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Notes – The Hidden RE Niche

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

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

A lot can happen in just a couple of years.  One moment we were in middle of one of the best times ever seen in the note industry, the next moment we were searching for new note investors to buy the notes we found and close on our transactions.  You see, what happened to the seller-financed note industry was that the major institutional buyers shut their doors and stopped buying notes.  In short they would buy the individual notes we found and then securitize them on Wall Street to get more money to buy more notes.  When Securitization stopped, so did the flow of their funds to purchase notes.

At the same exact time banks and institutional lenders immediately tightening up their lending criteria.  Those in turn meant that fewer people were and are currently still unable to qualify for traditional conventional financing to purchase properties.  When fewer people can qualify for traditional conventional financing the amount of seller financed notes that are carried back and in the market grew exponentially.  There is more “product” (seller financed notes) currently available for us to go after than any time I can remember in my note brokering and buying career since 1991!

There are several challenges in today’s market including but not limited to poor credit and low collateral (property) values, these hurdles are nothing new just more prevalent than prior years.  Are we still able to purchase individually held first position existing seller financed notes that came about when the seller of a property carried back the financing to facilitate the sale of the property? The answer is yes, a resounding YES!

In fact, my own personal statistics show, because of the current economic conditions, down real estate market and the overall individual need of money we are seeing higher response rates to our marketing and a higher acceptance rates compared to previous years.  In my business and any other cash flow business, the goal is to be there when people with notes, or your particular cash flow niche, need money.  If you haven’t seen the news, people need money now more than ever.  In my personal note industry expert opinion I believe that we are finally on the upswing of slow times.  In looking forward I have seen the signs of some potentially phenomenal growth and success in our note business in 2012 through at least 2014.

Cashflow as a Home-Based Business

Not only is the specific note business cashflow niche a good idea today as it always has been, but from another angle, as a home based business it is one of the few business that you can do from home and make an extremely good income.  In this time of high unemployment and people looking for jobs or switching careers a cash flow business might be the answer.

Individuals may choose to start home businesses after retiring, because of a job loss or when they stop enjoying the corporate life. Others want to spend more time with their family. Whatever the case, starting a cashflow home-based business can be a good option. It can provide the owner with the best of both worlds–being able to balance work and home life.

Convenience – Starting a cashflow home business can be ideal for families with dual incomes and small children. Parents who start home businesses can stay at home with small children, instead of having to pay extra for daycare. A home business also eliminates lengthy commutes to and from the office. Instead, the individual can spend the extra time planning her day, or managing various aspects of her business. Individuals can also dress more comfortably, often opting to wear their favorite casual clothes.

Keep Expenses Down – Having a cashflow home business versus a franchise or retail brick and mortar business can keep expenses down. Instead of paying rent for an office or small shop, many home business owners work out of a spare bedroom or den. The extra savings can be used to pay for marketing their cashflow business which is an absolute necessity for a cashflow business to be successful. Also, home business owners may be able to deduct most of the supplies and equipment they purchase on their tax forms.

Home Office Tax Write-offs – Individuals who run cashflow home businesses also may be able to deduct expenses such as electricity, real estate taxes, mortgage interest, insurance and even repairs. The federal stipulation for tax deductions states that the home must be the primary place of business, a location for meeting clients and a separate structure from the living area, according to the Internal Revenue Service.  Cashflow home business owners should check with their accountants for further tax advice for their specific situation.

Less Risk – Cashflow home businesses do not require as much capital to get started as traditional “brick and mortar” businesses–like retail stores. The home business owner can build his business at a gradual pace, while still earning income from a job. He can then leave his job and become a full-time cashflow business owner when transaction earnings become steady. Thus, it is considerable less risky to start a home business than most other types of businesses.

Professional Growth – Owning a cashflow home business gives a person an opportunity for professional growth, using skills in which they excel in already or by doing something they love. For example, a Note Broker can continue to hone his skills with a home business and still be doing a job he enjoys if necessary.  Additionally, the Note Broker can acquire additional skills, such as business and marketing skills, which he may not have developed while working for someone else due to lack of time or opportunity in a traditional job or office setting.

As a home based business (for most of us in the industry) the seller financed note business is still alive and well and a very good business to be in!  With the appropriate amount of desire, time, effort, knowledge and money (for marketing) a cashflow business not only a great idea but a solid option for a strong long term business as well as future extreme passive income as well.

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

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