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Things Are Looking Up

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

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

Happy New Year 2005! This year is shaping up to be a great year for my cash flow business. As you may be aware, I have been in the cash flow business for almost 14 years now with my main focus being in the private mortgage note niche, seller financed notes secured by real estate. During those year I got in the habit of keeping track of all kinds of different statistics to try and improve my business. To name a few, I’ve got statistics on the average balance of notes I have closed transactions on ($36,243), my average commission (10.91%), the percentage of partial purchases closed versus full purchases (73.6%), and even the percentage of deals closed with female note holders versus male note holders (76.8%). I might be considered anal by some but I prefer well organized. Either way it’s about knowing your business and what makes your business work and continue to be successful.

These statistics I mentioned above help me to know what I should continue to do and also what may not be working and what I should do less of or not at all. For instance, since I know that my bread and butter deals are notes under $50,000 I will continue to go after that size note. Since I know that my average commission is around 10% I have a better idea of what a realistic commission is on my next transaction. Since I know that 7 out of 10 of the transactions I close are partial purchases I will continue to push the partial options. Since I know that 7 out of 10 transactions I close are with female note holders I will have more confidence when a female note holder contacts me. Are you getting the full picture now?

What I do know is that, with these different statistics I have been tracking, I see a trend in the private mortgage note niche of more seller financed notes being taken back in the last few months if I compare that to 2 years ago. Interest rates have been low over the past few years which translated into more property buyers being able to get traditional financing for the purchase of their property and less seller financing. With the elections over and interest rates starting a slightly upward trend I am finally seeing more seller-financing going on. What this means is more note holders to go after and more transactions for you and for me. In our little cash flow niche of private mortgage notes we are probably the minority of people in the nation actually waiting for interest rates to go higher. The higher the interest rates the fewer people there will be who can qualify for traditional financing and the more seller financed notes will be available for us.

Last year at this time I added the Lawsuit Funding cash flow to my income stream arsenal. I am happy to report that I have closed several transactions in this new and upcoming niche and plan to continue to test it out this year as well. For this year I am very interested in the new niche of Life Settlements. I heard about it at last years Cash Flow Convention and read a few articles about it in the journal. I plan on investigating this niche some more and then possibly adding it to my cash flow business as well. Even though my main niche is still private mortgage notes it is nice to be able to assist people with other cash flows as well. As a person in the cash flow industry we are consultants and it does not hurt to be able to do several different cash flows along with your main niche as long as you stay focused.

My focus has never changed. When someone asks me what I do my answer is “I purchase and broker seller financed notes secured by real estate at a discount on the secondary market”. Plain and simple, that is what I do. However, when people know that you have access to cash they will eventually call you for everything from auto portfolios to cellular tower leases to cow paper. And when those people call my answer will not be “sorry I don’t do that”, rather in a nice pleasant voice “sure, I think we can help you with that, let me get a worksheet and we’ll see what we can do for you”.

This year, things are really looking up for the private mortgage note niche as well as many of the new and upcoming cash flows that we are be able to be involved in. Stay focused, keep on marketing and whatever you do, do not stop trying. I hope this year brings you everything that you deserve and I wish for you the greatest success.

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