Written by Jeffrey R. Armstrong – President/Owner of Armstrong Capital
Your favorite Master Note Buyer – Straightforward, Honest, Fair…
There are many tools that you will use and develop for yourself over the course of doing business in the cash flow industry. I am going to share with you one of the tools that I have developed and have been using in the area of private mortgage notes. This tool I refer to as my ‘Price Letter’ and it is in my free brokers package in the Note Broker’s section of my website for you to use and adapt to your business.
You have received the first call, compiled the necessary information, gathered quotes and negotiated with the note holder. If the note holder’s response is favorable to the prices you have given to him or her, the next step is to give it to them in writing. If they seem agreeable and are actually interested in taking it to the next step I will send my price letter to them. If they have a fax machine I will fax it to them first and then mail them a hard copy along with my brochure and business card. If they are not interested or they don’t like my offers I will not send it to them in writing. They will then go on a callback list to call them back in 3 months to see if they have a need to sell at that time.
By sending to them what you talked about over the phone it shows you are a professional and it gives you credibility when you put the prices in black and white. The letter itself includes the terms of their note, the options you gave over the phone, an incentive to do it now (i.e. $500 bonus) and instructions on what items you will need should they want to proceed.
I will make a note on my worksheet when I sent the price letter and make another note to call them back in one week if they have not called me already to verify that they have received the information and to answer any questions. You must follow up with them for the process to be effective. If you just assume that they will be sending you the documents when they receive your price letter you will lose a great many transactions.
In addition, when you give the note holder partial options on the ‘price letter’ you are able to break it down for them and show them the exact amount of money that they will be owed in the future. That figure will represent the remaining balance of the note when the note returns to them. That can prove to be a very valuable piece of information for the note holder.
Some consultants ask why I use the word “price” instead of the word “quote” when talking to potential note sellers. The definition of the word ‘quote’ is “…to state the approximate market value of an item, product or service…” When someone hears the word quote it is assumed that the figure given negotiable. The definition of the word ‘price’ is “…the amount of money paid…the actual cost at which something is obtained…” When someone hears the word price it is assumed that it is a concrete number. When I present my offers to a note holder I am giving them several options and I am telling them the current value of those options today. Those are some reasons why it is a ‘Price Letter’ and not a ‘quote Letter’.
You are encouraged to come up with your own type of ‘Price Letter’ or you may use my example. Either way you will need to use this tool in your cash flow business when you present your offers to the note holder.