Written by Jeffrey R. Armstrong – President/Owner of Armstrong Capital
Your favorite Master Note Buyer – Straightforward, Honest, Fair…
Many new and even experienced note brokers often want to know why they should ever work with a Master Buyer (Master Broker, Master Consultant) as well as when are the right times to work with a Master Buyer and when they should work directly with investors and funding sources. The answer depends on several factors: your experience and comfort level, the complexity of the transaction, time constraints, and your preference. Many of you will never have the need to form a strategic alliance with a Master Buyer while others may want that little extra assistance and support when you are just starting out or when a difficult transaction comes your way.
Just to refresh your memory; a Master Buyer is usually an individual who has exhibited the highest level of skill and expertise in the industry, has purchased for their own account and brokered hundreds up to thousands of closed transactions and are committed to working with note brokers by assisting them with getting their deals negotiated and closed. Master Buyers are deemed to be in the top one percent of brokers in the nation. In general, you should use a Master Buyer if:
– You are inexperienced and feel uncomfortable working directly with a funding source.
– You are uncomfortable structuring the transaction and negotiating with the seller.
– You don’t yet feel familiar enough with the documentation you’ll need to collect and review and calculations involved in putting together a transaction
Additionally, after you have your business up and running and you start to get some calls a Master Buyer can help you in a couple of different ways. If you are still working at another job and you do not have the time to actually work on the transaction yourself you can simply pass on a name and phone number of a pre-screened note holder and earn a referral fee if a transaction closes. Or, you may want to spend your time marketing, finding and pre-screening the note holders while you have a Master Buyer do the rest. A pre-screened note holder is a note holder that has contacted you directly and you have personally found out that 1) they are currently receiving payments on an income stream, and 2) that they currently have an interest in selling all or part of that income stream.
If you have the time and you want to work on the entire transaction but you would like some support and assistance with negotiating, packaging, due diligence or closing procedures a Master Buyer can help you with that as well. In addition to being able to take advantage of a Master Buyers relationship with investors and funding sources and their experience and knowledge. A Master Buyer can often save you valuable time and considerable effort in conjunction with a particular transaction as well as help you earn a potentially larger commission. Furthermore, a Master Buyer has the ability to quickly determine if a deal is feasible or not so you don’t spin your wheels and waste your time on something that has little chance of closing.
The upside of forming a strategic alliance and receiving support from a Master Buyer is that you can earn fee income while you are learning about the business. Master Buyers have different requirements on the minimum amount of information you can provide to them as well as their own individual ways of working with brokers, with some not even requiring you to complete the submission worksheet yourself. They will pick up and communicate directly with the seller early in the transaction if you choose. Regardless of whether the Master Buyer gathers the initial information or you do, the Master Buyer evaluates the transaction and chooses the investor or funding source.
A Master Buyer should not be used for general business questions rather, a Master Buyer should be used for questions you might have concerning a specific transaction or potential deal. A Master Buyer may be used as a sort of mentor for your first few transactions to learn from and gain some experience. For example, Kevin Hammer, of Hammer Funding, recently closed his first transaction with me. Here’s what Kevin had to say about his Master Buyer experience, “…thank you for all of your guidance and assistance with closing my first transaction. Your world-class professionalism, tireless work ethic and vast knowledge of the note business made closing this transaction not only easy, but also fun and exciting. Your Master Buyer Services are truly an asset to anyone starting out in this business…”
Some note brokers choose to do more than just their first few deals with a Master Buyer and use them on a regular basis, which is not a bad idea. Most Master Buyers have their own lists of ‘back pocket’ investors that they have built up over the years of individual and private investors and can sometimes find a place for that transaction that the regular advertising buyers might not be able to do. The next time you have questions about a particular transaction or a potential deal and you are not sure what to do with it or you would like support and assistance with it contact your favorite Master Buyer and let them help you on your path to success.
Remember, success demands action! Keep on marketing, it’s going to work! TWITA! (That’s What I’m Talking About!)