NoteWorthy Investments, Inc.

Working With Realtors^©

Creating Notes at the Point of Purchase

Modern note brokers are becoming very sophisticated at helping other professionals create notes at the point of purchase. This requires some technical knowledge which is made easy by using Working With Realtors.

Using Working With Realtors you can use two very strong tools in the note broker's tool kit to help Realtors close more deals and generate more commission for yourself.

1. The institutional note buyers we use will buy notes with a payor who may not be able to get a bank loan easily. Our note buyers tend to be much less stringent about the credit of the payor. This means we can create a loan at the point of purchase, sell all or part to an institutional note buyer and generate the cash to complete the sale.
   
2. The large note buyers we use will buy extremely creative notes as long as they are safely secured by real estate.

Working With Realtors will let you use these tools to create new and generous commissions for yourself. The program lets you create several different notes until you find the best one for each party in a real estate transaction. In computer jargon, this is called playing "What if.." Your job, in working with a real estate professional, is to create a seller carry-back mortgage that can be totally or partially sold to an institutional note buyer. This sale generates the cash to pay the seller, and a commission to you, the note broker.

As a note broker, you will need to know the sale price of the property, the maximum down payment the buyer can make, and the minimum amount of cash the seller needs. By "playing" with these numbers, and the interest rate on the note, the length of the property buyer's loan and the institution's yield requirements, you can create many note scenarios. This playing "What if..." is an excellent exercise for a computer program.

When you have a note that meets the needs of the buyer of the property, the seller of the property and Realtor or other professional, Working With Realtors will write a letter to each person, outlining the terms of the note, and the cash each can expect at the close of escrow.

A typical sale might look like this using Working With Realtors:

A $100,000 property is offered with 10% cash down and a $90,000 note at 10% with a balloon in 5 years. You, as the note broker, sell part of the note to an institutional note buyer at a 12.5% yield. They buy all the payments and $40,000 of the $90,000 balloon for $54,816. You give $44,816 to the seller of the note and keep $10,000 for commissions. The seller ends up with $104,816 in the following manner:

You, the note seller, get a $10,000 commission. You might give the real estate broker a 6%, $6,000 commission and keep $4,000 for yourself as your commission.

Working With Realtors will create a note that:

• Can be sold to an investor
• Meets the needs of the property buyer
• Helps the seller sell the property
• Helps Realtors and other professionals sell more properties
• Helps Realtors get more commission on hard-to-sell properties
• Generates a large commission for you, the note broker

Working With Realtor will:

• Write a letter to the Realtor outlining his or her commission and the note that was created
• Write a letter to the buyer showing the terms of his new mortgage
• Write a letter to the seller telling how much cash he or she will get at the close of escrow and how much in the future.

[ Top ]

Note Quoter Pro^©

NoteQuoter Pro is a very sophisticated, yet easy to use, Windows/Windows95 program that will calculate the many ways you can buy a cash flow at your desired yield. It will write a purchase offer letter to the note seller with your best offers.

With NoteQuoter Pro you will craft such creative offers for cash flows that you will be able to buy notes at a huge profit yet still eliminate most of your competition.

27 Ways to Buy a Note

The purchase options in NoteQuoter Pro are for buying parts of a cash flow. You can be creative and buy the note in many unusual ways:

• If the note pays $500 per month, can you buy it by tripling the payments to the seller?
• If the Note Seller needs to keep the monthly payments and needs cash now, can you solve his problem?
• Can you buy 1/2 of each payment and 1/2 of the balloon?
• Can you buy the last part of a payment stream?

With NoteQuoter Pro you can! With NoteQuoter Pro you can solve the seller's problem and buy the note in ways your competition simply cannot calculate.

Features of NoteQuoter Pro

• Built in financial calculator
• Easy input of the note parameters
• Excellent documentation
• On-line help
• Clear calculations of
•  
  • Note Buyer's Profit
  • Note Seller's Profit
  • Note Investor's Profit
  • Loan to Values
• Displaying profits in a graph for a quick, visual reference
• Writes a purchase offer letter to the note seller
• Communicates with Microsoft Word
• Fastest and most accurate way to quote a note
• Easier to use than a calculator

[ Top ]

NoteRecaster^©

One of the most exciting things about the discounted note business is the chance you have to "recast" or improve a note. If you bought a note at a discount you have created an opportunity to restructure and improve that note and increase your yield. It is not unusual to restructure a note that you bought for a yield of 18% and increase its yield to 35% or more. That is the beauty of buying notes at a discount.

It is very similar to buying an apartment building and fixing it up. You hope to increase the rents and therefore the property's price and its present value. Of course, you have to evict tenants, paint the property, add fixtures and do many other things to increase the present value of your building. When the property is improved, you can raise the rents and sell the property at a profit or keep the property and enjoy the extra income.

You can do the same thing with a note. If you can improve the note to increase its present value, then you can either sell the note for an extra profit, or you can keep the note and enjoy the added interest income that comes from your note improvements.

When you improve a note, you restructure it or change the terms of the note to increase its present value. You do this by getting the note payor to increase their payments. You can persuade the note payor to do this because you will give them something in exchange for the increased payments. You may offer to lower their interest rate, or reduce the time to pay off the note, or give them cash to pay off the note more quickly, or offer to pay the points on a new loan. There are many ways to get a payor to increase the payments and all are beneficial both to you, the discounted note buyer, and to the note payor.

NoteRecaster will help you improve a note. Only with the help of a computer can you really explore the many ways a note can be restructured. With this program you will see all the alternatives available to you and to the note payor.

NoteRecaster will:

• Calculate an infinite number of ways to restructure a note
• Calculate the total interest the payor will pay over the life of each restructured option
• Calculate the total interest the payor will save by agreeing to restructure his note
• Calculate your total profit from each restructured note
• Restructure a note to remove the balloon payment for the payor
• Print a graph comparing your yield to each restructured note and to your original yield
• Allow you to fix the interest rate and vary the payment
• Allow you to vary the payor's interest rate and vary the payment
• Write a letter to the note payor giving them several payment options. Each payment option will show the payor the interest and time saved by increasing their payments to you.

NoteRecaster will give you the opportunity to explore almost an infinite number of interest rates, payments, time and profits to you. How this information interacts to create new notes is the heart of NoteRecaster.

[ Top ]

Note Buyer Direct Connect

A powerful database of the corporate buyers of every kind of cash flow! You input the size, type and location of the cash flow you wish to sell. Direct Connect then searches its extensive and ever growing data base and gives you all the potential buyers for that cash flow. It then helps you package the note correctly for sale to a corporate note buyer. And you can update it anytime on the Internet. Simply click on the update button, Direct Connect dials into the Direct Connect Web Site and downloads all the latest information directly into your computer.

In addition to the database of institutional cash flow buyers, the new version includes a database of other services directed to note professionals.

[ Top ]

For more information on any of the above software, please contact NoteWorthy Investments.