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Note Business Technology

Written by Jeffrey R. Armstrong – President/Owner of Armstrong Capital

Your favorite Master Note Buyer – Straightforward, Honest, Fair…

When I first started the note business in 1991, my toolbox consisted of a phone, a pen, a worksheet and a calculator with which I could gather the information from the note holder, verify the payment amount, the balloon amount if any and verify the current balance of the note.  At that time, a fax machine that sat on your desk spewing out thermal paper faxes in rolls on the floor was a part of doing business.  A telephone connected to your wall through wires, what is now called a land line, was commonplace.  An answering machine sitting on your desk had a red light that blinked when there were messages was capable of capturing any calls we missed (well at least up to the length of the tiny tape cassette that was in the machine).  Direct mail letters were created using a typewriter and if you were up with the times you might have had a word processor.  Postage for first class mail was 29 cents, postcard postage was 23 cents and Fed Ex was a brand new name in overnight delivery.

As the 90’s rolled on computers became more useful and technology began to have an effect on the note business.  Instead of typing up my form letter, going to get thousands of copies and then putting them back in the typewriter and then typing the name, address and salutation one by one (yes I really did that) I could now put my form letter into a software program called WordPerfect (remember that) and magically merge in the names, addresses and salutation into the letter in a matter of seconds.  That cut my direct mail preparation time from a week to one day!  With the advent of the internet some note buyers were beginning to have websites and electronic mail.  Correspondence was done over the phone or sent through regular mail and overnight mail depending upon the urgency of the information or message.

In the early 90’s I can remember getting my first computer and getting dial up internet service.  I remember subscribing to Prodigy and would go online to play games like Othello and Solitaire.  As the late 90’s approached it became increasingly clear that the internet was not going to be a phase or something that only kids wanted to play games on.  I got my first laptop in 1998 (actually won it from a funding source in a contest) and it included an internet card that you could pop out and plug your phone line into to receive internet service!  In about 1999 I finally had a website built for me and it was one of the best decisions and investments I made for my business.  As a tool the internet would play more and more of a role for the note business as the years went on.   It shortened the time it took to get a deal completed and created a new platform to market from.

Enter the millennium; at this point a computer was just about a necessity in the note business as well as the internet.  Funding Sources were coming out with online submission forms and some even created algorithms so that you could enter in a notes parameters and it would spit out a quote for you.  Over time it was found that the numbers that these online algorithms came up with were hardly ever accurate because the value of a note is just not all about the numbers and there were just too many outside variables to consider for an automatic precise quote to be given instantaneously online.  At this point some individuals in the note business attempted to run their businesses 100% online without ever talking to people on the phone, and while it worked once in awhile the conclusion revealed that the Note Business is a people business and it will never be just about the numbers.  A note broker must still answer the phone and, in addition to completing the worksheet and getting the necessary information, build a rapport with the note holder, get the story behind the note and find the underlying need of the note holder.

In the mid-2000’s note brokers and note investors alike were becoming more computer and internet savvy.   If you didn’t have a website you were not in the business.  Email between note brokers and note investors became the preferred way to communicate.  Sending and receiving worksheets and even sending initial packages as attachment to an email became more acceptable instead of by overnight mail.

In the mid to late 2000’s technology provided us with more information available via the internet and it increased on almost a daily basis.  The ability to put an address of the subject property your browser and having a satellite image of the property pop up along with links to potential websites revealing past sales data, property characteristics, tax data, ownership information and even title information opened up additional avenues to get information quickly.  As an investor being able to look at this additional data before giving prices and options for a particular note saves all involved wasted time and effort on transactions that will never get to closing.  In some cases the internet now allowed us to also get more information on the note holders and note payor’s as well actually permitting us to have more information than ever before giving us the ability to make better informed decisions when buying a note.

Although important, the note buying and note brokering is no longer purely about the numbers.  Technology has improved not only the amount of information that we are able to obtain but also the speed with which we can now get that information.  Although my toolbox still includes a phone my worksheets are usually completed on my laptop.  Faxes, appraisals, title policies, reports and notices now are delivered email inbox instead of mail and overnight delivery.  As you can see, technologies have been evolving rapidly in the note industry over the past 20 years.   The note professional has had the burden of trying to keep up with technological advancements.  Today’s note professional’s skills and knowledge of the internet and its uses both for marketing purposes and due diligence are becoming more essential tools than ever before.  Keeping up with technology and advancements in the industry is a big part of a note professional’s job, don’t ignore it.

Remember, success demands action! Keep on marketing, it’s going to work! TWITA! (That’s What I’m Talking About!)

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