to, "Yes, I'll do your foreclosure for you, please send me a retainer for $3,000, $4,000, $5,000, $8,000.

When you do a number of them like Tyler has relationships with attorneys throughout the United States, and if we call our attorney I Florida and tell him what the situation is and that we need a demand letter, we can kind of go [inaudible 00:31:12] here and pay $125. If you have purchased 50 notes at $5,000 retainer in all these different states, you got a lot of capital tied up and you do not want that. You have to consider what the cost of foreclosure is I the price that you're going to pay.

In this case we're saying that, the price of a foreclosure, if we have to go all the way through, is $5,000. The other thing that we need to consider is, if we're going to take this back in the foreclosure sale, if it actually goes to sale and nobody bids on it and we get it back, what are we going to do with it? Well, we're going to sell it. What we want to do is we want to sell it fast. We're going to figure our sale price at 80% of the fair market value and so our sale price that we're going to sell it for is $89,600. The cost of foreclosure is subtracted off of that. Also, we're going to pay sales cost. We're going to have to pay commissions to a realtor, transfer taxes, city taxes, county taxes. There may be some fix up cost in order to sell it or whatever, but there is going to be some sales cost and we use a 10% of the sale price as our amount that we use to deduct from the price to see what we're going to end up with.

The net after selling is $75,700. We bought it for, excuse me, we have $89,000 sale price of the house minus $5,000 foreclosure cost. It's cost us $8,900 to sell it. We net $75,700 out of the sale. If that's the case then, what will we pay for it? Typically, we will pay 40% to 60% of the fair market value. 40% to 60% of the $112,000 is a 448 up to 616, and that's ow we would determine the price. This is the only way we determine the price. To be honest with you we would rarely pay above 45 to 50% of the fair market value. Not the balance of the note, please do not consider the unpaid balance of the note. The note is not being paid, so what does is it matter? The only thing it matters to you is what you can get rid of that house for, and you're going to determine your pricing based on that.

We've bought his firs at 30% of fair market value and we have paid as much as 60 but that's very rare, and it would be in a market where the time on market was less than 30 days. The house looked like it was in good condition, we would know that we can foreclose in a very short time or whatever those reasons would be, but if we paid in that range our return on investment is 13% to 69% annualized. Now, the next thing that you need to consider is that the ROI when you determine an ROI that doesn't take any time in the consideration. Is that return on investment of 13% for one year or for six months or for two years? If this foreclosure takes you two years you need to consider that when you determine your return on investment and this would be, then, 13% to 69% on an annualized basis.

Excuse me. These are the things that you must get no matter who you're buying it from and in order to close on this transaction you have to have this information. You need a copy of the signed original promisory note, you need a copy of the recorded trust deed, you need a copy of the closing statement, copy of the title insurance policy. You're going to want to know if you need to buy new insurance or whether you can be named on the policy that's already in place. If this is a first, you certainly need the fire insurance policy, you need a copy of the grant or warranty deed, depending upon which state you're in.

You need a copy of the payment record. I think we discussed this the last time we got together. Seems like ages ago but I know that we discussed it. Th payment record if the seller financed they have a problem with some kind of record then you need to see bank statement showing the deposit for these payments. You got to know that they actually were being made. You eed the social security number of the mortgages. It used to be that the seller financed note did to have to send out a 1098 to the home owner and to the IRS on a seller financed note. That don't apply to you. If you buy the note and they start paying you, then you need to supply them with a 1098 for the interest that they can deduct from their income tax. You must have social security number and you will be surprised that how many do not have it, and you're going to find other ways to go get it. You're going to have to try some of the areas of skip tracing to find a social security number.

You got to complete up address of the property as well as its legal description, get the pictures of the property sand those, again, you should be able to get from an ActiveRain agent. If it's a mobile home you need the mobile home title, if it is ID's as a mobile home as opposed to a manufactured home that setting on a foundation that is not titled as a mobile home. Then a copy of any superior mortgages. Make sure that if you're buying a first, make sure you are in first position. We just sent this checklist out just like this to the seller saying, "Here is the information that we need," and then we check them off as they come back in.

A lot of people are tickled to death once they get a note performing or once they get a note purchased and they quit and we don't. When we buy a note that is and once we get it performing, if it was not performing, then our efforts really just start because we can enhance the value of that note fairly easily and fairly substantially. Let's take look at how we might do it.

This note, $100,000 note, 30 years at 6%, the original payment on a note like that would be $599 a month. At the end of 30 months, so we're going to buy this after two and half years. The balance on the note is $96,670 and the house has a fair market value of $85,000 now. That $85,000 fait market value was provided to us by a BPO that we got on ActiveRain. This note, by the way is, when we bought it, delinquent.

We bought the note for $42,500, which was 50% of the $85,000 fair market value. The seller wanted nothing to do with foreclosure, he was at wits end, the people were not talking to him anymore. I think he said something that probably offended him. He didn't know the first thing about the psychology of working with a debtor, and offended him and then they just quit paying and quit talking to him. We bought this for $42,500, over the course of probably the next four months we did have to initiate foreclosure, we did have to send a demand letter on attorney [inaudible 00:41:37], this happened to be, actually it was in a trust deed state and a trustee such as Trustee cops set out the foreclosure notice.

Over the course once they notified, once they realized that we were going to go to sale they called us in and we worked out an agreement with the builder to pay us $400 a month until the $85,000 fair market value was paid off. You can see what we did here is, we lowered their payment from 400 to 599 and we also lowered the balance of the note. The balance of the not, $96,670 plus the arrearages that they had. We said, "Hey look, if you pay us $400 a month, we're going to re-amortize this note at $85,000, so you're going to save $11,000 just in principal payment and we are going to lower your interest rate from 6% to 4%. We're giving a lot of incentive to this home owner to stay I the house.

Here is some advice, always make your money on the purchase and not on the back of the home owner. If you're allowed to talk to the home owner, if they will talk to you and you have bought this property at 50 cents on the dollar, or if you've bought it at 15 cents on the dollar, if it's a second and home owner wants to stay in the house, you should be able to find a way to make that possible. We offered them $400 a month payment, reduced from 600599, we offered them a reduction in interest rate of 6% to 4% and we reduced the principal from 496,670 down to $85,000. You need to determine how long it will take to pay off that $85,000. let's do that real quick, all right.  

We have $85,000 present value, we have a payment of $400, and that's a payment going out, and we have an interest rate of 4%. How long will it take to pay off $85,000 at $400 a month at 4%. 370 months is going to take to pay that off. If we go back down here, you can see actually 371, if you round up. It's going to take 371 months.  

Now, here is what we're going to do. We're going to seize in that note and we're going to sell it to a note investor to yield 10%. We paid, keep in mind we paid $42,500 for this note. Now, we're going to sell it to an investor, that investor is going to receive $400 a month for 371 months and that investor wants a 10% yield. Again, future value, heck that out. Future value is zero. Now, what is the investor going to pay to get that 10% yield? They are going to pay $45,791, all right? I got a little error in that, that's not a big deal.

371, 10%, $400 a month payments present value, then he's going to pay $45,791. We paid 42,000 so what could we do next? Well, how about if we ... I'm sorry. We're going to sell the note to investor here for $45,000, all right? Delete, get that eight out of there. All right. We're going to sell it to the note investor for $45,000. What can we do to enhance the value of that note? We paid 425, we're selling to him for 45, there is not a lot of profit there. Let's say that we get the borrower, let's say that we ask the borrower after he's made three payments. We'd say, "Hey, if you pay us $500 a month instead of $400, pay us $100 more per month, we will reduce the interest rate to 2%.  

Now we have to determine how long is it going to take to pay off 2% interest rate at $500 a month. $85,00 balance at $500 a month, at 2% interest is going to take 200 and we're going to round up 200 and one months. You can quickly figure out how much over the course of this note life is this home owner going to save thousands and thousands and thousands of dollars.

More important to us as investors, however, is how much can we make by getting $100 a month and we can even reduce this down to zero percent, if we wanted to and make it more attractive to the homeowner to pay that $100 extra. Now if we're going to take this 201 months or $500 a month payments, so let's make this 201 and we're going to receive $500 a month payments now. How much can we sell it for if we're going to give that investor 2% or 10%? $48,683.24. We've just increased our income on selling that note by $3,600 or approximately 9% by reducing the payment that the homeowner id going to make.

These are fun things to do. There is so many things that you can do if you know how to use this calculator and you understand the time value of money. For example, let's say that when we went back and we offered that home owner $60,000 for his $97,000 note and he choked. What if we said, "Well, Mr. Homeowner, how much cash do you need?" He said, "I need $40,000."We would figure up our yield at 12%, let's say and $40,000 and we would buy enough of the months to come up with that $40,000 and then we would write him a promissory note for the remainder of that note at the same interest rate that he was collecting.

Now, he gets the cash that he needs, he gets rid of the note. We get a note at a good yield and at some point in time we may negotiate with him to give him more cash because we're sitting kind of in the driver's sit. There are just all kinds of things that you can do if you understand the time value of money and how to use this calculator.

Keep all that in mind and these are kind of calculations that if you're doing a second, some of them you can also use on seconds, but primarily we use these on firsts. I touched briefly on this the last time that we talked. We have avoided doing any kinds of seminars, boot camps, anything that we charged money for, simply because we think it has given the industry a bad name. There is so many people out there that are selling seminars, selling webinars, selling courses that have never bought a note. Then there are some that are luring people to a seminar and then selling them coaching for 15, 20, $25,000. Well, we get a to of people calling us asking us how we do certain things.  

It's just come down to the point now where we've decided, "hey, we're going to put together a boot camp. The boot camp will be a very thorough expansive, everything that we know and do and there will be nothing else for you to buy. You'll attend a four-day boot camp, the first one is going to be at the Four Point Sheraton Hotel close to LAX, Los Angeles airport. We're going to have four days starting on Thursday March 19th and go through Sunday. Believe me, we're going to leave no stone untouched. We're going to un-turn, we're going to show you exactly what we do, and we're going to show you exactly the tools that we use and tools that we suggest you have also.

We'll provide lunch every day, which will allow time for a lot of discussion about notes, about networking and so on. We're going to limit this to only 50 people so that we can easily cover everybody's questions and discussions and have fun doing it. It's going to be starting on Thursday, the 19th. The first day I will probably be the primary instructor the first day, we're going to cover Y notes, we'll cover firsts, we're going to cover seconds, we're going to cover performing, non-performing. We're going to cover institutional notes, we're going to cover seller-financed notes. We're going to get really expensive in the money math of how to enhance a note, what to do with notes after you have them, how do you make more money with them.

We'll get involved somewhat in note pricing, although Chris will cover that more on Saturday. On Friday, for those of you that didn't see our email announcement, we are so tickled to tell everybody and excited that Saprina Allen has joined our team full time. If you don't know Saprina, Saprina is probably the foremost asset manager in the country. She's got extensive knowledge and a background in institutional debt collection. She's going to go through the debt collecting portion, the asset management work-outs, why you would focus on the borrower, how to handle borrowers, what are the exit strategies of a note. She's going to cover something bankruptcy and foreclosure, managing risk. Then Ingrid Maddox, Ingrid is our executive vice president of our company also. She has a 20-year servicing background for a major Nevada lender, and she joined our firm in October.

These two people there just is nobody in the industry that has a team that includes two people like these. Ingrid will cover all the servicing regulations, the efforts that are made the boarding process, what needs to be done. For those of you that are not knowledgeable about servicing, it is a highly regulated business, even down to the point of requiring you to have a procedure manual to ensure confidentiality. I guess that kind of brings to a forefront today of all days when Entium, the health provider just announced that they were hacked, but you need to have a policy in place. I don't care if you're collecting and servicing your own accounts, you still have to have this policy in place of how you're going to protect the information that you have.  

Ingrid will be covering all that as it relates to the servicing end of the business. On Saturday, Krissie will be the instructor. Krissie is the president of our company. Krissie is a person that deals with the hedge funds. She's very knowledgeable in the finance end of it. She got an MBA in finance and was an investment banker for 10 years. She's going to talk about the business structure, how you set up your office in order to do business. The tools you'll need, how to use them, what we recommend, what we use. She'll discuss note sourcing and lender and hedge fund relationships.

Then Sunday Tyler Happier, our chief compliance offer, a licensed California attorney, is going to talk to you about raising capital, about the fundraising, about what you can do, what you cannot do, what you should do, how do you go about raising money if you want to be a fund manager. Tyler has written a very significant number of private placement memorandums, operating agreements and so on for people that are raising money under regulation D. He'll cover regulation D, he'll have a lot of securities and exchange information for you, answer questions in compliance issues. He will cover in detail the Dodd frank laws, the legislation and the licensing requirements for this business. I think if there is anything that people are concerned about is that part of the business. The compliance, Dodd Frank and how it relates to you as a note investor, the legislation that is in the offing as well as what is already there and the licensing requirements that you need to be aware of.

The price for this is $2,997 and it can be free. How can it be free? $2,997 is the price that you will pay to attend, if you buy a note from us, we will refund that price, so it would become off the price of the note that you buy. It's $2,997 and you could buy a note and get that money off of the price of the note. I'm going to guarantee you, I have been to virtually ... I have either purchased or attended virtually every note school, seminar, webinar out there and if you have too, you know what's available and you're not going to find anything that will compare to these four days, because you're going to leave there, first of all, with your mind swimming in information, but secondly, prepare to be in the note business.

If you are interested in attending, please contact Nancy King, you can always go back to this, you'll be getting an email. Call Nancy at (888) 966-1256 and just tell her you're interested in attending the boot camp or you can email us at infor@mscp, that's Main Street, Capital Partners Inc.com, mscpinc.com and contact us that way.  

There has been a lon time in the planing, I think one big deal that we're starting it in march is that Saprina is joining us and, believe me, Saprina has taught a lot of people in the note business, the asset management end of it. If you have not heard her talk before you will be impressed, if you have, you're going to want to see her again. Please, get in touch with us. If you have any questions, please, contact me, if you have any topics that you want covered in this live cast please give me a call. One last thing, I hope that this thing worked today and that I haven't been sitting here talking to myself for all this time. Thank you for attending and we'll see you next Tuesday. Bye.

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